8-K/A - CANN - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 15, 2022 ( December 30, 2021 )

GENERAL CANNABIS CORP

(Exact Name of Registrant as Specified in Charter)


Colorado	****	000-54457	****	90-1072649
(State or other jurisdiction<br>of incorporation)		(Commission File Number)		(I.R.S. Employer Identification Number)

1901 S Navajo Street<br>Denver , Colorado	80223
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: ( 303 ) 759-1300

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	****	Trading Symbol(s)	****	Name of each exchange<br>on which registered
N/A		N/A		N/A

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Explanatory Note

This Current Report on Form 8-K/A (this “Amendment”) amends the Current Report on Form 8-K (the “Original 8-K”) filed by General Cannabis Corp (the “Company”) dated December 30, 2021 and filed with the Securities and Exchange Commission on January 6, 2022. This Amendment is solely for the purpose of providing the financial statements and information required by Item 9.01(a) of Form 8-K and the pro forma financial information required by Item 9.01(b) of Form 8-K in connection with the Company’s previously reported acquisition of Trees Portland, LLC and Trees Waterfront, LLC.

This Amendment No. 1 on Form 8-K/A amends and supplements the Original 8-K to include the historical audited and unaudited financial statements of Trees Portland, LLC and Trees Waterfront, LLC and the pro forma combined financial information required by Item 9.01 of Form 8-K that were not included in the Original 8-K in reliance on the instructions to such item. Except as set forth herein, no modifications have been made to information contained in the Original 8-K, and the Company has not updated any information contained therein to reflect events that have occurred since the date of the Original 8-K.

Item 9.01Financial Statements and Exhibits.

(a) Financial statements of business acquired.

The audited financial statements of Trees Portland, LLC and Trees Waterfront, LLC as of and for the year ended December 31, 2020 and 2019, with the accompanying notes, are filed herewith as Exhibit 99.1 and 99.2 to this Form 8-K/A.

(b) Pro forma financial information.

The unaudited pro forma financial statements of Trees Portland, LLC and Trees Waterfront, LLC for the year ended December 31, 2020 and for the nine months ended September 30, 2021 and 2020, with the accompanying notes, are filed herewith as Exhibit 99.5 to this Form 8-K/A.

(d) The exhibits listed in the following Exhibit Index are filed as part of this Current Report on Form 8-K.

Exhibit No.		Description
23.1		Consent of Independent Auditors
99.1		Audited financial statements of Trees Portland, LLC as of and for the years ended December 30, 2020 and 2019.
99.2		Audited financial statements of Trees Waterfront, LLC as of and for the years ended December 30, 2020 and 2019.
99.3		Unaudited and unreviewed interim condensed consolidated financial statements of Trees Portland, LLC
99.4		Unaudited and unreviewed interim condensed consolidated financial statements of Trees Waterfront, LLC
99.5		Unaudited pro forma condensed combined consolidated financial statements as of and for the nine months ended September 30, 2021 and for the year ended December 31, 2020.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: March 15, 2022

GENERAL CANNABIS CORP
By:	/s/ Adam Hershey
Name:	Adam Hershey
Title:	Interim Chief Executive Officer

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation in this Form 8-K-A of our reports dated November 23, 2021, relating to the financial statements of Trees Portland, LLC and Trees Waterfront LLC as of December 31, 2020.

Certified Public Accountants Lakewood, CO

March 14, 2022

Exhibit 99.1

Trees Portland, LLC

Financial Statements

For the years ended December 31, 2020 and 2019

Trees Portland, LLC

Contents

Independent Auditor’s Report	1

Balance Sheets	2

Statements of Income and Members' Equity (Deficit)	3

Statements of Cash Flows	4

Notes to Financial Statements	5

November 23, 2021

To the Members

Trees Portland, LLC

Englewood, Colorado

Report on the Financial Statements

We have audited the accompanying financial statements of Trees Portland, LLC, which comprise the statements of financial position as of December 31, 2020, and the related statements of activities and cash flows for the years then ended and the related notes to the financial statements.

Going Concern Uncertainty

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company is dependent on financing that is not guaranteed, which raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management ’ s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor ’ s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Trees Portland, LLC as of December 31, 2020, and the results of its operations and its cash flows.

Emphasis of a Matter

Trees Waterfront,LLC has significant transactions and relationships with related party affiliates, including entities controlled by the Members, which are described in Note 7 to the financial statements. Transactions involving related parties cannot be presumed to be carried out on an arm’s length basis, as the requisite conditions of competitive, free market dealings may not exist. Our opinion is not modified with respect to this matter.

Certified Public Accountants

Lakewood, CO

Trees Portland, LLC

Balance Sheets


As of December 31,	****	2020		****	2019
ASSETS
Current Assets
Cash and cash equivalents		$	89,716		$	63,171
Inventory			101,647			90,218
Total current assets			191,363			153,389
Non-current assets
Property and equipment, net			2,838			1,113
Operating lease right-of-use asset			146,578			38,762
Other non-current assets			5,109			5,109
Total non-current assets			154,525			44,984
Total Assets			345,888			198,373

LIABILITIES AND MEMBER'S EQUITY
Current liabilities
Accounts payable			99,692			106,606
Accrued expenses and other current liabilities			180,533			203,118
Current portion of lease obligation			19,994			30,165
Total current liabilities			300,219			339,889
Long-term liabilities
Lease obligation, net of current portion			127,992			10,853
Total liabilities			428,211			350,742

Commitments and contingencies (see note 7)			—			—

Members' equity (deficit)			(82,323)			(152,369)
Total liabilities and members' equity (deficit)		$	345,888		$	198,373

See accompanying independent auditor’s report and notes to the financial statements

Trees Portland, LLC

Statements of Income and Members’ Equity (Deficit)


For the year ended December 31,	****	2020		****	2019
Product sales, net		$	3,093,193		$	1,933,983
Cost of goods sold			2,132,330			1,227,253
Gross margin			960,863			706,730

Operating expenses
Labor and benefits			551,126			495,474
Occupancy costs			38,153			35,598
Professional services			45,128			31,826
Office supplies and equipment			26,508			22,483
Advertising and promotion			17,658			40,891
Depreciation			651			489
Other operating expense			151,389			123,300
Total operating expenses			830,613			750,061
Operating income (loss)			130,250			(43,331)

Other expense (income)
Loss on business development activity			167,707			—
Other income			(9,571)			(4,173)
Total other expense (income)			158,136			(4,173)
Net loss		$	(27,886)		$	(39,158)
Members' equity (deficit), beginning of the year			(152,369)			(21,813)
Contributions from members			174,580			304,216
Distributions to members			(76,647)			(395,614)
Members' equity (deficit), end of the year		$	(82,323)		$	(152,369)

See accompanying independent auditor’s report and notes to the financial statements

Trees Portland, LLC

Statements of Cash Flows


For the year ended December 31,	****	2020		****	2019
Cash flows from operating activities
Net loss		$	(27,886)		$	(39,158)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			651			489
Lease payments in excess of lease expense			(848)			(652)
Changes in operating assets and liabilities:
Inventories			(11,429)			(63,584)
Prepaid expenses and other current assets			—			1,670
Accounts payable			(6,914)			84,908
Accrued expenses and other current liabilities			(22,585)			154,752
Net cash (used in) provided by operating activities			(69,011)			138,425
Cash flows from investing activities
Purchase of property and equipment			(2,376)			(1,602)
Net cash used for investing activities			(2,376)			(1,602)
Cash flows from financing activities
Contributions from member			174,580			304,216
Distributions to member			(76,647)			(395,614)
Net cash provided by (used for) financing activities			97,932			(91,398)
Net increase in cash and cash equivalents			26,545			45,425
Cash and cash equivalents at the beginning of the year			63,171			17,746
Cash and cash equivalents at the end of the year		$	89,716		$	63,171

Supplemental cash flow Information
Cash paid during the year for:
Amounts included in the measurement of lease liabilities		$	32,920		$	31,960
Supplemental non-cash financing activity
ROU assets obtained in exchange for new lease liabilities		$	136,135		$	67,976

See accompanying independent auditor’s report and notes to the financial statements

Trees Portland, LLC

Notes to Financial Statements

1.	ORGANIZATION AND NATURE OF BUSINESS

Trees Portland, LLC (“Trees Portland” or the “Company”) is a limited liability company which was formed in February 2016 under the laws of Oregon. Under the terms of the operating agreement, Trees Portland will continue in existence until the majority member makes a determination to dissolve the entity. The Company’s principal business is retail sales of recreational and medicinal cannabis products. The licensed retail store is located in Portland, Oregon.

The Company’s business is subject to legal risk. Even though the State of Oregon has granted licenses to the Company for retail distribution of marijuana products, these activities remain illegal under federal law. This causes difficulty in obtaining traditional banking and financing relationships. If the federal government elects to enforce the laws as currently written or changes the laws with respect to cannabis, it could have an adverse effect on the Company’s operations, including potential prosecution under the laws and liquidation of the Company. The Company is also subject to a variety of state laws, regulations, and local ordinances.

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates, and such results could be material.

Cash and Cash Equivalents

The Company’s recorded cash balance consists of cash on hand.

Inventories

Inventories consist of finished goods ready for sale to retail customers and are stated at the lower of cost or net realizable value. Net realizable value is determined as the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. The Company periodically reviews physical inventory to specifically identify and adjust the value of excess, obsolete, and otherwise unsaleable items. Based on the low level of historical write-offs and frequent inventory turnover, management believes that obsolete inventory as of the fiscal year end is immaterial, and therefore no reserve for obsolete inventory is recorded as of December 31, 2020 or 2019.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. When property and equipment is sold or retired, the cost and accumulated depreciation are eliminated from the accounts and gains or losses are recorded in the statements of income. Expenditures for maintenance and repairs are expensed as incurred.

Depreciation is determined using the straight-line method over the following estimated useful lives:

Equipment	5-10 years
Computers and hardware	3 years

Trees Portland, LLC

Notes to Financial Statements

Impairment of Long-Lived Assets

GAAP requires that long-lived assets, such as property and equipment, be reviewed for impai ment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. Specifically, management projects undiscounted cash flows expected over the period to be benefited. If such assets are considered to be impaired, the impairment recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Estimates of expected future cash flows represent management’s best estimate based on currently available information and reasonable, supportable assumptions. Any impairment recognized is permanent and may not be restored. As of December 31, 2020, and 2019, the Company believes no indicators of impairment exist.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers and all the related amendments (the “revenue standard” or “ASC 606”).

The Company generates revenue from the sale of cannabis to individual retail customers. It recognizes this revenue at a point in time when control of the goods has been transferred to the customer at an amount which reflects the consideration the Company receives in exchange for those goods. The Company’s sales consist of a single performance obligation for which the transaction price for a given product sold is equivalent to the price quoted for the product, net of any discounts or allowances applicable at a point in time.

The Company has elected to exclude from measurement of the transaction price all taxes (e.g., sales, use, value added and certain excise taxes) that are assessed by a governmental authority in connection with a specific revenue-producing transaction and collected by the Company from the customer. Accordingly, the Company recognizes revenue net of taxes.

The Company generally does not have contract assets or contract liabilities.

Cost of Goods Sold

Cost of goods sold includes the costs of inventory sold including the product packaging as well as any inventory shrink due to theft or waste.

Advertising and Marketing costs

Advertising and marketing costs are expensed as incurred.

Income Taxes

The Company has elected to be taxed as an S-Corporation under the provisions of the United States Internal Revenue Code. Accordingly, taxable income and losses of the Company are reported on the income tax returns of the Company’s members and no provision for income taxes has been reflected in these financial statements.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASC 842” or the “new lease standard”). The Company adopted ASC 842 as of January 1, 2019, using the effective date method.

ASC 842 requires companies leasing assets to recognize on their balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset. The Company elected to apply the short- term lease exemption for all leases with an original term of less than 12 months, for purposes of applying the recognition and measurement requirements in the new lease standard. See Note 4 for further discussion of the Company’s leases. 6

Trees Portland, LLC

Notes to Financial Statements

Other accounting standards have been issued or proposed by the FASB that do not require adoption until a future date and are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures**.**

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

To date, the Company has not generated net income from principal operations and has sustained net losses since Inception. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern within one year after the date that the financial statements are issued.

3.	PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:


As of December 31,	****	2020		****	2019
Equipment		$	2,377		$	—
Computers and hardware			1,602			1,602
Total property and equipment			3,979			1,602
Less: Acummulated depreciation			(1,141)			(489)
Property and equipment, net		$	2,838		$	1,113

4.	LEASES

The Company has an operating lease for its retail location (“store lease”). The lease is a 5-year lease with the option to extend the lease for one additional five-year term. At inception of the lease and upon initial adoption of ASC 842, management determined that the term extending option was not reasonably certain to be exercised, and therefore was excluded from the initial determination of the lease obligation and ROU asset. In November 2020, management notified the lessor of the Company’s intent to exercise the extension option per the terms of the agreement. Therefore, the Company remeasured the lease obligation liability and ROU asset. The balances at December 31, 2020 reflect this remeasurement. The Company’s lease agreement does not contain any material residual value guarantees or material restrictive covenants. The remaining term of the store lease is 4 months as of December 31, 2020, and the expected exercise of the extension option would result in a remaining term of 64 months.

In addition to the monthly base rent payments, the Company pays additional amounts to cover the cost of insurance, property taxes, and other operating expenses. These additional payments are variable and, in accordance with ASC 842, are excluded from the recognition and measurement of the lease obligation.

The Company’s operating lease liabilities and ROU assets are presented separately on the accompanying Balance Sheet. The leases do not have a stated interest rate, and therefore management used a discount rate of 10% to determine the present value of the lease obligation.

Trees Portland, LLC

Notes to Financial Statements

Lease expense is recognized on a straight-line bases over the term of the lease, with incremental variable lease payments are expensed as incurred. Lease expense is included in Occupancy costs in the accompanying Statement of Income and Member’s Equity. The components of lease expense are as follows:


For the year ended December 31,	****	2020		****	2019
Operating lease cost		$	32,073		$	31,308
Variable lease cost			6,080			4,290
Total lease cost		$	38,153		$	35,598

The Company’s remaining payments for its lease obligation are as follows:


Maturity of Lease Obligation as of December 31, 2020	****		****
2021		$	33,904
2022			34,924
2023			35,972
2024			37,052
2025			38,168
2026			12,848
Total lease payments			192,868
Less: Interest			(44,881)
Present value of lease obligation		$	147,987

5.	LOSS ON BUSINESS DEVELOPMENT ACTIVITIES

During 2020, the Company spent approximately $167,000 to fund a marijuana growing operation with the initial intent to acquire the business. However, management made the decision to abandon the acquisition operations. The Company no longer has any affiliation with, or obligations related to, the growin and ceased funding the operation.

6.	ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Details of the Company’s accrued expenses and other current liabilities are as follows:


As of December 31,	****	2020		****	2019
Sales tax accruals		$	106,206		$	143,651
Payroll accruals			73,950			49,803
Other expense accruals			377			9,664
Total accrued expenses and other current liabilities		$	180,533		$	203,118

7.	COMMITMENTS AND CONTINGENCIES

The Company’s operations are subject to a variety of local and state regulation. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, or losses of permits that could result in the Company ceasing operations. While management of the Company believes that the Company followed applicable local and state regulation for the years ended December 31, 2020 and 2019, and through the date of the financial statements, cannabis regulations continue to evolve and are subject to differing interpretations. As a result, the Company may be subject to regulatory fines, penalties or restrictions in the future.

Trees Portland, LLC

Notes to Financial Statements

8.	RELATED PARTY TRANSACTIONS

The Company compensates its owners for their role in managing the business. Total compensation paid to the owners was approximately $138,000 and $152,000 for the years ended December 31, 2020 and 2019, respectively. These costs are included in Labor and benefits in the accompanying Statement of Income and Member’s Equity. From time to time, the owner may pay the Company’s business expenses using personal funds and the submit an invoice for reimbursement. The Company had outstanding related party payables related to these reimbursements of $0 and $3,936 as of December 31, 2020 and 2019, respectively. The payables are included in Accounts payable in the accompanying Balance Sheets.

9.	SIGNIFICANT CONCENTRATIONS

The Company’s operations consistent of a single retail store. Any events or circumstances that occur to prevent the store from operating for a significant period, or that affect the demand for its products or costs of operation in its geographic location, could have a material adverse impact on the Company’s results of operations.

10.	SUBSEQUENT EVENTS

The Company has evaluated events through November 23, 2021, which is the date the consolidated financial statements were available to be issued. There were no material subsequent events that require recognition or disclosure in these consolidated financial statements other than those described below.

Acquisition

The Company, along with the affiliated entity, TDM, LLC (all together “Trees”) entered into an Asset Purchase Agreement with General Cannabis Corporation, a Colorado Corporation (“the Acquirer”), pursuant to which the Acquirer purchased certain assets of Trees with the intent to assume its cannabis retail sales operations. Trees agreed to receive a portion of the Acquirer’s shares of common stock and $5 million of cash as consideration. The sale of TDM, LLC became effective on September 2, 2021. The remaining entities sale will become effective upon approval by the Oregon Liquor and Cannabis Commission. 9

Exhibit 99.2

Trees Waterfront, LLC

Financial Statements

For the years ended December 31, 2020 and 2019

Trees Waterfront, LLC

Contents


Indepentdent Auditor’s Report	1

Balance Sheets	3

Statements of Income and Members' Equity (Deficit)	4

Statements of Cash Flows	5

Notes to Financial Statements	6

November 23, 2021

To the Members

Trees Waterfront, LLC

Englewood, Colorado

Report on the Financial Statements

We have audited the accompanying financial statements of Trees Waterfront, LLC, which comprise the statements of financial position as of December 31, 2020, and the related statements of activities and cash flows for the years then ended and the related notes to the financial statements.

Going Concern Uncertainty

Management ’ s Responsibility for the Financial Statements

Auditor ’ s Responsibility

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Trees Waterfront, LLC as of December 31, 2020, and the results of its operations and its cash flows.

Emphasis of a Matter

Certified Public Accountants

Lakewood, CO

Trees Waterfront, LLC

Balance Sheets


As of December 31,	****	2020		****	2019
ASSETS
Current Assets
Cash and cash equivalents		$	43,219		$	15,817
Inventory			102,193			122,160
Prepaid expenses and other current assets			400			—
Total current assets			145,812			137,977
Non-current assets
Property and equipment, net			8,381			11,976
Operating lease right-of-use asset			233,419			91,773
Other non-current assets			6,428			6,428
Total non-current assets			248,228			110,177
Total Assets			394,040			248,154

LIABILITIES AND MEMBER'S EQUITY
Current liabilities
Accounts payable			78,984			40,846
Accrued expenses and other current liabilities			83,693			48,246
Current portion of lease obligation			55,199			74,192
Total current liabilities			217,876			163,284
Long-term liabilities
Lease obligation, net of current portion			166,979			13,201
Total liabilities			384,855			176,485

Commitments and contingencies (see note 6)			—			—

Member's equity			9,185			71,669
Total liabilities and member's equity		$	394,040		$	248,154

See accompanying independent auditor’s report and notes to the financial statements

Trees Waterfront, LLC

Statements of Income and Member’s Equity


For the year ended December 31,	****	2020		****	2019
Product sales, net		$	1,353,108		$	475,980
Cost of goods sold			1,039,652			286,277
Gross margin			313,456			189,703

Operating expenses
Labor and benefits			205,518			141,836
Occupancy costs			79,435			77,888
Professional services			19,225			8,668
Office supplies and equipment			11,441			21,669
Advertising and promotion			30,136			51,560
Depreciation			4,682			4,324
Other operating expense			95,294			85,329
Total operating expenses			445,731			391,274
Operating loss			(132,275)			(201,571)

Other income
Other income			3,380			—
Net loss		$	(128,895)		$	(201,571)

Member's equity, beginning of the year			71,669			21,307
Contributions from member			78,632			251,933
Distributions to member			(12,221)			—
Member's equity, end of the year		$	9,185		$	71,669

See accompanying independent auditor’s report and notes to the financial statements

Trees Waterfront, LLC

Statements of Cash Flows


For the year ended December 31,	****	2020		****	2019
Cash flows from operating activities
Net loss		$	(128,895)		$	(201,571)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			4,682			4,324
Lease payments (greater than) less than lease expense			(6,861)			587
Changes in operating assets and liabilities:
Inventories			19,967			(122,160)
Prepaid expenses and other current assets			(400)			—
Accounts payable			38,138			40,846
Accrued expenses and other current liabilities			35,447			48,246
Net cash used by operating activities			(37,922)			(229,728)
Cash flows from investing activities
Purchase of property and equipment			(1,087)			(6,388)
Net cash used for investing activities			(1,087)			(6,388)
Cash flows from financing activities
Contributions from member			78,632			251,933
Distributions to member			(12,221)			—
Net cash provided by financing activities			66,411			251,933
Net increase in cash and cash equivalents			27,402			15,817
Cash and cash equivalents at the beginning of the year			15,817			—
Cash and cash equivalents at the end of the year		$	43,219		$	15,817

Supplemental cash flow Information
Cash paid during the year for:
Amount included in the measurement of lease liabilities		$	86,296		$	77,301

Supplemental non-cash financing activity
ROU assets obtained in exchange for new lease liabilities		$	212,381			153,630

See accompanying independent auditor’s report and notes to the financial statements

Trees Waterfront, LLC

Notes to Financial Statements

1.	ORGANIZATION AND NATURE OF BUSINESS

Trees Waterfront, LLC (“Trees Waterfront” or the “Company”) is a limited liability company which was formed in January 2018 under the laws of Oregon. Under the terms of the operating agreement, Trees Waterfront will continue in existence until its member makes a determination to dissolve the entity. The Company’s principal business is retail sales of recreational and medicinal cannabis products. The licensed retail store is located in Portland, Oregon.

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Use of Estimates

Cash and Cash Equivalents

The Company’s recorded cash balance consists of cash on hand.

Inventories

Property and Equipment

Trees Waterfront, LLC

Notes to Financial Statements

Depreciation is determined using the straight-line method over the following estimated useful lives:


Leasehold improvements	2-3 years
Furniture and equipment	5-10 years
Computers and hardware	3 years

Impairment of Long-Lived Assets

Revenue Recognition

The Company generally does not have contract assets or contract liabilities.

Cost of Goods Sold

Cost of goods sold includes the costs of inventory sold including the product packaging as well as any inventory shrink due to theft or waste.

Advertising and Marketing costs

Advertising and marketing costs are expensed as incurred.

Trees Waterfront, LLC

Notes to Financial Statements

Income Taxes

Recently Issued Accounting Pronouncements

ASC 842 requires companies leasing assets to recognize on their balance sheet a liability to make lease payments (the lease liability) and a right-of-use (“ROU”) asset representing its right to use the underlying asset. The Company elected to apply the short-term lease exemption for all leases with an original term of less than 12 months, for purposes of applying the recognition and measurement requirements in the new lease standard. See Note 4 for further discussion of the Company’s leases.

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

3.	PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:


As of December 31,	****	2020		****	2019
Leasehold improvements		$	9,000		$	9,000
Furniture and equipment			8,463			7,377
Computers and hardware			1,602			1,602
Total property and equipment			19,065			17,979
Less: Acummulated depreciation			(10,684)			(6,002)
Property and equipment, net		$	8,381		$	11,977

4.	LEASES

The Company has an operating lease for its retail location (“store lease”). The lease is a 3-year lease expiring at the end of March 2021. The Company has the option to extend the lease term for up to two successive terms of 3 year each. At inception of the lease and upon initial adoption of ASC 842, management determined that the term extending options were not reasonably certain to be exercised, and therefore were excluded from the initial determination of the lease obligation and ROU asset. In October 2020, 8

Trees Waterfront, LLC

Notes to Financial Statements

management notified the lessor of the Company’s intent to exercise the first 3-year extension option per the terms of the agreement. Therefore, the Company remeasured the lease obligation liability and ROU asset. The balances at December 31, 2020 reflect this remeasurement. Management concluded that it is still not reasonably certain that the second 3-year extension will be exercised. The Company’s lease agreement does not contain any material residual value guarantees or material restrictive covenants. The remaining term of the store lease is 3 months as of December 31, 2020, and the expected exercise of the extension option would result in a remaining term of 39 months.

Under the terms of the lease agreement, the Company makes fixed monthly rent payments and does not pay any additional variable amounts.

Lease expense is recognized on a straight-line bases over the term of the lease and is presented separately as Occupancy costs in the accompanying Statement of Income and Member’s Equity.

The Company’s remaining payments for its lease obligation are as follows:


Maturity of Lease Obligation as of December 31, 2020	****		****
2021		$	75,323
2022			84,462
2023			86,997
2024			15,226
Total lease payments			262,008
Lease: Interest			(39,830)
Present value of lease obligation		$	222,178

5.	ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Details of the Company’s accrued expenses and other current liabilities are as follows:


As of December 31,	****	2020		****	2019
Sales tax accruals		$	37,506		$	30,628
Payroll accruals			45,999			9,299
Other expense accruals			189			8,318
Total accrued expenses and other current liabilities		$	83,693		$	48,246

6.	COMMITMENTS AND CONTINGENCIES

Trees Waterfront, LLC

Notes to Financial Statements

7.	RELATED PARTY TRANSACTIONS

8.	SIGNIFICANT CONCENTRATIONS

9.	SUBSEQUENT EVENTS

Acquisition

Exhibit 99.3

Trees Portland, LLC

Financial Statements

For the nine months ended September 30, 2021 and 2020

Trees Portland, LLC

Contents


Balance Sheets	1

Statements of Income and Members' Equity (Deficit)	2

Statements of Cash Flows	3

Notes to Financial Statements	4

Trees Portland, LLC

Balance Sheets

	September 30,		December 31,
	2021		2020
	(unaudited and<br><br>unreviewed)
ASSETS
Current Assets
Cash and cash equivalents	$	76,260	$	89,716
Inventory		156,508		101,647
Total current assets		232,768		191,363
Non-current assets
Property and equipment, net		2,163		2,838
Operating lease right-of-use asset		161,921		146,578
Other non-current assets		5,109		5,109
Total non-current assets		169,193		154,525
Total Assets		401,961		345,888

LIABILITIES AND MEMBERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable		57,330		99,692
Accrued expenses and other current liabilities		164,301		180,533
Current portion of lease obligation		19,454		19,994
Total current liabilities		241,085		300,219
Long-term liabilities
Lease obligation, net of current portion		146,740		127,992
Total liabilities		387,825		428,211

Commitments and contingencies (see note 5)		—		—

Members' equity (deficit)		14,136		(82,323)
Total liabilities and members' equity (deficit)	$	401,961	$	345,888

See accompanying notes to the financial statements

Trees Portland, LLC

Statements of Income and Members’ Equity (Deficit) (unaudited and unreviewed)


		Three months ended September 30,						Nine months ended September 30,
	****	2021		****	2020		****	2021		****	2020

Product sales, net		$	879,386		$	826,384		$	2,691,663		$	2,334,232
Cost of goods sold			579,331			588,044			1,880,178			1,596,325
Gross margin			300,055			238,340			811,485			737,907

Operating expenses
Labor and benefits			118,525			122,675			373,496			393,536
Occupancy costs			10,696			8,517			31,162			25,871
Professional services			18,210			4,050			76,152			15,741
Office supplies and equipment			8,566			9,452			21,768			17,776
Advertising and promotion			5,518			3,947			14,151			13,542
Depreciation			224			224			675			500
Other operating expense			48,171			42,695			128,423			121,284
Total operating expenses			209,910			191,560			645,827			588,250
Operating income			90,145			46,780			165,658			149,657

Other income
Other income			2,787			2,551			8,574			7,229
Total other income			2,787			2,551			8,574			7,229
Net income		$	92,932		$	49,331		$	174,232		$	156,886

Members' deficit, beginning of the year			(74,227)			(117,904)			(82,323)			(152,369)
Contributions from members			46,524			21,319			189,400			69,120
Distributions to members			(51,093)			(30,042)			(267,173)			(150,933)
Members' equity (deficit), end of the year		$	14,136		$	(77,296)		$	14,136		$	(77,296)

See accompanying notes to the financial statements

Trees Portland, LLC

Statements of Cash Flows (unaudited and unreviewed)


		Nine months ended September 30,
	****		2021	****		2020
Cash flows from operating activities
Net income		$	174,232		$	156,886
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			675			500
Lease payments in excess of lease expense			2,865			(1,129)
Changes in operating assets and liabilities:
Inventories			(54,861)			(56,711)
Prepaid expenses and other current assets			—			—
Accounts payable			(42,362)			28,921
Accrued expenses and other current liabilities			(16,232)			31,560
Net cash provided by operating activities			64,317			160,027
Cash flows from investing activities
Purchase of property and equipment			—			(2,376)
Net cash used for investing activities			—			(2,376)
Cash flows from financing activities
Contributions from member			189,400			69,120
Distributions to member			(267,173)			(150,933)
Net cash used for financing activities			(77,773)			(81,813)
Net (decrease) increase in cash and cash equivalents			(13,456)			75,838
Cash and cash equivalents at the beginning of the year			89,716			63,171
Cash and cash equivalents at the end of the year		$	76,260		$	139,009

Supplemental cash flow Information
Cash paid for amounts included in the measurement of lease liabilities		$	25,455		$	24,610

Supplemental non-cash financing activity
ROU assets obtained in exchange for new lease liabilities		$	32,894		$	—

See accompanying notes to the financial statements

Trees Portland, LLC

Notes to Financial Statements (unaudited and unreviewed)

1.	ORGANIZATION AND NATURE OF BUSINESS

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to state fairly the financial position, results of operations, and cash flows of the Company at the dates and for the periods indicated. Interim results are not necessarily indicative of results for the full fiscal year. The comparative balance sheet as of December 31, 2020 was derived from the audited financial statements but does not include all disclosures required by GAAP.

These unaudited consolidated financial statements should be read in conjunction with the Company’s annual audited consolidated financial statements for the year ended December 31, 2020 and the notes thereto.

Use of Estimates

Cash and Cash Equivalents

The Company’s recorded cash balance consists of cash on hand.

Inventories

Impairment of Long-Lived Assets

Trees Portland, LLC

Notes to Financial Statements (unaudited and unreviewed)

projects undiscounted cash flows expected over the period to be benefited. If such assets are considered to be impaired, the impairment recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Estimates of expected future cash flows represent management’s best estimate based on currently available information and reasonable, supportable assumptions. Any impairment recognized is permanent and may not be restored. As of September 30, 2021, the Company believes no indicators of impairment exist.

Revenue Recognition

The Company generally does not have contract assets or contract liabilities.

Cost of Goods Sold

Cost of goods sold includes the costs of inventory sold including the product packaging as well as any inventory shrink due to theft or waste.

Advertising and Marketing costs

Advertising and marketing costs are expensed as incurred.

Income Taxes

Recently Issued Accounting Pronouncements

Accounting standards have been issued or proposed by the FASB that do not require adoption until a future date and are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures**.**

**3.**LEASES

The Company has an operating lease for its retail location (“store lease”) that was originally scheduled to expire in April 2021, with the Company’s option to extend the lease for one additional term of 5-years. In November 2020, management notified the lessor of the Company’s intent to exercise the extension option per the terms of the agreement. Therefore, the Company remeasured the lease obligation liability and ROU asset at that time based on the estimated renewal terms. The balances at December 31, 2020 reflect this remeasurement. In March of 2021, the Company executed a six-year extension of the store lease and remeasured the lease obligation and ROU asset based on the final terms of the extension. This resulted in an increase in the ROU asset and lease obligation

Trees Portland, LLC

Notes to Financial Statements (unaudited and unreviewed)

primarily due to the additional year of the extension period compared to the expected extension of 5 years. The Company’s lease agreement does not contain any material residual value guarantees or material restrictive covenants. The remaining term of the store lease is 67 months as of September 30, 2021.

The components of lease expense are as follows:


		For the three months ended September 30,						For the nine months ended September 30,
	****	2021		****	2020		****	2021		****	2020
Operating lease cost		$	9,672		$	7,827		$	28,319		$	23,481
Variable lease cost			1,024			690			2,843			2,390
Total lease cost		$	10,696		$	8,517		$	31,162		$	25,871

The Company’s remaining payments for its lease obligation are as follows:


Maturity of Lease Obligation as of September 30, 2021
2021 (October - December)	$	8,625
2022		35,650
2023		37,433
2024		39,304
2025		41,269
2026 and thereafter		58,010
Total lease payments		220,291
Less: Interest		(54,097)
Present value of lease obligation	$	166,194

**4.**ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Details of the Company’s accrued expenses and other current liabilities are as follows:


	****	September 30,		****	December 31,
		2021			2020
Sales tax accruals		$	57,861		$	106,206
Payroll accruals			98,760			73,950
Other expense accruals			7,680			377
Total accrued expenses and other current liabilities		$	164,301		$	180,533

Trees Portland, LLC

Notes to Financial Statements (unaudited and unreviewed)

**5.**COMMITMENTS AND CONTINGENCIES

The Company’s operations are subject to a variety of local and state regulation. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, or losses of permits that could result in the Company ceasing operations. While management of the Company believes that the Company continued to follow applicable local and state regulation for the nine months ended September 30, 2021, and through the date of the financial statements, cannabis regulations continue to evolve and are subject to differing interpretations. As a result, the Company may be subject to regulatory fines, penalties or restrictions in the future.

**6.**RELATED PARTY TRANSACTIONS

The Company compensates its owners for their role in managing the business. Total compensation paid to the owners was approximately $8,000 and $40,000 for the three months ended September 30, 2021 and 2020, respectively, and $24,000 and $116,000 for the nine months ended September 30, 2021 and 2020, respectively. These costs are included in Labor and benefits in the accompanying Statement of Income and Member’s Equity.

**7.**SIGNIFICANT CONCENTRATIONS

**8.**SUBSEQUENT EVENTS

The Company has evaluated events through February 11, 2022, which is the date the consolidated financial statements were available to be issued.

On December 30, 2021, the Company completed the sale of its assets to General Cannabis Corp. In exchange for the assets, the Company received $245,400 in cash, 4,754,038 in common shares of General Cannabis Corp, and will receive an additional $368,100 in equal payments over 24 months.

There were no additional material subsequent events that require recognition or disclosure in these consolidated financial statements.

Exhibit 99.4

Trees Waterfront, LLC

Financial Statements

For the nine months ended September 30, 2021 and 2020

Trees Waterfront, LLC

Contents

Balance Sheets	1

Statements of Income and Member's Equity (Deficit)	2

Statements of Cash Flows	3

Notes to Financial Statements	4

Trees Waterfront, LLC

Balance Sheets


	****	September 30,		****	December 31,
		2021			2020
		(unaudited and<br><br>unreviewed)
ASSETS
Current Assets
Cash and cash equivalents		$	42,690		$	43,219
Inventory			108,332			102,193
Prepaid expenses and other current assets			—			400
Total current assets			151,022			145,812
Non-current assets
Property and equipment, net			7,785			8,381
Operating lease right-of-use asset			308,798			233,419
Other non-current assets			6,428			6,428
Total non-current assets			323,011			248,228
Total Assets			474,033			394,040

LIABILITIES AND MEMBER'S EQUITY
Current liabilities
Accounts payable			58,085			78,984
Accrued expenses and other current liabilities			85,101			83,693
Current portion of lease obligation			46,267			55,199
Total current liabilities			189,453			217,876
Long-term liabilities
Lease obligation, net of current portion			255,098			166,979
Total liabilities			444,551			384,855

Commitments and contingencies (see note 6)			—			—

Member's equity			29,482			9,185
Total liabilities and member's equity		$	474,033		$	394,040

See accompanying notes to the financial statements

Trees Waterfront, LLC

Statements of Income and Member’s Equity (unaudited and unreviewed)


		For the three months ended September 30,						For the nine months ended September 30,
	****	2021		****	2020		****	2021		****	2020
Product sales, net		$	356,776		$	411,761		$	1,073,623		$	1,018,635
Cost of goods sold			206,535			276,912			694,123			743,605
Gross margin			150,241			134,849			379,500			275,030

Operating expenses
Labor and benefits			67,058			47,619			189,632			135,377
Occupancy costs			21,468			19,472			63,956			58,416
Professional services			8,602			2,889			58,399			6,176
Office supplies and equipment			8,698			2,278			15,511			8,913
Advertising and promotion			4,800			7,683			14,400			24,899
Depreciation			820			1,179			3,100			3,502
Other operating expense			39,088			19,436			58,586			100,533
Total operating expenses			150,534			100,556			403,584			337,816
Operating (loss) income			(293)			34,293			(24,084)			(62,786)

Other income
Other income			1,157			981			3,464			2,356
Net income (loss)		$	864		$	35,274		$	(20,620)		$	(60,430)

Member's equity, beginning of period			49,841			36,825			9,185			71,669
Contributions from member			—			—			68,375			69,860
Distributions to member			(21,223)			(9,038)			(27,458)			(18,038)
Member's equity, end of period		$	29,482		$	63,061		$	29,482		$	63,061

See accompanying notes to the financial statements

Trees Waterfront, LLC

Statements of Cash Flows (unaudited and unreviewed)


For the nine months ended September 30,	****	2021		****	2020
Cash flows from operating activities
Net loss		$	(22,365)		$	(60,431)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			3,100			3,502
Lease payments less than (greater than) lease expense			3,808			(1,149)
Changes in operating assets and liabilities:
Inventories			(6,139)			(49,173)
Prepaid expenses and other current assets			400			(100)
Accounts payable			(20,899)			39,840
Accrued expenses and other current liabilities			3,153			28,739
Net cash used by operating activities			(38,942)			(38,772)
Cash flows from investing activities
Purchase of property and equipment			(2,504)			(1,087)
Net cash used for investing activities			(2,504)			(1,087)
Cash flows from financing activities
Contributions from member			68,375			69,860
Distributions to member			(27,458)			(18,038)
Net cash provided by financing activities			40,917			51,822
Net increase (decrease) in cash and cash equivalents			(529)			11,963
Cash and cash equivalents at the beginning of the year			43,219			15,817
Cash and cash equivalents at the end of the year		$	42,690		$	27,780

Supplemental cash flow Information
Cash paid during the year for:
Amounts included in the measurement of lease liabilities		$	60,147		$	59,565

Supplemental non-cash financing activity
ROU assets obtained in exchange for new lease liabilities		$	120,393		$	—

See accompanying notes to the financial statements

Trees Waterfront, LLC

Notes to Financial Statements (unaudited and unreviewed)

1.	ORGANIZATION AND NATURE OF BUSINESS

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

Use of Estimates

Cash and Cash Equivalents

The Company’s recorded cash balance consists of cash on hand.

Inventories

Trees Waterfront, LLC

Notes to Financial Statements (unaudited and unreviewed)

year end is immaterial, and therefore no reserve for obsolete inventory is recorded as of September 30, 2021 or December 31, 2020.

Property and Equipment

Depreciation is determined using the straight-line method over the following estimated useful lives:

Leasehold improvements	2-3 years
Furniture and equipment	5-10 years
Computers and hardware	3 years

Impairment of Long-Lived Assets

GAAP requires that long-lived assets, such as property and equipment, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. Specifically, management projects undiscounted cash flows expected over the period to be benefited. If such assets are considered to be impaired, the impairment recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Estimates of expected future cash flows represent management’s best estimate based on currently available information and reasonable, supportable assumptions. Any impairment recognized is permanent and may not be restored. As of September 30, 2021 and December 31, 2020, the Company believes no indicators of impairment exist.

Revenue Recognition

The Company generally does not have contract assets or contract liabilities.

Cost of Goods Sold

Cost of goods sold includes the costs of inventory sold including the product packaging as well as any inventory shrink due to theft or waste. 5

Trees Waterfront, LLC

Notes to Financial Statements (unaudited and unreviewed)

Advertising and Marketing costs

Advertising and marketing costs are expensed as incurred.

Income Taxes

Recently Issued Accounting Pronouncements

**3.**PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:


	****		September 30,	****	****	December 31,
			2021			2020
Leasehold improvements		$	9,000		$	9,000
Furniture and equipment			10,968			8,463
Computers and hardware			1,602			1,602
Total property and equipment			21,570			19,065
Less: Acummulated depreciation			(13,785)			(10,684)
Property and equipment, net		$	7,785		$	8,381

**4.**LEASES

The Company has an operating lease for its retail location (“store lease”) that was originally scheduled to expire in March 2021, with the Company’s option to extend the lease term for up to two successive terms of 3 years each. In October 2020, management notified the lessor of the Company’s intent to exercise the first 3-year extension option per the terms of the agreement. Therefore, the Company remeasured the lease obligation liability and ROU asset at that time based on the estimated renewal terms. The balances at December 31, 2020 reflect this remeasurement. Effective April 1, 2021, the Company executed a 5-year extension of the store lease and remeasured the lease obligation and ROU asset based on the final terms of this extension. This resulted in an increase in the ROU asset and lease obligation primarily due to the additional 2 years added to the lease term compared to the expected extension of 3 years. The amendment to extend the lease term also included the Company’s option to renew the lease for one additional 5-year term at the then current market rates. Management concluded that it is not reasonably certain that the 5-year renewal option will be exercised. The Company’s lease agreement does not contain any material residual value guarantees or material restrictive covenants. The remaining term of the store lease is 54 months as of September 30, 2021.

Under the terms of the extension, the Company is responsible to pay property taxes and certain insurance costs associated with the leased property. These additional amounts are variable, and in accordance with ASC 842, are excluded from the recognition and measurement of the lease obligation. 6

Trees Waterfront, LLC

Notes to Financial Statements (unaudited and unreviewed)

Lease expense is recognized on a straight-line bases over the term of the lease and is presented separately as Occupancy costs in the accompanying Statement of Income and Member’s Equity.

The components of lease expense are as follows:


		For the three months ended September 30,						For the nine months ended September 30,
	****	2021		****	2020		****	2021		****	2020
Operating lease cost		$	21,468		$	19,472		$	63,956		$	58,416
Variable lease cost			0			—			(0)			—
Total lease cost		$	21,468		$	19,472		$	63,956		$	58,416

The Company’s remaining payments for its lease obligation are as follows:


Maturity of Lease Obligation as of September 30, 2021	****		****
2021 (October- December)		$	13,366
2022			82,005
2023			84,462
2024			86,997
2025			89,607
2026			22,566
Total lease payments			379,003
Less: Interest			(77,638)
Present value of lease obligation		$	301,365

**5.**ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Details of the Company’s accrued expenses and other current liabilities are as follows:


	****	September 30,		****	December 31,
		2021			2020
Sales tax accruals		$	22,386		$	37,506
Payroll accruals			62,715			45,999
Other expense accruals			—			188
Total accrued expenses and other current liabilities		$	85,101		$	83,693

**6.**COMMITMENTS AND CONTINGENCIES

The Company’s operations are subject to a variety of local and state regulation. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, or losses of permits that could result in the Company ceasing operations. While management of the Company believes that the Company continued to follow applicable local and state regulations during the nine months ended September 30, 2021, and through the date of the financial statements, cannabis regulations continue to evolve and are subject to differing interpretations. As a result, the Company may be subject to regulatory fines, penalties or restrictions in the future. 7

Trees Waterfront, LLC

Notes to Financial Statements (unaudited and unreviewed)

**7.**SIGNIFICANT CONCENTRATIONS

**8.**SUBSEQUENT EVENTS

The Company has evaluated events through February 11, 2022, which is the date the consolidated financial statements were available to be issued.

On December 30, 2021, the Company completed the sale of its assets to General Cannabis Corp. In exchange for the assets, the Company received $86,180 in cash, 1,669,537 in common shares of General Cannabis Corp, and will receive an additional $129,270 in equal payments over 24 months.

There were no additional material subsequent events that require recognition or disclosure in these consolidated financial statements. 8

Exhibit 99.5

GENERAL CANNABIS CORP

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Unaudited Pro Forma Condensed Combined Financial Information

The unaudited pro forma condensed combined balance sheet as of September 30, 2021 and the unaudited pro forma condensed combined statements of operations for each of the nine months ended September 30, 2021 and for the year ended December 31, 2020 combine the financial statements of General Cannabis Corp (“General Cannabis”) and Trees Portland, LLC and Trees Waterfront, LLC (“TREES Oregon”) giving effect to the transaction described in the Asset Purchase Agreement, as if they had occurred on January 1, 2020 in respect of the unaudited pro forma condensed combined statements of operations and on September 30, 2021 in respect of the unaudited pro forma condensed combined balance sheet.

The unaudited pro forma condensed combined financial information should be read in conjunction with:

·	General Cannabis’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2020, as contained in the Form 10-K filed on April 1, 2021 with the United States Securities and Exchange Commission (the “SEC”)
·	General Cannabis’s unaudited and unreviewed condensed consolidated financial statements and accompanying notes as of and for the nine months ended September 30, 2021
---	---
·	Trees Portland, LLC and Trees Waterfront, LLC audited financial statements as of and for the year ended December 31, 2020, contained elsewhere herein.
---	---
·	Trees Portland, LLC and Trees Waterfront, LLC unaudited and unreviewed condensed financial statements as of and for the nine months ended September 30, 2021 and 2020, contained elsewhere herein.
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·	The other information contained in or incorporated by reference into this filing.
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The final purchase consideration and the allocation of the purchase consideration may materially differ from that reflected in the unaudited pro forma condensed combined financial information after final valuation procedures are performed and amounts are finalized following the completion of the acquisition.

The unaudited pro forma adjustments give effect to events that are directly attributable to the transaction and are based on available data and certain assumptions that management believes are factually supportable. In addition, with respect to the unaudited condensed combined statements of operations, the unaudited pro forma adjustments are expected to have a continuing impact on the combined results.

The unaudited pro forma condensed combined financial information is presented for informational purposes only and to aid you in your analysis of the financial aspects of the acquisition. The unaudited pro forma condensed combined financial information described above has been derived from the historical financial statements of General Cannabis and Trees Portland, LLC and Trees Waterfront, LLC and the related notes included elsewhere in this Form 8-K. The unaudited pro forma condensed combined financial information is based on General Cannabis’s accounting policies. Further review may identify additional differences between the accounting policies of General Cannabis and TREES Oregon. The unaudited pro forma adjustments and the pro forma condensed combined financial information don’t reflect the impact of synergies or post-transaction management actions and are not necessarily indicative of the financial position or results of operations that may have occurred had the transaction taken place on the dates noted, or of General Cannabis’s future financial position or operating results.

GENERAL CANNABIS CORP

Unaudited Pro Forma Condensed Combined Balance Sheet

September 30, 2021


		General			Trees		Trees		Pro Forma			Pro Forma
		Cannabis			Portland		Waterfront		Adjustments			Combined
Assets	****		****	****		****				****	****		****
Current assets
Cash and cash equivalents		$	2,459,453		$	76,260	$	42,690	$	(104,382)	(A)	$	2,474,021
			—			—		—		(331,580)	(B)		(331,580)
Accounts receivable, net			102,928			—		—		—			102,928
Current portion of notes receivable			73,000			—		—		—			73,000
Inventories, net			885,583			156,508		108,332		(264,840)	(A)		885,583
										202,046	(C)		202,046
Prepaid expenses and other current assets			185,323			—		—		—			185,323
Assets of discontinued operations - current portion			8,922			—		—		—			8,922
Total current assets			3,715,209			232,768		151,022		(498,756)			3,600,243

Right-of-use operating lease asset			2,487,930			161,921		308,798		—			2,958,649
Property and equipment, net			666,307			2,163		7,785		(9,948)	(A)		666,307
										56,015	(D)		56,015
Intangible assets, net			5,820,833			—		—		850,000	(E)		6,670,833
Goodwill			10,100,113			—		—		1,183,744	(E)		11,283,857
Other non-current assets			—			5,109		6,428		(11,537)	(A)		—
Total assets		$	22,790,392		$	401,961	$	474,033	$	1,569,518		$	25,235,904

Liabilities and Stockholders’ Equity

Current Liabilities
Accounts payable and accrued expenses		$	856,935		$	221,631	$	143,186	$	(364,817)	(A)	$	856,935
Interest payable			444,752			—		—		—			444,752
Operating lease liability, current			587,291			19,454		46,267		—			653,012
Accrued stock payable			60,900			—		—		—			60,900
Warrant derivative liability			81,781			—		—		—			81,781
Note payable - current			866,448			—		—		—			866,448
Liabilities of discontinued operations			114,363			—		—		—			114,363
Total current liabilities			3,012,470			241,085		189,453		(364,817)			3,078,191

Operating lease liability, non-current			1,968,569			146,740		255,098		—			2,370,407
Long-term notes payable (net of discount)			5,351,764			—		—		497,371	(B)		5,849,135
Related party long-term notes payable (net of discount)			284,183			—		—		—			284,183
Total Liabilities			10,616,986			387,825		444,551		132,554			11,581,916
Commitments and contingencies			—			—		—		—			—

Stockholders’ Equity (Deficit)
Preferred stock, no par value; 5,000,000 shares authorized; 1,180 and nil outstanding, respectively			1,073,446			—		—		—			1,073,446
Common stock, $0.001 par value; 200,000,000 shares authorized; 84,713,865 shares and 60,813,673 shares issued and outstanding, respectively			84,711			—		—		—			84,711
Additional paid-in capital			91,029,601			—		—		1,477,422	(B)		92,507,023
Accumulated deficit			(80,014,352)			14,136		29,482		(40,458)	(A)		(80,011,192)
Total Stockholders’ Equity (Deficit)			12,173,406			14,136		29,482		1,436,964			13,653,988
Total Liabilities and Stockholders’ Equity (Deficit)		$	22,790,392		$	401,961	$	474,033	$	1,569,518		$	25,235,904

GENERAL CANNABIS CORP

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Nine Months Ended September 30, 2021


	General			Trees		Trees			Pro Forma			Pro Forma
	Cannabis			Portland		Oregon			Adjustments			Combined
Revenue			****					****
Cultivation sales	$	855,841		$	—	$	—		$	—		$	855,841
Retail sales		2,157,742			2,691,663		1,073,623			—			5,923,028
Interest		14,472			—		—			—			14,472
Total revenue		3,028,055			2,691,663		1,073,623			—			6,793,341

Costs and expenses
Cost of sales		2,539,840			1,880,178		694,123			—			5,114,141
Selling, general and administrative		1,853,731			569,000		342,085			—			2,764,816
Stock-based compensation expense		194,120			—		—			—			194,120
Professional fees		760,437			76,152		58,399			—			894,988
Depreciation and amortization		305,824			675		3,100			252,814	(A)(B)		562,413
Total costs and expenses		5,653,952			2,526,005		1,097,707			252,814			9,530,478

Operating (loss) income		(2,625,897)			165,658		(25,829)			(252,814)			(2,737,137)

Other expenses (income)
Amortization of debt discount and equity issuance costs		470,306			—		—			—			470,306
Interest expense		444,186			—		—			—			444,186
Loss on extinguishment of debt		233,374			—		—			—			233,374
Loss on derivative liability		1,043,531			—		—			—			1,043,531
Gain on sale of assets		(131,512)			—		—			—			(131,512)
Other (income), net		—			(8,574)		(3,464)			—			(12,038)
Total other expenses (income), net		2,059,885			(8,574)		(3,464)			—			2,047,847

Net (loss) income from continuing operations before income taxes	$	(4,685,782)		$	174,232	$	(20,620)		$	(252,814)		$	(4,784,984)

Loss from discontinued operations		(377,134)			—		—			—			(377,134)
(Loss) income from operations before income taxes	$	(5,062,916)		$	174,232	$	(20,620)		$	(252,814)		$	(5,162,118)

Provision for income taxes		—			—					—			—
Net (loss) income	$	(5,062,916)		$	174,232	$	(20,620)		$	(252,814)		$	(5,162,118)

Deemed dividend		—			—		—			—			—

Net (loss) income attributable to common stockholders	$	(5,062,916)		$	174,232	$	(20,620)		$	(252,814)		$	(5,162,118)


Per share data - Basic and diluted
Net loss from continuing operations per share	$	(0.07)			—		—		$	(0.04)		$	(0.07)
Net loss from discontinued operations per share	$	(0.01)			—		—		$	0.00		$	(0.01)
Net loss attributable to common stockholders per share	$	(0.08)			—		—		$	(0.04)		$	(0.07)
Weighted average number of common shares outstanding		64,381,989			—		—			6,423,575			70,805,564

GENERAL CANNABIS CORP

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2020


	General			Trees		Trees			Pro Forma			Pro Forma
	Cannabis			Portland		Oregon			Adjustments			Combined
Revenue			****					****
Cultivation sales	$	2,279,867		$	—	$	—		$	—		$	2,279,867
Retail sales		—			3,093,193		1,353,108			—			4,446,301
Interest		103,837			—		—			—			103,837
Total revenue		2,383,704			3,093,193		1,353,108			—			6,830,005

Costs and expenses
Cost of sales		1,388,626			2,132,330		1,039,652			—			4,560,608
Selling, general and administrative		2,901,931			784,834		421,824			—			4,108,589
Stock-based compensation expense		1,504,389			—		—			—			1,504,389
Professional fees		2,263,717			45,128		19,225			—			2,328,070
Depreciation and amortization		199,683			651		4,682			100,234	(A)(B)		305,250
Total costs and expenses		8,258,346			2,962,943		1,485,383			100,234			12,806,906

Operating (loss) income		(5,874,642)			130,250		(132,275)			(100,234)			(5,976,901)

Other expenses (income)
Amortization of debt discount and equity issuance costs		295,256			—		—			—			295,256
Interest expense		453,522			—		—			—			453,522
Loss on extinguishment of debt		1,638,009			—		—			—			1,638,009
(Gain) on derivative liability		(735,796)			—		—			—			(735,796)
Loss on business development activity		—			167,707		—			—			167,707
Other (income), net		(97,948)			(9,571)		(3,380)			—			(110,899)
Total other expenses (income), net		1,553,043			158,136		(3,380)			—			1,707,799

Net (loss) income from continuing operations before income taxes	$	(7,427,685)		$	(27,886)	$	(128,895)		$	(100,234)		$	(7,684,700)

Loss from discontinued operations		(252,007)			—		—			—			(252,007)
(Loss) income from operations before income taxes	$	(7,679,692)		$	(27,886)	$	(128,895)		$	(100,234)		$	(7,936,707)

Provision for income taxes		—			—					—			—
Net (loss) income	$	(7,679,692)		$	(27,886)	$	(128,895)		$	(100,234)		$	(7,936,707)

Deemed dividend		(830,494)			—		—			—			(830,494)

Net (loss) income attributable to common stockholders	$	(8,510,186)		$	(27,886)	$	(128,895)		$	(100,234)		$	(8,767,201)


Per share data - Basic and diluted
Net loss from continuing operations per share	$	(0.15)			—		—		$	(0.02)		$	(0.13)
Net loss from discontinued operations per share	$	(0.00)			—		—		$	0.00		$	(0.00)
Net loss attributable to common stockholders per share	$	(0.17)			—		—		$	(0.02)		$	(0.15)
Weighted average number of common shares outstanding		50,895,301			—		—			6,423,575			57,318,876

GENERAL CANNABIS CORP

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

**NOTE 1.**BASIS OF PRESENTATION

The unaudited pro forma condensed combined financial information set forth herein is based upon the consolidated financial statements of General Cannabis Corp and Trees Portland, LLC and Trees Waterfront, LLC. The unaudited pro forma condensed combined financial information is presented as if the transaction had been completed on January 1, 2020 with respect to the unaudited pro forma condensed combined statements of operations for each of the nine months ended September 30, 2021 and for the year ended December 31, 2020 and on September 30, 2021 in respect of the unaudited pro forma condensed combined balance sheet.

The unaudited pro forma condensed combined financial information is presented for informational purposes only and is not necessarily indicative of the combined financial position or results of operations had the transaction occurred as of the dates indicated, nor is it meant to be indicative of any anticipated combined financial position or future results of operations that the combined company will experience after the completion of the transactions.

We have accounted for the acquisition in this unaudited pro forma condensed combined financial information using the acquisition method of accounting, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 805 “Business Combinations” (“ASC 805”). In accordance with ASC 805, we use our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired.

Pro forma adjustments reflected in the unaudited pro forma condensed combined balance sheet are based on items that are factually supportable and directly attributable to the transaction. Pro forma adjustments reflected in the pro forma condensed combined statements of operations are based on items that are factually supportable, directly attributable to the transaction and expected to have a continuing impact on the combined results. The unaudited pro forma condensed combined financial information does not reflect the cost of any integration activities or benefits from the transaction, including potential synergies that may be generated in future periods.

NOTE 2. DESCRIPTION OF THE TRANSACTION

On December 30, 2021, General Cannabis completed the acquisition of substantially all of the assets of Trees Portland, LLC and Trees Waterfront, LLC, representing a portion of the overall Trees transaction previously disclosed pursuant to that certain First Amended and Restated Agreement and Plan of Reorganization and Liquidation dated May 28, 2021 by and among the Company, Seller and certain other sellers party thereto, that consists of the assets relating to the Trees dispensaries located in Portland, Oregon (“Oregon Closing”). The cash paid by the Company in connection with the Oregon Closing consisted of $331,580 and the stock consideration shall be 6,423,575 shares of the Company’s Common Stock. Further, cash equal to $497,371 will be paid to Seller in equal monthly installments over a period of 24 months from the Oregon Closing.

**NOTE 3.**PURCHASE PRICE ALLOCATION

The preliminary allocation for the consideration recorded for the acquisition is as follows:


Cash	$	14,568
Fixed assets		56,015
Inventory		202,046
Tradename		850,000
Goodwill		1,183,744
Total Purchase Price Consideration	$	2,306,373

The purchase price allocation is preliminary. The purchase price allocation will continue to be preliminary until a valuation is finalized and the fair value and useful life of the assets acquired is determined. The amounts from the final valuation may significantly differ from the preliminary allocation.

**NOTE 4.**PRO FORMA ADJUSTMENTS

The following pro forma adjustments give effect to the transaction:

Unaudited Pro Forma Condensed Combined Balance Sheet – As of September 30, 2021

Note ATo remove TREES Oregon assets, liabilities, and equity that were not acquired or assumed

Note BTo record cash, additional paid in capital, common stock, and promissory note as consideration

Note CTo record certain inventory from TREES Oregon

Note DTo record certain property, plant, and equipment acquired from TREES Oregon

Note ETo record goodwill and intangibles from acquisition

Unaudited Pro Forma Condensed Statement of Operations – For The Nine Months Ended September 30, 2021

Note ATo adjust depreciation expense to remove depreciation for assets not acquired

Note BTo record amortization of intangibles acquired from TREES Oregon

Unaudited Pro Forma Condensed Statement of Operations – For The Year Ended December 31, 2020

Note ATo adjust depreciation expense to remove depreciation for assets not acquired

Note BTo record amortization of intangibles acquired from TREES Oregon