Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2022 shares | |
Entity Information | |
Document Type | 40-F |
Document Registration Statement | false |
Document Annual Report | true |
Entity File Number | 333-253466 |
Document Period End Date | Dec. 31, 2022 |
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 | 2022 |
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 | |
Entity Common Stock, Shares Outstanding | 60,909,492 |
Multiple Voting Shares | |
Entity Information | |
Entity Common Stock, Shares Outstanding | 3,696,486 |
Business Contact | |
Entity Information | |
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 ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current | ||
Cash | $ 80,640 | $ 154,342 |
Accounts receivable, net | 8,949 | 7,413 |
Inventory | 115,053 | 93,363 |
Prepaid expenses, deposits, and other current assets | 8,885 | 10,949 |
Total Current Assets | 213,527 | 266,067 |
Non-current | ||
Property, plant, and equipment, net | 326,918 | 275,222 |
Intangible assets, net | 938,727 | 978,915 |
Right-of-use assets - operating, net | 137,368 | 88,721 |
Right-of-use assets - finance, net | 44,762 | 17,527 |
Goodwill | 94,108 | 229,910 |
Deposits and other assets | 8,470 | 3,550 |
TOTAL ASSETS | 1,763,880 | 1,859,912 |
Current | ||
Trade payables | 28,533 | 26,983 |
Accrued liabilities | 26,238 | 32,724 |
Lease liabilities - operating - current portion | 8,176 | 4,195 |
Lease liabilities - finance - current portion | 10,049 | 3,185 |
Contingent consideration - current portion | 63,429 | 39,868 |
Purchase consideration payable | 2,849 | 812 |
Income tax payable | 46,006 | 28,915 |
Debts payable - current portion | 40,523 | 8,112 |
Accrued interest payable - current portion | 3,191 | 7,542 |
Total Current Liabilities | 228,994 | 152,336 |
Non-current | ||
Deferred tax liabilities, net | 68,523 | 70,081 |
Lease liabilities - operating - non-current portion | 134,715 | 87,767 |
Lease liabilities - finance - non-current portion | 24,693 | 9,406 |
Construction finance liabilities | 36,181 | |
Contingent consideration - non-current portion | 26,661 | 145,654 |
Debts payable - non-current portion | 158,820 | 125,746 |
Senior secured notes, net of debt issuance costs | 244,682 | 245,408 |
Accrued interest payable - non-current portion | 4,763 | 3,451 |
Other long term liabilities | 524 | |
TOTAL LIABILITIES | 928,556 | 839,849 |
Shareholders' equity | ||
Additional paid-in capital | 1,349,713 | 1,289,827 |
Treasury stock - 645,300 and 568,300 shares, respectively | (8,987) | (7,828) |
Accumulated other comprehensive income | 3,266 | 3,266 |
Accumulated deficit | (510,668) | (265,202) |
Equity of Ayr Wellness Inc. | 833,324 | 1,020,063 |
Noncontrolling interest | 2,000 | |
TOTAL SHAREHOLDERS' EQUITY | 835,324 | 1,020,063 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 1,763,880 | 1,859,912 |
Multiple Voting Shares | ||
Shareholders' equity | ||
Share capital | 0 | 0 |
Subordinate Voting Shares | ||
Shareholders' equity | ||
Share capital | 0 | 0 |
Exchangeable Shares | ||
Shareholders' equity | ||
Share capital | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement | ||
Treasury stock shares | 645,300 | 568,300 |
Multiple Voting Shares | ||
Statement | ||
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 | ||
Statement | ||
Par value per share | $ 0 | $ 0 |
Shares authorized | Unlimited | Unlimited |
Number of shares issued | 60,909,492 | 56,337,175 |
Number of shares outstanding | 60,909,492 | 56,337,175 |
Exchangeable Shares | ||
Statement | ||
Par value per share | $ 0 | $ 0 |
Shares authorized | Unlimited | Unlimited |
Number of shares issued | 6,044,339 | 7,368,285 |
Number of shares outstanding | 6,044,339 | 7,368,285 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Operations | ||
Revenues, net of discounts | $ 465,618 | $ 357,608 |
Cost of goods sold excluding fair value items | 268,957 | 175,646 |
Incremental costs to acquire cannabis inventory in a business combination | 6,216 | 43,864 |
Cost of goods sold | 275,173 | 219,510 |
Gross profit | 190,445 | 138,098 |
Operating expenses | ||
Selling, general, and administrative | 222,092 | 144,444 |
Impairment of goodwill | 148,531 | |
Depreciation and amortization | 56,856 | 40,659 |
Acquisition expense | 5,991 | 9,002 |
Gain on sale of assets | (8) | |
Total operating expenses | 433,462 | 194,105 |
Loss from operations | (243,017) | (56,007) |
Other income (expense), net | ||
Share of loss on equity investments | (32) | |
Fair value gain on financial liabilities | 63,088 | 83,759 |
Interest expense, net | (30,575) | (16,550) |
Interest income | 275 | 204 |
Other, net | 120 | 935 |
Total other income, net | 32,908 | 68,316 |
Income (loss) before income taxes and noncontrolling interests | (210,109) | 12,309 |
Income taxes | ||
Current tax provision | (46,934) | (45,820) |
Deferred tax benefit | 1,558 | 16,559 |
Total income taxes | (45,376) | (29,261) |
Net loss before noncontrolling interest | (255,485) | (16,952) |
Net loss attributable to noncontrolling interest | (10,019) | |
Net loss attributable to Ayr Wellness Inc. | $ (245,466) | $ (16,952) |
Basic net loss per share | $ (3.58) | $ (0.30) |
Diluted net loss per share | $ (3.58) | $ (0.30) |
Weighted average number of shares outstanding (basic) | 68,635 | 57,329 |
Weighted average number of shares outstanding (diluted) | 68,635 | 57,329 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Share Capital Multiple Voting Shares | Share Capital Subordinate Voting Shares | Share Capital Exchangeable Shares | Additional paid-in capital | Treasury Stock | Accumulated other comprehensive income | Accumulated Deficit | Noncontrolling interest | Multiple Voting Shares | Subordinate Voting Shares | Exchangeable Shares | Total |
Equity at beginning of period at Dec. 31, 2020 | $ 530,808 | $ (557) | $ 3,266 | $ (248,250) | $ 285,268 | |||||||
Number of shares outstanding at beginning of period at Dec. 31, 2020 | 3,696,000 | 28,874,000 | 2,128,000 | (64,000) | ||||||||
Stock-based compensation | 27,155 | 27,155 | ||||||||||
Stock-based compensation in Shares | 1,916,000 | |||||||||||
Tax withholding on stock-based compensation awards | (28,536) | (28,536) | ||||||||||
Tax withholding on stock-based compensation awards, shares | (991,000) | |||||||||||
Exercise of rights, shares | 135,000 | 135,000 | ||||||||||
Exercise of warrants | 55,692 | $ 55,692 | ||||||||||
Exercise of warrants, shares | 7,203,000 | 7,203,000 | ||||||||||
Conversion of Exchangeable Shares, shares | 841,000 | (841,000) | 9,012,000 | |||||||||
Share issuance - business combinations and asset acquisitions | 576,196 | $ 576,196 | ||||||||||
Share issuance - business combinations and asset acquisitions, Shares | 13,571,000 | 6,082,000 | ||||||||||
Replacement options issued - business combinations | 4,453 | 4,453 | ||||||||||
Exercise of options | 315 | $ 315 | ||||||||||
Exercise of options, shares | 37,000 | 37,000 | ||||||||||
Equity offering | 118,052 | $ 118,052 | ||||||||||
Equity offering, shares | 4,600,000 | |||||||||||
Conversion of convertible debt | 7,429 | 7,429 | ||||||||||
Conversion of convertible debt, shares | 232,000 | |||||||||||
Repurchase of Equity Shares | (1,737) | $ (7,271) | $ (9,008) | |||||||||
Repurchase of Equity Shares, shares | (82,000) | (505,000) | ||||||||||
Repurchase of Equity Shares (Shares) | 586,000 | |||||||||||
Net loss | (16,952) | $ (16,952) | ||||||||||
Equity at end of period at Dec. 31, 2021 | 1,289,827 | $ (7,828) | 3,266 | (265,202) | 1,020,063 | |||||||
Number of shares outstanding at end of period at Dec. 31, 2021 | 3,696,000 | 56,337,000 | 7,368,000 | (568,000) | 3,696,486 | 56,337,175 | 7,368,285 | |||||
Stock-based compensation | 46,115 | 46,115 | ||||||||||
Stock-based compensation in Shares | 2,109,000 | |||||||||||
Tax withholding on stock-based compensation awards | (5,258) | (5,258) | ||||||||||
Tax withholding on stock-based compensation awards, shares | (676,000) | |||||||||||
Share issuance - related party - consulting services | 707 | 707 | ||||||||||
Share issuance - related party - consulting services (Shares) | 76,000 | |||||||||||
Share issuance - business combinations | 6,352 | 6,352 | ||||||||||
Share issuance - business combinations, shares | 682,000 | |||||||||||
Share issuance - earn-out consideration | 11,748 | 11,748 | ||||||||||
Share issuance - earn-out consideration (Shares) | 1,029,000 | |||||||||||
Conversion of Exchangeable Shares, shares | 2,006,000 | (2,006,000) | 71,000 | |||||||||
Consolidation of variable interest entities | $ 12,019 | 12,019 | ||||||||||
Replacement options issued - business combinations | $ 4,453 | |||||||||||
Exercise of options, shares | (33,000) | |||||||||||
Exercise of options, net of options sold to cover income taxes | 300 | $ 300 | ||||||||||
Exercise of options net of options sold to cover income taxes, shares | 33,000 | |||||||||||
Repurchase of Equity Shares | (78) | $ (1,159) | (1,237) | |||||||||
Repurchase of Equity Shares (Shares) | (5,000) | (77,000) | ||||||||||
Net loss | (245,466) | (10,019) | (255,485) | |||||||||
Equity at end of period at Dec. 31, 2022 | $ 1,349,713 | $ (8,987) | $ 3,266 | $ (510,668) | $ 2,000 | $ 835,324 | ||||||
Number of shares outstanding at end of period at Dec. 31, 2022 | 3,696,000 | 60,909,000 | 6,044,000 | (645,000) | 3,696,486 | 60,909,492 | 6,044,339 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | ||
Net loss before noncontrolling interest | $ (255,485) | $ (16,952) |
Adjustments for: | ||
Fair value gain on financial liabilities | (63,088) | (83,759) |
Stock-based compensation | 46,115 | 27,155 |
Stock-based compensation - related parties | 707 | |
Depreciation and amortization | 21,050 | 8,125 |
Amortization on intangible assets | 71,789 | 50,709 |
Impairment of goodwill | 148,531 | |
Share of loss on equity investments | 32 | |
Gain on disposal of equity investments | (178) | |
Gain (loss) on disposal of property, plant, and equipment | (8) | 50 |
Incremental costs to acquire cannabis inventory in a business combination | 6,216 | 43,864 |
Deferred tax benefit | (1,558) | (16,559) |
Amortization on financing costs | 2,292 | 1,744 |
Amortization on financing premium | (3,018) | (402) |
Changes in operating assets and liabilities, net of business combinations: | ||
Accounts receivable | (989) | (3,916) |
Inventory | (18,235) | (50,956) |
Prepaid expenses, deposits, and other current assets | 1,833 | (2,326) |
Trade payables | (7,087) | (1,430) |
Accrued liabilities | 92 | 7,943 |
Accrued interest payable | (2,685) | 1,446 |
Lease liabilities - operating | 2,272 | 1,912 |
Income tax payable | 17,091 | 5,717 |
Cash used in operating activities | (34,165) | (27,781) |
Investing activities | ||
Purchase of property, plant, and equipment | (62,497) | (91,630) |
Capitalized interest | (14,927) | (8,373) |
Proceeds from the sale of assets, net of transaction costs | 31,433 | |
Cash paid for business combinations and asset acquisitions, net of cash acquired | (11,546) | (92,270) |
Cash paid for business combinations and asset acquisitions, bridge financing | (22,750) | |
Cash paid for business combinations and asset acquisitions, working capital | (2,205) | (4,359) |
Payments for interests in equity accounted investments | (82) | |
Cash received in disposal of equity investment | 1,000 | |
Payments made by related corporation | 135 | |
Purchase of intangible asset | (4,000) | |
Cash received (paid) for bridge financing | 70 | (1,200) |
Deposits for business combinations, net of cash on hand | (2,825) | (100) |
Cash used in investing activities | (66,497) | (219,629) |
Financing activities | ||
Proceeds from exercise of warrants | 55,692 | |
Proceeds from exercise of options | 300 | 315 |
Proceeds from financing transaction, net of financing costs | 27,600 | 148,646 |
Proceeds from equity offering, net of expenses | 118,052 | |
Proceeds from issuance of notes payable, net of financing costs | 51,713 | |
Payments of financing costs | (2,142) | |
Payment for settlement of contingent consideration | (10,000) | |
Deposits paid for financing lease and note payable | (924) | |
Tax withholding on stock-based compensation awards | (5,258) | (28,536) |
Repayments of debts payable | (17,924) | (8,749) |
Repayments of lease liabilities - finance (principal portion) | (10,117) | (6,949) |
Repurchase of Equity Shares | (8,430) | (1,815) |
Cash provided by financing activities | 26,960 | 274,514 |
Net (decrease) increase in cash | (73,702) | 27,104 |
Cash, beginning of the period | 154,342 | 127,238 |
Cash, end of the period | 80,640 | 154,342 |
Supplemental disclosure of cash flow information: | ||
Interest paid during the period, net | 49,820 | 14,244 |
Income taxes paid during the period | 30,915 | 41,303 |
Non-cash investing and financing activities: | ||
Recognition of right-of-use assets for operating leases | 54,396 | 68,578 |
Recognition of right-of-use assets for finance leases | 32,444 | 18,576 |
Issuance of promissory note related to business combinations | 16,000 | |
Issuance of Equity Shares related to business combinations and asset acquisitions | 6,352 | 576,196 |
Issuance of Equity Shares related to equity component of debt | 7,429 | |
Issuance of Equity Shares related to settlement of contingent consideration | 11,748 | |
Issuance of promissory note related to settlement of contingent consideration | 14,934 | |
Repurchase of Equity Shares | $ 7,193 | |
Cancellation of Equity Shares | 78 | |
Capital expenditure disbursements for cultivation facility | $ 8,402 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2022 | |
NATURE OF OPERATIONS | |
NATURE OF OPERATIONS | 1. NATURE OF OPERATIONS Ayr Wellness Inc. (“Ayr” or the “Company”) is a vertically integrated cannabis multi-state operator in the United States of America (“U.S.”); through its operating companies in various states throughout the United States, 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 reviewed 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 (“Equity Shares”) are trading on the Canadian Stock Exchange (the “CSE”), under the symbol “AYR.A”. The Company’s Equity Shares are also trading on the Over-the-Counter Market (“OTC”) in the United States under the symbol “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. The Rights are expired as of December 31, 2022. Ayr’s headquarter office is 2601 South Bayshore Drive, Suite 900, Miami, FL 33133. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2022 | |
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$” or “$”). The functional currency of the 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, 2022 | |
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, 2022 and 2021 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 owned 100% by the Company unless otherwise noted. See Note 5 for variable interest entities that are consolidated by the Company. 3.2 Revenue The Company applies 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 the Company 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 and Canadian Deposit Insurance Corporation limits. The Company has historically not experienced losses related to these deposits. As of December 31, 2022, and 2021, there are no cash equivalents. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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 customer credit worthiness. As of December 31, 2022, and 2021, the Company had approximately $539 and $87, in allowance for doubtful accounts, respectively. For the years ended December 31, 2022 and 2021, the Company wrote off approximately $472 and $104, respectively. 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 Inventory is 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. When establishing the cost, Work-in-process and raw materials are determined using the weighted average cost method while the determination of cost for Finished goods inventory is 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 are written down to net realizable value. Inventory acquired in a business combination is valued at selling price less selling and disposal costs. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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 recorded at fair value using various methodologies including cost approach, sales comparison approach or income approach. Depreciation and amortization are calculated 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 noncontrolling 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 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 the following estimated useful lives, which do not exceed the contractual period, if any: Licenses/permits 15 Right-to-use licenses 15 Host community agreements 15 Trade name / brand 5 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, right-of-use assets, 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. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.9 Leases and sale and leaseback accounting The Company applies the accounting guidance in ASC 842 – Leases Right-of-use assets – operating, net Lease liabilities – operating – current portion Lease liabilities – operating – non-current portion Right-of-use assets – finance, net Lease liabilities – finance – current portion Lease liabilities – finance – non-current portion 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. A sale and leaseback transaction involves the transfer of an asset to another entity and the leaseback of the same asset. The Company applies ASC 606 and ASC 842 when accounting for sale and leaseback transactions. Significant estimates and judgments applied include determination of the fair value of the underlying asset, transfer of control, and determination of the implicit interest rate. The Company recognizes gains or losses related to the transfer of rights of the asset to the buyer-lessor and measures the ROU asset arising from the leaseback at the retained portion of the previous carrying amount. In cases where the transaction does not qualify for sale and leaseback accounting treatment, the asset is not derecognized, and no gain or loss is recorded. The transaction is treated as a financing transaction. See Note 9 for additional information. 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. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.11 Noncontrolling interests Equity interests owned by parties that are not shareholders of the Company in consolidated subsidiaries are considered noncontrolling interests. The share of net assets attributable to noncontrolling 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 the Company’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, see Note 3.19. 3.12 Derivatives The Company evaluates all 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 assets or liabilities, the derivative instrument is 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 assets or liabilities, the Company uses a valuation model when Level 1 inputs are not available to estimate fair value at each reporting date (see Notes 13 and 16). The classification of derivative instruments, including whether such instruments should be recognized as assets or liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument assets or 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. 3.13 Earnings per share The basic loss per share is computed by dividing the net loss by the weighted average number of shares outstanding, including Equity Shares, multiple voting shares of the Company and Exchangeable Shares, as defined below, 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 of the Company (“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 Equity 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, and Vested Options, because their effect would be anti-dilutive, therefore, basic loss per share and diluted loss per share will be the same. For the years ended December 31, 2022 and 2021, the potentially dilutive financial instruments excluded from the calculation of earnings per share included nil and 1,868 warrants, nil and 86 options and 3,779 and 1,955 RSUs, totaling 3,779 and 3,909 shares of potentially dilutive securities, respectively. 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, whichever is more readily determinable. 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 statements 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 straight line 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, refer to Note 14. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.14 Stock-based payments (Continued) (a) Stock-based payment transactions (Continued) 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. 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 for equity-linked financial instruments such as 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. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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. 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. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3.17 Foreign currency transactions and translations Transactions denominated in foreign currency 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). 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 based on the differences between the financial statements and tax basis 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. The Company recognizes deferred tax assets to the extent that the Company 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 the Company determines that the Company would be able to realize our deferred tax assets in the future more than their net recorded amount, the Company 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. 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, 2022, and 2021. 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 Section 280E of the United States Internal Revenue Code (“Section 280E”), under which the Company is generally only allowed to deduct expenses directly related to the cost of goods sold. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Co |
BUSINESS COMBINATIONS AND ASSET
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | 12 Months Ended |
Dec. 31, 2022 | |
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | |
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS Transactions accounted for as business combinations have been accounted for under the acquisition method in accordance with ASC 805, with the results included in the Company’s results from operations from the date of acquisition. The fair value of considerations transferred have been allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. In determining the fair value of all identifiable assets, liabilities and contingent liabilities acquired, the most significant estimates relate to contingent consideration and intangible assets. Management exercised judgement in estimating the probability and timing of when earnouts are expected to be achieved which is used as the basis for estimating fair value. For the intangible assets identified, depending on the type of intangible asset and the complexity of determining its fair value, an independent valuation expert or management may develop the fair value, using appropriate valuation techniques, which are generally based on a forecast of the total expected future net cash flows and take into consideration other significant assumptions such as the expected use, the infancy of the cannabis industry and industry comparatives, federal and state regulations, market uncertainty and the estimated lives of any long-lived facilities and assets that the intangibles may relate to. Cannabis licenses are the primary intangible asset acquired in business combinations as they provide the Company the ability to operate in each market. However, some cannabis licenses are subject to renewal and therefore there is some risk of non-renewal for several reasons, including operational, regulatory, legal, or economic factors. To appropriately consider the risk of non-renewal, the Company applies probability weighting to the expected future net cash flows in calculating the fair value of these intangible assets. The key assumptions used in these cash flow projections include discount rates and terminal growth rates. Of the key assumptions used, the impact of the estimated fair value of the intangible assets has the greatest sensitivity to the estimated discount rate used in the valuation. The terminal growth rate represents the rate at which these businesses will continue to grow into perpetuity. Other significant assumptions include revenue, gross profit, operating expenses and anticipated capital expenditures which are based upon the acquiree’s historical operations along with management projections. The evaluations are linked closely to the assumptions made by management regarding the future performance of these assets and any changes in the discount rate applied. 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 Equity 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 Equity Shares of the Company. The Company treats the Exchangeable Shares as options with a value equal to a share of Equity 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 the fact that (i) they are economically equivalent to the Company’s publicly traded Equity Shares and (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 by exchanging them for Equity Shares of the Company which can then be sold through the CSE. Changes in these assumptions would affect the presentation of the Exchangeable Shares from shareholders’ equity to noncontrolling interests; however, there would be no impact on loss per share. The goodwill recognized on each acquisition 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 8. 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) 2022 Second Quarter Acquisition Business Combinations On May 25, 2022, the Company completed its acquisition of Herbal Remedies Dispensaries, LLC (“Herbal Remedies”) through a membership interest purchase agreement. The fair value of identifiable assets acquired, and liabilities assumed as of the acquisition date are as follows: Herbal Remedies ASSETS ACQUIRED Cash $ 637 Inventory 1,480 Prepaid expenses and other assets 256 Intangible assets - licenses/permits 15,700 Property, plant, and equipment 122 Right-of-use assets - operating 700 Total assets acquired at fair value 18,895 LIABILITIES ASSUMED Trade payables 215 Accrued liabilities 68 Lease liabilities - operating 700 Total liabilities assumed at fair value 983 Goodwill 1,180 Consideration transferred $ 19,092 As part of the purchase accounting for the above acquisition, the Company recorded intangible assets of $15,700, all of which were associated with licenses that allow for the retail sales of cannabis. The amortization period for licenses was determined to be 15 years, which reasonably reflects the useful lives of the assets. 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) Herbal Remedies Business Combination Herbal Remedies is an operator of two licensed retail dispensaries in Quincy, Illinois. This acquisition expands the Company’s operational footprint with the addition of the state of Illinois. Purchase consideration was comprised of the following: (In thousands) Shares Fair Value Cash i $ 3,002 Debt Payable ii 14,220 Shares Issued iii 353 1,870 Total 353 $ 19,092 Pursuant to the terms of the Definitive Agreement (“Herbal Remedies Agreement”), Ayr satisfied the purchase price of $19,092 for Herbal Remedies through the following: i. $3,002 of the Herbal Remedies purchase price in the form of cash consideration and settlement of the final working capital which is deemed immaterial; ii. $14,220 of the Herbal Remedies purchase price in the form of a promissory note payable; and iii. $1,870 of the Herbal Remedies purchase price in the form of 353 Exchangeable Shares, these shares have contractual restrictions on their ability to be sold for six to twelve months (the “Herbal Remedies Lock-Up Provision”). The fair value of the shares was determined by the share price on the CSE at the date of acquisition and a 16.55% discount rate attributed to the contractual restrictions. 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) 2022 First Quarter Acquisition Business Combinations On February 15, 2022, the Company completed its acquisition of Cultivauna, LLC (“Cultivauna”) through a membership interest purchase agreement. Cultivauna has a production license in the state of Massachusetts and sells cannabis infused branded seltzers and water-soluble tinctures. The fair value of identifiable assets acquired and liabilities assumed as of the acquisition date are as follows: Cultivauna ASSETS ACQUIRED Cash $ 1,251 Accounts receivable 471 Inventory 1,206 Prepaid expenses and other assets 38 Intangible assets - trade name/brand 3,400 Intangible assets - host community agreements 2,100 Property, plant, and equipment 2,202 Right-of-use assets - operating 315 Total assets acquired at fair value 10,983 LIABILITIES ASSUMED Trade payables 23 Accrued liabilities 305 Lease liabilities - operating 315 Total liabilities assumed at fair value 643 Goodwill 11,281 Consideration transferred $ 21,621 As part of the purchase accounting for the above acquisition, the Company recorded intangible assets of $5,500, which were associated with a trade name/brand and host community agreement that allow for the processing, production, and retail sales of cannabis. The amortization period for the trade name/brand and host community agreement was determined to be 5 15 years 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) Cultivauna Business Combination Purchase consideration was comprised of the following: Shares Fair Value Cash i $ 11,027 Shares Issued ii 329 4,482 Contingent Consideration iii 6,112 Total 329 $ 21,621 Pursuant to the terms of the Definitive Agreement (“Cultivauna Agreement”), Ayr satisfied the purchase price of $21,621 for Cultivauna through the following: i. $11,027 of the Cultivauna purchase price in the form of cash consideration and settlement of the final working capital which is deemed immaterial; ii. $4,482 of the Cultivauna purchase price in the form of 329 Exchangeable Shares, these shares have contractual restrictions on their ability to be sold for six twelve months iii. A portion of the Cultivauna purchase price is derived from an earn-out provision through December 31, 2023, based on annualized net revenues generated during the measurement period, consisting of 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. 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) 2021 Fourth Quarter Acquisition Business combination On October 4, 2021, the Company completed its acquisition of PA Natural Medicine, LLC (“PA Natural”) through a membership interest purchase agreement. The 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 Inventory, net 2,670 Prepaid expenses and other assets 77 Intangible assets - licenses/permits 101,000 Property, plant, and equipment 848 Right-of-use assets - operating 786 Deposits 6 Total assets acquired at fair value 107,610 LIABILITIES ASSUMED Trade payables 1,991 Accrued liabilities 318 Lease liabilities - operating 704 Total liabilities assumed at fair value 3,013 Goodwill 15,159 Consideration transferred $ 119,756 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) 2021 Fourth Quarter Acquisition(Continued) Business combination(Continued) As part of the purchase accounting for the above acquisition, the Company recorded intangible assets of $101,000, all of which was associated with licenses that allow for the retail sales of cannabis. The amortization period for licenses was determined to be 15 years, which reasonably reflects the useful lives of the assets. 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 $ 36,498 Debt Payable ii 25,000 Shares Issued iii 814 19,217 Contingent Consideration iv 39,041 Total 814 $ 119,756 Pursuant to the terms of the Definitive Agreement (“PA Natural Agreement”), Ayr satisfied the purchase price of $119,756 for PA Natural through the following: i. $36,498 of the PA Natural purchase price in the form of cash consideration and settlement of the final working capital which is deemed immaterial; ii. $25,000 of the PA Natural purchase price in the form of a promissory note payable; iii. $19,217 of the PA Natural purchase price in the form of 814 Exchangeable Shares, these shares have contractual restrictions on their ability to be sold for four to twelve months (the “PA Natural Lock-Up Provision”). The fair value of the shares was determined by the share price on the CSE at the date of acquisition and an 11 % discount rate attributed to the contractual restrictions; and 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. 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) 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. The 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 $ 580 $ — $ 580 Inventory, net 3,237 — 3,237 Prepaid expenses and other assets 67 — 67 Intangible assets - licenses/permits 172,000 — 172,000 Intangible assets - host community agreements — 1,000 1,000 Property, plant, and equipment 30,699 — 30,699 Right-of-use assets - operating 13,234 — 13,234 Deposits 194 — 194 Total assets acquired at fair value 220,011 1,000 221,011 LIABILITIES ASSUMED Trade payables 1,658 — 1,658 Accrued liabilities 445 — 445 Advance from related parties 22,750 — 22,750 Lease liabilities - operating 13,026 — 13,026 Debts payable 3,000 — 3,000 Total liabilities assumed at fair value 40,879 40,879 Goodwill 11,524 — 11,524 Consideration transferred $ 190,656 $ 1,000 $ 191,656 As part of the purchase accounting for the above acquisitions, the Company recorded intangible assets of $172,000, which was associated with a license and host community agreement that allow for the processing, production, and retail sales of cannabis. The amortization period for the licenses and host community agreement was determined to be 15 years, which reasonably reflects the useful lives of the assets. 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) 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 Debt Payable ii 29,491 Shares Issued iii 1,511 29,744 Contingent Consideration iv 89,561 Total 1,511 $ 190,656 Pursuant to the terms of the Definitive Agreement (“GSD Agreement”), Ayr satisfied the purchase price of $190,656 for GSD through the following: i. $41,860 of the GSD purchase price in the form of cash consideration and settlement of the final working capital, which is deemed immaterial; ii. $29,491 of the GSD purchase price in the form of a promissory note payable; iii. $29,744 of the GSD purchase price in the form of 1,511 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 on the CSE 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. 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) 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, 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 Blue Camo LLC (“ 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, Equity Shares, Exchangeable Shares, contingent consideration, purchase consideration payable, and replacement options issued. 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) 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 $ 8,237 $ — $ — $ 14,887 Accounts receivable — 26 — 6 32 Inventory, net 46,842 10,289 — 313 57,444 Prepaid expenses and other assets 818 464 — 97 1,379 Intangible assets - licenses/permits 270,000 220,000 — 12 490,012 Intangible assets - right-to-use licenses — — 13,255 — 13,255 Property, plant, and equipment 56,746 10,899 3,910 493 72,048 Right-of-use assets - operating 11,750 15,824 — 3,489 31,063 Right-of-use assets - finance, net 379 13 — — 392 Deposits 619 166 — 252 1,037 Total assets acquired at fair value 393,804 265,918 17,165 4,662 681,549 LIABILITIES ASSUMED Trade payables 3,274 2,901 — — 6,175 Accrued liabilities 5,383 2,720 — 15 8,118 Income tax payable 1,819 — — — 1,819 Deferred tax liabilities 71,963 — — — 71,963 Lease liabilities - operating 11,693 15,825 — 3,497 31,015 Lease liabilities - finance 379 13 — — 392 Debts payable 7,479 — — — 7,479 Accrued interest 153 — — — 153 Total liabilities assumed at fair value 102,143 21,459 — 3,512 127,114 Goodwill 114,683 30,581 — — 145,264 Consideration transferred $ 406,344 $ 275,040 $ 17,165 $ 1,150 $ 699,699 As part of the purchase accounting for the above acquisitions, the Company recorded intangible assets of $503,267, which was associated with licenses and permits that allow for the processing, production, and retail sales of cannabis. The amortization period for the licenses and permits was determined to be 15 years, which reasonably reflects the useful lives of the assets. 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) Liberty Business Combination DJMMJ Investments LLC (“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 12,671 $ 399,499 Purchase Consideration Payable ii 76 2,392 Replacement Options Issued iii 248 4,453 Total 12,995 $ 406,344 Pursuant to the terms of the Definitive Agreement (“Liberty Agreement”), Ayr satisfied the purchase price of $406,344 for Liberty through the following: i. $399,499 of the Liberty purchase price in the form of 12,671 Subordinate Shares of the Company in a stock-for-stock combination. Liberty shareholders received 0.03683 Ayr shares for each Liberty share held; ii. $2,392 of the Liberty purchase price in the form of 76 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.See Note 13 for more information; and iii. $4,453 of the Liberty purchase price in the form of 248 replacement options issued that were fully vested. 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) 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 $ 9,733 Debt Payable ii 22,505 Shares Issued iii 4,570 125,187 Contingent Consideration iv 117,615 Total 4,570 $ 275,040 Pursuant to the terms of the Definitive Agreement (“Oasis Agreement”), Ayr satisfied the purchase price of $275,040 for Oasis through the following: i. $9,733 of the Oasis purchase price in the form of cash consideration; ii. $ 22,505 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. $125,187 of the Oasis purchase price in the form of 4,570 Exchangeable Shares, that are exchangeable on a one-for-one basis into an equal number of Subordinate Shares of the Company. 2,000 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 eighteen months 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. 4. BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Continued) 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 asset acquisition was $17,165 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 business combination was $ 1,150 , paid in cash. |
VARIABLE INTEREST ENTITIES ("VI
VARIABLE INTEREST ENTITIES ("VIE") | 12 Months Ended |
Dec. 31, 2022 | |
VARIABLE INTEREST ENTITIES ("VIE") | |
VARIABLE INTEREST ENTITIES ("VIE") | 5. VARIABLE INTEREST ENTITIES (“VIE”) Since February 2022 and through December 31, 2022, the Company has the ability to direct the activities of two entities, Tahoe Hydroponics Company, LLC and NV Green, Inc., collectively (“TH/NVG”), through a management services and equity purchase agreement, consummated in February 2022, thereby classifying the entities as VIEs, until certain conditions are met, at which time the Company will evaluate business combination accounting. The assets of TH/NVG can only be used to settle its liabilities and under the applicable agreements TH/NVG retains ultimate legal responsibilities for its operations. The fair value of identifiable assets acquired and liabilities assumed as of the acquisition date are as follows: Tahoe Hydro/NV Green ASSETS ACQUIRED Cash $ 675 Accounts receivable 77 Inventory, net 6,969 Due from related party 203 Prepaid expenses and other assets 41 Intangible assets - trade name/brand 6,400 Property, plant, and equipment 2,950 Right-of-use assets - operating 158 Total assets acquired at fair value 17,473 LIABILITIES ASSUMED Trade payables 373 Accrued liabilities 281 Lease liabilities - operating 158 Total liabilities assumed at fair value 812 Goodwill 208 Purchase consideration $ 16,869 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”). The Company determined that it possesses the power to direct activities through the management agreement, thereby classifying the entity as a VIE. On October 5, 2022, Parma was awarded a Certificate of Operation by the state of Ohio and began operations. 5. VARIABLE INTEREST ENTITIES (“VIE”) (Continued) The following tables present the summarized financial information about the Company’s consolidated VIEs which are included in the balance sheet and statement of operations as of and for the year ended December 31, 2022. All of these entities were determined to be VIEs as the Company possess the power to direct activities and obligation to absorb losses through management services agreements (“MSAs”). TH/NVG Parma Current assets $ 5,248 $ 10,751 Non-current assets 6,582 14,634 Total assets 11,830 25,385 Current liabilities 1,033 14,092 Non-current liabilities 898 1,952 Total liabilities 1,931 16,044 Noncontrolling interest 7,528 (5,528) Equity attributable to Ayr Wellness Inc. 2,371 14,869 Total liabilities and equity $ 11,830 $ 25,385 TH/NVG Parma Revenues, net of discounts $ 2,316 $ — Net income (loss) attributable to noncontrolling interest (4,491) (5,528) Net loss attributable to Ayr Wellness Inc. — — Net loss $ (4,491) $ (5,528) TH/NVG Parma Noncontrolling interest at January 1, 2021 $ — $ — (no activity) — — Noncontrolling interest at December 31, 2021 — — Total purchase consideration $ 16,868 — Working capital adjustment presented as consideration payable (4,849) — Net loss during the period (4,491) (5,528) Noncontrolling interest at December 31, 2022 $ 7,528 $ (5,528) |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORY | |
INVENTORY | 6. INVENTORY The Company’s inventory includes the following: December 31, December 31, 2022 2021 Materials, supplies, and packaging $ 11,111 $ 12,805 Work in process 76,700 56,858 Finished goods 27,242 23,125 Incremental costs to acquire cannabis inventory in business combinations, net – 575 Total inventory $ 115,053 $ 93,363 The amount of inventory included in cost of goods sold during the years ended December 31, 2022 and 2021, was $228,776 and $156,064 respectively. The Company reviews inventory on hand for estimated obsolescence or unmarketable items, as compared to future demand requirements and the shelf life of the various products. Based on the review, the Company records inventory write-downs, when necessary, when costs exceed expected net realizable value. For the years ended December 31, 2022 and 2021, $6,216 and $43,864 respectively, of expenses relating to the incremental costs to acquire cannabis inventory in business combinations are recognized in cost of goods sold 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, 2022 | |
PROPERTY, PLANT, AND EQUIPMENT | |
PROPERTY, PLANT, AND EQUIPMENT | 7. PROPERTY, PLANT, AND EQUIPMENT As of December 31, 2022, and December 31, 2021, property, plant, and equipment, net consisted of the following: December 31, December 31, 2022 2021 Furniture and equipment $ 58,682 $ 26,311 Auto and trucks 1,883 1,021 Buildings 91,233 65,820 Leasehold improvements 172,765 78,283 Land 14,165 17,892 Construction in progress 11,578 95,853 Total 350,306 285,180 Less: Accumulated depreciation and amortization 23,388 9,958 Total property, plant and equipment, net $ 326,918 $ 275,222 Capitalized interest for the year ended December 31, 2022 and 2021, totaled $14,927 and $8,373, respectively. Depreciation and amortization expense for the year ended December 31, 2022 and 2021, totaled $16,004 and $6,999, respectively, of which $11,550 and $5,078, respectively, is included in cost of goods sold. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | 8. GOODWILL AND INTANGIBLE ASSETS Goodwill As of December 31, 2022, and December 31, 2021, the Company’s goodwill is as follows: As of January 1, 2021 $ 57,964 Acquired through business combinations 171,946 As of December 31, 2021 229,910 Acquired through business combinations and initial consolidation VIEs 12,729 Impairment of goodwill (148,531) As of December 31, 2022 $ 94,108 Intangible Assets During the year ended December 31, 2022 an entity co-owned by the Company, was awarded a provisional Disproportionately Impacted Area cultivator license in Connecticut. The Company recorded an intangible asset of $3,000 in connection with the cash payment for the cost of the provisional license. Amortization expense is recorded within cost of goods sold and total operating expenses. The amount in cost of goods sold for the years ended December 31, 2022 and 2021, was $19,574 and $12,047, respectively. The following table represents intangible assets, net accumulated amortization: Useful life (# of years) December 31, 2022 December 31, 2021 Licenses/permits 15 $ 887,732 $ 935,265 Right-to-use licenses 15 17,717 12,592 Host community agreements 15 29,494 29,912 Trade name / brand 5 3,784 1,146 Total $ 938,727 $ 978,915 Amortization Expense 2023 $ 72,437 2024 72,149 2025 71,959 2026 71,959 2027 71,959 2028 and beyond 575,264 Total $ 935,727 Impairment of goodwill As part of the annual impairment test as of December 31, 2022, a one-step quantitative impairment test was performed over all its reporting units, which includes goodwill acquired through various acquisitions and the initial consolidation of VIEs. The following significant assumptions were applied in the determination of the fair value of each reporting unit using a discounted cash flow model: ● Cash flows: estimated cash flows were projected based on actual operating results from internal sources, as well as industry and market trends. The forecasts were extended to a total of five years (with a terminal value thereafter); ● Terminal value growth rate: The terminal growth rate of 3% was based on historical and projected consumer price inflation, historical and projected economic indicators and projected industry growth; ● Post-tax discount rate: the post-tax discount rate of 18% is reflective of the weighted average cost of capital (“WACC”). The WACC of 18% was estimated based on the risk-free rate, equity risk premium, beta premium, and after-tax cost of debt based on corporate bond yields; and ● Tax rate: the tax rates used in determining future cash flows were those substantively enacted at the respective valuation date. 8. GOODWILL AND INTANGIBLE ASSETS (Continued) Intangible Assets (Continued) Impairment of goodwill The Company compared the fair value of each reporting unit to its carrying value to determine whether the carrying value exceeded fair value. Due to changes in market expectations as a result of increased competition and price compression at the reporting units, the Company recorded impairment of goodwill of $148,531 for the year ended December 31, 2022, reducing the carrying value of goodwill acquired across all reporting units. The remaining goodwill of $94,108 relates to the Company’s Florida reporting unit. Long-lived assets The Company evaluates the recoverability of long-lived assets, including finite-lived intangible assets, to determine whether events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The Company determined that changes in market expectations as a result of increased competition and price compression at the reporting units were indicators that an impairment test was required as of December 31, 2022. The impairment test for long-lived assets is a three-step test, whereby management first determines the grouping of long-lived assets to be held and used, and next determines the recoverable amount by calculating the future undiscounted cash flows of each asset group, which is performed prior to the goodwill impairment test described above. If the recoverable amount is lower than the carrying value of the asset group, then impairment is indicated. The Company then determines the fair value of the asset group and allocates the impairment to the assets. The Company compared the carrying value of the asset group to its future undiscounted cash flows and determined that the carrying value did not exceed the future undiscounted cash flows. As such, the Company was not required to perform the impairment loss calculation (Step 3). The future undiscounted cash flows of the specific assets that were evaluated for impairment were determined using the multi period excess earnings method based on the following key assumption: ● Cash flows: estimated cash flows were projected based on actual operating results from internal sources,net of interest and depreciation/amortization, as well as industry and market trends. The forecasts were extended through the estimated useful lives of the assets. |
RIGHT-OF-USE ASSETS & LEASE LIA
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | |
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | 9. RIGHT-OF-USE ASSETS & LEASE LIABILITIES Information related to operating and finance leases is as follows: December 31, 2022 December 31, 2021 Operating Leases Finance Leases Operating Leases Finance Leases Incremental borrowing rate (weighted average) 11.98 % 9.68 % 12.66 % 11.76 % Weighted average remaining lease term 13.04 yrs 4.90 yrs 14.01 yrs 2.81 yrs The maturities of the contractual lease liabilities as of December 31, 2022, are as follows: Operating Leases Finance Leases Total 2023 $ 28,694 $ 12,862 $ 41,556 2024 28,362 11,395 39,757 2025 27,919 5,466 33,385 2026 27,276 3,390 30,666 2027 26,007 2,302 28,309 2028 and beyond 236,700 8,356 245,056 Total undiscounted lease liabilities 374,958 43,771 418,729 Impact of discounting (232,067) (9,029) (241,096) Total present value of minimum lease payments $ 142,891 $ 34,742 $ 177,633 In June 2022, the Company completed a sale and lease back transaction to sell two cultivation and processing facilities for a purchase price of $28,107, excluding transaction costs. The Company leased back the facilities and continues to operate and manage them under a long-term agreement. The transaction qualified for sale-leaseback treatment under ASC 842. As a result of the sale, the Company divested of $22,206 of buildings and improvements, and $3,728 of land. The Company recognized a gain on sale related to the transaction of $2,173 which was recorded within gain on sale of assets on the statements of operations. The lease was recorded as an operating lease and resulted in a lease liability of $25,331 and an ROU asset of $25,339, which was recorded net of a $750 work allowance. In June 2022, the Company closed on a real estate financing transaction resulting in $27,599 of cash proceeds for the sale and simultaneous leaseback of a cultivation facility. The transaction includes a construction financing allowance of up to $14,187, which will increase the base rent at the time the construction financing is drawn down. The initial term of the agreement is fifteen years, with two five-year options to renew. The initial payments are equal to 10% of the sum of the purchase price and increases when a draw is made on the construction finance allowance, payable monthly. In addition, a 3% increase in payments will be applied annually after the first year. The transaction was classified as a finance lease and control was never transferred to the buyer-lessor accordingly the transaction did not qualify for sale-leaseback treatment. Therefore, the Company is deemed to own this real estate and will continue to depreciate the assets and reflect the properties on the Company’s balance sheet. The Company recorded a financing obligation for the consideration received from the buyer-lessor, and future cash lease payments will be allocated between interest expense and reduction to the financing obligation, as applicable. As the transactions did not qualify for sale-leaseback treatment, under ASC 842, Leases, no gain or loss was recognized. 9. RIGHT-OF-USE ASSETS & LEASE LIABILITIES (Continued) Payments related to leases during the years ended December 31, 2022, and 2021, are as follows: Year Ended December 31, 2022 December 31, 2021 Lease liabilities - operating Lease liabilities - operating expense, COGS $ 8,946 $ 4,818 Lease liabilities - operating expense, G&A 14,795 8,518 Lease liabilities - finance Amortization of right-of-use assets, COGS 4,858 1,050 Amortization of right-of-use assets, G&A 188 76 Interest on lease liabilities - finance, COGS 2,525 720 Interest on lease liabilities - finance, G&A 58 320 Total lease expense $ 31,370 $ 15,502 |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND BALANCES | 12 Months Ended |
Dec. 31, 2022 | |
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. 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 paid to the related party also reimbursed them for 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, 2022 and 2021, $698 and $935 was included in prepaid expenses, a majority of which is for a letter of credit for an operating lease. Lease fees included in the operating lease during the years ended December 31, 2022 and 2021, were $861 and $575. During the years ended December 31, 2022 and 2021, included in general and administrative expenses are management fees of $12 and $11,085. During the years ended December 31, 2022 and 2021, the Company incurred fees from a company partially owned by a board member of Ayr. The total incurred fees were $54 and $82 of office expenses, $392 and $1,230 of development fees, $920 and $900 of rental fees, and $165 and $242 of interest expense, respectively, for the years ended December 31, 2022 and 2021. Additionally, the board member was issued 50 Equity Shares, valued at $707 on the grant date, related to a consulting agreement with the Company for services rendered. Refer below to the debts payable and senior secured notes and share capital notes for additional information regarding the debts payable to related parties and non-cash stock-based compensation plan, respectively, for the years ended December 31, 2022, and 2021. |
DEBTS PAYABLE AND SENIOR SECURE
DEBTS PAYABLE AND SENIOR SECURED NOTES | 12 Months Ended |
Dec. 31, 2022 | |
DEBTS PAYABLE AND SENIOR SECURED NOTES | |
DEBTS PAYABLE AND SENIOR SECURED NOTES | 11. DEBTS PAYABLE AND SENIOR SECURED NOTES Senior Secured Notes On November 12, 2021, the Company completed a private placement offering of approximately $133,250 aggregate principal amount of secured promissory notes at a premium price, resulting in approximately $147,000 of proceeds due December 2024, with a resulting yield-to-maturity of 9.8%. The notes will be considered additional notes under the indenture governing the Company’s existing notes which were entered into on December 10, 2020 (“December 2020 Notes”). Senior secured notes As of January 1, 2021 $ 103,653 Debt issuance costs (2,142) Debt issuance costs amortized 1,744 Senior secured notes issued 133,250 Senior secured notes premium 9,305 Senior secured notes premium amortized (402) As of December 31, 2021 $ 245,408 Debt issuance costs amortized 2,292 Senior secured notes premium amortized (3,018) Total senior secured notes classified as non-current payable as of December 31, 2022 $ 244,682 Total accrued interest payable related to senior secured notes as of December 31, 2022 $ — Debt Payable At December 31, 2022 and 2021, senior secured notes consisted of the following: Debts payable As of January 1, 2021 $ 62,233 Discounted as of January 31, 2021 1,280 Incurred through combinations and acquisitions 87,475 Converted to equity (7,430) Less: repayment (8,749) Less: discounted to fair value (951) As of December 31, 2021 133,858 Discounted as of December 31, 2021 951 Incurred through earn-out provision 14,934 Debt issued 68,000 Construction financing 36,303 Less: repayment (17,924) Total debts payable, undiscounted as of December 31, 2022 236,122 Less: discounted to fair value (598) Total debts payable as of December 31, 2022 $ 235,524 Total accrued interest payable related to debts payable as of December 31, 2022 $ 7,954 11. DEBTS PAYABLE AND SENIOR SECURED NOTES (Continued) Debt Payable (Continued) The details of debts payable were as follows: December 31, 2022 Related party debt Non-related party debt Total debt $ 24,022 $ 212,100 $ 236,122 Less: current portion 1,409 39,114 40,523 Total non-current debt, undiscounted 22,613 172,986 195,599 Less: discount to fair value — (598) (598) Total non-current debt $ 22,613 $ 172,388 $ 195,001 The following table presents the future debt obligations as of December 31, 2022: Future debt obligations (per year) 2023 $ 40,523 2024 94,392 2025 33,282 2026 1,874 2027 29,870 2028 and beyond 36,181 Total debt obligations $ 236,122 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 Naturals, Inc. (“Sira”), the Company issued a related-party promissory note in the amount of $5,000 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 payable monthly. Pursuant to the agreement to acquire The Canopy NV, LLC (“Canopy”), the Company issued a related-party promissory note in the amount of $4,500 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. As of December 31, 2022, the Company paid the note in full. Pursuant to the agreement to acquire Washoe Wellness, LLC (“Washoe”), the Company issued a related-party promissory note in the amount of $5,640 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 $6,562 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 deferral of principal. On March 28, 2022, the Company amended a non-related party note of $2,525 that was assumed during the acquisition of Washoe, which was acquired during May 2019. The loan was amended to extend the maturity date an additional year, while the payment terms and interest rate remained the same. Under ASC 470, this was a debt modification. As of December 31, 2022, the Company paid the notes in full. Pursuant to the agreement to acquire LivFree Wellness, LLC (“LivFree”), the Company issued a related-party promissory note in the amount of $20,000 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. Principal and interest is payable at maturity. 11. DEBTS PAYABLE AND SENIOR SECURED NOTES (Continued) Debt Payable (Continued) Pursuant to the agreement to acquire CannaPunch of Nevada LLC (“CannaPunch”), the Company issued a related-party promissory note in the amount of $2,000 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. Principal and interest is payable at maturity. Pursuant to the Oasis Agreement, the Company issued non-related party promissory notes in the amount of $22,505 to the former members of Oasis that are secured by all the membership interests in Oasis. The notes mature four years from closing date of March 2021 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 $29,491 to the former members of GSD that are secured by all the assets of GSD. The note matures three years from the closing date of September 2021 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 that matures on August 6, 2023, with a 9% annual interest rate.Interest is payable quarterly. Pursuant to the PA Natural Agreement, the Company issued non-related party promissory notes in the amount of $25,000 to the former members of PA Natural that are secured by all the assets of and a pledge of membership interests in PA Natural. The notes mature three years from the closing date of October 2021 with an 8% annual interest payable quarterly. On March 1, 2022, pursuant to the PA Natural Agreement, the Company issued non-related party promissory notes in the amount of $14,934 for earnout consideration. The notes are secured by all the assets and a pledge of the Company’s membership interests in PA Natural. The notes mature three years from the date of the agreement with an 8.0% annual interest rate payable quarterly. On March 17, 2022, the Company entered into a loan agreement with a community bank for total proceeds of $26,200, net of financing costs of $287, with a 4.625% annual interest rate payable monthly. The loan is secured with a first mortgage lien on certain real property in Massachusetts and matures five years from the date of the agreement, with an option to extend for an additional five years. The loan is subject to certain financial and other covenants, that we are in compliance with as of December 31, 2022. On May 16, 2022, the Company entered into a loan agreement with a community bank for total proceeds of $25,800, with an annual interest rate of Prime Rate plus 1.5%, floating, with a 5.0% floor (the rate is currently 9.0% as of December 31, 2022). The loan is secured with a first mortgage lien on certain real property and matures two years from the date of the agreement. The loan is subject to certain financial and other covenants, that we are in compliance with as of December 31, 2022. Interest expense associated with related party debt payable for the years ended December 31, 2022, and 2021, was $1,507 and $1,767, 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 and accrued interest of $153 with a 12% annual interest rate. The Company had the right to convert the debt into Equity Shares if the share price met a minimum trading price. The fair value of the embedded derivative related to this conversion feature was $3,154. On March 4, 2021, the Company called the notes to either be paid out or converted into Equity Shares over a thirty-day period. During the year ended December 31, 2021, the debt was fully settled as $50 was paid and 232 Equity 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, 2022 | |
SHARE CAPITAL | |
SHARE CAPITAL | 12. SHARE CAPITAL The following activity occurred during the year ended December 31, 2022: ● 5 Equity Shares repurchased in 2021 were cancelled, and 82 Equity Shares were repurchased and held in the current year. ● In relation to the vesting of 2,135 RSUs, 1,459 Equity Shares were issued due to net settlement. o 78 shares were forfeited during the year. ● 33 Equity Shares were issued in connection with options exercised. ● 1,029 Equity Shares were issued in connection with the earn-out provision related to the acquisition of PA Natural. ● 908 Exchangeable Shares were exchanged for 908 Equity Shares related to the purchase considerations to the CannTech PA, LLC acquisition in 2020. ● 329 Exchangeable Shares were issued in connection with the Cultivauna Acquisition. ● 353 Exchangeable Shares were issued in connection with the Herbal Remedies Acquisition. ● 76 Equity Shares were issued to a related party for services rendered . ● 1,027 Exchangeable Shares were exchanged for 1,027 Equity Shares related to the Oasis acquisition. ● 71 Exchangeable Shares were converted to Equity Shares. 12. SHARE CAPITAL (Continued) The following activity occurred during the year ended December 31, 2021: ● 586 Equity Shares were repurchased of which 82 were cancelled. ● 7,203 Equity Shares were issued in connection with the exercise of 7,555 Warrants, of which 355 shares were issued in relation with cashless conversion feature (net share settlement). 57 Warrants were forfeited on September 30, 2021 related to the 2021 Warrant Incentive Program. ● 135 Equity Shares were issued in connection with the conversion of 1,385 Rights, which were each redeemed for one tenth ( 1/10 ) of one Equity Share. Rights were trading on the CSE under the symbol “AYR.RT” until they expired on May 25, 2021. ● 9,012 Exchangeable Shares were converted into Equity Shares as of December 31, 2021. ● On January 14, 2021, the Company closed its equity offering of 4,600 Equity Shares at a price of $26.89 per share for total gross proceeds of approximately $123,714 , net of $5,672 of commission and expenses. ● In relation to the exercise of 1,916 RSUs, 926 Equity Shares were issued due to net settlement share. ● 37 Equity Shares were issued in connection with options exercised as of December 31, 2021. ● As part of the Acquisitions, the Company issued: o 12,747 Equity Shares as part of the purchase consideration of Liberty. o 4,570 Exchangeable Shares as part of the purchase consideration of Oasis. 2,000 of the shares are in escrow and payable upon reaching certain cultivation targets at the facility under development. o 1,511 Equity Shares as part of the purchase consideration of GSD. o 814 Equity Shares as part of the purchase consideration of PA Natural. Warrants The average remaining life of Warrants is 1.4 years in 2022 (2021:2.4 years) with an aggregate intrinsic value of $nil in 2022 (2021: $16,400). The Warrants have an exercises price of $9.07US. The number of Warrants outstanding as of December 31, 2022, and December 31, 2021, is: Weighted Average Fair Number of warrants outstanding Number Value Balance as of January 1, 2021 10,486 $ 6,516 Exercise of warrants (7,555) (4,694) Forfeitures of warrants, due to expiration (57) (36) Balance as of December 31, 2021 2,874 1,786 No activity Balance as of December 31, 2022 2,874 $ 1,786 |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
DERIVATIVE LIABILITIES | |
DERIVATIVE LIABILITIES | 13. DERIVATIVE LIABILITIES Purchase Consideration and Contingent Consideration 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. As of December 31, 2022 and December 31, 2021, the fair value was $26,652 and $25,316, respectively. The earn-out provisions related to the acquisitions of Oasis, GSD, PA Natural, and Cultivauna are measured at fair value based on unobservable inputs and are considered a Level 3 measurement. The provision uses a Monte-Carlo simulation to estimate the fair value through the end of the earn-out period based on the Company’s share price at the acquisition date and other inputs based on other observable market data.Refer to Note 16 for assumptions used. As of December 31, 2022, the fair value of the Oasis, GSD, and Cultivauna earn-out provisions were $nil, $63,429, and $9 respectively. As of December 31, 2021, the fair value of the Oasis, GSD, and PA Natural earn-out provisions were $28,667, $91,671, and $39,868, respectively. In March 2022, the Company paid and settled the earn-out provision related to the PA Natural acquisition. The Company paid $10,000 of cash, issued $14,934 of promissory notes, and issued $11,748 of Equity Shares, and recognized a gain during the period of $3,186 on the change in fair value of the contingent consideration obligation. As of December 31, 2022 the contingent consideration related to Sira and Cultivauna ($26,661) represent a non-current liability while the consideration related to GSD represent a current liability ($63,429). In May 2022, the Company acquired Herbal Remedies and recorded a fair value adjustment on the purchase consideration settlement of $1,780 related to the issuance of a promissory note. The fair value adjustment relating to derivative liabilities has been included in the statements of operations under “Fair value gain on financial liabilities” as detailed below: Year Ended December 31, December 31, 2022 2021 Gain from FV adjustment on contingent consideration $ 61,675 $ 83,657 Gain (loss) from FV adjustment on purchase consideration settlement (1,780) 102 Gain from settlement of contingent consideration 3,186 — Total $ 63,081 $ 83,759 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 14. STOCK-BASED COMPENSATION The Company has adopted an equity incentive plan, as amended on May 2, 2021 (“The Plan”), 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 seeking to align 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. The maximum number of Equity Shares that may be issued under the Plan and any other security-based compensation agreements shall not exceed 12% of the total number of fully diluted shares issued and outstanding from time to time. In addition, the Company 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 Equity Shares that may be awarded under the 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, 2022 and 2021, 2,135 Equity Shares vested, of which 1,459 were issued due to net settlement, and 1,916 of which 925 were issued due to net settlement, respectively. During the years ended December 31, 2022 and 2021, the result of the net settlement was 676 Equity Shares were withheld with a total value of $5,258, and 991 Equity Shares were withheld with a total value of $28,536 to pay income taxes on behalf of the grantees, respectively. As of December 31, 2022, the average remaining life of unvested RSUs is one year and three months with an expected expense over the next 12 months of $21,538 with an aggregate intrinsic value of $16,135 using the stock price as of December 31, 2022, and as of December 31, 2021, the average remaining life of unvested RSUs is one year with an expected expense over the next 12 months of $37,910, with an aggregate intrinsic value of $113,417 using the stock price as of December 31, 2021. Weighted Number of Average Grant Shares Date Fair Value RSUs outstanding and nonvested, as of January 1, 2021 4,235 $ 16.63 Granted 5,781 17.79 Vested (1,916) 18.44 RSUs outstanding and nonvested, as of December 31, 2021 8,100 18.83 Granted 741 6.45 Vested (2,135) 18.58 Forfeited (78) 15.90 RSUs outstanding and nonvested, as of December 31, 2022 6,628 $ 17.56 14. STOCK-BASED COMPENSATION (Continued) Options Other than as described below, no options have been granted during either of the years ended December 31, 2022 and 2021.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 $4,453 in relation to 248 options, which were fully vested as of the date of acquisition. The range of exercise price is between $8.47 and $23.66. As of December 31, 2022 and 2021,the weighted average remaining life of the options is under eight months and one year , respectively, with an aggregate intrinsic value of $nil and $400, respectively. Number of Weighted Average Options Fair Value Balance as of January 1, 2021 — $ — Replacement options issued 248 17.93 Options exercised (37) 17.93 Options sold to cover income taxes (13) 17.93 Balance as of December 31, 2021 198 17.93 Options exercised (33) 17.93 Balance as of December 31, 2022 165 17.93 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022, 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, 2022, 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 $60,217 of open commitments to contractors. As of December 31, 2022, the Company did not have any significant construction commitments. |
FINANCIAL RISK FACTORS
FINANCIAL RISK FACTORS | 12 Months Ended |
Dec. 31, 2022 | |
FINANCIAL RISK FACTORS | |
FINANCIAL RISK FACTORS | 16. FINANCIAL RISK FACTORS (a) Fair value Fair value is the price that would be received to sell/acquire an asset or paid to transfer/assume 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 nonfinancial 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 no transfers between levels in the hierarchy during the years ended December 31, 2022 and 2021. For financial assets and liabilities not measured at fair value, their carrying value is considered to approximate fair value due to their market terms. The carrying values of cash, deposits, accounts receivable, 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, 2022 December 31,2021 Financial liabilities Contingent consideration Level 3 $ 90,090 $ 185,522 16. FINANCIAL RISK FACTORS (Continued) (a) Fair value (Continued) The following table summarizes the range of inputs used at the initial and subsequent measurement dates to value the contingent consideration for the year ended December 31, 2022 in the table above: Equity Volatility 55.65 - 85.05 % Revenue Volatility 7.46 - 23.96 % Risk-free Rate 1.62 - 4.67 % Revenue Risk Premium 5.58 - 9.61 % Credit Risk Rate 10.50 - 19.10 % Discount Rate 8.40 - 10.00 % (b) 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 are predominantly at 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. |
TAXATION
TAXATION | 12 Months Ended |
Dec. 31, 2022 | |
TAXATION | |
TAXATION | 17. TAXATION As the Company operates in the legal cannabis industry, the Company is subject to the limits of Section 280E for United States federal income tax purposes as well as state income tax purposes for all states except for Arizona and Massachusetts. Under Section 280E, the Company is generally only allowed to deduct expenses directly related to cost of goods sold. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under Section 280E. Therefore, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income or loss recognized for financial reporting purposes. The Company is treated as a United States corporation for the United States federal income tax purposes under Section 7874 of the Internal Revenue Code, as amended (“Section 7874”) and is subject to United States federal income tax on its worldwide income. However, for Canadian tax purposes, the Company, regardless of any application of Section 7874, is treated as a Canadian resident company (as defined in the Income Tax Act (Canada) (the “ITA”) for Canadian income tax purposes. As a result, the Company is subject to taxation both in Canada and the United States. The Company is also subject to state income taxation in Massachusetts, Pennsylvania, Florida, Arizona, Illinois, Nevada, New Jersey, and Ohio. Income Tax is accounted for in accordance with ASC 740, Income Taxes. 17. TAXATION (Continued) For the years ended December 31, 2022, and 2021 income taxes expense consisted of: Year Ended 2022 2021 Current expense: Federal $ 38,053 $ 38,461 State 8,881 7,359 Foreign – – Total current expense: 46,934 45,820 Deferred expense (benefit): Federal (5,701) (13,414) State 4,143 (3,145) Foreign (232) (2,981) Change in valuation allowance 232 2,981 Total deferred (benefit): (1,558) (16,559) Total income tax expense: $ 45,376 $ 29,261 The difference between the income tax expense for the years ended December 31, 2022 and 2021 and the expected income taxes based on the statutory tax rate applied to income (loss) before income tax as follows: Year Ended 2022 2021 Income (loss) before income taxes and noncontrolling interest $ (210,109) $ 12,309 Statutory tax rates 21 % 21 % Expected income tax recovery (44,123) 2,585 Difference in foreign tax rates (4,311) (672) State Taxes 13,024 4,982 Foreign exchange gain or loss 146 – Impairment loss 31,191 – Translation Adjustment 669 – Unrealized change in fair value of financial liabilities (13,248) – Acquisition costs 147 1,857 Interest income inclusion 4,244 – Non-deductible expenses 61,072 18,235 Amortization of debt premium (815) – Tax rate change – (767) Prior year adjustment (2,877) – Valuation allowance 232 2,981 Other 25 60 Total income tax expense: $ 45,376 $ 29,261 17. TAXATION (Continued) At December 31, 2022 and 2021, the components of deferred tax assets and liabilities were as follows: Year Ended 2022 2021 Deferred tax assets Net operating losses $ 9,515 $ 7,967 Share issuance costs 1,311 2,245 Share based compensation - included in cost of good sold 1,385 – Investments – 34 Inventory 1,389 153 Other assets 763 1,052 Total deferred tax assets 14,363 11,451 Valuation allowance (8,784) (8,552) Total deferred tax assets 5,579 2,899 Deferred tax liabilities Depreciation - included in cost of good sold (7,173) (6,071) Amortization - included in cost of good sold (65,642) (64,197) Debt financing costs (1,202) (1,821) Other liabilities (85) (891) Total deferred tax liability (74,102) (72,980) Net deferred tax liability $ (68,523) $ (70,081) 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 $232 and $2,981, for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021,the Company had $30,538 and $29,507, respectively of gross Canadian net operating loss carryforwards which will begin to expire in 2037. 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, 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.For the years ended December 31, 2022 and 2021, the Company did not record an accrual for uncertain tax positions. 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. The Company 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. Congress passed the Inflation Reduction Act in August 2022. The Company does not anticipate any impact to its income tax provision as a result of the new legislation. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022, the Company terminated the previously announced proposed acquisition of Gentle Ventures, LLC d/b/a Dispensary 33 (“Dispensary 33”) and certain of its affiliates that collectively own and operate two licensed retail dispensaries in Chicago, Illinois. Following the mutual termination, the Company will no longer be required to pay the previously announced purchase consideration of $55,000 upfront, including $12,000 of cash, $3,000 of sellers notes and $40,000 of stock. Subsequent to December 31, 2022, the Company signed a definitive agreement to sell Blue Camo, LLC (“Blue Camo”). The sale includes three Oasis-branded dispensaries in the greater Phoenix area, a cultivation and processing facility in Chandler, a cultivation facility in Phoenix, and Willcox OC, LLC, a joint venture developing an outdoor cultivation facility. Total consideration consists of $20,000 in cash before working capital adjustments and the assumption of lease obligations eliminating approximately $15,000 in long-term lease liabilities. In a separate arrangement, all potential earn-out consideration and debt outstanding related to the Q1 2021 purchase of Blue Camo are to be eliminated, reducing the Company’s long-term debt by $22,500. The sale is subject to certain closing conditions and regulatory approvals. Although the Company expects to receive this variance approval, there is no assurance that it will be granted. As of December 31, 2022, Blue Camo was classified as held and used as it did not meet the accounting criteria to be classified as held for sale in accordance with ASC 205. Management will revisit this assessment as of March 31, 2023 as it relates to the classification of held for sale and the potential for a net loss on sale to be recognized of approximately $175,000 based on the carrying value of Blue Camo. Refer to Note 8 ‘Goodwill and Intangible Assets’ for impairment procedures performed as of December 31, 2022. Subsequent to December 31, 2022, the Company entered into an option agreement with Daily Releaf, LLC (“Daily Releaf”) and Heaven Wellness, LLC (“Heaven Wellness”), each provisionally licensed to operate a medical marijuana dispensary in Ohio. The agreement provides the Company with the future ability to acquire |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of consolidation | 3.1 Basis of consolidation The financial statements for the years ended December 31, 2022 and 2021 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 owned 100% by the Company unless otherwise noted. See Note 5 for variable interest entities that are consolidated by the Company. |
Revenue | 3.2 Revenue The Company applies 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 the Company 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 and Canadian Deposit Insurance Corporation limits. The Company has historically not experienced losses related to these deposits. As of December 31, 2022, and 2021, 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 customer credit worthiness. As of December 31, 2022, and 2021, the Company had approximately $539 and $87, in allowance for doubtful accounts, respectively. For the years ended December 31, 2022 and 2021, the Company wrote off approximately $472 and $104, 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 Inventory is 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. When establishing the cost, Work-in-process and raw materials are determined using the weighted average cost method while the determination of cost for Finished goods inventory is 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 are written down to net realizable value. Inventory acquired in a business combination is valued at selling price less selling and disposal 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 recorded at fair value using various methodologies including cost approach, sales comparison approach or income approach. Depreciation and amortization are calculated 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 (a) Goodwill The Company measures goodwill as the fair value of the consideration transferred, including the recognized amount of any noncontrolling 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 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 the following estimated useful lives, which do not exceed the contractual period, if any: Licenses/permits 15 Right-to-use licenses 15 Host community agreements 15 Trade name / brand 5 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, right-of-use assets, 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 and sale and leaseback accounting | 3.9 Leases and sale and leaseback accounting The Company applies the accounting guidance in ASC 842 – Leases Right-of-use assets – operating, net Lease liabilities – operating – current portion Lease liabilities – operating – non-current portion Right-of-use assets – finance, net Lease liabilities – finance – current portion Lease liabilities – finance – non-current portion 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. A sale and leaseback transaction involves the transfer of an asset to another entity and the leaseback of the same asset. The Company applies ASC 606 and ASC 842 when accounting for sale and leaseback transactions. Significant estimates and judgments applied include determination of the fair value of the underlying asset, transfer of control, and determination of the implicit interest rate. The Company recognizes gains or losses related to the transfer of rights of the asset to the buyer-lessor and measures the ROU asset arising from the leaseback at the retained portion of the previous carrying amount. In cases where the transaction does not qualify for sale and leaseback accounting treatment, the asset is not derecognized, and no gain or loss is recorded. The transaction is treated as a financing transaction. See Note 9 for additional information. |
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. |
Noncontrolling interests | 3.11 Noncontrolling interests Equity interests owned by parties that are not shareholders of the Company in consolidated subsidiaries are considered noncontrolling interests. The share of net assets attributable to noncontrolling 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 the Company’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, see Note 3.19. |
Derivatives | 3.12 Derivatives The Company evaluates all 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 assets or liabilities, the derivative instrument is 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 assets or liabilities, the Company uses a valuation model when Level 1 inputs are not available to estimate fair value at each reporting date (see Notes 13 and 16). The classification of derivative instruments, including whether such instruments should be recognized as assets or liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument assets or 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. |
Earnings per share | 3.13 Earnings per share The basic loss per share is computed by dividing the net loss by the weighted average number of shares outstanding, including Equity Shares, multiple voting shares of the Company and Exchangeable Shares, as defined below, 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 of the Company (“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 Equity 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, and Vested Options, because their effect would be anti-dilutive, therefore, basic loss per share and diluted loss per share will be the same. For the years ended December 31, 2022 and 2021, the potentially dilutive financial instruments excluded from the calculation of earnings per share included nil and 1,868 warrants, nil and 86 options and 3,779 and 1,955 RSUs, totaling 3,779 and 3,909 shares of potentially dilutive securities, respectively. |
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, whichever is more readily determinable. 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 statements 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 straight line 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, refer to Note 14. 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. 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 for equity-linked financial instruments such as 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. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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. 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 Transactions denominated in foreign currency 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). 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 based on the differences between the financial statements and tax basis 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. The Company recognizes deferred tax assets to the extent that the Company 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 the Company determines that the Company would be able to realize our deferred tax assets in the future more than their net recorded amount, the Company 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. 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, 2022, and 2021. 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 Section 280E of the United States Internal Revenue Code (“Section 280E”), under which the Company is generally only allowed to deduct expenses directly related to the cost of goods sold. |
Variable Interest Entities ("VIE") | 3.19 Variable Interest Entities (“VIE”) Under certain provisions of ASC Topic 810 – Consolidations A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured that such equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains or losses of the entity. The primary beneficiary has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. We assess all variable interests in the entity and use our judgment when determining whether a particular entity is a VIE and if we are the primary beneficiary. Other qualitative factors that are considered include decision-making responsibilities, the VIE capital structure, risk and rewards sharing, contractual agreements with the VIE, voting rights, and level of involvement of other parties. We assess the primary beneficiary determination for a VIE on an ongoing basis if there are any changes in the facts and circumstances related to a VIE. See Note 5. Where we determine we are the primary beneficiary of a VIE, we consolidate the accounts of that VIE, under the guidance of ASC 805, Business Combinations, |
Significant accounting judgments and estimates | 3.20 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 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. 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 consideration targets 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. 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 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. (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 | 3.21 Change in accounting standards The Company is treated as an “emerging growth company” as defined under the Jumpstart Our Business Start-ups Act of 2012, as amended (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 and Adopted Accounting Standards In June 2016, the Financial Accounting Standards Board (“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, ASU 2020-03, and ASU 2022-02 (“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, 2022, and interim periods therein. The adoption of ASU 2016-13 is not expected to have a material impact on the Company’s 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 intra-period 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 adoption of ASU 2019-12, on January 1, 2022, did not have a material impact on the Company’s 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 adoption of ASU 2020-01, on January 1, 2022, did not have a material impact on the Company’s financial statements. In June 2022, the FASB issued ASU No. 2022-03 Topic 820 – Fair Value Measurement – Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”), (1) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example, and (3) to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of ASU 2022-03 will have on the Company’s financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of depreciation and amortization over 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 |
Schedule of finite-lived intangible assets | Licenses/permits 15 Right-to-use licenses 15 Host community agreements 15 Trade name / brand 5 |
BUSINESS COMBINATIONS AND ASS_2
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Herbal remedies | |
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | |
Schedule of details of the asset acquisition | Herbal Remedies ASSETS ACQUIRED Cash $ 637 Inventory 1,480 Prepaid expenses and other assets 256 Intangible assets - licenses/permits 15,700 Property, plant, and equipment 122 Right-of-use assets - operating 700 Total assets acquired at fair value 18,895 LIABILITIES ASSUMED Trade payables 215 Accrued liabilities 68 Lease liabilities - operating 700 Total liabilities assumed at fair value 983 Goodwill 1,180 Consideration transferred $ 19,092 |
Schedule of details of the purchase price consideration, and fair value of the identifiable assets acquired and liabilities assumed | (In thousands) Shares Fair Value Cash i $ 3,002 Debt Payable ii 14,220 Shares Issued iii 353 1,870 Total 353 $ 19,092 Pursuant to the terms of the Definitive Agreement (“Herbal Remedies Agreement”), Ayr satisfied the purchase price of $19,092 for Herbal Remedies through the following: i. $3,002 of the Herbal Remedies purchase price in the form of cash consideration and settlement of the final working capital which is deemed immaterial; ii. $14,220 of the Herbal Remedies purchase price in the form of a promissory note payable; and iii. $1,870 of the Herbal Remedies purchase price in the form of 353 Exchangeable Shares, these shares have contractual restrictions on their ability to be sold for six to twelve months (the “Herbal Remedies Lock-Up Provision”). The fair value of the shares was determined by the share price on the CSE at the date of acquisition and a 16.55% discount rate attributed to the contractual restrictions. |
Cultivauna, LLC | |
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | |
Schedule of details of the asset acquisition | Cultivauna ASSETS ACQUIRED Cash $ 1,251 Accounts receivable 471 Inventory 1,206 Prepaid expenses and other assets 38 Intangible assets - trade name/brand 3,400 Intangible assets - host community agreements 2,100 Property, plant, and equipment 2,202 Right-of-use assets - operating 315 Total assets acquired at fair value 10,983 LIABILITIES ASSUMED Trade payables 23 Accrued liabilities 305 Lease liabilities - operating 315 Total liabilities assumed at fair value 643 Goodwill 11,281 Consideration transferred $ 21,621 |
Schedule of details of the purchase price consideration, and fair value of the identifiable assets acquired and liabilities assumed | Shares Fair Value Cash i $ 11,027 Shares Issued ii 329 4,482 Contingent Consideration iii 6,112 Total 329 $ 21,621 Pursuant to the terms of the Definitive Agreement (“Cultivauna Agreement”), Ayr satisfied the purchase price of $21,621 for Cultivauna through the following: i. $11,027 of the Cultivauna purchase price in the form of cash consideration and settlement of the final working capital which is deemed immaterial; ii. $4,482 of the Cultivauna purchase price in the form of 329 Exchangeable Shares, these shares have contractual restrictions on their ability to be sold for six twelve months iii. A portion of the Cultivauna purchase price is derived from an earn-out provision through December 31, 2023, based on annualized net revenues generated during the measurement period, consisting of 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. |
PA natural acquisition | |
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | |
Schedule of details of the asset acquisition | PA Natural ASSETS ACQUIRED Cash $ 2,223 Inventory, net 2,670 Prepaid expenses and other assets 77 Intangible assets - licenses/permits 101,000 Property, plant, and equipment 848 Right-of-use assets - operating 786 Deposits 6 Total assets acquired at fair value 107,610 LIABILITIES ASSUMED Trade payables 1,991 Accrued liabilities 318 Lease liabilities - operating 704 Total liabilities assumed at fair value 3,013 Goodwill 15,159 Consideration transferred $ 119,756 |
Schedule of details of the purchase price consideration, and fair value of the identifiable assets acquired and liabilities assumed | Shares Fair Value Cash i $ 36,498 Debt Payable ii 25,000 Shares Issued iii 814 19,217 Contingent Consideration iv 39,041 Total 814 $ 119,756 Pursuant to the terms of the Definitive Agreement (“PA Natural Agreement”), Ayr satisfied the purchase price of $119,756 for PA Natural through the following: i. $36,498 of the PA Natural purchase price in the form of cash consideration and settlement of the final working capital which is deemed immaterial; ii. $25,000 of the PA Natural purchase price in the form of a promissory note payable; iii. $19,217 of the PA Natural purchase price in the form of 814 Exchangeable Shares, these shares have contractual restrictions on their ability to be sold for four to twelve months (the “PA Natural Lock-Up Provision”). The fair value of the shares was determined by the share price on the CSE at the date of acquisition and an 11 % discount rate attributed to the contractual restrictions; and 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. |
Q3 2021 | |
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | |
Schedule of details of the asset acquisition | GSD Eskar Total ASSETS ACQUIRED Cash $ 580 $ — $ 580 Inventory, net 3,237 — 3,237 Prepaid expenses and other assets 67 — 67 Intangible assets - licenses/permits 172,000 — 172,000 Intangible assets - host community agreements — 1,000 1,000 Property, plant, and equipment 30,699 — 30,699 Right-of-use assets - operating 13,234 — 13,234 Deposits 194 — 194 Total assets acquired at fair value 220,011 1,000 221,011 LIABILITIES ASSUMED Trade payables 1,658 — 1,658 Accrued liabilities 445 — 445 Advance from related parties 22,750 — 22,750 Lease liabilities - operating 13,026 — 13,026 Debts payable 3,000 — 3,000 Total liabilities assumed at fair value 40,879 40,879 Goodwill 11,524 — 11,524 Consideration transferred $ 190,656 $ 1,000 $ 191,656 |
GSD Business Combination | |
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | |
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 Debt Payable ii 29,491 Shares Issued iii 1,511 29,744 Contingent Consideration iv 89,561 Total 1,511 $ 190,656 Pursuant to the terms of the Definitive Agreement (“GSD Agreement”), Ayr satisfied the purchase price of $190,656 for GSD through the following: i. $41,860 of the GSD purchase price in the form of cash consideration and settlement of the final working capital, which is deemed immaterial; ii. $29,491 of the GSD purchase price in the form of a promissory note payable; iii. $29,744 of the GSD purchase price in the form of 1,511 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 on the CSE 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 | |
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | |
Schedule of details of the asset acquisition | Liberty Oasis Parma Ohio Medical Total ASSETS ACQUIRED Cash $ 6,650 $ 8,237 $ — $ — $ 14,887 Accounts receivable — 26 — 6 32 Inventory, net 46,842 10,289 — 313 57,444 Prepaid expenses and other assets 818 464 — 97 1,379 Intangible assets - licenses/permits 270,000 220,000 — 12 490,012 Intangible assets - right-to-use licenses — — 13,255 — 13,255 Property, plant, and equipment 56,746 10,899 3,910 493 72,048 Right-of-use assets - operating 11,750 15,824 — 3,489 31,063 Right-of-use assets - finance, net 379 13 — — 392 Deposits 619 166 — 252 1,037 Total assets acquired at fair value 393,804 265,918 17,165 4,662 681,549 LIABILITIES ASSUMED Trade payables 3,274 2,901 — — 6,175 Accrued liabilities 5,383 2,720 — 15 8,118 Income tax payable 1,819 — — — 1,819 Deferred tax liabilities 71,963 — — — 71,963 Lease liabilities - operating 11,693 15,825 — 3,497 31,015 Lease liabilities - finance 379 13 — — 392 Debts payable 7,479 — — — 7,479 Accrued interest 153 — — — 153 Total liabilities assumed at fair value 102,143 21,459 — 3,512 127,114 Goodwill 114,683 30,581 — — 145,264 Consideration transferred $ 406,344 $ 275,040 $ 17,165 $ 1,150 $ 699,699 |
Liberty | |
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | |
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 12,671 $ 399,499 Purchase Consideration Payable ii 76 2,392 Replacement Options Issued iii 248 4,453 Total 12,995 $ 406,344 Pursuant to the terms of the Definitive Agreement (“Liberty Agreement”), Ayr satisfied the purchase price of $406,344 for Liberty through the following: i. $399,499 of the Liberty purchase price in the form of 12,671 Subordinate Shares of the Company in a stock-for-stock combination. Liberty shareholders received 0.03683 Ayr shares for each Liberty share held; ii. $2,392 of the Liberty purchase price in the form of 76 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.See Note 13 for more information; and iii. $4,453 of the Liberty purchase price in the form of 248 replacement options issued that were fully vested. |
Oasis | |
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | |
Schedule of details of the purchase price consideration, and fair value of the identifiable assets acquired and liabilities assumed | Shares Fair Value Cash i $ 9,733 Debt Payable ii 22,505 Shares Issued iii 4,570 125,187 Contingent Consideration iv 117,615 Total 4,570 $ 275,040 Pursuant to the terms of the Definitive Agreement (“Oasis Agreement”), Ayr satisfied the purchase price of $275,040 for Oasis through the following: i. $9,733 of the Oasis purchase price in the form of cash consideration; ii. $ 22,505 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. $125,187 of the Oasis purchase price in the form of 4,570 Exchangeable Shares, that are exchangeable on a one-for-one basis into an equal number of Subordinate Shares of the Company. 2,000 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 eighteen months 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. |
VARIABLE INTEREST ENTITIES ("_2
VARIABLE INTEREST ENTITIES ("VIE") - (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
VARIABLE INTEREST ENTITIES ("VIE") | |
Schedule of fair value of identifiable assets acquired and liabilities assumed as of the acquisition date | Tahoe Hydro/NV Green ASSETS ACQUIRED Cash $ 675 Accounts receivable 77 Inventory, net 6,969 Due from related party 203 Prepaid expenses and other assets 41 Intangible assets - trade name/brand 6,400 Property, plant, and equipment 2,950 Right-of-use assets - operating 158 Total assets acquired at fair value 17,473 LIABILITIES ASSUMED Trade payables 373 Accrued liabilities 281 Lease liabilities - operating 158 Total liabilities assumed at fair value 812 Goodwill 208 Purchase consideration $ 16,869 |
Schedule of financial information about the consolidated VIEs included in the balance sheet and statement of operations | TH/NVG Parma Current assets $ 5,248 $ 10,751 Non-current assets 6,582 14,634 Total assets 11,830 25,385 Current liabilities 1,033 14,092 Non-current liabilities 898 1,952 Total liabilities 1,931 16,044 Noncontrolling interest 7,528 (5,528) Equity attributable to Ayr Wellness Inc. 2,371 14,869 Total liabilities and equity $ 11,830 $ 25,385 TH/NVG Parma Revenues, net of discounts $ 2,316 $ — Net income (loss) attributable to noncontrolling interest (4,491) (5,528) Net loss attributable to Ayr Wellness Inc. — — Net loss $ (4,491) $ (5,528) TH/NVG Parma Noncontrolling interest at January 1, 2021 $ — $ — (no activity) — — Noncontrolling interest at December 31, 2021 — — Total purchase consideration $ 16,868 — Working capital adjustment presented as consideration payable (4,849) — Net loss during the period (4,491) (5,528) Noncontrolling interest at December 31, 2022 $ 7,528 $ (5,528) |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORY | |
Schedule of inventory | December 31, December 31, 2022 2021 Materials, supplies, and packaging $ 11,111 $ 12,805 Work in process 76,700 56,858 Finished goods 27,242 23,125 Incremental costs to acquire cannabis inventory in business combinations, net – 575 Total inventory $ 115,053 $ 93,363 |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, plant and equipment | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Schedule of property, plant and equipment | December 31, December 31, 2022 2021 Furniture and equipment $ 58,682 $ 26,311 Auto and trucks 1,883 1,021 Buildings 91,233 65,820 Leasehold improvements 172,765 78,283 Land 14,165 17,892 Construction in progress 11,578 95,853 Total 350,306 285,180 Less: Accumulated depreciation and amortization 23,388 9,958 Total property, plant and equipment, net $ 326,918 $ 275,222 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of goodwill | As of January 1, 2021 $ 57,964 Acquired through business combinations 171,946 As of December 31, 2021 229,910 Acquired through business combinations and initial consolidation VIEs 12,729 Impairment of goodwill (148,531) As of December 31, 2022 $ 94,108 |
Schedule of intangible assets, net accumulated amortization | Useful life (# of years) December 31, 2022 December 31, 2021 Licenses/permits 15 $ 887,732 $ 935,265 Right-to-use licenses 15 17,717 12,592 Host community agreements 15 29,494 29,912 Trade name / brand 5 3,784 1,146 Total $ 938,727 $ 978,915 |
Schedule of anticipated amortization expense | Useful life (# of years) December 31, 2022 December 31, 2021 Licenses/permits 15 $ 887,732 $ 935,265 Right-to-use licenses 15 17,717 12,592 Host community agreements 15 29,494 29,912 Trade name / brand 5 3,784 1,146 Total $ 938,727 $ 978,915 Amortization Expense 2023 $ 72,437 2024 72,149 2025 71,959 2026 71,959 2027 71,959 2028 and beyond 575,264 Total $ 935,727 |
RIGHT-OF-USE ASSETS & LEASE L_2
RIGHT-OF-USE ASSETS & LEASE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of quantitative information about right-of-use assets [line items] | |
Schedule of Information related to operating and finance leases | December 31, 2022 December 31, 2021 Operating Leases Finance Leases Operating Leases Finance Leases Incremental borrowing rate (weighted average) 11.98 % 9.68 % 12.66 % 11.76 % Weighted average remaining lease term 13.04 yrs 4.90 yrs 14.01 yrs 2.81 yrs |
Schedule of maturities of contractual lease liabilities | Operating Leases Finance Leases Total 2023 $ 28,694 $ 12,862 $ 41,556 2024 28,362 11,395 39,757 2025 27,919 5,466 33,385 2026 27,276 3,390 30,666 2027 26,007 2,302 28,309 2028 and beyond 236,700 8,356 245,056 Total undiscounted lease liabilities 374,958 43,771 418,729 Impact of discounting (232,067) (9,029) (241,096) Total present value of minimum lease payments $ 142,891 $ 34,742 $ 177,633 |
Schedule of payments related to leases | Year Ended December 31, 2022 December 31, 2021 Lease liabilities - operating Lease liabilities - operating expense, COGS $ 8,946 $ 4,818 Lease liabilities - operating expense, G&A 14,795 8,518 Lease liabilities - finance Amortization of right-of-use assets, COGS 4,858 1,050 Amortization of right-of-use assets, G&A 188 76 Interest on lease liabilities - finance, COGS 2,525 720 Interest on lease liabilities - finance, G&A 58 320 Total lease expense $ 31,370 $ 15,502 |
DEBTS PAYABLE AND SENIOR SECU_2
DEBTS PAYABLE AND SENIOR SECURED NOTES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
December 2020 Senior secured notes | |
DEBTS PAYABLE AND SENIOR SECURED NOTES | |
Schedule of debt | Senior secured notes As of January 1, 2021 $ 103,653 Debt issuance costs (2,142) Debt issuance costs amortized 1,744 Senior secured notes issued 133,250 Senior secured notes premium 9,305 Senior secured notes premium amortized (402) As of December 31, 2021 $ 245,408 Debt issuance costs amortized 2,292 Senior secured notes premium amortized (3,018) Total senior secured notes classified as non-current payable as of December 31, 2022 $ 244,682 Total accrued interest payable related to senior secured notes as of December 31, 2022 $ — |
Debt payable | |
DEBTS PAYABLE AND SENIOR SECURED NOTES | |
Schedule of debt | Debts payable As of January 1, 2021 $ 62,233 Discounted as of January 31, 2021 1,280 Incurred through combinations and acquisitions 87,475 Converted to equity (7,430) Less: repayment (8,749) Less: discounted to fair value (951) As of December 31, 2021 133,858 Discounted as of December 31, 2021 951 Incurred through earn-out provision 14,934 Debt issued 68,000 Construction financing 36,303 Less: repayment (17,924) Total debts payable, undiscounted as of December 31, 2022 236,122 Less: discounted to fair value (598) Total debts payable as of December 31, 2022 $ 235,524 Total accrued interest payable related to debts payable as of December 31, 2022 $ 7,954 December 31, 2022 Related party debt Non-related party debt Total debt $ 24,022 $ 212,100 $ 236,122 Less: current portion 1,409 39,114 40,523 Total non-current debt, undiscounted 22,613 172,986 195,599 Less: discount to fair value — (598) (598) Total non-current debt $ 22,613 $ 172,388 $ 195,001 |
Schedule of the future debt obligation | Future debt obligations (per year) 2023 $ 40,523 2024 94,392 2025 33,282 2026 1,874 2027 29,870 2028 and beyond 36,181 Total debt obligations $ 236,122 |
SHARE CAPITAL (Tables)
SHARE CAPITAL (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SHARE CAPITAL | |
Schedule of number of warrants and outstanding | Weighted Average Fair Number of warrants outstanding Number Value Balance as of January 1, 2021 10,486 $ 6,516 Exercise of warrants (7,555) (4,694) Forfeitures of warrants, due to expiration (57) (36) Balance as of December 31, 2021 2,874 1,786 No activity Balance as of December 31, 2022 2,874 $ 1,786 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DERIVATIVE LIABILITIES | |
Schedule of fair value adjustment relating to derivative liabilities | Year Ended December 31, December 31, 2022 2021 Gain from FV adjustment on contingent consideration $ 61,675 $ 83,657 Gain (loss) from FV adjustment on purchase consideration settlement (1,780) 102 Gain from settlement of contingent consideration 3,186 — Total $ 63,081 $ 83,759 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
STOCK-BASED COMPENSATION | |
Schedule of activity for restricted stock units | Weighted Number of Average Grant Shares Date Fair Value RSUs outstanding and nonvested, as of January 1, 2021 4,235 $ 16.63 Granted 5,781 17.79 Vested (1,916) 18.44 RSUs outstanding and nonvested, as of December 31, 2021 8,100 18.83 Granted 741 6.45 Vested (2,135) 18.58 Forfeited (78) 15.90 RSUs outstanding and nonvested, as of December 31, 2022 6,628 $ 17.56 |
Schedule of replacement options | Number of Weighted Average Options Fair Value Balance as of January 1, 2021 — $ — Replacement options issued 248 17.93 Options exercised (37) 17.93 Options sold to cover income taxes (13) 17.93 Balance as of December 31, 2021 198 17.93 Options exercised (33) 17.93 Balance as of December 31, 2022 165 17.93 |
FINANCIAL RISK FACTORS (Tables)
FINANCIAL RISK FACTORS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
FINANCIAL RISK FACTORS | |
Schedule of financial assets and liabilities | December 31, 2022 December 31,2021 Financial liabilities Contingent consideration Level 3 $ 90,090 $ 185,522 |
Contingent consideration | |
FINANCIAL RISK FACTORS | |
Schedule of sensitivity analysis of fair value measurement to changes in unobservable inputs | The following table summarizes the range of inputs used at the initial and subsequent measurement dates to value the contingent consideration for the year ended December 31, 2022 in the table above: Equity Volatility 55.65 - 85.05 % Revenue Volatility 7.46 - 23.96 % Risk-free Rate 1.62 - 4.67 % Revenue Risk Premium 5.58 - 9.61 % Credit Risk Rate 10.50 - 19.10 % Discount Rate 8.40 - 10.00 % |
TAXATION (Tables)
TAXATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
TAXATION | |
Schedule of provision for income taxes | Year Ended 2022 2021 Current expense: Federal $ 38,053 $ 38,461 State 8,881 7,359 Foreign – – Total current expense: 46,934 45,820 Deferred expense (benefit): Federal (5,701) (13,414) State 4,143 (3,145) Foreign (232) (2,981) Change in valuation allowance 232 2,981 Total deferred (benefit): (1,558) (16,559) Total income tax expense: $ 45,376 $ 29,261 |
Schedule of reconciliation between the effective tax rate on income from continuing operations and statutory tax | Year Ended 2022 2021 Income (loss) before income taxes and noncontrolling interest $ (210,109) $ 12,309 Statutory tax rates 21 % 21 % Expected income tax recovery (44,123) 2,585 Difference in foreign tax rates (4,311) (672) State Taxes 13,024 4,982 Foreign exchange gain or loss 146 – Impairment loss 31,191 – Translation Adjustment 669 – Unrealized change in fair value of financial liabilities (13,248) – Acquisition costs 147 1,857 Interest income inclusion 4,244 – Non-deductible expenses 61,072 18,235 Amortization of debt premium (815) – Tax rate change – (767) Prior year adjustment (2,877) – Valuation allowance 232 2,981 Other 25 60 Total income tax expense: $ 45,376 $ 29,261 |
Schedule of components of deferred tax assets and liabilities | Year Ended 2022 2021 Deferred tax assets Net operating losses $ 9,515 $ 7,967 Share issuance costs 1,311 2,245 Share based compensation - included in cost of good sold 1,385 – Investments – 34 Inventory 1,389 153 Other assets 763 1,052 Total deferred tax assets 14,363 11,451 Valuation allowance (8,784) (8,552) Total deferred tax assets 5,579 2,899 Deferred tax liabilities Depreciation - included in cost of good sold (7,173) (6,071) Amortization - included in cost of good sold (65,642) (64,197) Debt financing costs (1,202) (1,821) Other liabilities (85) (891) Total deferred tax liability (74,102) (72,980) Net deferred tax liability $ (68,523) $ (70,081) |
NATURE OF OPERATIONS (Details)
NATURE OF OPERATIONS (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
NATURE OF OPERATIONS | |
Number of operating segment | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Cash equivalents | $ 0 | $ 0 |
Allowance for doubtful accounts | 539 | 87 |
Accounts receivable written off | $ 472 | $ 104 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, plant, and equipment ("PPE") (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Furniture and fixtures | Bottom of range | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life | 5 years |
Furniture and fixtures | Top of range | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life | 7 years |
Office equipment | Bottom of range | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life | 3 years |
Office equipment | Top of range | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life | 5 years |
Machinery and equipment | Bottom of range | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life | 5 years |
Machinery and equipment | Top of range | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life | 15 years |
Auto and trucks | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life | 5 years |
Buildings | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life | 39 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible assets and Equity investments (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Development costs capitalized | $ 0 |
Bottom of range | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Voting right | 20% |
Top of range | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Voting right | 50% |
Licences/permits | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life | 15 years |
Right-to-use licenses | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life | 15 years |
Host community agreements | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life | 15 years |
Trade name/brand | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Non-controlling interests (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Noncontrolling interest | $ 2,000 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings per share (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Warrants | 0 | 1,868 |
Options | 0 | 86 |
RSUs | 3,779 | 1,955 |
Total | 3,779 | 3,909 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Significant accounting judgments and estimates (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Bottom of range | |
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | |
Weighted average lessee's incremental borrowing rate applied to lease liabilities | 7.80% |
Top of range | |
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | |
Weighted average lessee's incremental borrowing rate applied to lease liabilities | 15.50% |
BUSINESS COMBINATIONS AND ASS_3
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | |
Goodwill expected to be deductible for income tax purposes | $ 0 |
Exchangeable Shares | |
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS | |
Exchangeable stock exchange ratio | 1 |
BUSINESS COMBINATIONS AND ASS_4
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - 2022 Second Quarter Acquisition (Details) EquityInstruments in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
May 25, 2022 USD ($) | May 31, 2022 USD ($) | Dec. 31, 2022 USD ($) EquityInstruments item | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Acquisition-date fair value of total consideration transferred | |||||
Purchase price | $ 2,849 | $ 812 | |||
Reduction in long term debt | $ 14,934 | ||||
Herbal Remedies Agreement | |||||
Acquisition-date fair value of total consideration transferred | |||||
Cash | $ 3,002 | ||||
Debt Payable | 14,220 | ||||
Shares Issued | $ 1,870 | ||||
Shares Issued, shares | 353 | ||||
Total | $ 19,092 | ||||
Purchase price | 19,092 | ||||
LIABILITIES ASSUMED | |||||
Licensed retail | item | 2 | ||||
Promissory note payable | Herbal Remedies Agreement | |||||
Acquisition-date fair value of total consideration transferred | |||||
Reduction in long term debt | 14,220 | ||||
Exchangeable Shares | Herbal Remedies Agreement | |||||
Acquisition-date fair value of total consideration transferred | |||||
Shares Issued | $ 1,870 | ||||
Shares Issued, shares | 353 | ||||
Percentage of discount rate attributed to the contractual restrictions | 16.55% | ||||
Exchangeable Shares | Minimum | Herbal Remedies Agreement | |||||
Acquisition-date fair value of total consideration transferred | |||||
Lock-up provision | 6 months | ||||
Exchangeable Shares | Maximum | Herbal Remedies Agreement | |||||
Acquisition-date fair value of total consideration transferred | |||||
Lock-up provision | 12 months | ||||
Herbal Remedies business combination | |||||
Acquisition-date fair value of total consideration transferred | |||||
Gain Loss On Change In Fair Value Of Purchase Consideration | $ 1,780 | ||||
ASSETS ACQUIRED | |||||
Cash | $ 637 | ||||
Inventory | 1,480 | ||||
Prepaid expenses and other assets | 256 | ||||
Intangible assets - licenses/permits | 15,700 | ||||
Right-of-use assets - operating | 700 | ||||
Property, plant and equipment | 122 | ||||
Total assets acquired at fair value | 18,895 | ||||
LIABILITIES ASSUMED | |||||
Trade payables | 215 | ||||
Accrued liabilities | 68 | ||||
Lease liabilities - operating | 700 | ||||
Total liabilities assumed at fair value | 983 | ||||
Goodwill | 1,180 | ||||
Consideration transferred | $ 19,092 | ||||
Useful life | 15 years | ||||
Herbal Remedies business combination | Exchangeable Shares | |||||
Acquisition-date fair value of total consideration transferred | |||||
Shares Issued, shares | EquityInstruments | 353 |
BUSINESS COMBINATIONS AND ASS_5
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - 2022 First Quarter Acquisition (Details) EquityInstruments in Thousands, $ in Thousands | 12 Months Ended | ||||
Feb. 15, 2022 USD ($) EquityInstruments | Dec. 31, 2022 USD ($) EquityInstruments | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Oct. 04, 2021 EquityInstruments | |
Acquisition-date fair value of total consideration transferred | |||||
Purchase price | $ 2,849 | $ 812 | |||
Reduction in long term debt | $ 14,934 | ||||
Cultivauna Agreement | |||||
Acquisition-date fair value of total consideration transferred | |||||
Cash | $ 11,027 | ||||
Shares Issued | $ 4,482 | ||||
Shares Issued, shares | EquityInstruments | 329 | 329 | |||
Total | $ 21,621 | ||||
Purchase price | $ 21,621 | ||||
Trade name/brand | |||||
LIABILITIES ASSUMED | |||||
Useful life | 5 years | ||||
Host community agreements | |||||
LIABILITIES ASSUMED | |||||
Useful life | 15 years | ||||
Exchangeable Shares | Cultivauna Agreement | |||||
Acquisition-date fair value of total consideration transferred | |||||
Shares Issued, shares | 329 | ||||
Purchase price | $ 4,482 | ||||
Percentage of discount rate attributed to the contractual restrictions | 14.85% | ||||
Exchangeable Shares | Minimum | Cultivauna Agreement | |||||
Acquisition-date fair value of total consideration transferred | |||||
Lock-up provision | 6 months | ||||
Exchangeable Shares | Maximum | Cultivauna Agreement | |||||
Acquisition-date fair value of total consideration transferred | |||||
Lock-up provision | 12 months | ||||
Cultivauna, LLC | |||||
Acquisition-date fair value of total consideration transferred | |||||
Intangible assets | $ 5,500 | ||||
Cultivauna, LLC | Cultivauna Agreement | |||||
ASSETS ACQUIRED | |||||
Cash | 1,251 | ||||
Accounts receivable | 471 | ||||
Inventory | 1,206 | ||||
Prepaid expenses and other assets | 38 | ||||
Property, plant and equipment | 2,202 | ||||
Right-of-use assets - operating | 315 | ||||
Total assets acquired at fair value | 10,983 | ||||
LIABILITIES ASSUMED | |||||
Trade payables | 23 | ||||
Accrued liabilities | 305 | ||||
Lease liabilities - operating | 315 | ||||
Total liabilities assumed at fair value | 643 | ||||
Goodwill | 11,281 | ||||
Consideration transferred | $ 21,621 | ||||
Cultivauna, LLC | Minimum | |||||
LIABILITIES ASSUMED | |||||
Useful life | 5 years | ||||
Cultivauna, LLC | Maximum | |||||
LIABILITIES ASSUMED | |||||
Useful life | 15 years | ||||
Cultivauna, LLC | Trade name/brand | Cultivauna Agreement | |||||
ASSETS ACQUIRED | |||||
Intangible assets - trade name/brand | $ 3,400 | ||||
Cultivauna, LLC | Host community agreements | Cultivauna Agreement | |||||
ASSETS ACQUIRED | |||||
Intangible assets - host community agreements | $ 2,100 | ||||
Cultivauna, LLC | Exchangeable Shares | |||||
Acquisition-date fair value of total consideration transferred | |||||
Shares Issued, shares | EquityInstruments | 329 |
BUSINESS COMBINATIONS AND ASS_6
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - 2021 Fourth Quarter Acquisition (Details) EquityInstruments in Thousands, $ in Thousands | Oct. 04, 2021 USD ($) EquityInstruments | Dec. 31, 2021 USD ($) |
LIABILITIES ASSUMED | ||
Amortization period useful life | 15 years | |
PA natural acquisition | ||
Acquisition-date fair value of total consideration transferred [abstract] | ||
Cash | $ 36,498 | |
Debt Payable | 25,000 | |
Shares Issued | $ 19,217 | |
Shares Issued, shares | EquityInstruments | 814 | |
Contingent Consideration | $ 39,041 | $ 39,868 |
Total Consideration | 119,756 | |
ASSETS ACQUIRED | ||
Cash | 2,223 | |
Inventory, net | 2,670 | |
Prepaid expenses and other assets | 77 | |
Intangible assets - licenses/permits | 101,000 | |
Intangible assets - licenses/permits | 101,000 | |
Property, plant and equipment | 848 | |
Right-of-use assets | 786 | |
Deposits | 6 | |
Total assets acquired at fair value | 107,610 | |
LIABILITIES ASSUMED | ||
Trade payables | 1,991 | |
Accrued liabilities | 318 | |
Lease liabilities - operating | 704 | |
Total liabilities assumed at fair value | 3,013 | |
Goodwill | 15,159 | |
Consideration transferred | 119,756 | |
PA natural acquisition | Exchangeable Shares | ||
Acquisition-date fair value of total consideration transferred [abstract] | ||
Cash | 36,498 | |
Debt Payable | 25,000 | |
Shares Issued | $ 19,217 | |
Shares Issued, shares | EquityInstruments | 814 | |
Total Consideration | $ 119,756 | |
LIABILITIES ASSUMED | ||
Percentage of discount rate attributed to the contractual restrictions | 11% | |
PA natural acquisition | Exchangeable Shares | Minimum | ||
LIABILITIES ASSUMED | ||
Lock-up provision | 4 months | |
PA natural acquisition | Exchangeable Shares | Maximum | ||
LIABILITIES ASSUMED | ||
Lock-up provision | 12 months |
BUSINESS COMBINATIONS AND ASS_7
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - 2021 Third Quarter Acquisitions (Details) EquityInstruments in Thousands, $ in Thousands | 12 Months Ended | ||||||||
Feb. 15, 2022 USD ($) EquityInstruments | Sep. 15, 2021 USD ($) ft² EquityInstruments | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Oct. 04, 2021 EquityInstruments | Feb. 26, 2021 USD ($) | Feb. 26, 2021 EquityInstruments | Feb. 26, 2021 ft² | Feb. 26, 2021 a | |
Acquisition-date fair value of total consideration transferred | |||||||||
Purchase price | $ 2,849 | $ 812 | |||||||
Cultivauna Agreement | |||||||||
Acquisition-date fair value of total consideration transferred | |||||||||
Cash | $ 11,027 | ||||||||
Shares Issued | $ 4,482 | ||||||||
Shares Issued, shares | EquityInstruments | 329 | 329 | |||||||
Contingent Consideration | $ 6,112 | ||||||||
Total | 21,621 | ||||||||
Purchase price | $ 21,621 | ||||||||
Trade name/brand | |||||||||
LIABILITIES ASSUMED | |||||||||
Useful life | 5 years | ||||||||
Host community agreements | |||||||||
LIABILITIES ASSUMED | |||||||||
Useful life | 15 years | ||||||||
Exchangeable Shares | Cultivauna Agreement | |||||||||
Acquisition-date fair value of total consideration transferred | |||||||||
Shares Issued, shares | 329 | ||||||||
Purchase price | $ 4,482 | ||||||||
Percentage of discount rate attributed to the contractual restrictions | 14.85% | ||||||||
Exchangeable Shares | Minimum | Cultivauna Agreement | |||||||||
Acquisition-date fair value of total consideration transferred | |||||||||
Lock-up provision | 6 months | ||||||||
Exchangeable Shares | Maximum | Cultivauna Agreement | |||||||||
Acquisition-date fair value of total consideration transferred | |||||||||
Lock-up provision | 12 months | ||||||||
Eskar Asset Acquisition | |||||||||
ASSETS ACQUIRED | |||||||||
Cash | $ 1,000 | ||||||||
Intangible assets - host community agreements | 1,000 | ||||||||
Total assets acquired at fair value | 1,000 | ||||||||
LIABILITIES ASSUMED | |||||||||
Consideration transferred | 1,000 | ||||||||
Q3 2021 | |||||||||
ASSETS ACQUIRED | |||||||||
Cash | 580 | ||||||||
Inventory | 3,237 | ||||||||
Prepaid expenses and other assets | 67 | ||||||||
Intangible assets - trade name/brand | 172,000 | ||||||||
Intangible assets - host community agreements | 1,000 | ||||||||
Property, plant and equipment | 30,699 | ||||||||
Right-of-use assets - operating | 13,234 | ||||||||
Deposits | 194 | ||||||||
Total assets acquired at fair value | 221,011 | ||||||||
LIABILITIES ASSUMED | |||||||||
Trade payables | 1,658 | ||||||||
Accrued liabilities | 445 | ||||||||
Advance from related parties | 22,750 | ||||||||
Lease liabilities - operating | 13,026 | ||||||||
Debts payable | 3,000 | ||||||||
Total liabilities assumed at fair value | 40,879 | ||||||||
Goodwill | 11,524 | ||||||||
Consideration transferred | 191,656 | ||||||||
GSD Business Combination | |||||||||
Acquisition-date fair value of total consideration transferred | |||||||||
Cash | 41,860 | ||||||||
Debt Payable | 29,491 | ||||||||
Shares Issued | $ 29,744 | ||||||||
Shares Issued, shares | EquityInstruments | 1,511 | ||||||||
Contingent Consideration | $ 89,561 | ||||||||
Total | $ 190,656 | ||||||||
Area of cultivation and production facilities | ft² | 30,000 | ||||||||
Area of cultivation and production facilities under construction | ft² | 75,000 | ||||||||
ASSETS ACQUIRED | |||||||||
Cash | $ 580 | ||||||||
Inventory | 3,237 | ||||||||
Prepaid expenses and other assets | 67 | ||||||||
Intangible assets - trade name/brand | 172,000 | ||||||||
Property, plant and equipment | 30,699 | ||||||||
Right-of-use assets - operating | 13,234 | ||||||||
Deposits | 194 | ||||||||
Total assets acquired at fair value | 220,011 | ||||||||
LIABILITIES ASSUMED | |||||||||
Trade payables | 1,658 | ||||||||
Accrued liabilities | 445 | ||||||||
Advance from related parties | 22,750 | ||||||||
Lease liabilities - operating | 13,026 | ||||||||
Debts payable | 3,000 | ||||||||
Total liabilities assumed at fair value | 40,879 | ||||||||
Goodwill | 11,524 | ||||||||
Consideration transferred | $ 190,656 | ||||||||
Useful life | 15 years | ||||||||
GSD Business Combination | Exchangeable Shares | |||||||||
Acquisition-date fair value of total consideration transferred | |||||||||
Percentage of discount rate attributed to the contractual restrictions | 9.20% | ||||||||
GSD Business Combination | Exchangeable Shares | Minimum | |||||||||
Acquisition-date fair value of total consideration transferred | |||||||||
Lock-up provision | 4 months | ||||||||
GSD Business Combination | Exchangeable Shares | Maximum | |||||||||
Acquisition-date fair value of total consideration transferred | |||||||||
Lock-up provision | 12 months | ||||||||
Liberty | |||||||||
Acquisition-date fair value of total consideration transferred | |||||||||
Shares Issued | $ 399,499 | ||||||||
Shares Issued, shares | EquityInstruments | 12,671 | ||||||||
Total | 406,344 | ||||||||
Purchase price | 2,392 | ||||||||
Area of cultivation and production facilities | 300,000 | 387 | |||||||
ASSETS ACQUIRED | |||||||||
Cash | 6,650 | ||||||||
Inventory | 46,842 | ||||||||
Prepaid expenses and other assets | 818 | ||||||||
Property, plant and equipment | 56,746 | ||||||||
Right-of-use assets - operating | 11,750 | ||||||||
Right-of-use assets - finance, net | 379 | ||||||||
Deposits | 619 | ||||||||
Total assets acquired at fair value | 393,804 | ||||||||
LIABILITIES ASSUMED | |||||||||
Trade payables | 3,274 | ||||||||
Accrued liabilities | 5,383 | ||||||||
Deferred tax liabilities | 71,963 | ||||||||
Lease liabilities - operating | 11,693 | ||||||||
Lease liabilities - finance | 379 | ||||||||
Income tax payable | 1,819 | ||||||||
Accrued interest | 153 | ||||||||
Debts payable | 7,479 | ||||||||
Total liabilities assumed at fair value | 102,143 | ||||||||
Goodwill | 114,683 | ||||||||
Consideration transferred | $ 406,344 | ||||||||
Liberty | Exchangeable Shares | |||||||||
Acquisition-date fair value of total consideration transferred | |||||||||
Shares Issued, shares | EquityInstruments | 248 |
BUSINESS COMBINATIONS AND ASS_8
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - 2021 First Quarter Acquisitions (Details) shares in Thousands, EquityInstruments in Thousands, $ in Thousands | 12 Months Ended | ||||||||||||
Oct. 04, 2021 | Mar. 31, 2021 USD ($) ft² | Mar. 23, 2021 USD ($) ft² EquityInstruments shares | Feb. 26, 2021 USD ($) | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | Mar. 31, 2022 USD ($) | Mar. 30, 2021 USD ($) ft² | Feb. 26, 2021 | Feb. 26, 2021 EquityInstruments | Feb. 26, 2021 ft² | Feb. 26, 2021 a | Feb. 26, 2021 shares | |
Acquisition-date fair value of total consideration transferred [abstract] | |||||||||||||
Reduction in long term debt | $ 14,934 | ||||||||||||
Purchase consideration payable | $ 2,849 | $ 812 | |||||||||||
Replacement options issued | shares | 248 | 248 | |||||||||||
Replacement options issued - business combinations | $ 4,453 | $ 4,453 | |||||||||||
LIABILITIES ASSUMED | |||||||||||||
Amortization period useful life | 15 years | ||||||||||||
Exchangeable shares [member] | |||||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||||||||
Exchangeable Stock Exchange Ratio | 1 | ||||||||||||
Parma Asset Acquisition [Member] | |||||||||||||
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 | ||||||||||||
Property, plant and equipment | 3,910 | ||||||||||||
Total assets acquired at fair value | 17,165 | ||||||||||||
LIABILITIES ASSUMED | |||||||||||||
Consideration transferred | $ 17,165 | ||||||||||||
Q1 2021 | |||||||||||||
ASSETS ACQUIRED | |||||||||||||
Cash | $ 14,887 | ||||||||||||
Accounts receivable | 32 | ||||||||||||
Inventory | 57,444 | ||||||||||||
Prepaid expenses and other assets | 1,379 | ||||||||||||
Intangible assets | 503,267 | ||||||||||||
Intangible assets - licenses/permits | 490,012 | ||||||||||||
Intangible assets - right-to-use licenses | 13,255 | ||||||||||||
Right-of-use assets - operating | 31,063 | ||||||||||||
Right-of-use assets - finance, net | 392 | ||||||||||||
Property, plant and equipment | 72,048 | ||||||||||||
Deposits | 1,037 | ||||||||||||
Total assets acquired at fair value | 681,549 | ||||||||||||
LIABILITIES ASSUMED | |||||||||||||
Trade payables | 6,175 | ||||||||||||
Accrued liabilities | 8,118 | ||||||||||||
Income tax payable | 1,819 | ||||||||||||
Deferred tax liabilities | 71,963 | ||||||||||||
Lease liabilities - operating | 31,015 | ||||||||||||
Lease liabilities - finance | 392 | ||||||||||||
Debts payable | 7,479 | ||||||||||||
Accrued interest | 153 | ||||||||||||
Total liabilities assumed at fair value | 127,114 | ||||||||||||
Goodwill | 145,264 | ||||||||||||
Consideration transferred | $ 699,699 | ||||||||||||
Amortization period useful life | 15 years | ||||||||||||
Liberty | |||||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||||||||
Shares Issued | $ 399,499 | ||||||||||||
Shares Issued, shares | EquityInstruments | 12,671 | ||||||||||||
Total | 406,344 | ||||||||||||
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 | ||||||||||||
Total Consideration, Acquisition Date, Number Of Shares | shares | 12,995 | ||||||||||||
Purchase consideration payable | 2,392 | ||||||||||||
Purchase Consideration Payable, Shares | shares | 76 | ||||||||||||
Replacement options issued | shares | 248 | ||||||||||||
Replacement options issued - business combinations | 4,453 | ||||||||||||
ASSETS ACQUIRED | |||||||||||||
Cash | 6,650 | ||||||||||||
Inventory | 46,842 | ||||||||||||
Prepaid expenses and other assets | 818 | ||||||||||||
Intangible assets - licenses/permits | 270,000 | ||||||||||||
Right-of-use assets - operating | 11,750 | ||||||||||||
Right-of-use assets - finance, net | 379 | ||||||||||||
Property, plant and equipment | 56,746 | ||||||||||||
Deposits | 619 | ||||||||||||
Total assets acquired at fair value | 393,804 | ||||||||||||
LIABILITIES ASSUMED | |||||||||||||
Trade payables | 3,274 | ||||||||||||
Accrued liabilities | 5,383 | ||||||||||||
Income tax payable | 1,819 | ||||||||||||
Deferred tax liabilities | 71,963 | ||||||||||||
Lease liabilities - operating | 11,693 | ||||||||||||
Lease liabilities - finance | 379 | ||||||||||||
Debts payable | 7,479 | ||||||||||||
Accrued interest | 153 | ||||||||||||
Total liabilities assumed at fair value | 102,143 | ||||||||||||
Goodwill | 114,683 | ||||||||||||
Consideration transferred | 406,344 | ||||||||||||
Liberty | Exchangeable shares [member] | |||||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||||||||
Shares Issued, shares | EquityInstruments | 248 | ||||||||||||
Replacement options issued - business combinations | $ 4,453 | ||||||||||||
Oasis | |||||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||||||||
Cash | $ 9,733 | ||||||||||||
Debt Payable | 22,505 | ||||||||||||
Shares Issued | $ 125,187 | ||||||||||||
Shares Issued, shares | EquityInstruments | 4,570 | ||||||||||||
Contingent Consideration | $ 117,615 | $ 0 | $ 28,667 | ||||||||||
Total | $ 275,040 | ||||||||||||
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 | ||||||||||||
Accounts receivable | 26 | ||||||||||||
Inventory | 10,289 | ||||||||||||
Prepaid expenses and other assets | 464 | ||||||||||||
Intangible assets - licenses/permits | 220,000 | ||||||||||||
Right-of-use assets - operating | 15,824 | ||||||||||||
Right-of-use assets - finance, net | 13 | ||||||||||||
Property, plant and equipment | 10,899 | ||||||||||||
Deposits | 166 | ||||||||||||
Total assets acquired at fair value | 265,918 | ||||||||||||
LIABILITIES ASSUMED | |||||||||||||
Trade payables | 2,901 | ||||||||||||
Accrued liabilities | 2,720 | ||||||||||||
Lease liabilities - operating | 15,825 | ||||||||||||
Lease liabilities - finance | 13 | ||||||||||||
Total liabilities assumed at fair value | 21,459 | ||||||||||||
Goodwill | 30,581 | ||||||||||||
Consideration transferred | 275,040 | ||||||||||||
Oasis | Exchangeable shares [member] | |||||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||||||||
Shares Issued | $ 125,187 | ||||||||||||
Shares Issued, shares | EquityInstruments | 4,570 | ||||||||||||
Shares held in escrow | shares | 2,000 | ||||||||||||
Exchangeable Stock Exchange Ratio | 1 | ||||||||||||
Percentage of Discount Rate Attributed to the Contractual Restrictions | 15% | ||||||||||||
Oasis | Exchangeable shares [member] | Minimum | |||||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||||||||
Lock-up provision | 6 months | ||||||||||||
Oasis | Exchangeable shares [member] | Maximum | |||||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||||||||
Lock-up provision | 18 months | ||||||||||||
Ohio Medical Solutions, LLC [Member] | |||||||||||||
Acquisition-date fair value of total consideration transferred [abstract] | |||||||||||||
Area of cultivation and production facilities | ft² | 9,000 | ||||||||||||
ASSETS ACQUIRED | |||||||||||||
Accounts receivable | $ 6 | ||||||||||||
Inventory | 313 | ||||||||||||
Prepaid expenses and other assets | 97 | ||||||||||||
Intangible assets - licenses/permits | 12 | ||||||||||||
Right-of-use assets - operating | 3,489 | ||||||||||||
Property, plant and equipment | 493 | ||||||||||||
Deposits | 252 | ||||||||||||
Total assets acquired at fair value | 4,662 | ||||||||||||
LIABILITIES ASSUMED | |||||||||||||
Accrued liabilities | 15 | ||||||||||||
Lease liabilities - operating | 3,497 | ||||||||||||
Total liabilities assumed at fair value | 3,512 | ||||||||||||
Consideration transferred | $ 1,150 |
VARIABLE INTEREST ENTITIES ("_3
VARIABLE INTEREST ENTITIES ("VIE") - Preliminary fair value of identifiable assets acquired and liabilities assumed as of the acquisition date (Details) $ in Thousands | 11 Months Ended | |
Dec. 31, 2022 entity | Feb. 28, 2022 USD ($) | |
LIABILITIES ASSUMED | ||
Number of entities over which the company has the ability to direct activities | entity | 2 | |
TH/NVG | VIE | ||
ASSETS ACQUIRED | ||
Cash | $ 675 | |
Accounts receivable | 77 | |
Inventory, net | 6,969 | |
Due from related party | 203 | |
Prepaid expenses and other assets | 41 | |
Intangible assets - trade name/brand | 6,400 | |
Property, plant, and equipment | 2,950 | |
Right-of-use assets - operating | 158 | |
Total assets acquired at fair value | 17,473 | |
LIABILITIES ASSUMED | ||
Trade payables | 373 | |
Accrued liabilities | 281 | |
Lease liabilities - operating | 158 | |
Total liabilities assumed at fair value | 812 | |
Goodwill | 208 | |
Consideration transferred | $ 16,869 |
VARIABLE INTEREST ENTITIES ("_4
VARIABLE INTEREST ENTITIES ("VIE") - Summarized financial information about the Company's consolidated VIEs which are included in the balance sheet and statement of operations (Details) - USD ($) $ in Thousands | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
VARIABLE INTEREST ENTITIES ("VIE") | |||
Current assets | $ 213,527 | $ 213,527 | $ 266,067 |
TOTAL ASSETS | 1,763,880 | 1,763,880 | 1,859,912 |
Current liabilities | 228,994 | 228,994 | 152,336 |
TOTAL LIABILITIES | 928,556 | 928,556 | 839,849 |
Noncontrolling interest | 2,000 | 2,000 | |
Equity attributable to Ayr Wellness Inc. | 833,324 | 833,324 | 1,020,063 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 1,763,880 | 1,763,880 | 1,859,912 |
Revenues, net of discounts | 465,618 | 357,608 | |
Net income (loss) attributable to noncontrolling interest | (10,019) | ||
Net loss attributable to Ayr Wellness Inc. | (245,466) | (16,952) | |
Net loss | (255,485) | $ (16,952) | |
TH/NVG | |||
VARIABLE INTEREST ENTITIES ("VIE") | |||
Noncontrolling interest | 7,528 | 7,528 | |
Net loss | (4,491) | ||
TH/NVG | VIE | |||
VARIABLE INTEREST ENTITIES ("VIE") | |||
Current assets | 5,248 | 5,248 | |
Non current assets | 6,582 | 6,582 | |
TOTAL ASSETS | 11,830 | 11,830 | |
Current liabilities | 1,033 | 1,033 | |
Non current liabilities | 898 | 898 | |
TOTAL LIABILITIES | 1,931 | 1,931 | |
Noncontrolling interest | 7,528 | 7,528 | |
Equity attributable to Ayr Wellness Inc. | 2,371 | 2,371 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 11,830 | 11,830 | |
Revenues, net of discounts | 2,316 | ||
Net income (loss) attributable to noncontrolling interest | (4,491) | ||
Net loss | (4,491) | ||
Parma | |||
VARIABLE INTEREST ENTITIES ("VIE") | |||
Noncontrolling interest | (5,528) | (5,528) | |
Net loss | (5,528) | ||
Parma | VIE | |||
VARIABLE INTEREST ENTITIES ("VIE") | |||
Current assets | 10,751 | 10,751 | |
Non current assets | 14,634 | 14,634 | |
TOTAL ASSETS | 25,385 | 25,385 | |
Current liabilities | 14,092 | 14,092 | |
Non current liabilities | 1,952 | 1,952 | |
TOTAL LIABILITIES | 16,044 | 16,044 | |
Noncontrolling interest | (5,528) | (5,528) | |
Equity attributable to Ayr Wellness Inc. | 14,869 | 14,869 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 25,385 | 25,385 | |
Net income (loss) attributable to noncontrolling interest | (5,528) | ||
Net loss | $ (5,528) |
VARIABLE INTEREST ENTITIES ("_5
VARIABLE INTEREST ENTITIES ("VIE") - Noncontrolling interest (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Jan. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Shareholders' equity | ||||
Net loss | $ (255,485) | $ (16,952) | ||
Ending balance | $ 2,000 | 2,000 | ||
TH/NVG | ||||
Shareholders' equity | ||||
Total purchase consideration | $ 16,868 | |||
Working capital adjustment presented as consideration payable | $ (4,849) | |||
Net loss | (4,491) | |||
Ending balance | 7,528 | 7,528 | ||
TH/NVG | VIE | ||||
Shareholders' equity | ||||
Net loss | (4,491) | |||
Ending balance | 7,528 | 7,528 | ||
Parma | ||||
Shareholders' equity | ||||
Net loss | (5,528) | |||
Ending balance | (5,528) | (5,528) | ||
Parma | VIE | ||||
Shareholders' equity | ||||
Net loss | (5,528) | |||
Ending balance | $ (5,528) | $ (5,528) |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INVENTORY | ||
Materials, supplies, and packaging | $ 11,111,000 | $ 12,805,000 |
Work in process | 76,700,000 | 56,858,000 |
Finished goods, net | 27,242,000 | 23,125,000 |
Incremental costs to acquire cannabis inventory in a business combination, net | 575,000 | |
Total inventory | 115,053,000 | 93,363,000 |
Amount of inventory included in cost of goods sold | 228,776 | 156,064 |
Incremental costs to acquire inventory in a business combination | $ 6,216,000 | $ 43,864,000 |
PROPERTY, PLANT, AND EQUIPMEN_2
PROPERTY, PLANT, AND EQUIPMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
PROPERTY, PLANT, AND EQUIPMENT | ||
Property, plant, and equipment, net | $ 326,918 | $ 275,222 |
Gross | ||
PROPERTY, PLANT, AND EQUIPMENT | ||
Property, plant, and equipment, net | 350,306 | 285,180 |
Accumulated depreciation and amortization | ||
PROPERTY, PLANT, AND EQUIPMENT | ||
Property, plant, & equipment, net | (23,388) | (9,958) |
Furniture and equipment | ||
PROPERTY, PLANT, AND EQUIPMENT | ||
Property, plant, and equipment, net | 58,682 | 26,311 |
Auto and trucks | ||
PROPERTY, PLANT, AND EQUIPMENT | ||
Property, plant, and equipment, net | 1,883 | 1,021 |
Buildings | ||
PROPERTY, PLANT, AND EQUIPMENT | ||
Property, plant, and equipment, net | 91,233 | 65,820 |
Leasehold improvements | ||
PROPERTY, PLANT, AND EQUIPMENT | ||
Property, plant, and equipment, net | 172,765 | 78,283 |
Land | ||
PROPERTY, PLANT, AND EQUIPMENT | ||
Property, plant, and equipment, net | 14,165 | 17,892 |
Construction in progress | ||
PROPERTY, PLANT, AND EQUIPMENT | ||
Property, plant, and equipment, net | $ 11,578 | $ 95,853 |
PROPERTY, PLANT, AND EQUIPMEN_3
PROPERTY, PLANT, AND EQUIPMENT - Depreciation and amortization Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
PROPERTY, PLANT, AND EQUIPMENT | ||
Capitalized interest | $ 14,927 | $ 8,373 |
Cost of sales | ||
PROPERTY, PLANT, AND EQUIPMENT | ||
Depreciation and amortization expense | 11,550 | 5,078 |
Expenses | ||
PROPERTY, PLANT, AND EQUIPMENT | ||
Depreciation and amortization expense | $ 16,004 | $ 6,999 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
GOODWILL AND INTANGIBLE ASSETS | ||
Goodwill at beginning of period | $ 229,910 | $ 57,964 |
Acquired through business combinations and initial consolidation VIEs | 12,729 | 171,946 |
Impairment of goodwill | 148,531 | |
Goodwill at end of period | 94,108 | $ 229,910 |
Florida | ||
GOODWILL AND INTANGIBLE ASSETS | ||
Goodwill at end of period | $ 94,108 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - INTANGIBLES - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
GOODWILL AND INTANGIBLE ASSETS | |||
Extended forecast period | 5 years | ||
Terminal growth rate | 3% | ||
Post-tax discount rate | 18% | ||
WACC | 18% | ||
Impairment of goodwill | $ 148,531 | ||
Goodwill | 94,108 | $ 229,910 | $ 57,964 |
Florida | |||
GOODWILL AND INTANGIBLE ASSETS | |||
Goodwill | 94,108 | ||
Cost of sales | |||
GOODWILL AND INTANGIBLE ASSETS | |||
Amortization expense | $ 19,574 | $ 12,047 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
GOODWILL AND INTANGIBLE ASSETS | ||
Intangible assets, net | $ 938,727 | $ 978,915 |
DIA cultivator provisional license | ||
GOODWILL AND INTANGIBLE ASSETS | ||
Intangible assets, net | 3,000 | |
Licences/permits | ||
GOODWILL AND INTANGIBLE ASSETS | ||
Intangible assets, net | $ 887,732 | 935,265 |
Useful life (of years) | 15 years | |
Right-to-use licenses | ||
GOODWILL AND INTANGIBLE ASSETS | ||
Intangible assets, net | $ 17,717 | 12,592 |
Useful life (of years) | 15 years | |
Host community agreements | ||
GOODWILL AND INTANGIBLE ASSETS | ||
Intangible assets, net | $ 29,494 | 29,912 |
Useful life (of years) | 15 years | |
Trade name/brand | ||
GOODWILL AND INTANGIBLE ASSETS | ||
Intangible assets, net | $ 3,784 | $ 1,146 |
Useful life (of years) | 5 years |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - INTANGIBLE ASSETS - Amortization expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
GOODWILL AND INTANGIBLE ASSETS | |
Amortization Expense | $ 935,727 |
2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
Amortization Expense | 72,437 |
2024 | |
GOODWILL AND INTANGIBLE ASSETS | |
Amortization Expense | 72,149 |
2025 | |
GOODWILL AND INTANGIBLE ASSETS | |
Amortization Expense | 71,959 |
2026 | |
GOODWILL AND INTANGIBLE ASSETS | |
Amortization Expense | 71,959 |
2027 | |
GOODWILL AND INTANGIBLE ASSETS | |
Amortization Expense | 71,959 |
2028 and beyond | |
GOODWILL AND INTANGIBLE ASSETS | |
Amortization Expense | $ 575,264 |
RIGHT-OF-USE ASSETS & LEASE L_3
RIGHT-OF-USE ASSETS & LEASE LIABILITIES - Information related to leases (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | ||
Incremental borrowing rate (weighted average), Operating Leases | 11.98% | 12.66% |
Weighted average remaining lease term, Operating Leases | 13 years 14 days | 14 years 3 days |
Incremental borrowing rate(weighted average), Finance Lease | 9.68% | 11.76% |
Weighted average remaining lease term, Finance Leases | 4 years 10 months 24 days | 2 years 9 months 21 days |
RIGHT-OF-USE ASSETS & LEASE L_4
RIGHT-OF-USE ASSETS & LEASE LIABILITIES - Maturity of contractual undiscounted lease liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | ||
Total undiscounted operating lease obligations | $ 374,958 | |
Impact of discounting on operating leases | (232,067) | |
Total present value of minimum lease payments of operating leases | 142,891 | |
Total undiscounted finance lease obligations | 43,771 | |
Impact of discounting on finance leases | (9,029) | |
Total present value of minimum lease payments of finance leases | 34,742 | |
Total undiscounted lease obligations | 418,729 | |
Impact of discounting | (241,096) | |
Total lease obligations | 177,633 | $ 25,331 |
2023 | ||
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | ||
Total undiscounted operating lease obligations | 28,694 | |
Total undiscounted finance lease obligations | 12,862 | |
Total undiscounted lease obligations | 41,556 | |
2024 | ||
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | ||
Total undiscounted operating lease obligations | 28,362 | |
Total undiscounted finance lease obligations | 11,395 | |
Total undiscounted lease obligations | 39,757 | |
2025 | ||
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | ||
Total undiscounted operating lease obligations | 27,919 | |
Total undiscounted finance lease obligations | 5,466 | |
Total undiscounted lease obligations | 33,385 | |
2026 | ||
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | ||
Total undiscounted operating lease obligations | 27,276 | |
Total undiscounted finance lease obligations | 3,390 | |
Total undiscounted lease obligations | 30,666 | |
2027 | ||
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | ||
Total undiscounted operating lease obligations | 26,007 | |
Total undiscounted finance lease obligations | 2,302 | |
Total undiscounted lease obligations | 28,309 | |
2028 and beyond | ||
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | ||
Total undiscounted operating lease obligations | 236,700 | |
Total undiscounted finance lease obligations | 8,356 | |
Total undiscounted lease obligations | $ 245,056 |
RIGHT-OF-USE ASSETS & LEASE L_5
RIGHT-OF-USE ASSETS & LEASE LIABILITIES - Payments related to capitalized Lease (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lease liabilities - finance | ||
Total lease expense | $ 31,370 | $ 15,502 |
COGS | ||
Lease liabilities - operating | ||
Lease liabilities - operating expense | 8,946 | 4,818 |
Lease liabilities - finance | ||
Amortization of right-of-use assets | 4,858 | 1,050 |
Interest on lease liabilities - finance | 2,525 | 720 |
G&A | ||
Lease liabilities - operating | ||
Lease liabilities - operating expense | 14,795 | 8,518 |
Lease liabilities - finance | ||
Amortization of right-of-use assets | 188 | 76 |
Interest on lease liabilities - finance | $ 58 | $ 320 |
RIGHT-OF-USE ASSETS & LEASE L_6
RIGHT-OF-USE ASSETS & LEASE LIABILITIES - Additional information (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2022 USD ($) Option item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | |||
Number of cultivation and processing facilities entered for sale and lease back | item | 2 | ||
Purchase price of sale and lease back transaction | $ 28,107 | ||
Gain on sale of assets | 2,173 | $ 8 | |
Lease liability | 25,331 | 177,633 | |
Right-of-use assets - operating, net | 25,339 | 137,368 | $ 88,721 |
ROU asset, work allowance | 750 | ||
Proceeds from financing transaction, net of financing costs | 27,599 | $ 27,600 | $ 148,646 |
Maximum construction financing allowance | $ 14,187 | ||
Initial term of the agreement | 15 years | ||
Number of options to renew | Option | 2 | ||
Renewal term | 5 years | ||
Percentage of initial payments on purchase price | 10% | ||
Percentage of increase in payments annually after first year | 3% | ||
Transactions for sale-leaseback treatment, gain or loss was recognized | $ 0 | ||
Land | |||
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | |||
Assets divested | 3,728 | ||
Buildings and improvement | |||
RIGHT-OF-USE ASSETS & LEASE LIABILITIES | |||
Assets divested | $ 22,206 |
RELATED PARTY TRANSACTIONS AN_2
RELATED PARTY TRANSACTIONS AND BALANCES - Additional Information (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 14, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Share issuance cost | $ 5,672 | ||
Mercer Park, L.P. | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Advance paid for services | $ 698 | $ 935 | |
Management fees | 12 | 11,085 | |
Lease fees | 861 | 575 | |
Panther Residential Management, LLC ("Panther") | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Office expenses | 54 | 82 | |
Development fees | 392 | 1,230 | |
Rental fees | 920 | 900 | |
Interest Expense | $ 165 | $ 242 | |
Board Member | |||
RELATED PARTY TRANSACTIONS AND BALANCES | |||
Issued equity shares | 50 | ||
Share issuance cost | $ 707 |
DEBTS PAYABLE AND SENIOR SECU_3
DEBTS PAYABLE AND SENIOR SECURED NOTES - Senior Secured Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Nov. 12, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | |
DEBTS PAYABLE AND SENIOR SECURED NOTES | ||||
Face value | $ 14,934 | |||
December 2020 Senior secured notes | ||||
Borrowings | ||||
Balance at the beginning of the year | $ 245,408 | $ 103,653 | ||
Debt issuance costs | (2,142) | |||
Debt issuance costs amortized | 2,292 | 1,744 | ||
Senior secured notes issued | 133,250 | |||
Senior secured notes premium | 9,305 | |||
Senior secured notes premium amortized | (3,018) | (402) | ||
Balance at the end of the year | $ 244,682 | $ 245,408 | ||
December 2020 Senior secured notes private placement offering | ||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | ||||
Face value | $ 133,250 | |||
Proceeds from premium | $ 147,000 | |||
Yield to maturity | 9.80% |
DEBTS PAYABLE AND SENIOR SECU_4
DEBTS PAYABLE AND SENIOR SECURED NOTES - Debt Payable (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Jan. 31, 2021 | |
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||
Less: repayment | $ (17,924) | $ (8,749) | |
Less: discounted to fair value | (598) | ||
Total debts payable, undiscounted | 236,122 | ||
Borrowings | |||
Principal payments | 236,122 | ||
Less: current portion | 40,523 | 8,112 | |
Total non-current debt, undiscounted | 195,599 | ||
Less: discounted to fair value | (598) | ||
Total non-current debt | 195,001 | ||
2023 | |||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||
Total debts payable, undiscounted | 40,523 | ||
Borrowings | |||
Principal payments | 40,523 | ||
2024 | |||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||
Total debts payable, undiscounted | 94,392 | ||
Borrowings | |||
Principal payments | 94,392 | ||
2025 | |||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||
Total debts payable, undiscounted | 33,282 | ||
Borrowings | |||
Principal payments | 33,282 | ||
2026 | |||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||
Total debts payable, undiscounted | 1,874 | ||
Borrowings | |||
Principal payments | 1,874 | ||
2027 | |||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||
Total debts payable, undiscounted | 29,870 | ||
Borrowings | |||
Principal payments | 29,870 | ||
2028 and beyond | |||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||
Total debts payable, undiscounted | 36,181 | ||
Borrowings | |||
Principal payments | 36,181 | ||
Debt payable | |||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||
Balance at the beginning of the year | 133,858 | 62,233 | |
Discounted as of January 31, 2021/December 31, 2021 | 951 | $ 1,280 | |
Incurred through combinations and acquisitions | 87,475 | ||
Converted to equity | (7,430) | ||
Less: repayment | (17,924) | (8,749) | |
Less: discounted to fair value | (598) | (951) | |
Incurred through earn-out provision | 14,934 | ||
Debt issued | 68,000 | ||
Construction financing | 36,303 | ||
Total debts payable, undiscounted | 236,122 | ||
Balance at the end of the year | 235,524 | 133,858 | |
Total accrued interest payable related to debts payable as of December 31, 2022 | 7,954 | ||
Borrowings | |||
Principal payments | 236,122 | ||
Less: discounted to fair value | (598) | $ (951) | |
Related party debt | |||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||
Total debts payable, undiscounted | 24,022 | ||
Borrowings | |||
Principal payments | 24,022 | ||
Less: current portion | 1,409 | ||
Total non-current debt, undiscounted | 22,613 | ||
Total non-current debt | 22,613 | ||
Non-related party debt | |||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||
Less: discounted to fair value | (598) | ||
Total debts payable, undiscounted | 212,100 | ||
Borrowings | |||
Principal payments | 212,100 | ||
Less: current portion | 39,114 | ||
Total non-current debt, undiscounted | 172,986 | ||
Less: discounted to fair value | (598) | ||
Total non-current debt | $ 172,388 |
DEBTS PAYABLE AND SENIOR SECU_5
DEBTS PAYABLE AND SENIOR SECURED NOTES - Agreement (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||||
May 16, 2022 USD ($) | Mar. 17, 2022 USD ($) | Mar. 01, 2022 USD ($) | May 24, 2019 USD ($) | Oct. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Mar. 31, 2022 USD ($) | Mar. 28, 2022 USD ($) | Mar. 23, 2021 USD ($) | |
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Reduction in long term debt | $ 14,934 | ||||||||||||
Debt issued | $ 51,713 | ||||||||||||
Interest expense | 30,575 | $ 16,550 | |||||||||||
Related party debt | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Interest expense | $ 1,507 | $ 1,767 | |||||||||||
Promissory notes payable in PA Natural agreement | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Reduction in long term debt | $ 14,934 | ||||||||||||
Terms of note | 3 years | ||||||||||||
Annual interest rate | 8% | ||||||||||||
Loan agreement with community bank 1 | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Terms of note | 5 years | ||||||||||||
Annual interest rate | 4.625% | ||||||||||||
Debt issued | $ 26,200 | ||||||||||||
Debt issuance costs | $ 287 | ||||||||||||
Option to extend, additional period | 5 years | ||||||||||||
Loan agreement with community bank 2 | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Terms of note | 2 years | ||||||||||||
Debt issued | $ 25,800 | ||||||||||||
Loan agreement with community bank 2 | Floating rate | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Annual interest rate | 1.50% | ||||||||||||
Loan agreement with community bank 2 | Floor rate | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Annual interest rate | 5% | 9% | |||||||||||
Oasis | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Debt Payable | $ 22,505 | ||||||||||||
Oasis | Promissory notes payable in Oasis agreement | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Reduction in long term debt | $ 22,505 | ||||||||||||
Terms of note | 4 years | ||||||||||||
Annual interest rate | 10% | ||||||||||||
GSD | Promissory notes payable in GSD agreement | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Reduction in long term debt | $ 29,491 | ||||||||||||
Terms of note | 3 years | ||||||||||||
Annual interest rate | 9% | ||||||||||||
Interest rate from the second year | 12.5 | ||||||||||||
Debt Payable | $ 3,000 | ||||||||||||
PA Natural Acquisition | Promissory notes payable in PA Natural agreement | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Reduction in long term debt | $ 25,000 | ||||||||||||
Terms of note | 3 years | ||||||||||||
Annual interest rate | 8% | ||||||||||||
Washoe Acquisition | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Annual interest rate | 6% | ||||||||||||
Washoe Acquisition | Promissory notes payable Washoe Agreement | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Reduction in long term debt | 5,640 | ||||||||||||
Terms of note | 3 years | ||||||||||||
Annual interest rate | 6% | 7% | |||||||||||
Deferral of principal | 3 months | ||||||||||||
Washoe Acquisition | Promissory notes assumed in Washoe acquisition | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Debts payable | $ 6,562 | ||||||||||||
Washoe Acquisition | Promissory notes assumed in Washoe Acquisition non related party one | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Debts payable | $ 2,525 | ||||||||||||
Sira Acquisition | Promissory notes payable Sira agreement | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Reduction in long term debt | $ 5,000 | ||||||||||||
Terms of note | 5 years | ||||||||||||
Annual interest rate | 6% | ||||||||||||
Canopy Acquisition | Promissory notes payable Canopy agreement | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Reduction in long term debt | $ 4,500 | ||||||||||||
Terms of note | 5 years | ||||||||||||
Annual interest rate | 6% | ||||||||||||
LivFree Acquisition | Promissory notes payable LivFree Agreement | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Reduction in long term debt | $ 20,000 | ||||||||||||
Terms of note | 5 years | ||||||||||||
Annual interest rate | 6% | ||||||||||||
CannaPunch Acquisition | Promissory notes payable CannaPunch Agreement | |||||||||||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||||||||||
Reduction in long term debt | $ 2,000 | ||||||||||||
Terms of note | 5 years | ||||||||||||
Annual interest rate | 6% |
DEBTS PAYABLE AND SENIOR SECU_6
DEBTS PAYABLE AND SENIOR SECURED NOTES - Convertible debt (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||||
Mar. 04, 2021 | Feb. 26, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | |
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||
Face value | $ 14,934 | ||||
Accrued interest | $ 3,191 | $ 7,542 | |||
Repayment of debt | $ 17,924 | 8,749 | |||
Convertible debt under liberty agreement | Liberty | |||||
DEBTS PAYABLE AND SENIOR SECURED NOTES | |||||
Face value | $ 4,325 | ||||
Accrued interest | $ 153 | ||||
Annual interest rate | 12% | ||||
Fair value of embedded derivative upon conversion feature | $ 3,154 | ||||
Period for the conversion or paid out of the convertible debt | 30 days | ||||
Repayment of debt | $ 50 | ||||
Number of subordinate shares issued for conversion of debt | 232 |
SHARE CAPITAL - Additional Info
SHARE CAPITAL - Additional Information (Details) $ / shares in Units, EquityInstruments in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Jan. 14, 2021 USD ($) shares | Jan. 14, 2021 $ / shares | Sep. 30, 2021 shares | Dec. 31, 2022 USD ($) EquityInstruments $ / shares shares | Dec. 31, 2021 USD ($) shares | Oct. 04, 2021 EquityInstruments | Mar. 23, 2021 EquityInstruments | Feb. 26, 2021 EquityInstruments | |
SHARE CAPITAL | ||||||||
Number of shares repurchased and cancelled | 5,000 | |||||||
Number of shares repurchased | 586,000 | |||||||
Shares issued due to net settlement | 926,000 | |||||||
Number of warrants forfeited | 57,000 | (57,000) | ||||||
Shares issued in connection with option | 33,000 | |||||||
Number of shares issued on exercise of warrants | 7,203,000 | |||||||
Exercise of warrants, number | 7,555,000 | |||||||
Equity offering, shares | 4,600,000 | |||||||
Shares issue price | $ / shares | $ 26.89 | |||||||
Total gross proceeds from equity offering | $ | $ 123,714 | |||||||
Share issuance cost | $ | $ 5,672 | |||||||
Exercise of options, shares | (33,000) | 37,000 | ||||||
Value of shares in ESCROW | $ | $ 2,000 | |||||||
Shares exercised through cashless conversion feature | 355,000 | |||||||
Number of shares issued to related party | 76,000 | |||||||
Number of shares repurchased | 82,000 | 82,000 | ||||||
PA natural acquisition | ||||||||
SHARE CAPITAL | ||||||||
Share issuance for earn-out consideration | 1,029,000 | |||||||
Share issuance - business combinations, shares | 814,000 | |||||||
Number of shares issued | EquityInstruments | 814 | |||||||
Oasis | ||||||||
SHARE CAPITAL | ||||||||
Share issuance - business combinations, shares | 4,570,000 | |||||||
Number of shares issued | EquityInstruments | 4,570 | |||||||
GSD | ||||||||
SHARE CAPITAL | ||||||||
Share issuance - business combinations, shares | 1,511,000 | |||||||
Liberty | ||||||||
SHARE CAPITAL | ||||||||
Share issuance - business combinations, shares | 12,747,000 | |||||||
Number of shares issued | EquityInstruments | 12,671 | |||||||
Subordinate Voting Shares | ||||||||
SHARE CAPITAL | ||||||||
Exercise of rights, shares | 135,000 | |||||||
Number of rights converted | 1,385,000 | |||||||
Number of securities into which each right may be redeemed | 0.1 | |||||||
Exchangeable Shares | ||||||||
SHARE CAPITAL | ||||||||
Conversion of exchangeable shares, shares | 71,000 | 9,012,000 | ||||||
Exchangeable Shares | PA natural acquisition | ||||||||
SHARE CAPITAL | ||||||||
Number of shares issued | EquityInstruments | 814 | |||||||
Exchangeable Shares | Cultivauna, LLC | ||||||||
SHARE CAPITAL | ||||||||
Number of shares issued | EquityInstruments | 329 | |||||||
Exchangeable Shares | Herbal Remedies business combination | ||||||||
SHARE CAPITAL | ||||||||
Number of shares issued | EquityInstruments | 353 | |||||||
Exchangeable Shares | Oasis | ||||||||
SHARE CAPITAL | ||||||||
Conversion of exchangeable shares, shares | 1,027,000 | |||||||
Equity shares related to purchase consideration | 1,027,000 | |||||||
Number of shares issued | EquityInstruments | 4,570 | |||||||
Exchangeable Shares | CannTech PA, LLC | ||||||||
SHARE CAPITAL | ||||||||
Conversion of exchangeable shares, shares | 908,000 | |||||||
Equity shares related to purchase consideration | 908,000 | |||||||
Exchangeable Shares | Liberty | ||||||||
SHARE CAPITAL | ||||||||
Number of shares issued | EquityInstruments | 248 | |||||||
RSU | ||||||||
SHARE CAPITAL | ||||||||
Vested RSU | EquityInstruments | 2,135 | |||||||
Shares issued due to net settlement | 1,459,000 | |||||||
Number of warrants forfeited | 78,000 | |||||||
Number of shares issued on exercise of warrants | 1,916,000 | |||||||
Warrants | ||||||||
SHARE CAPITAL | ||||||||
Exercise price of warrants | $ / shares | $ 9.07 | |||||||
Fair value of warrants | $ | $ 0 | $ 16,400 | ||||||
Average remaining life of warrants | 1 year 4 months 24 days | 2 years 4 months 24 days |
SHARE CAPITAL - Warrants (Detai
SHARE CAPITAL - Warrants (Details) - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Warrants | |||
Balance at the beginning of the year, number | 2,874 | 10,486 | |
Exercise of warrants, number | (7,555) | ||
Forfeitures of warrants, due to expiration | 57 | (57) | |
Balance at the end of the year, number | 2,874 | 2,874 | |
Weighted Average | |||
Warrants | |||
Balance at the beginning of the year, amount | $ 1,786 | $ 6,516 | |
Exercise of warrants, amount | (4,694) | ||
Forfeitures of warrants, due to expiration, amount | (36) | ||
Balance at the end of the year, amount | $ 1,786 | $ 1,786 |
DERIVATIVE LIABILITIES Warrants
DERIVATIVE LIABILITIES Warrants - Purchase Consideration and Contingent Consideration (Details) - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
May 31, 2022 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 04, 2021 | Mar. 23, 2021 | |
DERIVATIVE LIABILITIES | ||||||
Payment for settlement of contingent consideration | $ 10,000 | $ 10,000 | ||||
Reduction in long term debt | 14,934 | |||||
Share issuance - earn-out consideration | 11,748 | 11,748 | ||||
Fair value gain on financial liabilities | 63,088 | $ 83,759 | ||||
Current liabilities | 228,994 | 152,336 | ||||
Contingent consideration | ||||||
DERIVATIVE LIABILITIES | ||||||
Fair value gain on financial liabilities | $ 3,186 | |||||
Sira Acquisition | ||||||
DERIVATIVE LIABILITIES | ||||||
Contingent consideration fair value | 26,652 | 25,316 | ||||
Sira and Cultivauna | Contingent consideration | ||||||
DERIVATIVE LIABILITIES | ||||||
Non current liabilities | 26,661 | |||||
Oasis | ||||||
DERIVATIVE LIABILITIES | ||||||
Contingent consideration | 0 | 28,667 | $ 117,615 | |||
GSD | ||||||
DERIVATIVE LIABILITIES | ||||||
Contingent consideration | 63,429 | 91,671 | ||||
GSD | Contingent consideration | ||||||
DERIVATIVE LIABILITIES | ||||||
Current liabilities | $ 63,429 | |||||
PA Natural Acquisition | ||||||
DERIVATIVE LIABILITIES | ||||||
Contingent consideration | $ 39,868 | $ 39,041 | ||||
Share issuance - earn-out consideration (Shares) | 1,029 | |||||
Cultivauna, LLC | ||||||
DERIVATIVE LIABILITIES | ||||||
Contingent consideration | $ 9 | |||||
Herbal remedies | ||||||
DERIVATIVE LIABILITIES | ||||||
Fair value adjustment on the purchase consideration settlement | $ 1,780 |
DERIVATIVE LIABILITIES Warran_2
DERIVATIVE LIABILITIES Warrants - Fair value loss on financial liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
DERIVATIVE LIABILITIES | ||
Gain(loss) from FV adjustment | $ 63,081 | $ 83,759 |
Adjustment on contingent consideration | ||
DERIVATIVE LIABILITIES | ||
Gain(loss) from FV adjustment | 61,675 | 83,657 |
purchase consideration settlement | ||
DERIVATIVE LIABILITIES | ||
Gain(loss) from FV adjustment | (1,780) | $ 102 |
Contingent consideration | ||
DERIVATIVE LIABILITIES | ||
Gain(loss) from FV adjustment | $ 3,186 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) $ / shares in Units, shares in Thousands, EquityInstruments in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) EquityInstruments $ / shares shares | Dec. 31, 2021 USD ($) EquityInstruments $ / shares shares | |
STOCK-BASED COMPENSATION | ||
Share-based payment arrangement, percentage of total number of fully diluted shares issued and outstanding, maximum | 12% | |
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 | |
Forfeitures of RSUs | $ | 0 | |
Shares issued due to net settlement | shares | 926 | |
Net settlement of subordinate shares | $ | $ 28,536,000 | |
Remaining life of options | 8 months | 1 year |
Fair value of replacement options issued | $ | $ 4,453,000 | $ 4,453,000 |
Replacement options | ||
Balance at the beginning (In shares) | shares | 198 | |
Replacement options issued | shares | 248 | 248 |
Options exercised | shares | 33 | (37) |
Options sold to cover income taxes | shares | (13) | |
Balance at the end (In shares) | shares | 165 | 198 |
Weighted Average Fair Value | ||
Balance at the beginning | $ / shares | $ 17.93 | |
Replacement options issued | $ / shares | $ 17.93 | |
Options exercised | $ / shares | 17.93 | 17.93 |
Options sold to cover income taxes | $ / shares | 17.93 | |
Balance at the end | $ / shares | $ 17.93 | $ 17.93 |
Restricted Stock Units (RSUs) | ||
STOCK-BASED COMPENSATION | ||
Shares outstanding | 6,628 | 8,100 |
Granted, number | 741 | 5,781 |
Forfeitures of RSUs | 78 | 0 |
Vested | 2,135 | 1,916 |
Shares issued due to net settlement | shares | 1,459 | 925 |
Net settlement, withheld shares | shares | 676 | 991 |
Net settlement of subordinate shares | $ | $ 5,258,000 | |
Remaining life of options | 1 year 3 months | 1 year |
Stock-based compensation expense | $ | $ 21,538,000 | $ 37,910,000 |
Aggregate intrinsic value | $ | $ 16,135,000 | $ 113,417,000 |
Balance at the beginning of the year, number | 8,100 | 4,235 |
Balance at the beginning of the year, Weighted Average Grant Date Fair Value | $ | $ 18.83 | $ 16.63 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | $ 6.45 | $ 17.79 |
Vested , number | (2,135) | (1,916) |
Vested, Weighted Average Grant Date Fair Value | $ / shares | $ 18.58 | $ 18.44 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | $ 15.90 | |
Balance at the end of the year, number | 6,628 | 8,100 |
Balance at the end of the year, Weighted Average Grant Date Fair Value | $ | $ 17.56 | $ 18.83 |
Market based RSUs | ||
STOCK-BASED COMPENSATION | ||
Shares outstanding | 650 | |
Balance at the end of the year, number | 650 | |
Market and performance based RSUs | ||
STOCK-BASED COMPENSATION | ||
Shares outstanding | 1,300 | |
Balance at the end of the year, number | 1,300 | |
Stock options | ||
STOCK-BASED COMPENSATION | ||
Granted, number | 0 | 0 |
Aggregate intrinsic value | $ | $ 0 | $ 400,000 |
Bottom of range | ||
Replacement options | ||
Share closing price | $ / shares | $ 8.47 | |
Bottom of range | Restricted Stock Units (RSUs) | ||
STOCK-BASED COMPENSATION | ||
Vesting period | 1 year | |
Top of range | ||
Replacement options | ||
Share closing price | $ / shares | $ 23.66 | |
Top of range | Restricted Stock Units (RSUs) | ||
STOCK-BASED COMPENSATION | ||
Vesting period | 4 years |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Dec. 31, 2021 USD ($) |
COMMITMENTS AND CONTINGENCIES | |
Construction Commitments | $ 60,217 |
FINANCIAL RISK FACTORS (Details
FINANCIAL RISK FACTORS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
FINANCIAL RISK FACTORS | ||
Transfers into Level 3 of fair value hierarchy, assets | $ 0 | $ 0 |
Transfers out of Level 3 of fair value hierarchy, assets | 0 | 0 |
Transfers out of Level 1 into Level 2 of fair value hierarchy, assets | 0 | 0 |
Transfers out of Level 2 into Level 1 of fair value hierarchy, assets | 0 | 0 |
Transfers into Level 3 of fair value hierarchy, liabilities | 0 | 0 |
Transfers out of Level 3 of fair value hierarchy, liabilities | 0 | 0 |
Transfers out of Level 1 into Level 2 of fair value hierarchy, liabilities | 0 | 0 |
Transfers out of Level 2 into Level 1 of fair value hierarchy, liabilities | $ 0 | $ 0 |
FINANCIAL RISK FACTORS - Financ
FINANCIAL RISK FACTORS - Financial assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Contingent consideration | Level 3 | ||
FINANCIAL RISK FACTORS | ||
Financial liabilities | $ 90,090 | $ 185,522 |
FINANCIAL RISK FACTORS - Contin
FINANCIAL RISK FACTORS - Contingent consideration (Details) | Dec. 31, 2022 |
Equity Volatility | Bottom of range | |
FINANCIAL RISK FACTORS | |
Input liabilities | 0.5565 |
Equity Volatility | Top of range | |
FINANCIAL RISK FACTORS | |
Input liabilities | 0.8505 |
Revenue Volatility | Bottom of range | |
FINANCIAL RISK FACTORS | |
Input liabilities | 0.0746 |
Revenue Volatility | Top of range | |
FINANCIAL RISK FACTORS | |
Input liabilities | 0.2396 |
Risk-free rate | Bottom of range | |
FINANCIAL RISK FACTORS | |
Input liabilities | 0.0162 |
Risk-free rate | Top of range | |
FINANCIAL RISK FACTORS | |
Input liabilities | 0.0467 |
Revenue Risk Premium | Bottom of range | |
FINANCIAL RISK FACTORS | |
Input liabilities | 0.0558 |
Revenue Risk Premium | Top of range | |
FINANCIAL RISK FACTORS | |
Input liabilities | 0.0961 |
Credit Risk Rate | Bottom of range | |
FINANCIAL RISK FACTORS | |
Input liabilities | 0.1050 |
Credit Risk Rate | Top of range | |
FINANCIAL RISK FACTORS | |
Input liabilities | 0.1910 |
Discount Rate | Bottom of range | |
FINANCIAL RISK FACTORS | |
Input liabilities | 0.0840 |
Discount Rate | Top of range | |
FINANCIAL RISK FACTORS | |
Input liabilities | 0.1000 |
TAXATION - Provision for income
TAXATION - Provision for income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
TAXATION | ||
Current expense | $ 46,934 | $ 45,820 |
Deferred expense (benefit) | (1,558) | (16,559) |
Change in valuation allowance | 232 | 2,981 |
Total income tax expense: | 45,376 | 29,261 |
Federal | ||
TAXATION | ||
Current expense | 38,053 | 38,461 |
Deferred expense (benefit) | (5,701) | (13,414) |
State | ||
TAXATION | ||
Current expense | 8,881 | 7,359 |
Deferred expense (benefit) | 4,143 | (3,145) |
Foreign | ||
TAXATION | ||
Deferred expense (benefit) | $ (232) | $ (2,981) |
TAXATION - Reconciliation of in
TAXATION - Reconciliation of income tax expense and expected income taxes based on the statutory tax rate (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of actual and expected income tax expense based on the statutory tax rate applied to pre-tax income (loss) | ||
Income (loss) before income taxes and noncontrolling interests | $ (210,109) | $ 12,309 |
Statutory tax rates | 21% | 21% |
Expected income tax recovery | $ (44,123) | $ 2,585 |
Difference in foreign tax rates | (4,311) | (672) |
State taxes | 13,024 | 4,982 |
Foreign exchange gain or loss | 146 | |
Impairment loss | 31,191 | |
Translation Adjustment | 669 | |
Unrealized change in fair value of financial liabilities | (13,248) | |
Acquisitions costs | 147 | 1,857 |
Interest income inclusion | 4,244 | |
Non-deductible expenses | 61,072 | 18,235 |
Amortization of debt premium | (815) | |
Tax rate change | (767) | |
Prior year adjustment | (2,877) | |
Valuation allowance | 232 | 2,981 |
Other | 25 | 60 |
Total income tax expense: | $ 45,376 | $ 29,261 |
TAXATION - Deferred tax assets
TAXATION - Deferred tax assets and liabilities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
TAXATION | ||
Deferred tax assets | $ 14,363,000 | $ 11,451,000 |
Valuation allowance | (8,784,000) | (8,552,000) |
Total deferred tax assets | 5,579,000 | 2,899,000 |
Deferred tax liabilities | (74,102,000) | (72,980,000) |
Net deferred tax liabilities | (68,523,000) | (70,081,000) |
Increase in valuation allowance | 232,000 | 2,981,000 |
Operating loss carryforwards subject to expiration | 30,538,000,000 | 29,507,000,000 |
Accrual for uncertain tax positions | 0 | 0 |
Net operating losses | ||
TAXATION | ||
Deferred tax assets | 9,515,000 | 7,967,000 |
Share issuance costs | ||
TAXATION | ||
Deferred tax assets | 1,311 | 2,245 |
Share based compensation - included in cost of good sold | ||
TAXATION | ||
Deferred tax assets | 1,385,000 | |
Investments | ||
TAXATION | ||
Deferred tax assets | 34,000 | |
Inventory | ||
TAXATION | ||
Deferred tax assets | 1,389,000 | 153,000 |
Other assets | ||
TAXATION | ||
Deferred tax assets | 763,000 | 1,052,000 |
Depreciation - included in cost of good sold | ||
TAXATION | ||
Deferred tax liabilities | (7,173,000) | (6,071,000) |
Amortization - included in cost of good sold | ||
TAXATION | ||
Deferred tax liabilities | (65,642,000) | (64,197,000) |
Debt financing costs | ||
TAXATION | ||
Deferred tax liabilities | (1,202,000) | (1,821,000) |
Other liabilities | ||
TAXATION | ||
Deferred tax liabilities | $ (85,000) | $ (891,000) |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) item entity | |
Blue Camo | |
SUBSEQUENT EVENTS | |
Net loss on sale to be recognized | $ 175,000 |
Termination of proposed business acquisition [Member] | Dispensary 33 | |
SUBSEQUENT EVENTS | |
Number of retail dispensaries proposed to be acquired | item | 2 |
Upfront consideration proposed | $ 55,000 |
Amount of cash included in total consideration | 12,000 |
Amount of seller notes included in total consideration | 3,000 |
Amount of stock included in total consideration | 40,000 |
Agreement for sale of business | Blue Camo | |
SUBSEQUENT EVENTS | |
Amount of cash included in total consideration | $ 20,000 |
Number of retail dispensaries proposed to be sold | item | 3 |
Elimination of long term lease liabilities | $ 15,000 |
Reduction of long-term debt | $ 22,500 |
Option agreement granting future ability to acquire business. | |
SUBSEQUENT EVENTS | |
Number of entities acquired | entity | 2 |
Option agreement granting future ability to acquire business. | Daily Releaf | |
SUBSEQUENT EVENTS | |
Percentage of equity interest acquired | 100% |
Option agreement granting future ability to acquire business. | Heaven Wellness | |
SUBSEQUENT EVENTS | |
Percentage of equity interest acquired | 100% |