1. | NATURE OF OPERATIONS |
2. | SIGNIFICANT ACCOUNTING POLICIES |
(a) | Basis of Preparation and Statement of Compliance |
(b) | Basis of Measurement |
(c) | Functional and Presentation Currency |
(d) | Basis of Consolidation |
Subsidiaries | Jurisdiction | Interest | ||||||
GTI23, Inc. | Delaware | 100 | % | |||||
VCP23, LLC | Delaware | 100 | % | |||||
GTI Core, LLC | Delaware | 100 | % |
Subsidiaries | Ownership | Jurisdiction | Purpose | |||||
JB17, LLC | 100 | % | Maryland | Management company | ||||
GTI-Clinic Illinois Holdings, LLC | 100 | % | Illinois | License holder | ||||
IL Disp, LLC | 50 | % | Illinois | License holder | ||||
RISE Holdings, Inc. | 100 | % | Massachusetts | License holder | ||||
GTI Maryland, LLC | 100 | % | Maryland | License holder | ||||
Ohio Investors 2017, LLC | 99 | % | Ohio | Holding Company | ||||
GTI Ohio, LLC | 99 | % | Ohio | License holder | ||||
GTI Nevada, LLC | 100 | % | Nevada | License holder | ||||
GTI Pennsylvania, LLC | 100 | % | Pennsylvania | License holder | ||||
GTI Florida, LLC | 100 | % | Florida | Holding company | ||||
KSGNF, LLC | 100 | % | Florida | License holder | ||||
GTI New Jersey, LLC | 100 | % | New Jersey | License holder | ||||
KW Ventures Holdings, LLC | 100 | % | Pennsylvania | License holder | ||||
Chesapeake Alternatives, LLC | 100 | % | Maryland | License holder | ||||
Meshow, LLC | 0 | % | Maryland | License holder | ||||
Advanced Grow Labs, LLC | 100 | % | Connecticut | License holder | ||||
Bluepoint Wellness of Westport, LLC | 46 | % | Connecticut | License holder | ||||
Bluepoint Apothecary, LLC | 100 | % | Connecticut | License holder | ||||
Southern CT Wellness and Healing | 100 | % | Connecticut | License Holder | ||||
Integral Associates, LLC | 100 | % | Nevada | License holder | ||||
Integral Associates CA, LLC | 100 | % | California | License holder | ||||
Fiorello Pharmaceuticals, Inc. | 100 | % | New York | License holder | ||||
MC Brands, LLC | 100 | % | Colorado | Intellectual property | ||||
For Success Holding Company | 100 | % | California | Intellectual property | ||||
VCP IP Holdings, LLC | 100 | % | Delaware | Intellectual property | ||||
Vision Management Services, LLC | 100 | % | Delaware | Management company | ||||
TWD18, LLC | 100 | % | Delaware | Investment company | ||||
VCP Real Estate Holdings, LLC | 100 | % | Delaware | Real Estate holding company |
(e) | Investment in Associates |
(f) | Non-controlling Interests |
(g) | Cash and Cash Equivalents |
(h) | Accounts Receivable |
(i) | Inventories |
(j) | Property and Equipment |
Land | Not Depreciated | |
Buildings and Improvements | 39 Years | |
Furniture and Fixtures | 5 – 7 Years | |
Computer Equipment and Software | 5 Years | |
Leasehold Improvements | Remaining Life of Lease | |
Production and Processing Equipment | 5 – 7 Years | |
| Assets Under Construction | Not Depreciated |
(k) | Note Receivable and Investments |
(l) | Intangible Assets |
Licenses and Permits | 7-15 years | |
Tradenames | 3-15 years | |
Customer Relationships | 3-7 years | |
Non-competition Agreement | 2-5 years |
(m) | Goodwill |
(n) | Income Taxes |
(o) | Revenue Recognition |
| • | Identify a customer along with a corresponding contract; |
| • | Identify the performance obligation(s) in the contract to transfer goods or provide distinct services to a customer; |
| • | Determine the transaction price the Company expects to be entitled to in exchange for transferring promised goods or services to a customer; |
| • | Allocate the transaction price to the performance obligation(s) in the contract; and |
| • | Recognize revenue when or as the Company satisfies the performance obligation(s). |
(p) | Stock-Based Payments |
(q) | Fair Value of Financial Instruments |
(r) | Commitments and Contingencies |
(s) | Share Capital |
(t) | Earnings (Loss) per Share |
(u) | Business Combinations |
(v) | Foreign Currency |
(w) | Impairment of Other Long-Lived Assets |
(x) | Significant Accounting Judgments, Estimates and Assumptions |
(i) | Estimated Useful Lives and Amortization of Intangible Assets (Also see Note 8—Intangible Asset and Goodwill) |
(ii) | Business Combinations |
(iii) | Inventories |
(iv) | Investments in Private Holdings |
(v) | Goodwill Impairment |
(vi) | Determination of Reporting Units |
(vii) | Consolidation |
(viii) | Allowance for Uncollectible Accounts |
(ix) | Stock-Based Payments |
(x) | Fair Value of Financial Instruments |
(y) | New and Revised Standards |
(i) | In June 2016, the Financial Accounting Standards Board (“ FASB ”) issued Accounting Standards Update (“ASU ”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (“ASU ”), which replaces the incurred loss model with a current expected credit loss (“2016-13 CECL ”) model and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. This standard applies to financial assets, measured at amortized cost, including loans, held-to-maturity |
(ii) | In January 2017, the FASB issued ASU No. 2017-04 “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU ”), which simplifies the accounting for goodwill impairment. ASU 2017-04 2017-04 requires entities to record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (Step 1 under the current impairment test). The standard eliminates Step 2 from the current goodwill impairment test, which included determining the implied fair value of goodwill and comparing it with the carrying amount of that goodwill. ASU 2017-04 must be applied prospectively and is effective in the first quarter of 2020. Early adoption is permitted. The Company adopted the new standard in the first quarter of 2020. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. |
(iii) | In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820)(“ASU ”). 2018-13 ASU 2018-13 adds, modifies, and removes certain fair value measurement disclosure requirements. ASU 2018-13 is effective for annual and interim periods beginning after December 15, 2019. The Company adopted the new standard in the first quarter of 2020. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. |
(iv) | In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes (“ASU ”). ASU 2019-12 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for the Company beginning January 1, 2021. We do not expect the adoption of this guidance will have a material impact on the Company’s consolidated financial statements. |
(v) | In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (“ASU ”), 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 2020-01 is effective for the Company beginning January 1, 2021. We do not expect the adoption of this guidance will have a material impact on the Company’s consolidated financial statements. |
(vi) | On August 5, 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. We do not expect the adoption of this guidance will have a material impact on the Company’s consolidated financial statements . |
(z) | Coronavirus Pandemic |
(a) | Basis of Preparation and Statement of Compliance |
(b) | Basis of Measurement |
(c) | Functional and Presentation Currency |
20. | QUARTERLY FINANCIAL DATA (UNAUDITED) |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||||
2020 | ||||||||||||||||||||
Net Sales | $ | 102,602,602 | $ | 119,639,924 | $ | 157,103,841 | $ | 177,226,522 | $ | 556,572,889 | ||||||||||
Income from operations | 7,552,657 | 14,050,703 | 37,211,186 | 47,292,283 | 106,106,829 | |||||||||||||||
Net Income (loss) attributable to Green Thumb Industries Inc. | (4,206,264 | ) | (12,909,505 | ) | 9,643,929 | 22,464,807 | 14,992,967 | |||||||||||||
Net Income (loss) per share—basic | (0.02 | ) | (0.06 | ) | 0.04 | 0.11 | 0.07 | |||||||||||||
Net Income (loss) per share—diluted | (0.02 | ) | (0.06 | ) | 0.04 | 0.11 | 0.07 | |||||||||||||
Weighted average number of common shares outstanding—basic | 208,468,356 | 209,902,732 | 211,990,405 | 213,249,477 | 210,988,259 | |||||||||||||||
Weighted average number of common shares outstanding—diluted | 208,468,356 | 209,902,732 | 214,212,292 | 217,178,771 | 212,531,188 | |||||||||||||||
2019 | ||||||||||||||||||||
Net Sales | $ | 27,913,163 | $ | 44,726,777 | $ | 67,990,907 | $ | 75,801,758 | $ | 216,432,605 | ||||||||||
(Loss) Income from operations | (13,629,660 | ) | (9,326,730 | ) | 1,376,718 | (6,111,030 | ) | (27,690,702 | ) | |||||||||||
Net loss attributable to Green Thumb Industries Inc. | (9,563,056 | ) | (20,892,049 | ) | (14,590,793 | ) | (14,070,509 | ) | (59,116,407 | ) | ||||||||||
Net loss per share—basic | (0.06 | ) | (0.11 | ) | (0.07 | ) | (0.07 | ) | (0.31 | ) | ||||||||||
Net loss per share—diluted | (0.06 | ) | (0.11 | ) | (0.07 | ) | (0.07 | ) | (0.31 | ) | ||||||||||
Weighted average number of common shares outstanding—basic | 167,171,886 | 182,261,947 | 204,709,085 | 207,666,666 | 190,602,400 | |||||||||||||||
Weighted average number of common shares outstanding—diluted | 167,171,886 | 182,261,947 | 204,709,085 | 207,666,666 | 190,602,400 |
(d) | Basis of Consolidation |
Subsidiaries | Jurisdiction | Interest | ||||||
GTI23, Inc. | Delaware | 100 | % | |||||
VCP23, LLC | Delaware | 100 | % | |||||
GTI Core, LLC | Delaware | 100 | % |
Subsidiaries | Ownership | Jurisdiction | Purpose | |||||
JB17, LLC | 100 | % | Maryland | Management company | ||||
GTI-Clinic Illinois Holdings, LLC | 100 | % | Illinois | License holder | ||||
IL Disp, LLC | 50 | % | Illinois | License holder | ||||
RISE Holdings, Inc. | 100 | % | Massachusetts | License holder | ||||
GTI Maryland, LLC | 100 | % | Maryland | License holder | ||||
Ohio Investors 2017, LLC | 99 | % | Ohio | Holding Company | ||||
GTI Ohio, LLC | 99 | % | Ohio | License holder | ||||
GTI Nevada, LLC | 100 | % | Nevada | License holder | ||||
GTI Pennsylvania, LLC | 100 | % | Pennsylvania | License holder | ||||
GTI Florida, LLC | 100 | % | Florida | Holding company | ||||
KSGNF, LLC | 100 | % | Florida | License holder | ||||
GTI New Jersey, LLC | 100 | % | New Jersey | License holder | ||||
KW Ventures Holdings, LLC | 100 | % | Pennsylvania | License holder | ||||
Chesapeake Alternatives, LLC | 100 | % | Maryland | License holder | ||||
Meshow, LLC | 0 | % | Maryland | License holder | ||||
Advanced Grow Labs, LLC | 100 | % | Connecticut | License holder | ||||
Bluepoint Wellness of Westport, LLC | 46 | % | Connecticut | License holder | ||||
Bluepoint Apothecary, LLC | 100 | % | Connecticut | License holder | ||||
Southern CT Wellness and Healing | 100 | % | Connecticut | License Holder | ||||
Integral Associates, LLC | 100 | % | Nevada | License holder | ||||
Integral Associates CA, LLC | 100 | % | California | License holder | ||||
Fiorello Pharmaceuticals, Inc. | 100 | % | New York | License holder | ||||
MC Brands, LLC | 100 | % | Colorado | Intellectual property | ||||
For Success Holding Company | 100 | % | California | Intellectual property | ||||
VCP IP Holdings, LLC | 100 | % | Delaware | Intellectual property | ||||
Vision Management Services, LLC | 100 | % | Delaware | Management company | ||||
TWD18, LLC | 100 | % | Delaware | Investment company | ||||
VCP Real Estate Holdings, LLC | 100 | % | Delaware | Real Estate holding company |
(e) | Investment in Associates |
(f) | Non-controlling Interests |
(g) | Cash and Cash Equivalents |
(h) | Accounts Receivable |
(i) | Inventories |
(j) | Property and Equipment |
Land | Not Depreciated | |
Buildings and Improvements | 39 Years | |
Furniture and Fixtures | 5 – 7 Years | |
Computer Equipment and Software | 5 Years | |
Leasehold Improvements | Remaining Life of Lease | |
Production and Processing Equipment | 5 – 7 Years | |
| Assets Under Construction | Not Depreciated |
(k) | Note Receivable and Investments |
(l) | Intangible Assets |
Licenses and Permits | 7-15 years | |
Tradenames | 3-15 years | |
Customer Relationships | 3-7 years | |
Non-competition Agreement | 2-5 years |
(m) | Goodwill |
(n) | Income Taxes |
(o) | Revenue Recognition |
| • | Identify a customer along with a corresponding contract; |
| • | Identify the performance obligation(s) in the contract to transfer goods or provide distinct services to a customer; |
| • | Determine the transaction price the Company expects to be entitled to in exchange for transferring promised goods or services to a customer; |
| • | Allocate the transaction price to the performance obligation(s) in the contract; and |
| • | Recognize revenue when or as the Company satisfies the performance obligation(s). |
(p) | Stock-Based Payments |
(q) | Fair Value of Financial Instruments |
(r) | Commitments and Contingencies |
(s) | Share Capital |
(t) | Earnings (Loss) per Share |
(u) | Business Combinations |
(v) | Foreign Currency |
(w) | Impairment of Other Long-Lived Assets |
(x) | Significant Accounting Judgments, Estimates and Assumptions |
(i) | Estimated Useful Lives and Amortization of Intangible Assets (Also see Note 8—Intangible Asset and Goodwill) |
(ii) | Business Combinations |
(iii) | Inventories |
(iv) | Investments in Private Holdings |
(v) | Goodwill Impairment |
(vi) | Determination of Reporting Units |
(vii) | Consolidation |
(viii) | Allowance for Uncollectible Accounts |
(ix) | Stock-Based Payments |
(x) | Fair Value of Financial Instruments |
21. | SUBSEQUENT EVENTS |
(y) | New and Revised Standards |
(i) | In June 2016, the Financial Accounting Standards Board (“ FASB ”) issued Accounting Standards Update (“ASU ”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (“ASU ”), which replaces the incurred loss model with a current expected credit loss (“2016-13 CECL ”) model and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. This standard applies to financial assets, measured at amortized cost, including loans, held-to-maturity |
(ii) | In January 2017, the FASB issued ASU No. 2017-04 “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU ”), which simplifies the accounting for goodwill impairment. ASU 2017-04 2017-04 requires entities to record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (Step 1 under the current impairment test). The standard eliminates Step 2 from the current goodwill impairment test, which included determining the implied fair value of goodwill and comparing it with the carrying amount of that goodwill. ASU 2017-04 must be applied prospectively and is effective in the first quarter of 2020. Early adoption is permitted. The Company adopted the new standard in the first quarter of 2020. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. |
(iii) | In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820)(“ASU ”). 2018-13 ASU 2018-13 adds, modifies, and removes certain fair value measurement disclosure requirements. ASU 2018-13 is effective for annual and interim periods beginning after December 15, 2019. The Company adopted the new standard in the first quarter of 2020. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. |
(iv) | In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes (“ASU ”). ASU 2019-12 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for the Company beginning January 1, 2021. We do not expect the adoption of this guidance will have a material impact on the Company’s consolidated financial statements. |
(v) | In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (“ASU ”), 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 2020-01 is effective for the Company beginning January 1, 2021. We do not expect the adoption of this guidance will have a material impact on the Company’s consolidated financial statements. |
(vi) | On August 5, 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. We do not expect the adoption of this guidance will have a material impact on the Company’s consolidated financial statements . |
(z) | Coronavirus Pandemic |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||||
2020 | ||||||||||||||||||||
Net Sales | $ | 102,602,602 | $ | 119,639,924 | $ | 157,103,841 | $ | 177,226,522 | $ | 556,572,889 | ||||||||||
Income from operations | 7,552,657 | 14,050,703 | 37,211,186 | 47,292,283 | 106,106,829 | |||||||||||||||
Net Income (loss) attributable to Green Thumb Industries Inc. | (4,206,264 | ) | (12,909,505 | ) | 9,643,929 | 22,464,807 | 14,992,967 | |||||||||||||
Net Income (loss) per share—basic | (0.02 | ) | (0.06 | ) | 0.04 | 0.11 | 0.07 | |||||||||||||
Net Income (loss) per share—diluted | (0.02 | ) | (0.06 | ) | 0.04 | 0.11 | 0.07 | |||||||||||||
Weighted average number of common shares outstanding—basic | 208,468,356 | 209,902,732 | 211,990,405 | 213,249,477 | 210,988,259 | |||||||||||||||
Weighted average number of common shares outstanding—diluted | 208,468,356 | 209,902,732 | 214,212,292 | 217,178,771 | 212,531,188 | |||||||||||||||
2019 | ||||||||||||||||||||
Net Sales | $ | 27,913,163 | $ | 44,726,777 | $ | 67,990,907 | $ | 75,801,758 | $ | 216,432,605 | ||||||||||
(Loss) Income from operations | (13,629,660 | ) | (9,326,730 | ) | 1,376,718 | (6,111,030 | ) | (27,690,702 | ) | |||||||||||
Net loss attributable to Green Thumb Industries Inc. | (9,563,056 | ) | (20,892,049 | ) | (14,590,793 | ) | (14,070,509 | ) | (59,116,407 | ) | ||||||||||
Net loss per share—basic | (0.06 | ) | (0.11 | ) | (0.07 | ) | (0.07 | ) | (0.31 | ) | ||||||||||
Net loss per share—diluted | (0.06 | ) | (0.11 | ) | (0.07 | ) | (0.07 | ) | (0.31 | ) | ||||||||||
Weighted average number of common shares outstanding—basic | 167,171,886 | 182,261,947 | 204,709,085 | 207,666,666 | 190,602,400 | |||||||||||||||
Weighted average number of common shares outstanding—diluted | 167,171,886 | 182,261,947 | 204,709,085 | 207,666,666 | 190,602,400 |
19. | SEGMENT REPORTING |
Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Revenues, Net of Discounts | ||||||||||||
Consumer Packaged Goods | $ | 273,977,174 | $ | 109,930,160 | $ | 25,706,134 | ||||||
Retail | 396,371,725 | 137,809,904 | 41,994,791 | |||||||||
Intersegment Eliminations | (113,776,010 | ) | (31,307,459 | ) | (5,207,245 | ) | ||||||
Total Revenues, net of discounts | $ | 556,572,889 | $ | 216,432,605 | $ | 62,493,680 | ||||||
Depreciation and Amortization | ||||||||||||
Consumer Packaged Goods | $ | 28,207,195 | $ | 17,792,040 | $ | 2,666,603 | ||||||
Retail | 24,298,380 | 13,690,300 | 2,461,117 | |||||||||
Intersegment Eliminations | — | — | 56,260 | |||||||||
Total Depreciation and Amortization | $ | 52,505,575 | $ | 31,482,340 | $ | 5,183,980 | ||||||
Income Taxes | ||||||||||||
Consumer Packaged Goods | $ | 33,964,636 | $ | 3,727,292 | $ | 2,245,450 | ||||||
Retail | 49,888,166 | 9,905,876 | 4,938,145 | |||||||||
Intersegment Eliminations | — | (4,289,135 | ) | — | ||||||||
Total Income Taxes | $ | 83,852,802 | $ | 9,344,033 | $ | 7,183,595 | ||||||
Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Revenues, Net of Discounts | ||||||||||||
Consumer Packaged Goods | $ | 273,977,174 | $ | 109,930,160 | $ | 25,706,134 | ||||||
Retail | 396,371,725 | 137,809,904 | 41,994,791 | |||||||||
Intersegment Eliminations | (113,776,010 | ) | (31,307,459 | ) | (5,207,245 | ) | ||||||
Total Revenues, net of discounts | $ | 556,572,889 | $ | 216,432,605 | $ | 62,493,680 | ||||||
Depreciation and Amortization | ||||||||||||
Consumer Packaged Goods | $ | 28,207,195 | $ | 17,792,040 | $ | 2,666,603 | ||||||
Retail | 24,298,380 | 13,690,300 | 2,461,117 | |||||||||
Intersegment Eliminations | — | — | 56,260 | |||||||||
Total Depreciation and Amortization | $ | 52,505,575 | $ | 31,482,340 | $ | 5,183,980 | ||||||
Income Taxes | ||||||||||||
Consumer Packaged Goods | $ | 33,964,636 | $ | 3,727,292 | $ | 2,245,450 | ||||||
Retail | 49,888,166 | 9,905,876 | 4,938,145 | |||||||||
Intersegment Eliminations | — | (4,289,135 | ) | — | ||||||||
Total Income Taxes | $ | 83,852,802 | $ | 9,344,033 | $ | 7,183,595 | ||||||
Subsidiaries | Jurisdiction | Interest | ||||||
GTI23, Inc. | Delaware | 100 | % | |||||
VCP23, LLC | Delaware | 100 | % | |||||
GTI Core, LLC | Delaware | 100 | % |
Subsidiaries | Ownership | Jurisdiction | Purpose | |||||
JB17, LLC | 100 | % | Maryland | Management company | ||||
GTI-Clinic Illinois Holdings, LLC | 100 | % | Illinois | License holder | ||||
IL Disp, LLC | 50 | % | Illinois | License holder | ||||
RISE Holdings, Inc. | 100 | % | Massachusetts | License holder | ||||
GTI Maryland, LLC | 100 | % | Maryland | License holder | ||||
Ohio Investors 2017, LLC | 99 | % | Ohio | Holding Company | ||||
GTI Ohio, LLC | 99 | % | Ohio | License holder | ||||
GTI Nevada, LLC | 100 | % | Nevada | License holder | ||||
GTI Pennsylvania, LLC | 100 | % | Pennsylvania | License holder | ||||
GTI Florida, LLC | 100 | % | Florida | Holding company | ||||
KSGNF, LLC | 100 | % | Florida | License holder | ||||
GTI New Jersey, LLC | 100 | % | New Jersey | License holder | ||||
KW Ventures Holdings, LLC | 100 | % | Pennsylvania | License holder | ||||
Chesapeake Alternatives, LLC | 100 | % | Maryland | License holder | ||||
Meshow, LLC | 0 | % | Maryland | License holder | ||||
Advanced Grow Labs, LLC | 100 | % | Connecticut | License holder | ||||
Bluepoint Wellness of Westport, LLC | 46 | % | Connecticut | License holder | ||||
Bluepoint Apothecary, LLC | 100 | % | Connecticut | License holder | ||||
Southern CT Wellness and Healing | 100 | % | Connecticut | License Holder | ||||
Integral Associates, LLC | 100 | % | Nevada | License holder | ||||
Integral Associates CA, LLC | 100 | % | California | License holder | ||||
Fiorello Pharmaceuticals, Inc. | 100 | % | New York | License holder | ||||
MC Brands, LLC | 100 | % | Colorado | Intellectual property | ||||
For Success Holding Company | 100 | % | California | Intellectual property | ||||
VCP IP Holdings, LLC | 100 | % | Delaware | Intellectual property | ||||
Vision Management Services, LLC | 100 | % | Delaware | Management company | ||||
TWD18, LLC | 100 | % | Delaware | Investment company | ||||
VCP Real Estate Holdings, LLC | 100 | % | Delaware | Real Estate holding company |
Land | Not Depreciated | |
Buildings and Improvements | 39 Years | |
Furniture and Fixtures | 5 – 7 Years | |
Computer Equipment and Software | 5 Years | |
Leasehold Improvements | Remaining Life of Lease | |
Production and Processing Equipment | 5 – 7 Years | |
| Assets Under Construction | Not Depreciated |
Licenses and Permits | 7-15 years | |
Tradenames | 3-15 years | |
Customer Relationships | 3-7 years | |
Non-competition Agreement | 2-5 years |
3. | REVERSE TAKEOVER TRANSACTION |
4. | INVENTORIES |
December 31, 2020 | December 31, 2019 | |||||||
Raw Material | $ | 6,372,659 | $ | 6,375,032 | ||||
Packaging and Miscellaneous | 8,592,153 | 4,887,970 | ||||||
Work in Process | 25,488,806 | 20,162,723 | ||||||
Finished Goods | 30,821,392 | 16,640,629 | ||||||
Reserve for Obsolete Inventory | (1,732,05 7 | ) | (2,031,873 | ) | ||||
Total Inventories | $ | 69,542,953 | $ | 46,034,481 | ||||
December 31, 2020 | December 31, 2019 | |||||||
Raw Material | $ | 6,372,659 | $ | 6,375,032 | ||||
Packaging and Miscellaneous | 8,592,153 | 4,887,970 | ||||||
Work in Process | 25,488,806 | 20,162,723 | ||||||
Finished Goods | 30,821,392 | 16,640,629 | ||||||
Reserve for Obsolete Inventory | (1,732,05 7 | ) | (2,031,873 | ) | ||||
Total Inventories | $ | 69,542,953 | $ | 46,034,481 | ||||
5. | NOTE RECEIVABLE |
2019 | ||
Risk-free Rate | 1.90% | |
Exercise Price of Underlying Securities | $1.998 | |
Share Price of Underlying Security | 1.90 | |
Volatility | 71.50% | |
Remaining Life (in years) | 1.0 |
6. | PROPERTY AND EQUIPMENT |
Cost | Land | Buildings and Improvements | Equipment, Computers and Furniture | Leasehold Improvements | Capitalized Interest | Assets Under Construction | Total | |||||||||||||||||||||
As at January 1, 2020 | $ | 3,272,439 | $ | 33,377,471 | $ | 35,509,871 | $ | 68,681,497 | $ | 2,500,000 | $ | 21,372,116 | $ | 164,713,394 | ||||||||||||||
Additions | 586,867 | 22,687,020 | 13,587,238 | 19,925,75 5 | 488,681 | 4,595,227 | 61,870,788 | |||||||||||||||||||||
Disposals | (979,930 | ) | (4,507,086 | ) | — | — | — | (6,978,389 | ) | (12,465,405 | ) | |||||||||||||||||
As at December 31, 2020 | $ | 2,879,376 | $ | 51,557,405 | $ | 49,097,109 | $ | 88,607,252 | $ | 2,988,681 | $ | 18,988,954 | $ | 214,118,777 | ||||||||||||||
Accumulated Depreciation | ||||||||||||||||||||||||||||
As at January 1, 2020 | $ | — | $ | 2,236,254 | $ | 3,882,178 | $ | 2,998,287 | $ | — | $ | — | $ | 9,116,719 | ||||||||||||||
As at December 31, 2020 | $ | — | $ | 3,357,360 | $ | 10,344,829 | $ | 10,264,683 | $ | 226,028 | $ | — | $ | 24,192,900 | ||||||||||||||
Net book value | ||||||||||||||||||||||||||||
As at January 1, 2020 | $ | 3,272,439 | $ | 31,141,217 | $ | 31,627,693 | $ | 65,683,210 | $ | 2,500,000 | $ | 21,372,116 | $ | 155,596,675 | ||||||||||||||
As at December 31, 2020 | $ | 2,879,376 | $ | 48,200,045 | $ | 38,752,280 | $ | 78,342,569 | $ | 2,762,653 | $ | 18,988,954 | $ | 189,925,877 | ||||||||||||||
At December 31, 2019, property and equipment consisted of the following: | ||||||||||||||||||||||||||||
Cost | Land | Buildings and Improvements | Equipment, Computers and Furniture | Leasehold Improvements | Capitalized Interest | Assets Under Construction | Total | |||||||||||||||||||||
As at January 1, 2019 | $ | 2,243,085 | $ | 20,861,988 | $ | 11,001,498 | $ | 18,435,893 | $ | — | $ | 16,664,958 | $ | 69,207,422 | ||||||||||||||
Additions | 4,393,030 | 28,217,500 | 23,109,209 | 38,002,678 | 2,500,000 | 4,678,084 | 100,900,501 | |||||||||||||||||||||
Additions from acquisitions | — | — | 4,253,362 | 12,242,926 | — | 29,074 | 16,525,362 | |||||||||||||||||||||
Disposals | (3,363,676 | ) | (15,702,017 | ) | (2,854,198 | ) | — | — | — | (21,919,891 | ) | |||||||||||||||||
As at December 31, 2019 | $ | 3,272,439 | $ | 33,377,471 | $ | 35,509,871 | $ | 68,681,497 | $ | 2,500,000 | $ | 21,372,116 | $ | 164,713,394 | ||||||||||||||
Accumulated Depreciation | ||||||||||||||||||||||||||||
As at January 1, 2019 | $ | — | $ | 1,351,230 | $ | 1,524,114 | $ | 1,007,998 | $ | — | $ | — | $ | 3,883,342 | ||||||||||||||
As at December 31, 2019 | $ | — | $ | 2,236,254 | $ | 3,882,178 | $ | 2,998,287 | $ | — | $ | — | $ | 9,116,719 | ||||||||||||||
Net book value | ||||||||||||||||||||||||||||
As at January 1, 2019 | $ | 2,243,085 | $ | 19,510,758 | $ | 9,477,384 | $ | 17,427,895 | $ | — | $ | 16,664,958 | $ | 65,324,080 | ||||||||||||||
As at December 31, 2019 | $ | 3,272,439 | $ | 31,141,217 | $ | 31,627,693 | $ | 65,683,210 | $ | 2,500,000 | $ | 21,372,116 | $ | 155,596,675 |
Cost | Land | Buildings and Improvements | Equipment, Computers and Furniture | Leasehold Improvements | Capitalized Interest | Assets Under Construction | Total | |||||||||||||||||||||
As at January 1, 2020 | $ | 3,272,439 | $ | 33,377,471 | $ | 35,509,871 | $ | 68,681,497 | $ | 2,500,000 | $ | 21,372,116 | $ | 164,713,394 | ||||||||||||||
Additions | 586,867 | 22,687,020 | 13,587,238 | 19,925,75 5 | 488,681 | 4,595,227 | 61,870,788 | |||||||||||||||||||||
Disposals | (979,930 | ) | (4,507,086 | ) | — | — | — | (6,978,389 | ) | (12,465,405 | ) | |||||||||||||||||
As at December 31, 2020 | $ | 2,879,376 | $ | 51,557,405 | $ | 49,097,109 | $ | 88,607,252 | $ | 2,988,681 | $ | 18,988,954 | $ | 214,118,777 | ||||||||||||||
Accumulated Depreciation | ||||||||||||||||||||||||||||
As at January 1, 2020 | $ | — | $ | 2,236,254 | $ | 3,882,178 | $ | 2,998,287 | $ | — | $ | — | $ | 9,116,719 | ||||||||||||||
As at December 31, 2020 | $ | — | $ | 3,357,360 | $ | 10,344,829 | $ | 10,264,683 | $ | 226,028 | $ | — | $ | 24,192,900 | ||||||||||||||
Net book value | ||||||||||||||||||||||||||||
As at January 1, 2020 | $ | 3,272,439 | $ | 31,141,217 | $ | 31,627,693 | $ | 65,683,210 | $ | 2,500,000 | $ | 21,372,116 | $ | 155,596,675 | ||||||||||||||
As at December 31, 2020 | $ | 2,879,376 | $ | 48,200,045 | $ | 38,752,280 | $ | 78,342,569 | $ | 2,762,653 | $ | 18,988,954 | $ | 189,925,877 | ||||||||||||||
At December 31, 2019, property and equipment consisted of the following: | ||||||||||||||||||||||||||||
Cost | Land | Buildings and Improvements | Equipment, Computers and Furniture | Leasehold Improvements | Capitalized Interest | Assets Under Construction | Total | |||||||||||||||||||||
As at January 1, 2019 | $ | 2,243,085 | $ | 20,861,988 | $ | 11,001,498 | $ | 18,435,893 | $ | — | $ | 16,664,958 | $ | 69,207,422 | ||||||||||||||
Additions | 4,393,030 | 28,217,500 | 23,109,209 | 38,002,678 | 2,500,000 | 4,678,084 | 100,900,501 | |||||||||||||||||||||
Additions from acquisitions | — | — | 4,253,362 | 12,242,926 | — | 29,074 | 16,525,362 | |||||||||||||||||||||
Disposals | (3,363,676 | ) | (15,702,017 | ) | (2,854,198 | ) | — | — | — | (21,919,891 | ) | |||||||||||||||||
As at December 31, 2019 | $ | 3,272,439 | $ | 33,377,471 | $ | 35,509,871 | $ | 68,681,497 | $ | 2,500,000 | $ | 21,372,116 | $ | 164,713,394 | ||||||||||||||
Accumulated Depreciation | ||||||||||||||||||||||||||||
As at January 1, 2019 | $ | — | $ | 1,351,230 | $ | 1,524,114 | $ | 1,007,998 | $ | — | $ | — | $ | 3,883,342 | ||||||||||||||
As at December 31, 2019 | $ | — | $ | 2,236,254 | $ | 3,882,178 | $ | 2,998,287 | $ | — | $ | — | $ | 9,116,719 | ||||||||||||||
Net book value | ||||||||||||||||||||||||||||
As at January 1, 2019 | $ | 2,243,085 | $ | 19,510,758 | $ | 9,477,384 | $ | 17,427,895 | $ | — | $ | 16,664,958 | $ | 65,324,080 | ||||||||||||||
As at December 31, 2019 | $ | 3,272,439 | $ | 31,141,217 | $ | 31,627,693 | $ | 65,683,210 | $ | 2,500,000 | $ | 21,372,116 | $ | 155,596,675 |
7. | ACQUISITIONS |
(a) | 2020 Business Acquisitions |
(i) | Acquisition of Southern CT Wellness and Healing |
(b) | 2019 Business Acquisitions |
| Advanced Grow Labs, LLC | Integral Associates, LLC | Other Acquisitions | ||||||||||
Cash Paid | $ | 15,481,967 | $ | 52,807,500 | $ | 44,147,694 | ||||||
Shares of the Company Issued | 79,959,170 | 273,146,014 | 142,607,973 | |||||||||
Deferred Share Issuance | 5,380,000 | — | 11,207,798 | |||||||||
Conversion of Previous Notes Receivable | — | — | 27,121,559 | |||||||||
Acquisition Liability | — | 791,068 | — | |||||||||
Contingent Consideration | 7,831,000 | 39,985,000 | 8,926,000 | |||||||||
Total Consideration | $ | 108,652,137 | $ | 366,729,582 | $ | 234,011,024 | ||||||
| Advanced Grow Labs, LLC | Integral Associates, LLC | Other Acquisitions | ||||||||||
Cash | $ | 1,406,377 | $ | 744,825 | $ | 777,371 | ||||||
Inventory | 1,906,828 | 10,107,303 | 1,732,525 | |||||||||
Accounts Receivable | 420,649 | 1,477,535 | 265,956 | |||||||||
Prepaid Expenses | — | 492,571 | 38,705 | |||||||||
Property and Equipment | 5,934,295 | 8,107,836 | 2,667,436 | |||||||||
Right-of-Use | 565,336 | 4,840,609 | 2,056,008 | |||||||||
Investment in CAL Funding | 9,900,000 | — | — | |||||||||
Deposits and Other Assets | 246,843 | 122,826 | 1,405,986 | |||||||||
Intangible Assets: | ||||||||||||
Licenses and Permits | 28,920,000 | 175,845,000 | 48,155,000 | |||||||||
Tradename | 930,000 | 57,425,000 | 38,740,592 | |||||||||
Customer Relationships | 12,462,000 | 2,678,000 | 9,298,000 | |||||||||
Non-competition Agreements | 100,000 | — | 2,465,000 | |||||||||
Liabilities Assumed | (1,230,441 | ) | (11,091,246 | ) | (6,172,243 | ) | ||||||
Deferred Tax Liabilities | (12,731,349 | ) | — | (20,823,225 | ) | |||||||
Total Identifiable Net Assets | 48,830,538 | 250,750,259 | 80,607,111 | |||||||||
Goodwill | 59,821,599 | 115,979,323 | 153,403,913 | |||||||||
Net Assets | $ | 108,652,137 | $ | 366,729,582 | $ | 234,011,024 | ||||||
(i) | Acquisition of Advanced Grow Labs, LLC |
(ii) | Acquisition of Integral Associates, LLC |
(iii) | Acquisition of For Success Holding Company |
(iv) | Acquisition of Fiorello Pharmaceuticals, Inc |
(v) | MC Brands, LLC |
(c) | Pro Forma Financial Information—Significant 2019 Acquisitions |
| Transaction Date through December 31, 2019 | For the Year Ended December 31, 2018 | |||||||||||||||
| Advanced Grow Labs, LLC | Integral Associates, LLC | Advanced Grow Labs, LLC | Integral Associates, LLC | |||||||||||||
Revenues, net of discounts | $ | 16,377,199 | $ | 39,246,745 | $ | 17,016,743 | $ | 60,261,432 | ||||||||
Net income (loss) | 3,612,455 | (6,375,800 | ) | 7,497,696 | 13,218,159 |
For the Year Ended December 31, 2019 | ||||||||||||||||||||||||
| Green Thumb Industries Inc. | Advanced Grow Labs, LLC | Integral Associates, LLC | Pro Forma Adjustments | Notes | Pro Forma Combined | |||||||||||||||||||
Unaudited | Unaudited | |||||||||||||||||||||||
Revenues, net of discounts | $ | 160,808,662 | $ | 18,516,074 | $ | 79,146,937 | $ | — | $ | 258,471,673 | ||||||||||||||
Net income (loss) attributable to Green Thumb Industries Inc. | (56,353,062 | ) | 4,586,122 | (1,110,610 | ) | (8,394,854 | ) | (a), (b) | (61,272,404 | ) |
| (a) | Includes estimated amortization expense on intangible assets acquired as part of the acquisition of AGL and Integral Associates of $327,302 representing one month of amortization expense and $6,639,127 representing five months of amortization expense, respectively. |
| (b) | Includes estimated income tax expense of AGL of $164,780 and Integral Associates of $1,263,645 based on a 24% effective tax rate. |
For the Year Ended December 31, 2018 | ||||||||||||||||||||||||
| Green Thumb Industries Inc. | Advanced Grow Labs, LLC | Integral Associates, LLC | Pro Forma Adjustments | Notes | Pro Forma Combined | |||||||||||||||||||
Unaudited | Unaudited | |||||||||||||||||||||||
Revenues, net of discounts | $ | 62,493,680 | $ | 17,016,743 | $ | 60,261,432 | $ | — | $ | 139,771,855 | ||||||||||||||
Net income (loss) attributable to Green Thumb Industries Inc. | (5,243,917 | ) | 7,497,696 | 13,218,159 | (24,006,529 | ) | (a), (b) | (8,534,591 | ) |
| (a) | Includes estimated amortization expense on intangible assets acquired as part of the acquisition of AGL and Integral Associates of $3,927,619 and $15,933,905 each representing twelve months of amortization expense, respectively. |
| (b) | Includes estimated income tax expense of AGL of $972,647 and Integral Associates of $3,172,358 based on a 24% effective tax rate. |
| Advanced Grow Labs, LLC | Integral Associates, LLC | Other Acquisitions | ||||||||||
Cash Paid | $ | 15,481,967 | $ | 52,807,500 | $ | 44,147,694 | ||||||
Shares of the Company Issued | 79,959,170 | 273,146,014 | 142,607,973 | |||||||||
Deferred Share Issuance | 5,380,000 | — | 11,207,798 | |||||||||
Conversion of Previous Notes Receivable | — | — | 27,121,559 | |||||||||
Acquisition Liability | — | 791,068 | — | |||||||||
Contingent Consideration | 7,831,000 | 39,985,000 | 8,926,000 | |||||||||
Total Consideration | $ | 108,652,137 | $ | 366,729,582 | $ | 234,011,024 | ||||||
| Advanced Grow Labs, LLC | Integral Associates, LLC | Other Acquisitions | ||||||||||
Cash | $ | 1,406,377 | $ | 744,825 | $ | 777,371 | ||||||
Inventory | 1,906,828 | 10,107,303 | 1,732,525 | |||||||||
Accounts Receivable | 420,649 | 1,477,535 | 265,956 | |||||||||
Prepaid Expenses | — | 492,571 | 38,705 | |||||||||
Property and Equipment | 5,934,295 | 8,107,836 | 2,667,436 | |||||||||
Right-of-Use | 565,336 | 4,840,609 | 2,056,008 | |||||||||
Investment in CAL Funding | 9,900,000 | — | — | |||||||||
Deposits and Other Assets | 246,843 | 122,826 | 1,405,986 | |||||||||
Intangible Assets: | ||||||||||||
Licenses and Permits | 28,920,000 | 175,845,000 | 48,155,000 | |||||||||
Tradename | 930,000 | 57,425,000 | 38,740,592 | |||||||||
Customer Relationships | 12,462,000 | 2,678,000 | 9,298,000 | |||||||||
Non-competition Agreements | 100,000 | — | 2,465,000 | |||||||||
Liabilities Assumed | (1,230,441 | ) | (11,091,246 | ) | (6,172,243 | ) | ||||||
Deferred Tax Liabilities | (12,731,349 | ) | — | (20,823,225 | ) | |||||||
Total Identifiable Net Assets | 48,830,538 | 250,750,259 | 80,607,111 | |||||||||
Goodwill | 59,821,599 | 115,979,323 | 153,403,913 | |||||||||
Net Assets | $ | 108,652,137 | $ | 366,729,582 | $ | 234,011,024 | ||||||
| Transaction Date through December 31, 2019 | For the Year Ended December 31, 2018 | |||||||||||||||
| Advanced Grow Labs, LLC | Integral Associates, LLC | Advanced Grow Labs, LLC | Integral Associates, LLC | |||||||||||||
Revenues, net of discounts | $ | 16,377,199 | $ | 39,246,745 | $ | 17,016,743 | $ | 60,261,432 | ||||||||
Net income (loss) | 3,612,455 | (6,375,800 | ) | 7,497,696 | 13,218,159 |
For the Year Ended December 31, 2019 | ||||||||||||||||||||||||
| Green Thumb Industries Inc. | Advanced Grow Labs, LLC | Integral Associates, LLC | Pro Forma Adjustments | Notes | Pro Forma Combined | |||||||||||||||||||
Unaudited | Unaudited | |||||||||||||||||||||||
Revenues, net of discounts | $ | 160,808,662 | $ | 18,516,074 | $ | 79,146,937 | $ | — | $ | 258,471,673 | ||||||||||||||
Net income (loss) attributable to Green Thumb Industries Inc. | (56,353,062 | ) | 4,586,122 | (1,110,610 | ) | (8,394,854 | ) | (a), (b) | (61,272,404 | ) |
| (a) | Includes estimated amortization expense on intangible assets acquired as part of the acquisition of AGL and Integral Associates of $327,302 representing one month of amortization expense and $6,639,127 representing five months of amortization expense, respectively. |
| (b) | Includes estimated income tax expense of AGL of $164,780 and Integral Associates of $1,263,645 based on a 24% effective tax rate. |
For the Year Ended December 31, 2018 | ||||||||||||||||||||||||
| Green Thumb Industries Inc. | Advanced Grow Labs, LLC | Integral Associates, LLC | Pro Forma Adjustments | Notes | Pro Forma Combined | |||||||||||||||||||
Unaudited | Unaudited | |||||||||||||||||||||||
Revenues, net of discounts | $ | 62,493,680 | $ | 17,016,743 | $ | 60,261,432 | $ | — | $ | 139,771,855 | ||||||||||||||
Net income (loss) attributable to Green Thumb Industries Inc. | (5,243,917 | ) | 7,497,696 | 13,218,159 | (24,006,529 | ) | (a), (b) | (8,534,591 | ) |
| (a) | Includes estimated amortization expense on intangible assets acquired as part of the acquisition of AGL and Integral Associates of $3,927,619 and $15,933,905 each representing twelve months of amortization expense, respectively. |
| (b) | Includes estimated income tax expense of AGL of $972,647 and Integral Associates of $3,172,358 based on a 24% effective tax rate. |
8. | INTANGIBLE ASSETS AND GOODWILL |
Licenses and Permits | Tradenames | Customer Relationships | Non-Competition Agreements | Total | ||||||||||||||||
Cost | ||||||||||||||||||||
As at January 1, 2020 | $ | 336,954,213 | $ | 97,455,590 | $ | 25,258,000 | $ | 2,585,480 | $ | 462,253,283 | ||||||||||
Adjustments to Purchase Price Allocation | (145,000 | ) | 1,840,009 | — | — | 1,695,009 | ||||||||||||||
Additions from acquisitions | 6,326,523 | — | — | — | 6,326,523 | |||||||||||||||
As at December 31, 2020 | $ | 343,135,736 | $ | 99,295,599 | $ | 25,258,000 | $ | 2,585,480 | $ | 470,274,815 | ||||||||||
Accumulated Amortization | ||||||||||||||||||||
As at January 1, 2020 | $ | 18,477,500 | $ | 4,121,800 | $ | 3,932,416 | $ | 474,669 | $ | 27,006,385 | ||||||||||
Amortization | 23,516,095 | 9,333,378 | 3,650,589 | 526,334 | 37,026,396 | |||||||||||||||
As at December 31, 2020 | $ | 41,993,595 | $ | 13,455,178 | $ | 7,583,005 | $ | 1,001,003 | $ | 64,032,781 | ||||||||||
Net book value | ||||||||||||||||||||
As at January 1, 2020 | $ | 318,476,713 | $ | 93,333,790 | $ | 21,325,584 | $ | 2,110,811 | $ | 435,246,898 | ||||||||||
As at December 31, 2020 | $ | 301,142,141 | $ | 85,840,421 | $ | 17,674,995 | $ | 1,584,477 | $ | 406,242,034 |
Licenses and Permits | Tradenames | Customer Relationships | Non-Competition Agreements | Total | ||||||||||||||||
Cost | ||||||||||||||||||||
As at January 1, 2019 | $ | 89,705,213 | $ | 360,000 | $ | 820,000 | $ | 20,480 | $ | 90,905,693 | ||||||||||
Additions from acquisitions | 247,249,000 | 97,095,590 | 24,438,000 | 2,565,000 | 371,347,590 | |||||||||||||||
As at December 31, 2019 | $ | 336,954,213 | $ | 97,455,590 | $ | 25,258,000 | $ | 2,585,480 | $ | 462,253,283 | ||||||||||
Accumulated Amortization | ||||||||||||||||||||
As at January 1, 2019 | $ | 2,322,715 | $ | — | $ | 204,500 | $ | 12,800 | $ | 2,540,015 | ||||||||||
Amortization | 16,154,785 | 4,121,800 | 3,727,916 | 461,869 | 24,466,370 | |||||||||||||||
As at December 31, 2019 | $ | 18,477,500 | $ | 4,121,800 | $ | 3,932,416 | $ | 474,669 | $ | 27,006,385 | ||||||||||
Net book value | ||||||||||||||||||||
As at January 1, 2019 | $ | 87,382,498 | $ | 360,000 | $ | 615,500 | $ | 7,680 | $ | 88,365,678 | ||||||||||
As at December 31, 2019 | $ | 318,476,713 | $ | 93,333,790 | $ | 21,325,584 | $ | 2,110,811 | $ | 435,246,898 |
Year Ending December 31, | Estimated Amortization (Prior to Change in Useful Life) | Increase (Decrease) from Change in Useful Life | Estimated Amortization (After Change in Useful Life) | |||||||||
2021 | $ | 34,032,387 | $ | 5,161,946 | $ | 39,194,333 | ||||||
2022 | 33,601,647 | 5,161,946 | 38,763,593 | |||||||||
2023 | 33,518,831 | 5,161,946 | 38,680,777 | |||||||||
2024 | 32,937,498 | 5,161,946 | 38,099,444 | |||||||||
2025 | 32,839,831 | 5,161,946 | 38,001,777 | |||||||||
Thereafter | 239,311,840 | (25,809,730 | ) | 213,502,110 | ||||||||
$ | 406,242,034 | $ | — | $ | 406,242,034 | |||||||
Retail | Consumer Packaged Goods | Total | ||||||||||
As at January 1, 2020 | $ | 119,873,759 | $ | 255,211,232 | $ | 375,084,991 | ||||||
Acquisitions | 9,615,751 | — | 9,615,751 | |||||||||
Adjustments to Purchase Price Allocations | 1,191,425 | (3,194,700 | ) | (2,003,275 | ) | |||||||
As at December 31, 2020 | $ | 130,680,935 | $ | 252,016,532 | $ | 382,697,467 | ||||||
Retail | Consumer Packaged Goods | Total | ||||||||||
As at January 1, 2019 | $ | 15,286,360 | $ | 23,918,000 | $ | 39,204,360 | ||||||
Acquisition of Advanced Grow Labs, LLC | 16,756,250 | 44,572,349 | 61,328,599 | |||||||||
Acquisition of Integral Associates, LLC | 46,655,753 | 69,323,570 | 115,979,323 | |||||||||
Other Acquisitions | 32,936,590 | 120,963,598 | 153,900,188 | |||||||||
Adjustments to Purchase Price Allocations | 8,238,806 | (3,566,285 | ) | 4,672,521 | ||||||||
As at December 31, 2019 | $ | 119,873,759 | $ | 255,211,232 | $ | 375,084,991 | ||||||
Licenses and Permits | Tradenames | Customer Relationships | Non- Competition Agreements | Total | ||||||||||||||||
Cost | ||||||||||||||||||||
As at January 1, 2020 | $ | 336,954,213 | $ | 97,455,590 | $ | 25,258,000 | $ | 2,585,480 | $ | 462,253,283 | ||||||||||
Adjustments to Purchase Price Allocation | (145,000 | ) | 1,840,009 | — | — | 1,695,009 | ||||||||||||||
Additions from acquisitions | 6,326,523 | — | — | — | 6,326,523 | |||||||||||||||
As at December 31, 2020 | $ | 343,135,736 | $ | 99,295,599 | $ | 25,258,000 | $ | 2,585,480 | $ | 470,274,815 | ||||||||||
Accumulated Amortization | ||||||||||||||||||||
As at January 1, 2020 | $ | 18,477,500 | $ | 4,121,800 | $ | 3,932,416 | $ | 474,669 | $ | 27,006,385 | ||||||||||
Amortization | 23,516,095 | 9,333,378 | 3,650,589 | 526,334 | 37,026,396 | |||||||||||||||
As at December 31, 2020 | $ | 41,993,595 | $ | 13,455,178 | $ | 7,583,005 | $ | 1,001,003 | $ | 64,032,781 | ||||||||||
Net book value | ||||||||||||||||||||
As at January 1, 2020 | $ | 318,476,713 | $ | 93,333,790 | $ | 21,325,584 | $ | 2,110,811 | $ | 435,246,898 | ||||||||||
As at December 31, 2020 | $ | 301,142,141 | $ | 85,840,421 | $ | 17,674,995 | $ | 1,584,477 | $ | 406,242,034 |
Licenses and Permits | Tradenames | Customer Relationships | Non- Competition Agreements | Total | ||||||||||||||||
Cost | ||||||||||||||||||||
As at January 1, 2019 | $ | 89,705,213 | $ | 360,000 | $ | 820,000 | $ | 20,480 | $ | 90,905,693 | ||||||||||
Additions from acquisitions | 247,249,000 | 97,095,590 | 24,438,000 | 2,565,000 | 371,347,590 | |||||||||||||||
As at December 31, 2019 | $ | 336,954,213 | $ | 97,455,590 | $ | 25,258,000 | $ | 2,585,480 | $ | 462,253,283 | ||||||||||
Accumulated Amortization | ||||||||||||||||||||
As at January 1, 2019 | $ | 2,322,715 | $ | — | $ | 204,500 | $ | 12,800 | $ | 2,540,015 | ||||||||||
Amortization | 16,154,785 | 4,121,800 | 3,727,916 | 461,869 | 24,466,370 | |||||||||||||||
As at December 31, 2019 | $ | 18,477,500 | $ | 4,121,800 | $ | 3,932,416 | $ | 474,669 | $ | 27,006,385 | ||||||||||
Net book value | ||||||||||||||||||||
As at January 1, 2019 | $ | 87,382,498 | $ | 360,000 | $ | 615,500 | $ | 7,680 | $ | 88,365,678 | ||||||||||
As at December 31, 2019 | $ | 318,476,713 | $ | 93,333,790 | $ | 21,325,584 | $ | 2,110,811 | $ | 435,246,898 |
Year Ending December 31, | Estimated Amortization (Prior to Change in Useful Life) | Increase (Decrease) from Change in Useful Life | Estimated Amortization (After Change in Useful Life) | |||||||||
2021 | $ | 34,032,387 | $ | 5,161,946 | $ | 39,194,333 | ||||||
2022 | 33,601,647 | 5,161,946 | 38,763,593 | |||||||||
2023 | 33,518,831 | 5,161,946 | 38,680,777 | |||||||||
2024 | 32,937,498 | 5,161,946 | 38,099,444 | |||||||||
2025 | 32,839,831 | 5,161,946 | 38,001,777 | |||||||||
Thereafter | 239,311,840 | (25,809,730 | ) | 213,502,110 | ||||||||
$ | 406,242,034 | $ | — | $ | 406,242,034 | |||||||
Retail | Consumer Packaged Goods | Total | ||||||||||
As at January 1, 2020 | $ | 119,873,759 | $ | 255,211,232 | $ | 375,084,991 | ||||||
Acquisitions | 9,615,751 | — | 9,615,751 | |||||||||
Adjustments to Purchase Price Allocations | 1,191,425 | (3,194,700 | ) | (2,003,275 | ) | |||||||
As at December 31, 2020 | $ | 130,680,935 | $ | 252,016,532 | $ | 382,697,467 | ||||||
Retail | Consumer Packaged Goods | Total | ||||||||||
As at January 1, 2019 | $ | 15,286,360 | $ | 23,918,000 | $ | 39,204,360 | ||||||
Acquisition of Advanced Grow Labs, LLC | 16,756,250 | 44,572,349 | 61,328,599 | |||||||||
Acquisition of Integral Associates, LLC | 46,655,753 | 69,323,570 | 115,979,323 | |||||||||
Other Acquisitions | 32,936,590 | 120,963,598 | 153,900,188 | |||||||||
Adjustments to Purchase Price Allocations | 8,238,806 | (3,566,285 | ) | 4,672,521 | ||||||||
As at December 31, 2019 | $ | 119,873,759 | $ | 255,211,232 | $ | 375,084,991 | ||||||
9. | INVESTMENTS |
Convertible Notes Receivable | Equity | Total | ||||||||||
Balance at January 1, 2020 | $ | 7,533,000 | $ | 6,535,821 | $ | 14,068,821 | ||||||
Additions | — | 525,000 | 525,000 | |||||||||
Disposals | — | (169,818 | ) | (169,818 | ) | |||||||
Conversion of notes receivable | (7,533,000 | ) | 7,533,000 | — | ||||||||
Fair value adjustments | — | 26,370,803 | 26,370,803 | |||||||||
Balance at December 31, 2020 | $ | — | $ | 40,794,806 | $ | 40,794,806 | ||||||
Convertible Notes Receivable | Equity | Total | ||||||||||
Balance at January 1, 2019 | $ | 30,336,000 | $ | 10,597,283 | $ | 40,933,283 | ||||||
Fair value adjustment | (1,398,000 | ) | (4,061,462 | ) | (5,459,462 | ) | ||||||
Applied to consideration in business combination | (21,405,000 | ) | — | (21,405,000 | ) | |||||||
Balance at December 31, 2019 | $ | 7,533,000 | $ | 6,535,821 | $ | 14,068,821 | ||||||
December 31, 2019 | ||
Risk free rate | 1.58% – 2.46% | |
Equity Volatility * | 58% – 106% | |
Market Yield | 15% – 18% | |
Probability of Qualified Financing | 0% | |
Probability of Sale | 30% | |
Probability of No Event | 70% |
| * | Management estimated that market interest rates on similar borrowings without the conversion feature to be approximately 18% and used an implied volatility of 58% in measuring the fair value of the convertible note. |
December 31, 2019 | ||
Risk free rate | 1.58% – 2.46% | |
Equity Volatility * | 58% – 106% | |
Market Yield | 15% – 18% | |
Probability of Qualified Financing | 0% | |
Probability of Sale | 30% | |
Probability of No Event | 70% |
| * | Management estimated that market interest rates on similar borrowings without the conversion feature to be approximately 18% and used an implied volatility of 58% in measuring the fair value of the convertible note. |
Convertible Notes Receivable | Equity | Total | ||||||||||
Balance at January 1, 2020 | $ | 7,533,000 | $ | 6,535,821 | $ | 14,068,821 | ||||||
Additions | — | 525,000 | 525,000 | |||||||||
Disposals | — | (169,818 | ) | (169,818 | ) | |||||||
Conversion of notes receivable | (7,533,000 | ) | 7,533,000 | — | ||||||||
Fair value adjustments | — | 26,370,803 | 26,370,803 | |||||||||
Balance at December 31, 2020 | $ | — | $ | 40,794,806 | $ | 40,794,806 | ||||||
Convertible Notes Receivable | Equity | Total | ||||||||||
Balance at January 1, 2019 | $ | 30,336,000 | $ | 10,597,283 | $ | 40,933,283 | ||||||
Fair value adjustment | (1,398,000 | ) | (4,061,462 | ) | (5,459,462 | ) | ||||||
Applied to consideration in business combination | (21,405,000 | ) | — | (21,405,000 | ) | |||||||
Balance at December 31, 2019 | $ | 7,533,000 | $ | 6,535,821 | $ | 14,068,821 | ||||||
18. | VARIABLE INTEREST ENTITIES |
December 31, 2020 | December 31, 2019 | |||||||||||||||||||||||
| Chesapeake Alternatives, LLC | IL Disp, LLC | Other Non-material VIEs | Chesapeake Alternatives, LLC | IL Disp, LLC | Other Non-material VIEs | |||||||||||||||||||
Current assets | $ | 32,307,718 | $ | 3,738,868 | $ | 2,362,572 | $ | 19,455,533 | $ | 1,381,716 | $ | 1,352,935 | ||||||||||||
Non-current assets | 3,367,360 | 3,657,392 | 2,281,839 | 22,384,663 | 3,083,659 | 2,534,297 | ||||||||||||||||||
Current liabilities | 23,362,255 | 336,970 | 1,563,224 | 14,219,204 | 149,498 | 783,682 | ||||||||||||||||||
Non-current liabilities | 768,573 | 461,926 | 783,356 | 1,169,989 | 137,736 | 855,440 | ||||||||||||||||||
Noncontrolling interests | — | 3,173,683 | 267,289 | 350,206 | 2,089,071 | (22,488 | ) | |||||||||||||||||
Equity attributable to Green Thumb Industries Inc. | 11,544,250 | 3,173,683 | 2,030,542 | 6,645,263 | 2,089,070 | 2,270,598 |
For the Year Ended December 31, 2020 | For the Year Ended December 31, 2019 | For the Year Ended December 31, 2018 | ||||||||||||||||||||||||||||||||||
| Chesapeake Alternatives, LLC | IL Disp, LLC | Other Non-material VIEs | Chesapeake Alternatives, LLC | IL Disp, LLC | Other Non- material VIEs | Chesapeake Alternatives, LLC | IL Disp, LLC | Other Non-material VIEs | ||||||||||||||||||||||||||||
Revenues | $ | 19,724,513 | $ | 18,693,964 | $ | 10,011,729 | $ | 16,056,521 | $ | 5,857,946 | $ | 3,516,164 | $ | 13,783,876 | $ | 643,898 | $ | 4,555,543 | ||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | 411,162 | 3,034,612 | 639,179 | — | 699,624 | (112,245 | ) | 1,407,266 | 60,601 | (582,280 | ) | |||||||||||||||||||||||||
Net income (loss) attributable to Green Thumb Industries Inc. | 4,576,717 | 3,034,612 | 574,941 | 1,807,229 | 699,625 | (79,402 | ) | — | 60,600 | (102,037 | ) | |||||||||||||||||||||||||
Net income (loss) | $ | 4,987,879 | $ | 6,069,224 | $ | 1,214,120 | $ | 1,807,229 | $ | 1,399,249 | $ | (191,647 | ) | $ | 1,407,266 | $ | 121,201 | $ | (684,317 | ) | ||||||||||||||||
Variable Interest Entities | ||||||||||||||||||||
| Chesapeake Alternatives, LLC | IL Disp, LLC | Other Non-material VIEs | Other Noncontrolling Interests | Total | ||||||||||||||||
Balance as at January 1, 2019 | $ | 1,486,062 | $ | 1,957,147 | $ | 89,757 | $ | (35,507 | ) | $ | 3,497,459 | |||||||||
Contributions | — | — | — | 1,650,000 | 1,650,000 | |||||||||||||||
Distributions | (1,135,856 | ) | (567,700 | ) | — | (5,812,505 | ) | (7,516,061 | ) | |||||||||||
Net income (loss) | — | 699,624 | (112,245 | ) | (1,017,842 | ) | (430,463 | ) | ||||||||||||
Changes in ownership | — | — | — | 5,311,978 | 5,311,978 | |||||||||||||||
Balance as at December 31, 2019 | 350,206 | 2,089,071 | (22,488 | ) | 96,124 | 2,512,913 | ||||||||||||||
Contributions | — | — | 50,000 | — | 50,000 | |||||||||||||||
Distributions | (439,098 | ) | (1,950,000 | ) | (399,402 | ) | — | (2,788,500 | ) | |||||||||||
Net income (loss) | 411,162 | 3,034,612 | 639,179 | — | 4,084,953 | |||||||||||||||
Changes in ownership | (322,270 | ) | — | — | — | (322,270 | ) | |||||||||||||
Balance as at December 31, 2020 | $ | — | $ | 3,173,683 | $ | 267,289 | $ | 96,124 | $ | 3,537,096 | ||||||||||
December 31, 2020 | December 31, 2019 | |||||||||||||||||||||||
| Chesapeake Alternatives, LLC | IL Disp, LLC | Other Non-material VIEs | Chesapeake Alternatives, LLC | IL Disp, LLC | Other Non-material VIEs | |||||||||||||||||||
Current assets | $ | 32,307,718 | $ | 3,738,868 | $ | 2,362,572 | $ | 19,455,533 | $ | 1,381,716 | $ | 1,352,935 | ||||||||||||
Non-current assets | 3,367,360 | 3,657,392 | 2,281,839 | 22,384,663 | 3,083,659 | 2,534,297 | ||||||||||||||||||
Current liabilities | 23,362,255 | 336,970 | 1,563,224 | 14,219,204 | 149,498 | 783,682 | ||||||||||||||||||
Non-current liabilities | 768,573 | 461,926 | 783,356 | 1,169,989 | 137,736 | 855,440 | ||||||||||||||||||
Noncontrolling interests | — | 3,173,683 | 267,289 | 350,206 | 2,089,071 | (22,488 | ) | |||||||||||||||||
Equity attributable to Green Thumb Industries Inc. | 11,544,250 | 3,173,683 | 2,030,542 | 6,645,263 | 2,089,070 | 2,270,598 |
For the Year Ended December 31, 2020 | For the Year Ended December 31, 2019 | For the Year Ended December 31, 2018 | ||||||||||||||||||||||||||||||||||
| Chesapeake Alternatives, LLC | IL Disp, LLC | Other Non-material VIEs | Chesapeake Alternatives, LLC | IL Disp, LLC | Other Non- material VIEs | Chesapeake Alternatives, LLC | IL Disp, LLC | Other Non-material VIEs | ||||||||||||||||||||||||||||
Revenues | $ | 19,724,513 | $ | 18,693,964 | $ | 10,011,729 | $ | 16,056,521 | $ | 5,857,946 | $ | 3,516,164 | $ | 13,783,876 | $ | 643,898 | $ | 4,555,543 | ||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | 411,162 | 3,034,612 | 639,179 | — | 699,624 | (112,245 | ) | 1,407,266 | 60,601 | (582,280 | ) | |||||||||||||||||||||||||
Net income (loss) attributable to Green Thumb Industries Inc. | 4,576,717 | 3,034,612 | 574,941 | 1,807,229 | 699,625 | (79,402 | ) | — | 60,600 | (102,037 | ) | |||||||||||||||||||||||||
Net income (loss) | $ | 4,987,879 | $ | 6,069,224 | $ | 1,214,120 | $ | 1,807,229 | $ | 1,399,249 | $ | (191,647 | ) | $ | 1,407,266 | $ | 121,201 | $ | (684,317 | ) | ||||||||||||||||
Variable Interest Entities | ||||||||||||||||||||
| Chesapeake Alternatives, LLC | IL Disp, LLC | Other Non-material VIEs | Other Noncontrolling Interests | Total | ||||||||||||||||
Balance as at January 1, 2019 | $ | 1,486,062 | $ | 1,957,147 | $ | 89,757 | $ | (35,507 | ) | $ | 3,497,459 | |||||||||
Contributions | — | — | — | 1,650,000 | 1,650,000 | |||||||||||||||
Distributions | (1,135,856 | ) | (567,700 | ) | — | (5,812,505 | ) | (7,516,061 | ) | |||||||||||
Net income (loss) | — | 699,624 | (112,245 | ) | (1,017,842 | ) | (430,463 | ) | ||||||||||||
Changes in ownership | — | — | — | 5,311,978 | 5,311,978 | |||||||||||||||
Balance as at December 31, 2019 | 350,206 | 2,089,071 | (22,488 | ) | 96,124 | 2,512,913 | ||||||||||||||
Contributions | — | — | 50,000 | — | 50,000 | |||||||||||||||
Distributions | (439,098 | ) | (1,950,000 | ) | (399,402 | ) | — | (2,788,500 | ) | |||||||||||
Net income (loss) | 411,162 | 3,034,612 | 639,179 | — | 4,084,953 | |||||||||||||||
Changes in ownership | (322,270 | ) | — | — | — | (322,270 | ) | |||||||||||||
Balance as at December 31, 2020 | $ | — | $ | 3,173,683 | $ | 267,289 | $ | 96,124 | $ | 3,537,096 | ||||||||||
As of December 31, 2020 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and Cash Equivalents | $ | 83,757,785 | $ | — | $ | — | $ | 83,757,785 | ||||||||
Investments | 923,581 | — | 39,871,225 | 40,794,806 | ||||||||||||
Contingent Consideration Payable | — | — | (27,100,000 | ) | (27,100,000 | ) | ||||||||||
Warrant Liability | — | — | (39,454,000 | ) | (39,454,000 | ) | ||||||||||
$ | 84,681,366 | $ | — | $ | (26,682,775 | ) | $ | 57,998,591 | ||||||||
As of December 31, 2019 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and Cash Equivalents | $ | 46,667,334 | $ | — | $ | — | $ | 46,667,334 | ||||||||
Notes Receivable | — | — | 815,937 | 815,937 | ||||||||||||
Investments | — | — | 14,068,821 | 14,068,821 | ||||||||||||
Liability of Redemption of Noncontrolling Interest | — | — | (5,500,000 | ) | (5,500,000 | ) | ||||||||||
Contingent Consideration Payable | — | — | (58,936,739 | ) | (58,936,739 | ) | ||||||||||
Warrant Liability | — | — | (15,879,843 | ) | (15,879,843 | ) | ||||||||||
$ | 46,667,334 | $ | — | $ | (65,431,824 | ) | $ | (18,764,490 | ) | |||||||
10. | LEASES |
(a) | Operating Leases |
Year Ended | ||||||||
December 31, 2020 | December 31, 2019 | |||||||
Weighted average remaining lease term | 12.10 | 7.42 | ||||||
Weighted average discount rate | 13.7 | % | 12.0 | % |
Year Ending December 31 | Third Party | Related Party | Total | |||||||||
2021 | $ | 24,009,579 | $ | 1,307,183 | $ | 25,316,762 | ||||||
2022 | 25,487,123 | 1,337,130 | 26,824,253 | |||||||||
2023 | 25,360,510 | 1,367,771 | 26,728,281 | |||||||||
2024 | 24,856,882 | 1,255,714 | 26,112,596 | |||||||||
2025 | 22,834,433 | 1,182,489 | 24,016,922 | |||||||||
2026 and Thereafter | 242,729,225 | 9,162,841 | 251,892,066 | |||||||||
Total Lease Payments | 365,277,752 | 15,613,128 | 380,890,880 | |||||||||
Less: Interest | (223,015,394 | ) | (7,586,616 | ) | (230,602,010 | ) | ||||||
Present Value of Lease Liability | $ | 142,262,358 | $ | 8,026,512 | $ | 150,288,870 | ||||||
(b) | Related Party Operating Leases |
( c) | Sales Lease Back Transactions |
(i) | Toledo, Ohio Cultivation and Processing Facility |
(ii) | Oglesby Cultivation and Processing Facility |
(iii) | Danville Cultivation and Processing Facility |
Year Ended | ||||||||
December 31, 2020 | December 31, 2019 | |||||||
Weighted average remaining lease term | 12.10 | 7.42 | ||||||
Weighted average discount rate | 13.7 | % | 12.0 | % |
Year Ending December 31 | Third Party | Related Party | Total | |||||||||
2021 | $ | 24,009,579 | $ | 1,307,183 | $ | 25,316,762 | ||||||
2022 | 25,487,123 | 1,337,130 | 26,824,253 | |||||||||
2023 | 25,360,510 | 1,367,771 | 26,728,281 | |||||||||
2024 | 24,856,882 | 1,255,714 | 26,112,596 | |||||||||
2025 | 22,834,433 | 1,182,489 | 24,016,922 | |||||||||
2026 and Thereafter | 242,729,225 | 9,162,841 | 251,892,066 | |||||||||
Total Lease Payments | 365,277,752 | 15,613,128 | 380,890,880 | |||||||||
Less: Interest | (223,015,394 | ) | (7,586,616 | ) | (230,602,010 | ) | ||||||
Present Value of Lease Liability | $ | 142,262,358 | $ | 8,026,512 | $ | 150,288,870 | ||||||
15. | OTHER INCOME (EXPENSE) |
For the Years Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Fair value adjustments on equity investments | $ | 26,370,803 | $ | (3,530,969 | ) | $ | 4,797,283 | |||||
Fair value adjustments on convertible notes receivable | — | (1,771,420 | ) | 13,586,000 | ||||||||
Fair value adjustment on put and call options | — | (132,523 | ) | 2,869,342 | ||||||||
Fair value adjustments on warrants received | — | — | 37,765,718 | |||||||||
Fair value adjustments on variable note receivable | (815,937 | ) | (6,608,790 | ) | (4,206,141 | ) | ||||||
Fair value adjustment on convertible note payable in connection with RTO | — | — | 1,981,358 | |||||||||
Fair value adjustments on warrants issued | (23,001,771 | ) | 4,159,687 | — | ||||||||
Fair value adjustments on contingent consideration | 9,877,013 | (3,686,921 | ) | — | ||||||||
Equity earnings in joint ventures | 2,319,963 | 450,000 | ||||||||||
Other | 626,675 | 802,000 | (376,139 | ) | ||||||||
Total Other Income (Expense) | $ | 15,376,746 | $ | (10,318,936 | ) | $ | 56,417,421 | |||||
For the Years Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Fair value adjustments on equity investments | $ | 26,370,803 | $ | (3,530,969 | ) | $ | 4,797,283 | |||||
Fair value adjustments on convertible notes receivable | — | (1,771,420 | ) | 13,586,000 | ||||||||
Fair value adjustment on put and call options | — | (132,523 | ) | 2,869,342 | ||||||||
Fair value adjustments on warrants received | — | — | 37,765,718 | |||||||||
Fair value adjustments on variable note receivable | (815,937 | ) | (6,608,790 | ) | (4,206,141 | ) | ||||||
Fair value adjustment on convertible note payable in connection with RTO | — | — | 1,981,358 | |||||||||
Fair value adjustments on warrants issued | (23,001,771 | ) | 4,159,687 | — | ||||||||
Fair value adjustments on contingent consideration | 9,877,013 | (3,686,921 | ) | — | ||||||||
Equity earnings in joint ventures | 2,319,963 | 450,000 | ||||||||||
Other | 626,675 | 802,000 | (376,139 | ) | ||||||||
Total Other Income (Expense) | $ | 15,376,746 | $ | (10,318,936 | ) | $ | 56,417,421 | |||||
11. | NOTES PAYABLE |
December 31, 2020 | December 31, 2019 | |||||||
In connection with an acquisition completed in 2017, the Company is required to make quarterly charitable contributions of $50,000 through October 2024. The net present value of these required payments has been recorded as a liability with an interest rate of 2.17%. | $ | 717,430 | $ | 970,957 | ||||
Private placement debt dated May 22, 2019, in the original amount of $105,466,429 with an interest rate of 12.00%, matures on May 22, 2023. The debt was issued at a discount, the carrying value of which is $10,511,335 and $15,090,517 as of December 31, 2020 and 2019, respectively. | 94,955,094 | 90,375,912 | ||||||
Rise Joliet mortgage dated June 5, 2020, in the original amount of $1,814,000 with an interest rate of 5.00%, matures on June 5, 2035. The debt was issued at a discount, the carrying value of which is $174,222, and is presented net of principal payments of $40,806 as of December 31, 2020. | 1,598,972 | — | ||||||
Rise Lakewood mortgage dated August 20, 2020, in the original amount of $833,000 with an interest rate of 7.25%, matures on August 20, 2025, and is presented net of principal payments of $9,517 as of December 31, 2020. | 823,483 | — | ||||||
Rise Mundelein mortgage dated December 6, 2020, in the original amount of $960,000 with an interest rate of 6.95%, matures on December 06, 2025. | 960,000 | — | ||||||
Total notes payable | 99,054,979 | 91,346,869 | ||||||
Less: current portion of notes payable | (341,983 | ) | (206,675 | ) | ||||
Notes payable, net of current portion | $ | 98,712,996 | $ | 91,140,194 | ||||
(a) | Bridge Financing |
(b) | Private Placement Financing |
(c) | Modification of Private Placement Financing |
(d) | Extension of Private Placement Financing |
(e) | Mortgage on Joliet, Illinois Dispensary |
(f) | Mortgage on Lakewood, Ohio Dispensary |
(g) | Mortgage on Mundelein, Illinois Property |
(h) | Related Parties |
December 31, 2020 | December 31, 2019 | |||||||
In connection with an acquisition completed in 2017, the Company is required to make quarterly charitable contributions of $50,000 through October 2024. The net present value of these required payments has been recorded as a liability with an interest rate of 2.17%. | $ | 717,430 | $ | 970,957 | ||||
Private placement debt dated May 22, 2019, in the original amount of $105,466,429 with an interest rate of 12.00%, matures on May 22, 2023. The debt was issued at a discount, the carrying value of which is $10,511,335 and $15,090,517 as of December 31, 2020 and 2019, respectively. | 94,955,094 | 90,375,912 | ||||||
Rise Joliet mortgage dated June 5, 2020, in the original amount of $1,814,000 with an interest rate of 5.00%, matures on June 5, 2035. The debt was issued at a discount, the carrying value of which is $174,222, and is presented net of principal payments of $40,806 as of December 31, 2020. | 1,598,972 | — | ||||||
Rise Lakewood mortgage dated August 20, 2020, in the original amount of $833,000 with an interest rate of 7.25%, matures on August 20, 2025, and is presented net of principal payments of $9,517 as of December 31, 2020. | 823,483 | — | ||||||
Rise Mundelein mortgage dated December 6, 2020, in the original amount of $960,000 with an interest rate of 6.95%, matures on December 06, 2025. | 960,000 | — | ||||||
Total notes payable | 99,054,979 | 91,346,869 | ||||||
Less: current portion of notes payable | (341,983 | ) | (206,675 | ) | ||||
Notes payable, net of current portion | $ | 98,712,996 | $ | 91,140,194 | ||||
Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Current: | ||||||||||||
Federal | $ | 65,118,212 | $ | 18,095,946 | $ | 2,842,696 | ||||||
State | 16,640,086 | 4,665,000 | 279,899 | |||||||||
Foreign | — | — | — | |||||||||
Total Current | 81,758,298 | 22,760,946 | 3,122,595 | |||||||||
Deferred: | ||||||||||||
Federal | 3,520,293 | (12,535,000 | ) | 3,330,000 | ||||||||
State | (1,425,789 | ) | (881,913 | ) | 731,000 | |||||||
Foreign | — | — | — | |||||||||
Total Deferred | 2,094,504 | (13,416,913 | ) | 4,061,000 | ||||||||
Total | $ | 83,852,802 | $ | 9,344,033 | $ | 7,183,595 | ||||||
2020 | 2019 | 2018 | ||||||||||
Income/(Loss) before Income Taxes | $ | 102,930,722 | $ | (50,202,837 | ) | $ | 29,751,374 | |||||
Statutory Tax Rates | 21 | % | 21 | % | 21 | % | ||||||
Expense/(Recovery) based on Statutory Rates | 21,615,452 | (10,542,596 | ) | 6,247,788 | ||||||||
Pass-throughs and Non-controlling Interests | — | 49,203 | (1,062,111 | ) | ||||||||
State Taxes | 14,836,807 | (1,536,694 | ) | (279,899 | ) | |||||||
Provision to Return Adjustment | 5,299,091 | (1,209,592 | ) | 53,304 | ||||||||
Adjustments for Stock Compensation | (211,132 | ) | (1,952,083 | ) | — | |||||||
Non-deductible Expenses | 27,570,364 | 14,166,223 | 2,263,978 | |||||||||
Change in State Rate Reconciliation | (2,535,415 | ) | 513,338 | — | ||||||||
Change in Valuation Allowance | 7,705,790 | 7,604,098 | — | |||||||||
Change in Uncertain Tax Position | 9,918,112 | 2,113,263 | — | |||||||||
Other Differences | (346,267 | ) | 138,873 | (39,465 | ) | |||||||
Income Tax Expense | $ | 83,852,802 | $ | 9,344,033 | $ | 7,183,595 | ||||||
Year Ended December 31, | ||||||||
2020 | 2019 | |||||||
Deferred Tax Assets | ||||||||
Operating Lease Liabilities | $ | 33,641,132 | $ | 10,483,126 | ||||
Net Operating Losses | 13,236,414 | 12,997,199 | ||||||
163(j) Interest Limitation | 5,481,144 | — | ||||||
Warrant Fair Value Derivative | 5,251,087 | — | ||||||
Stock-based Compensation | 7,096,512 | 4,592,242 | ||||||
Other | 3,453,748 | 519,437 | ||||||
Valuation Allowance | (17,033,118 | ) | (7,604,098 | ) | ||||
Total Deferred Tax Assets | 51,126,919 | 20,987,906 | ||||||
Deferred Tax Liabilities | ||||||||
Operating Right of Use Assets | $ | (31,211,307 | ) | $ | (10,176,807 | ) | ||
Fair Value Investments | (7,734,744 | ) | (1,080,760 | ) | ||||
Intangibles | (37,398,110 | ) | (43,896,437 | ) | ||||
Total Deferred Tax Liabilities | (76,344,161 | ) | (55,154,005 | ) | ||||
Net Deferred Tax Liabilities | $ | (25,217,242 | ) | $ | (34,166,099 | ) | ||
Balance as of December 31, 2018 | $ | — | ||
Additions for current year | 1,720,865 | |||
Additions for prior year | 392,398 | |||
Subtractions for current year | — | |||
Balance as of December 31, 2019 | $ | 2,113,263 | ||
Additions for current year | 7,536,097 | |||
Additions for prior year | 2,382,014 | |||
Subtractions for current year | (1,690,986 | ) | ||
Balance as of December 31, 2020 | $ | 10,340,388 | ||
12. | WARRANTS |
| Number of Shares | Weighted Average Exercise Price (C$) | Weighted Average Contractual Life | Number of Shares | Weighted Average Exercise Price (USD) | Weighted Average Contractual Life | |||||||||||||||||||
Liability Classified | Equity Classified | |||||||||||||||||||||||
Balance as at January 1, 2020 | 2,406,811 | C$ | 18.59 | 4.86 | — | $ | — | — | ||||||||||||||||
Additional Modification Warrants | 84,924 | 14.03 | 5.00 | — | — | — | ||||||||||||||||||
Dispensary Mortgage Warrants | — | — | — | 35,000 | 9.10 | 5.00 | ||||||||||||||||||
Warrants Exercised | (5,941 | ) | 12.42 | 5.00 | — | — | — | |||||||||||||||||
Balance as at December 31, 2020 | 2,485,794 | C$ | 18.45 | 4.87 | 35,000 | $ | 9.10 | 5.00 | ||||||||||||||||
| Number of Shares | Weighted Average Exercise Price (C$) | Weighted Average Contractual Life | Number of Shares | Weighted Average Exercise Price (USD) | Weighted Average Contractual Life | |||||||||||||||||||
Liability Classified | Equity Classified | |||||||||||||||||||||||
Balance as at January 1, 2019 | — | C$ | — | — | — | $ | — | — | ||||||||||||||||
Bridge Financing Warrants | 218,964 | 22.90 | 0.32 | — | — | — | ||||||||||||||||||
Private Placement Financing Warrants | 1,822,771 | 19.39 | 3.79 | — | — | — | ||||||||||||||||||
Modification Warrants | 365,076 | 12.04 | 0.75 | — | — | — | ||||||||||||||||||
Warrants Exercised | — | — | — | — | — | — | ||||||||||||||||||
Balance as at December 31, 2019 | 2,406,811 | C$ | 18.59 | 4.86 | — | $ | — | — | ||||||||||||||||
(a) | Liability Classified Warrants |
Warrant Liability | Strike Price | Warrants Outstanding | December 31, 2020 | December 31, 2019 | ||||||||||||
Bridge Financing Warrants | C$ | 22.90 | 218,964 | $ | 2,544,500 | $ | 1,385,400 | |||||||||
Private Placement Financing Warrants | C$ | 19.39 | 1,822,771 | 28,756,500 | 12,189,169 | |||||||||||
Modification Warrants | C$ | 12.04 | 360,256 | 6,630,000 | 2,305,274 | |||||||||||
Additional Modification Warrants | C$ | 14.03 | 83,803 | 1,523,000 | — | |||||||||||
Totals | 2,485,794 | $ | 39,454,000 | $ | 15,879,843 | |||||||||||
(i) | Note Purchase Agreement Warrants |
Significant Assumptions | December 31, 2020 | December 31, 2019 | ||||||
Volatility | 72.19% – 79.10% | 117.43% – 123.64% | ||||||
Remaining Term | 1.78 – 4.39 years | 2.78 – 4.86 years | ||||||
Risk Free Rate | 0.20% – 0.28% | 1.68% – 1.69% |
(b) | Equity Classified Warrants |
Warrants Included in Contributed Surplus | Strike Price | Warrants Outstanding | December 31, 2020 | December 31, 2019 | ||||||||||||
Dispensary Mortgage Warrants | $ | 9.10 | 35,000 | $ | 181,272 | $ | — |
(i) | Dispensary Mortgage Warrants |
Significant Assumptions | December 31, 2020 | December 31, 2019 | ||||||
Volatility | 80 | % | — | |||||
Remaining Term | 5 years | — | ||||||
Risk Free Rate | 0.37 | % | — |
| Number of Shares | Weighted Average Exercise Price (C$) | Weighted Average Contractual Life | Number of Shares | Weighted Average Exercise Price (USD) | Weighted Average Contractual Life | |||||||||||||||||||
Liability Classified | Equity Classified | |||||||||||||||||||||||
Balance as at January 1, 2020 | 2,406,811 | C$ | 18.59 | 4.86 | — | $ | — | — | ||||||||||||||||
Additional Modification Warrants | 84,924 | 14.03 | 5.00 | — | — | — | ||||||||||||||||||
Dispensary Mortgage Warrants | — | — | — | 35,000 | 9.10 | 5.00 | ||||||||||||||||||
Warrants Exercised | (5,941 | ) | 12.42 | 5.00 | — | — | — | |||||||||||||||||
Balance as at December 31, 2020 | 2,485,794 | C$ | 18.45 | 4.87 | 35,000 | $ | 9.10 | 5.00 | ||||||||||||||||
| Number of Shares | Weighted Average Exercise Price (C$) | Weighted Average Contractual Life | Number of Shares | Weighted Average Exercise Price (USD) | Weighted Average Contractual Life | |||||||||||||||||||
Liability Classified | Equity Classified | |||||||||||||||||||||||
Balance as at January 1, 2019 | — | C$ | — | — | — | $ | — | — | ||||||||||||||||
Bridge Financing Warrants | 218,964 | 22.90 | 0.32 | — | — | — | ||||||||||||||||||
Private Placement Financing Warrants | 1,822,771 | 19.39 | 3.79 | — | — | — | ||||||||||||||||||
Modification Warrants | 365,076 | 12.04 | 0.75 | — | — | — | ||||||||||||||||||
Warrants Exercised | — | — | — | — | — | — | ||||||||||||||||||
Balance as at December 31, 2019 | 2,406,811 | C$ | 18.59 | 4.86 | — | $ | — | — | ||||||||||||||||
Warrant Liability | Strike Price | Warrants Outstanding | December 31, 2020 | December 31, 2019 | ||||||||||||
Bridge Financing Warrants | C$ | 22.90 | 218,964 | $ | 2,544,500 | $ | 1,385,400 | |||||||||
Private Placement Financing Warrants | C$ | 19.39 | 1,822,771 | 28,756,500 | 12,189,169 | |||||||||||
Modification Warrants | C$ | 12.04 | 360,256 | 6,630,000 | 2,305,274 | |||||||||||
Additional Modification Warrants | C$ | 14.03 | 83,803 | 1,523,000 | — | |||||||||||
Totals | 2,485,794 | $ | 39,454,000 | $ | 15,879,843 | |||||||||||
Significant Assumptions | December 31, 2020 | December 31, 2019 | ||||||
Volatility | 72.19% – 79.10% | 117.43% – 123.64% | ||||||
Remaining Term | 1.78 – 4.39 years | 2.78 – 4.86 years | ||||||
Risk Free Rate | 0.20% – 0.28% | 1.68% – 1.69% |
Warrants Included in Contributed Surplus | Strike Price | Warrants Outstanding | December 31, 2020 | December 31, 2019 | ||||||||||||
Dispensary Mortgage Warrants | $ | 9.10 | 35,000 | $ | 181,272 | $ | — |
Significant Assumptions | December 31, 2020 | December 31, 2019 | ||||||
Volatility | 80 | % | — | |||||
Remaining Term | 5 years | — | ||||||
Risk Free Rate | 0.37 | % | — |
Issued and Outstanding | ||||||||||||
| Subordinate Voting Shares | Multiple Voting Shares | Super Voting Shares | ||||||||||
As at January 1, 2019 | 43,920,131 | 677,230 | 424,513 | |||||||||
Issuance of shares under business combinations and investments | 45,571,444 | — | — | |||||||||
Noncontrolling Interests adjustment for change in ownership | — | 31,000 | — | |||||||||
Issuance of shares for redemption of noncontrolling interest | 2,498,404 | — | — | |||||||||
Issuance of shares upon vesting of RSUs | 1,165,630 | — | — | |||||||||
Issuance of shares upon exercise of broker options | 114,080 | — | — | |||||||||
Issuance of shares for professional fees | 19,875 | — | — | |||||||||
Exchange of shares | 35,710,400 | (334,880 | ) | (22,224 | ) | |||||||
As at December 31, 2019 | 128,999,964 | 373,350 | 402,289 | |||||||||
As at January 1, 2020 | 128,999,964 | 373,350 | 402,289 | |||||||||
Issuance of shares under business combinations and investments | 1,752,065 | — | — | |||||||||
Distribution of contingent consideration | 2,713,463 | — | — | |||||||||
Distribution of deferred shares | 1,220,548 | — | — | |||||||||
Issuance of shares upon exercise of options and warrants | 171,813 | — | — | |||||||||
Issuances of shares upon vesting of RSUs | 923,468 | — | — | |||||||||
Exchange of shares | 42,331,900 | (333,061 | ) | (90,258 | ) | |||||||
As at December 31, 2020 | 178,113,221 | 40,289 | 312,031 | |||||||||
Contingent Shares Issued | ||||||||||||
December 31, 2020 | ||||||||||||
Transaction | Date of Transaction | Units | Value | |||||||||
Advanced Grow Labs, LLC | February 12, 2019 | 1,396,533 | $ | 11,544,855 | ||||||||
For Success Holding Company | February 21, 2019 | 779,690 | 6,686,432 | |||||||||
Integral Associates, LLC | June 5, 2019 | 537,240 | 4,654,526 | |||||||||
2,713,463 | $ | 22,885,813 | ||||||||||
Deferred Shares Outstanding | ||||||||||||||||||||
December 31, 2020 | December 31, 2019 | |||||||||||||||||||
Transaction | Date of Transaction | Units | Value | Units | Value | |||||||||||||||
Advanced Grow Labs, LLC | February 12, 2019 | — | $ | — | 472,500 | $ | 5,380,000 | |||||||||||||
For Success Holding Company | February 21, 2019 | 147,095 | 1,835,330 | 793,448 | 9,900,000 | |||||||||||||||
Rise Canton | May 15, 2019 | — | — | 101,695 | 1,307,798 | |||||||||||||||
Southern CT Wellness and Healing | December 18, 2020 | 32,205 | 751,987 | — | — | |||||||||||||||
179,300 | $ | 2,587,317 | 1,367,643 | $ | 16,587,798 | |||||||||||||||
Year Ended December 31, | ||||||||
2020 | 2019 | |||||||
Risk-free interest rate | 0.31% – 1.37% | 1.18% – 1.84% | ||||||
Expected dividend yield | 0% | 0% | ||||||
Expected volatility | 80% | 80% – 100% | ||||||
Expected option life | 3 – 5 years | 3 – 5 years |
| Number of Shares | Weighted Average Grant Date Fair Value (C$) | |||||||
Nonvested Shares at December 31, 2019 | 1,399,762 | 9.30 | ||||||
Granted | 286,880 | 13.90 | ||||||
Forfeited | (73,834 | ) | 15.85 | |||||
Vested | (923,468 | ) | 15.21 | |||||
Nonvested Shares at December 31, 2020 | 689,340 | 16.77 |
For the Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Stock Options Expense | $ | 10,937,768 | $ | 6,393,277 | $ | 1,876,627 | ||||||
RSU Expense | 8,398,950 | 11,892,100 | 4,748,44 4 | |||||||||
Total Stock-Based Compensation Expense | $ | 19,336,718 | $ | 18,285,377 | $ | 6,625,07 1 | ||||||
17. | FAIR VALUE MEASUREMENTS |
As of December 31, 2020 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and Cash Equivalents | $ | 83,757,785 | $ | — | $ | — | $ | 83,757,785 | ||||||||
Investments | 923,581 | — | 39,871,225 | 40,794,806 | ||||||||||||
Contingent Consideration Payable | — | — | (27,100,000 | ) | (27,100,000 | ) | ||||||||||
Warrant Liability | — | — | (39,454,000 | ) | (39,454,000 | ) | ||||||||||
$ | 84,681,366 | $ | — | $ | (26,682,775 | ) | $ | 57,998,591 | ||||||||
As of December 31, 2019 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash and Cash Equivalents | $ | 46,667,334 | $ | — | $ | — | $ | 46,667,334 | ||||||||
Notes Receivable | — | — | 815,937 | 815,937 | ||||||||||||
Investments | — | — | 14,068,821 | 14,068,821 | ||||||||||||
Liability of Redemption of Noncontrolling Interest | — | — | (5,500,000 | ) | (5,500,000 | ) | ||||||||||
Contingent Consideration Payable | — | — | (58,936,739 | ) | (58,936,739 | ) | ||||||||||
Warrant Liability | — | — | (15,879,843 | ) | (15,879,843 | ) | ||||||||||
$ | 46,667,334 | $ | — | $ | (65,431,824 | ) | $ | (18,764,490 | ) | |||||||
14. | INCOME TAXES |
Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Current: | ||||||||||||
Federal | $ | 65,118,212 | $ | 18,095,946 | $ | 2,842,696 | ||||||
State | 16,640,086 | 4,665,000 | 279,899 | |||||||||
Foreign | — | — | — | |||||||||
Total Current | 81,758,298 | 22,760,946 | 3,122,595 | |||||||||
Deferred: | ||||||||||||
Federal | 3,520,293 | (12,535,000 | ) | 3,330,000 | ||||||||
State | (1,425,789 | ) | (881,913 | ) | 731,000 | |||||||
Foreign | — | — | — | |||||||||
Total Deferred | 2,094,504 | (13,416,913 | ) | 4,061,000 | ||||||||
Total | $ | 83,852,802 | $ | 9,344,033 | $ | 7,183,595 | ||||||
2020 | 2019 | 2018 | ||||||||||
Income/(Loss) before Income Taxes | $ | 102,930,722 | $ | (50,202,837 | ) | $ | 29,751,374 | |||||
Statutory Tax Rates | 21 | % | 21 | % | 21 | % | ||||||
Expense/(Recovery) based on Statutory Rates | 21,615,452 | (10,542,596 | ) | 6,247,788 | ||||||||
Pass-throughs and Non-controlling Interests | — | 49,203 | (1,062,111 | ) | ||||||||
State Taxes | 14,836,807 | (1,536,694 | ) | (279,899 | ) | |||||||
Provision to Return Adjustment | 5,299,091 | (1,209,592 | ) | 53,304 | ||||||||
Adjustments for Stock Compensation | (211,132 | ) | (1,952,083 | ) | — | |||||||
Non-deductible Expenses | 27,570,364 | 14,166,223 | 2,263,978 | |||||||||
Change in State Rate Reconciliation | (2,535,415 | ) | 513,338 | — | ||||||||
Change in Valuation Allowance | 7,705,790 | 7,604,098 | — | |||||||||
Change in Uncertain Tax Position | 9,918,112 | 2,113,263 | — | |||||||||
Other Differences | (346,267 | ) | 138,873 | (39,465 | ) | |||||||
Income Tax Expense | $ | 83,852,802 | $ | 9,344,033 | $ | 7,183,595 | ||||||
Year Ended December 31, | ||||||||
2020 | 2019 | |||||||
Deferred Tax Assets | ||||||||
Operating Lease Liabilities | $ | 33,641,132 | $ | 10,483,126 | ||||
Net Operating Losses | 13,236,414 | 12,997,199 | ||||||
163(j) Interest Limitation | 5,481,144 | — | ||||||
Warrant Fair Value Derivative | 5,251,087 | — | ||||||
Stock-based Compensation | 7,096,512 | 4,592,242 | ||||||
Other | 3,453,748 | 519,437 | ||||||
Valuation Allowance | (17,033,118 | ) | (7,604,098 | ) | ||||
Total Deferred Tax Assets | 51,126,919 | 20,987,906 | ||||||
Deferred Tax Liabilities | ||||||||
Operating Right of Use Assets | $ | (31,211,307 | ) | $ | (10,176,807 | ) | ||
Fair Value Investments | (7,734,744 | ) | (1,080,760 | ) | ||||
Intangibles | (37,398,110 | ) | (43,896,437 | ) | ||||
Total Deferred Tax Liabilities | (76,344,161 | ) | (55,154,005 | ) | ||||
Net Deferred Tax Liabilities | $ | (25,217,242 | ) | $ | (34,166,099 | ) | ||
Balance as of December 31, 2018 | $ | — | ||
Additions for current year | 1,720,865 | |||
Additions for prior year | 392,398 | |||
Subtractions for current year | — | |||
Balance as of December 31, 2019 | $ | 2,113,263 | ||
Additions for current year | 7,536,097 | |||
Additions for prior year | 2,382,014 | |||
Subtractions for current year | (1,690,986 | ) | ||
Balance as of December 31, 2020 | $ | 10,340,388 | ||
Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Weighted average grant date fair value (per share) of stock option units granted (C$) | 6.58 | 8.06 | 10.85 | |||||||||
Intrinsic value of stock option units exercised, using market price at exercise date (USD) | $ | 1,184,089 | $ | 88,010 | $ | 31,604 |
Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Weighted average grant date fair value (per share) of RSUs granted (C$) | 13.90 | 11.70 | 10.28 | |||||||||
Total fair value of RSUs vested, using market price at vest date (USD) | $ | 9,076,673 | $ | 13,522,284 | $ | — |
| Number of Shares | Weighted Average Exercise Price (C$) | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | |||||||||||||
Balance as at December 31, 2019 | 3,839,017 | 13.21 | 5.57 | $ | 218,234 | |||||||||||
Granted | 2,604,511 | 10.36 | ||||||||||||||
Exercised | (165,872 | ) | 12.72 | |||||||||||||
Forfeited | (613,250 | ) | 13.27 | |||||||||||||
Balance as at December 31, 2020 | 5,664,406 | 11.91 | 4.39 | $ | 85,408,034 | |||||||||||
Vested | 1,749,365 | 13.37 | ||||||||||||||
Exercisable at December 31, 2020 | 1,532,282 | 13.22 | 5.07 | $ | 21,590,351 |
16. | COMMITMENTS AND CONTINGENCIES |
(a) | Contingencies |
(b) | Claims and Litigation |
(c) | Construction Commitments |
13. | SHARE CAPITAL |
(a) | Authorized |
(i) | Subordinate Voting Shares |
(ii) | Multiple Voting Shares |
(iii) | Super Voting Shares |
(b) | Issued and Outstanding |
Issued and Outstanding | ||||||||||||
| Subordinate Voting Shares | Multiple Voting Shares | Super Voting Shares | ||||||||||
As at January 1, 2019 | 43,920,131 | 677,230 | 424,513 | |||||||||
Issuance of shares under business combinations and investments | 45,571,444 | — | — | |||||||||
Noncontrolling Interests adjustment for change in ownership | — | 31,000 | — | |||||||||
Issuance of shares for redemption of noncontrolling interest | 2,498,404 | — | — | |||||||||
Issuance of shares upon vesting of RSUs | 1,165,630 | — | — | |||||||||
Issuance of shares upon exercise of broker options | 114,080 | — | — | |||||||||
Issuance of shares for professional fees | 19,875 | — | — | |||||||||
Exchange of shares | 35,710,400 | (334,880 | ) | (22,224 | ) | |||||||
As at December 31, 2019 | 128,999,964 | 373,350 | 402,289 | |||||||||
As at January 1, 2020 | 128,999,964 | 373,350 | 402,289 | |||||||||
Issuance of shares under business combinations and investments | 1,752,065 | — | — | |||||||||
Distribution of contingent consideration | 2,713,463 | — | — | |||||||||
Distribution of deferred shares | 1,220,548 | — | — | |||||||||
Issuance of shares upon exercise of options and warrants | 171,813 | — | — | |||||||||
Issuances of shares upon vesting of RSUs | 923,468 | — | — | |||||||||
Exchange of shares | 42,331,900 | (333,061 | ) | (90,258 | ) | |||||||
As at December 31, 2020 | 178,113,221 | 40,289 | 312,031 | |||||||||
(i) | Issuance of Shares Under Business Combinations and Investments |
(ii) | Distribution of Contingent Consideration |
Contingent Shares Issued | ||||||||||||
December 31, 2020 | ||||||||||||
Transaction | Date of Transaction | Units | Value | |||||||||
Advanced Grow Labs, LLC | February 12, 2019 | 1,396,533 | $ | 11,544,855 | ||||||||
For Success Holding Company | February 21, 2019 | 779,690 | 6,686,432 | |||||||||
Integral Associates, LLC | June 5, 2019 | 537,240 | 4,654,526 | |||||||||
2,713,463 | $ | 22,885,813 | ||||||||||
(iii) | Deferred Shares—Issuances and Distribution s |
Deferred Shares Outstanding | ||||||||||||||||||||
December 31, 2020 | December 31, 2019 | |||||||||||||||||||
Transaction | Date of Transaction | Units | Value | Units | Value | |||||||||||||||
Advanced Grow Labs, LLC | February 12, 2019 | — | $ | — | 472,500 | $ | 5,380,000 | |||||||||||||
For Success Holding Company | February 21, 2019 | 147,095 | 1,835,330 | 793,448 | 9,900,000 | |||||||||||||||
Rise Canton | May 15, 2019 | — | — | 101,695 | 1,307,798 | |||||||||||||||
Southern CT Wellness and Healing | December 18, 2020 | 32,205 | 751,987 | — | — | |||||||||||||||
179,300 | $ | 2,587,317 | 1,367,643 | $ | 16,587,798 | |||||||||||||||
(iv) | Changes in Ownership and Noncontrolling Interests |
(c) | Stock-Based Compensation |
| Number of Shares | Weighted Average Exercise Price (C$) | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | |||||||||||||
Balance as at December 31, 2019 | 3,839,017 | 13.21 | 5.57 | $ | 218,234 | |||||||||||
Granted | 2,604,511 | 10.36 | ||||||||||||||
Exercised | (165,872 | ) | 12.72 | |||||||||||||
Forfeited | (613,250 | ) | 13.27 | |||||||||||||
Balance as at December 31, 2020 | 5,664,406 | 11.91 | 4.39 | $ | 85,408,034 | |||||||||||
Vested | 1,749,365 | 13.37 | ||||||||||||||
Exercisable at December 31, 2020 | 1,532,282 | 13.22 | 5.07 | $ | 21,590,351 |
Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Weighted average grant date fair value (per share) of stock option units granted (C$) | 6.58 | 8.06 | 10.85 | |||||||||
Intrinsic value of stock option units exercised, using market price at exercise date (USD) | $ | 1,184,089 | $ | 88,010 | $ | 31,604 |
Year Ended December 31, | ||||||||
2020 | 2019 | |||||||
Risk-free interest rate | 0.31% – 1.37% | 1.18% – 1.84% | ||||||
Expected dividend yield | 0% | 0% | ||||||
Expected volatility | 80% | 80% – 100% | ||||||
Expected option life | 3 – 5 years | 3 – 5 years |
| Number of Shares | Weighted Average Grant Date Fair Value (C$) | |||||||
Nonvested Shares at December 31, 2019 | 1,399,762 | 9.30 | ||||||
Granted | 286,880 | 13.90 | ||||||
Forfeited | (73,834 | ) | 15.85 | |||||
Vested | (923,468 | ) | 15.21 | |||||
Nonvested Shares at December 31, 2020 | 689,340 | 16.77 |
Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Weighted average grant date fair value (per share) of RSUs granted (C$) | 13.90 | 11.70 | 10.28 | |||||||||
Total fair value of RSUs vested, using market price at vest date (USD) | $ | 9,076,673 | $ | 13,522,284 | $ | — |
For the Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Stock Options Expense | $ | 10,937,768 | $ | 6,393,277 | $ | 1,876,627 | ||||||
RSU Expense | 8,398,950 | 11,892,100 | 4,748,44 4 | |||||||||
Total Stock-Based Compensation Expense | $ | 19,336,718 | $ | 18,285,377 | $ | 6,625,07 1 | ||||||
2019 | ||
Risk-free Rate | 1.90% | |
Exercise Price of Underlying Securities | $1.998 | |
Share Price of Underlying Security | 1.90 | |
Volatility | 71.50% | |
Remaining Life (in years) | 1.0 |