Annual report [Section 13 and 15(d), not S-K Item 405]

PREPAID EXPENSES AND OTHER CURRENT ASSETS

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PREPAID EXPENSES AND OTHER CURRENT ASSETS
 12 Months Ended
Dec. 31, 2025
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
PREPAID EXPENSES AND OTHER CURRENT ASSETS
 4. PREPAID EXPENSES AND OTHER CURRENT ASSETS
The components of prepaid expenses and other current assets are as follows:
As of December 31,
2025 2024
Prepaid expenses and deposits $ 3,676  $ 3,452 
Employee retention credit receivable
 688  9,181 
Assets held for sale
 382  611 
Other current assets 2,112  1,786 
Total prepaid expenses and other current assets $ 6,858  $ 15,030 
Employee Retention Credit Receivable
The Coronavirus Aid, Relief, and Economic Security Act, passed in March 2020 and subsequently amended in 2021, allowed eligible employers to take credits on certain amounts of qualified wages if the Company experienced either a full or partial suspension of operations due to COVID related government orders. During the year ended December 31, 2023, the Company, with guidance from a third-party specialist, determined it was entitled to employee retention credit (“ERC”) claims for previous business interruptions related to COVID and filed for such claims with the Internal Revenue Service (“IRS”). As of December 31, 2025 and 2024, outstanding ERC claims were recorded as deferred income in Accrued expenses and other current liabilities, with an offsetting receivable amount in Prepaid expenses and other current assets within the consolidated balance sheets.
On February 11, 2025, the Company executed an agreement with an unrelated third party to sell certain ERC claims and received $5,081 in net cash proceeds on February 14, 2025. The Company was entitled to receive a portion of any interest paid on its respective ERC claims through the transaction date. Amounts were recognized in the consolidated statements of operations when the claims were paid by the IRS. As of December 31, 2025, all factored claims were received from the IRS.
The Company retained $4,162 of ERC claims. The amount reflected in Prepaid expenses and other current assets as of December 31, 2025, of $688 represents the portion of retained claims that have not yet been refunded by the IRS.
During the year ended December 31, 2025, the Company received payments on retained claims from the IRS in the amount of $3,411, plus interest on such amounts, which were recorded in other income (expense), net in the consolidated statements of operations. In addition, during the year ended December 31, 2025, the IRS paid $5,979 of factored claims plus interest on such amounts, of which $5,081 is also recorded in other income (expense), net in the consolidated statements of operations.
Assets Held for Sale
As of December 31, 2025, the Company determined that certain assets relating to one of its dispensaries located in Illinois, with total carrying value of $382, met the criteria to be classified as assets held for sale, and were included in Prepaid expenses and other current assets in the consolidated balance sheet. In January 2026, the operations of that dispensary were turned over to the buyer pursuant to a master services agreement.
As of December 31, 2024, the Company determined that certain assets relating to one of its dispensaries located in Nevada, with total carrying value of $611, met the criteria to be classified as assets held for sale, and were included in Prepaid expenses and other current assets in the consolidated balance sheet. In May 2025, the Company sold the assets for a net gain of $2,243, which was recorded in operating expenses in the consolidated statements of operations for the year ended December 31, 2025.
Additionally, during the year ended December 31, 2024, the Company sold one of its business licenses in California, and one of its business licenses in Nevada which were both previously written off, for a net gain of $750 and $425, respectively. These amounts were recorded in operating expenses in the consolidated statements of operations.