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

ACQUISITIONS

v3.25.0.1
ACQUISITIONS
 12 Months Ended
Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
ACQUISITIONS
 6. ACQUISITIONS
2024 Asset Acquisitions
The Company, through management services agreements, obtained control of the following entities during the year ended December 31, 2024: (i) Statewide; and (2) RJK (each as defined below). The Company consolidated these entities under the variable interest entities (“VIE”) provisions of ASC 810, Consolidation.
The following table summarizes the preliminary purchase price allocations as of their respective acquisition dates:
Statewide (1)
RJK (1)
Total
Assets Acquired:
Cash and cash equivalents $ 24  $ 194  $ 218 
Other assets
 —  20  20 
Inventory 24  251  275 
Property, plant and equipment 18  50  68 
Intangible assets (2)
3,787  7,008  10,795 
Total assets acquired $ 3,853  $ 7,523  $ 11,376 
Liabilities Assumed:
Accounts payable and accrued liabilities $ 24  $ 323  $ 347 
Total liabilities assumed $ 24  $ 323  $ 347 
Net assets acquired $ 3,829  $ 7,200  $ 11,029 
Consideration:
Consideration paid in cash, net of working capital adjustments $ 1,838  $ 3,413  $ 5,251 
Consideration to be paid in promissory notes (fair value) 1,991  3,787  5,778 
Fair value of consideration $ 3,829  $ 7,200  $ 11,029 
(1)The Company accounted for these transactions as an asset acquisition after an evaluation of the U.S. GAAP guidance for business combinations. This conclusion was reached based on the determination that the license represented substantially all of the fair value of the gross assets acquired.
(2)Represents licenses, which have 15-year useful lives.
Statewide
In September 2024, the Company entered into an Asset Purchase Agreement with Statewide Property Holdings Ohio, LLC (“Statewide”) for certain assets to be acquired in connection with one dispensary in Toledo, Ohio, and a 10(B) additional dispensary expected to be sited in Warren, Ohio, which will be completed in three separate closings. The first closing occurred in October 2024, the second closing for the license and inventory assets at the Toledo, Ohio dispensary occurred in February 2025, and the third closing for the inventory assets in the Warren, Ohio dispensary is subject to regulatory approval. As part of the first closing, the Company also entered into a Management Services Agreement (the “MSA”) in October 2024 which resulted in the day-to-day operations of the dispensary transferring to the Company, subject to state regulatory constraints, until the license and inventory assets are acquired in the second and third closings. Based on the terms of the MSA, it was determined that the Company has a variable interest in Statewide, and as such is consolidated in the Company’s financial statements beginning in October 2024.
RJK
In October 2024, the Company entered into an Asset Purchase Agreement with RJK Holdings of Ohio, LLC (“RJK”) for certain assets to be acquired in connection with one dispensary in Oxford, Ohio and a 10(B) additional dispensary expected to be sited in Mansfield, Ohio, which will be completed in three separate closings. The first closing occurred in November 2024, the second closing for the license and inventory assets at the Oxford, Ohio dispensary occurred in February 2025, and the third closing for the license and inventory assets at the Mansfield, Ohio dispensary is subject to regulatory approval. As part of the first closing, the Company also entered into a MSA in November 2024 which resulted in the day-to-day operations of the dispensary transferring to the Company, subject to regulatory constraints, until the license and assets are acquired in the second and third closings. Based on the terms of the MSA, it was determined that the Company has a variable interest in RJK, and as such is consolidated in the Company’s financial statements beginning in November 2024.
2023 Business Combinations
The Company did not have any acquisitions during the year ended December 31, 2023.
ACQUISITIONS
 6. ACQUISITIONS
2024 Asset Acquisitions
The Company, through management services agreements, obtained control of the following entities during the year ended December 31, 2024: (i) Statewide; and (2) RJK (each as defined below). The Company consolidated these entities under the variable interest entities (“VIE”) provisions of ASC 810, Consolidation.
The following table summarizes the preliminary purchase price allocations as of their respective acquisition dates:
Statewide (1)
RJK (1)
Total
Assets Acquired:
Cash and cash equivalents $ 24  $ 194  $ 218 
Other assets
 —  20  20 
Inventory 24  251  275 
Property, plant and equipment 18  50  68 
Intangible assets (2)
3,787  7,008  10,795 
Total assets acquired $ 3,853  $ 7,523  $ 11,376 
Liabilities Assumed:
Accounts payable and accrued liabilities $ 24  $ 323  $ 347 
Total liabilities assumed $ 24  $ 323  $ 347 
Net assets acquired $ 3,829  $ 7,200  $ 11,029 
Consideration:
Consideration paid in cash, net of working capital adjustments $ 1,838  $ 3,413  $ 5,251 
Consideration to be paid in promissory notes (fair value) 1,991  3,787  5,778 
Fair value of consideration $ 3,829  $ 7,200  $ 11,029 
(1)The Company accounted for these transactions as an asset acquisition after an evaluation of the U.S. GAAP guidance for business combinations. This conclusion was reached based on the determination that the license represented substantially all of the fair value of the gross assets acquired.
(2)Represents licenses, which have 15-year useful lives.
Statewide
In September 2024, the Company entered into an Asset Purchase Agreement with Statewide Property Holdings Ohio, LLC (“Statewide”) for certain assets to be acquired in connection with one dispensary in Toledo, Ohio, and a 10(B) additional dispensary expected to be sited in Warren, Ohio, which will be completed in three separate closings. The first closing occurred in October 2024, the second closing for the license and inventory assets at the Toledo, Ohio dispensary occurred in February 2025, and the third closing for the inventory assets in the Warren, Ohio dispensary is subject to regulatory approval. As part of the first closing, the Company also entered into a Management Services Agreement (the “MSA”) in October 2024 which resulted in the day-to-day operations of the dispensary transferring to the Company, subject to state regulatory constraints, until the license and inventory assets are acquired in the second and third closings. Based on the terms of the MSA, it was determined that the Company has a variable interest in Statewide, and as such is consolidated in the Company’s financial statements beginning in October 2024.
RJK
In October 2024, the Company entered into an Asset Purchase Agreement with RJK Holdings of Ohio, LLC (“RJK”) for certain assets to be acquired in connection with one dispensary in Oxford, Ohio and a 10(B) additional dispensary expected to be sited in Mansfield, Ohio, which will be completed in three separate closings. The first closing occurred in November 2024, the second closing for the license and inventory assets at the Oxford, Ohio dispensary occurred in February 2025, and the third closing for the license and inventory assets at the Mansfield, Ohio dispensary is subject to regulatory approval. As part of the first closing, the Company also entered into a MSA in November 2024 which resulted in the day-to-day operations of the dispensary transferring to the Company, subject to regulatory constraints, until the license and assets are acquired in the second and third closings. Based on the terms of the MSA, it was determined that the Company has a variable interest in RJK, and as such is consolidated in the Company’s financial statements beginning in November 2024.
2023 Business Combinations
The Company did not have any acquisitions during the year ended December 31, 2023.