ACQUISITIONS |
3 Months Ended | ||||||
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Mar. 31, 2024 | |||||||
| Business Combination and Asset Acquisition [Abstract] | |||||||
| ACQUISITIONS |
Nature’s Remedy
In connection with the Company’s acquisition of Nature’s Remedy of Massachusetts, Inc. and certain of its affiliates (collectively, “Nature’s Remedy”), in September 2021 the Company agreed to issue up to an additional $5,000 in Company SVS to Sammartino Investments LLC (“Sammartino”) upon the occurrence or non-occurrence of certain events after the closing date. The payment of the contingent consideration depends on whether or not a competitor (as defined in the definitive acquisition documents) opens a competing dispensary within a certain radius of the Company’s dispensary in Tyngsborough, Massachusetts during the period beginning on the 12-month anniversary of the closing date and ending on the 30-month anniversary of the closing date (the “Milestone Period”). On each monthly anniversary of the closing date during the Milestone Period (beginning on the 13-month anniversary of the closing date), Sammartino shall accrue $278 worth of Company SVS (a “Monthly Milestone Accrual”). On the 18-month, 24-month and 30-month anniversary of the closing date (and provided a competitor has not opened a competing dispensary within a certain radius of the Company’s dispensary in Tyngsborough, Massachusetts), Sammartino is entitled to be issued Company SVS in an amount equal to $1,667 divided by a volume weighted average reference share price.
A competitor has not opened a competing dispensary within the stated radius of the Company’s dispensary in Tyngsborough, Massachusetts. Consequently, beginning in March 2023, the Company began recording a liability for the Monthly Milestone Accrual. As of March 31, 2024, $5,000 of Monthly Milestone Accrual was classified as acquisition-related milestone accrual in other current liabilities. As of December 31, 2023, the aggregate contingent consideration liability was $4,984, of which $4,167 of Monthly Milestone Accrual was classified as acquisition-related milestone accrual in other current liabilities and the remaining $817 was included as short-term contingent consideration liability.
As discussed in greater detail in Note 18 - Commitments and Contingencies, on February 28, 2023, the Company informed Sammartino that Sammartino had breached several provisions of the Merger and Membership Interest Purchase Agreement between the Company, Sammartino and certain other parties thereto (as amended, the “MIPA”) and pursuant to the terms of the MIPA the Company had elected to offset these damages against (among other things) all present and future Monthly Milestone Accruals (the “Sammartino Matter”).
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