Quarterly report [Sections 13 or 15(d)]

DEBT

v3.26.1
DEBT
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
DEBT
 8. DEBT
The components of the Company’s debt are as follows:
Effective Interest Rate Maturity Date March 31, 2026 (unaudited) December 31, 2025
Principal amounts:
2026 Term Loan
 16% March 2029 $ 160,000  $ — 
Second Lien Notes n/a n/a —  86,194 
2024 Term Loan
 n/a
n/a
 —  46,075 
Acquisition-related promissory notes payable
8% - 13%
June 2026 - April 2027
 29,737  28,337 
Mortgage loans
6% - 10%
January 2027 - September 2030
 32,346  32,470 
Total debt subject to scheduled repayments 222,083  193,076 
Promissory notes payable to Sammartino (1)
10%
September 2024 - September 2026
 21,500  21,500 
Total debt 243,583  214,576 
Less: debt issuance costs and original issue discounts (12,229) (8,742)
Total debt, net $ 231,354  $ 205,834 
Debt, net - current portion $ 12,887  $ 6,639 
Debt, net - non-current portion $ 218,467  $ 199,195 
(1)This amount is related to the promissory notes issued to Sammartino Investments LLC (“Sammartino”) in connection with the acquisition of Nature's Remedy of Massachusetts, Inc. (“Nature's Remedy”) in September 2021. The Company currently has no obligation to pay the principal and interest. See further discussion of the Sammartino Matter in Note 16 - Commitments and Contingencies for more information.
2026 Term Loan
On March 27, 2026, the Company refinanced both its senior secured term loan (“2024 Term Loan”) and its 12% second lien notes due 2026 (“Second Lien Notes”), which had outstanding principal balances of $46,075 and $86,194, respectively, as of December 31, 2025, and were scheduled to mature within twelve months of December 31, 2025. The refinancing of the 2024 Term Loan and Second Lien Notes was accounted for as a partial extinguishment resulting in a loss on debt extinguishment/modification of $4,977, which is included in other income (expense), net in the consolidated statements of operations. The refinancing was completed through the issuance of a $160,000 senior secured term loan (“2026 Term Loan”) to a syndicate of lenders, bearing interest at a rate of 12.5% per annum payable in cash monthly with maturity in March 2029, and an original issue discount of $6,400. The 2026 Term Loan lender used $136,117 to: (i) settle the outstanding principal, accrued but unpaid interest, exit fee and make-whole on the 2024 Term Loan; (ii) settle the outstanding principal and accrued but unpaid interest on the Second Lien Notes; and (iii) pay certain fees and expenses associated with the issuance of the 2026 Term Loan. Remaining excess proceeds of $17,483 were retained on the balance sheet for general corporate purposes.
Serpentine Capital Management III, LLC, an entity controlled by James Cacioppo, the Company’s Chief Executive Officer, Chairman and founder, participated in the 2026 Term Loan with a principal amount of $27,993. Denis Arsenault, a founder and significant equity holder of the Company, participated in the 2026 Term Loan with a principal amount of $21,016.
Acquisition-related promissory notes payable
Parma
In the first half of 2025, the Company entered into agreements to acquire a dispensary license and assume an existing lease in Parma, Ohio, subject to regulatory approval, for a total purchase price of $3,200. The Company paid an initial deposit of $250. In February 2026, the transaction closed upon receipt of regulatory approval, and the remaining consideration was paid through a combination of $1,550 in cash and $1,400 in aggregate promissory notes. The promissory notes bear interest at a stated rate of 10% per annum, are payable quarterly in cash, and mature in April 2027.
The transaction was accounted for as an asset acquisition, as the acquired set did not constitute a business due to the absence of a transferred workforce, customers, substantive processes, or revenue‑generating activities. Accordingly, the acquisition was accounted for under ASC 805‑50, and no goodwill was recognized. The right‑of‑use asset recognized for the assumed lease approximated the corresponding lease liability and therefore did not require allocation of the consideration transferred. As a result, substantially all of the consideration was allocated to the acquired dispensary license, which is recorded as a finite‑lived intangible asset and is being amortized on a straight‑line basis over an estimated useful life of 15 years.
Mortgage Loans
Arlington Mortgage
In December 2021, the Company entered into a $6,900 mortgage loan agreement (the “Arlington Mortgage”), which is principally secured by the Company’s retail property in Arlington, Virginia. The Arlington Mortgage bears a fixed interest rate of 5.875% per annum, payable monthly, and will mature in January 2027.
Dickson City Mortgage
In July 2022, the Company entered into a $2,800 mortgage loan agreement (the “Dickson City Mortgage”), which is principally secured by the Company’s retail property in Dickson City, Pennsylvania. The Dickson City Mortgage matures in July 2027 and bears interest at a variable rate equal to prime rate plus 2%. The interest rate as of March 31, 2026 was 8.75%.
Manassas Mortgage
In April 2023, the Company entered into a $20,000 mortgage loan agreement (the “Manassas Mortgage”), which is principally secured by the Company’s cultivation and manufacturing facility located in Manassas, Virginia (the “Property”). The Manassas Mortgage requires monthly payments and was originally scheduled to mature in April 2028. The interest rate is variable and determined based on the 30-day average secured overnight financing rate plus 3.55%.

In September 2025, the Company executed a modification agreement (the “Modification Agreement”) related to the Manassas Mortgage, pursuant to which: (i) the outstanding principal balance was increased by $4,000, (the “Additional Loan Proceeds”); (ii) the loan’s maturity date was extended to September 2030; and (iii) the interest rate floor was lowered from 8.25% to 7.50% (the interest rate remains the average 30-day secured overnight financing rate plus 3.55%). The Manassas Mortgage, as modified, remains principally secured by the Property. In addition, as part of the Modification Agreement, the Company was required to deposit $761 of the Additional Loan Proceeds into a restricted account, designated for use in fulfilling certain conditions associated with ongoing construction at the Property.
The interest rate as of March 31, 2026 was 7.50%.
Financial Covenants
2026 Term Loan
The 2026 Term Loan includes a financial covenant that requires the Company to maintain a minimum unrestricted cash balance of $15,000 at all times. As of March 31, 2026, the Company was in compliance with this financial covenant.
Mortgage loans
The Company’s three mortgage loan agreements contain certain financial and other covenants with which the Company is required to comply. As of March 31, 2026, the Company was in compliance with all financial covenants contained in each of the mortgage loan agreements.
Annual Maturities
As of March 31, 2026, aggregate future scheduled repayments of the Company’s debt were as follows:
Remainder of the year 2027 2028 2029 2030 Thereafter Total
2026 Term Loan
 $ —  $ —  $ —  $ 160,000  $ —  $ —  $ 160,000 
Acquisition-related promissory notes payable 6,223  23,514  —  —  —  —  29,737 
Mortgage loans 386  9,304  383  418  21,855  —  32,346 
Total debt subject to scheduled repayments $ 6,609  $ 32,818  $ 383  $ 160,418  $ 21,855  $ —  $ 222,083 
The above table excludes the maturities of the Company’s promissory notes payable to Sammartino, as the repayment of these notes, if any, would arise in the context of a non-appealable final judgment by a court. Refer to Note 16 - Commitments and Contingencies for more information. Specifically, the promissory notes that were payable to Sammartino are as follows: $16,500 in 2024 and $5,000 in 2026. However, these balances are classified as long-term debt since the Company does not expect to repay these amounts within the next 12 months.
Interest Expense
Interest expense, net is comprised of the following:
Three Months Ended March 31,
2026 2025
Interest expense
Interest and accretion - Second Lien Notes $ 3,382  $ 3,103 
Interest and accretion - 2024 Term Loan
 2,814  3,190 
Interest and accretion - 2026 Term Loan
 274  — 
Interest and accretion - Finance lease liabilities 2,549  2,475 
Interest and accretion - Promissory notes
 931  814 
Interest and accretion - Mortgage loans and other financing activities 619  602 
Capitalized interest (93) (62)
Total interest expense 10,476  10,122 
Interest income (88) (122)
Total interest expense, net $ 10,388  $ 10,000