CBSTQ 10-K/A
Cannabist Co Holdings Inc. (CBSTQ)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| Large accelerated filer | ☐ | ☒ | ||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||
| Emerging growth company | ||||||
| (1) | Not applicable. |
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THE CANNABIST COMPANY HOLDINGS INC.
TABLE OF CONTENTS
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| Item 10. Directors, Executive Officers and Corporate Governance |
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| Item 13. Certain Relationships and Related Transactions, and Director Independence |
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| F-1 | ||||
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Trading Price and Volume
The Company’s common shares are listed on the Cboe Canada (the “Cboe”) under the symbol “CBST” and are quoted on the OTCQX Best Market (the “OTCQX”) under the symbol “CBSTF” and on the Frankfurt Stock Exchange under the symbol “3LP”.
Performance Graph Comparison Of Five-Year Cumulative Total Return
This graph compares the cumulative total shareholder return on our common shares for over the last five years with the cumulative return of the S&P 500 (SPX) and the Horizons Marijuana Life Sciences Index ETF over the same period .
Shareholders
As of December 31, 2024, there are 419 holders of record of our common shares.
Dividends
The Company has not declared cash dividends on the common shares in the past. The Company currently intends to reinvest all future earnings to finance the development and growth of its business. As a result, the Company does not intend to pay dividends on the common shares in the foreseeable future. Any future determination to pay distributions will be at the discretion of the Board and will depend on the financial condition, business environment, operating results, capital requirements, any contractual restrictions on the payment of distributions and any other factors that the Board deems relevant. The Company is not bound or limited in any way to pay dividends in the event that the Board determines that a dividend is in the best interest of its shareholders.
Exchange Controls
There are no governmental laws, decrees or regulations in Canada that restrict the export or import of capital, including foreign exchange controls, or that affect the remittance of dividends, interest or other payments to nonresident holders of the securities of the Company, other than Canadian withholding tax. See “Certain Canadian Federal Income Tax Considerations for Non-Residents of Canada,” below.
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Certain Canadian Federal Income Tax Considerations for Non-Residents of Canada
The following is, as of the date hereof, a summary of the principal Canadian federal income tax considerations generally applicable under the Income Tax Act (Canada) and the regulations promulgated thereunder (the “Tax Act”) to a holder who acquires, as beneficial owner, our Common Shares, and who, for purposes of the Tax Act and at all relevant times: (i) holds the Common Shares as capital property; (ii) deals at arm’s length with, and is not affiliated with, us; (iii) is not, and is not deemed to be resident in Canada; and (iv) does not use or hold and will not be deemed to use or hold, our Common Shares in a business carried on in Canada (a “Non-Resident Holder”). Generally, our Common Shares will be considered to be capital property to a Non-Resident Holder provided the Non-Resident Holder does not hold our Common Shares in the course of carrying on a business of trading or dealing in securities and has not acquired them in one or more transactions considered to be an adventure or concern in the nature of trade. Special rules, which are not discussed in this summary, may apply to a Non-Resident Holder that is an insurer that carries on an insurance business in Canada and elsewhere or is an authorized foreign bank (as defined in the Tax Act). Such Non-Resident Holders should seek advice from their own tax advisors.
This summary is based upon the provisions of the Tax Act in force as of the date hereof, all specific proposals, or the Proposed Amendments, to amend the Tax Act that have been publicly and officially announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof and management’s understanding of the current administrative policies and practices of the Canada Revenue Agency (the “CRA”) published in writing by it prior to the date hereof. This summary assumes the Proposed Amendments will be enacted in the form proposed. However, no assurance can be given that the Proposed Amendments will be enacted in their current form, or at all. This summary is not exhaustive of all possible Canadian federal income tax considerations and, except for the Proposed Amendments, does not take into account or anticipate any changes in the law or any changes in the CRA’s administrative policies or practices, whether by legislative, governmental, or judicial action or decision, nor does it take into account or anticipate any other federal or any provincial, territorial or foreign tax considerations, which may differ significantly from those discussed herein.
Non-Resident Holders should consult their own tax advisors with respect to an investment in our Common Shares. This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any prospective purchaser or holder of our Common Shares, and no representations with respect to the income tax consequences to any prospective purchaser or holder are made. Consequently, prospective purchasers or holders of our Common Shares should consult their own tax advisors with respect to their particular circumstances.
Currency Conversion
Generally, for purposes of the Tax Act, all amounts relating to the acquisition, holding, or disposition of our Common Shares must be converted into Canadian dollars based on the exchange rates as determined in accordance with the Tax Act. The amounts subject to withholding tax and any capital gains or capital losses realized by a Non-Resident Holder may be affected by fluctuations in the Canadian-U.S. dollar exchange rate.
Disposition of Common Shares
A Non-Resident Holder will not generally be subject to tax under the Tax Act on a disposition of a Common Share, unless the Common Share constitutes “taxable Canadian property” (as defined in the Tax Act) of the Non-Resident Holder at the time of disposition and the Non-Resident Holder is not entitled to relief under an applicable income tax treaty or convention.
Provided the Common Shares are listed on a “designated stock exchange,” as defined in the Tax Act at the time of disposition, the Common Shares will generally not constitute taxable Canadian property of a Non-Resident Holder at that time, unless at any time during the 60-month period immediately preceding the disposition the following two conditions are satisfied concurrently: (i) (a) the Non-Resident Holder; (b) persons with whom the Non-Resident Holder did not deal at arm’s length; (c) partnerships in which the Non-Resident Holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships; or (d) any combination of the persons and partnerships described in (a) through (c), owned 25% or more of the issued shares of any class or series of our shares; and (ii) more than 50% of the fair market value of our shares was derived directly or indirectly from one or any combination of: real or immovable property situated in Canada, “Canadian resource properties”, “timber resource properties” (each as defined in the Tax Act), and options in respect of, or interests in or for civil law rights in, such properties (whether or not such property exists). Notwithstanding the foregoing, in certain circumstances set out in the Tax Act, the Common Shares could be deemed to be taxable Canadian property. Even if the Common Shares are taxable Canadian property to a Non-Resident Holder, such Non-Resident Holder may be exempt from tax under the Tax Act on the disposition of such Common Shares by virtue of an applicable income tax treaty or convention. A Non-Resident Holder contemplating a disposition of Common Shares that may constitute taxable Canadian property should consult a tax advisor prior to such disposition.
Receipt of Dividends
Dividends received or deemed to be received by a Non-Resident Holder on our Common Shares will be subject to Canadian withholding tax under the Tax Act. The general rate of withholding tax is 25%, although such rate may be reduced under the provisions of an applicable income tax convention between Canada and the Non-Resident Holder’s country of residence. For example, under the Treaty, the rate is generally reduced to 15% where the Non-Resident Holder beneficially owns such dividends and is a resident of the United States for the purposes of, and is fully entitled to the benefits of, the Treaty.
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Recent Sales of Unregistered Securities
There have been no securities sold by the Company for the period covered by this Annual Report on Form 10-K which were not registered under the Securities Act. Included are new issues, securities issued upon conversion from other share classes, and securities issued in exchange for property, services, or other securities.
Issuer Purchases of Equity Securities
None.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial information required by Item 8 is located beginning on page F-1 of this report.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Directors and Executive Officers
The following table sets forth the directors and executive officers of the Company as of April 28, 2025 and their respective positions.
| Name |
Age | Position | ||||
| Michael Abbott | 61 | Chairman and Director | ||||
| Frank Savage | 86 | Director | ||||
| James A.C. Kennedy | 71 | Director | ||||
| Jonathan P. May | 58 | Lead Independent Director | ||||
| Jeff Clarke | 63 | Director | ||||
| Alison Worthington | 60 | Director | ||||
| Julie Hill | 78 | Director | ||||
| Dr. Rosemary Mazanet | 69 | Director | ||||
| David Hart | 48 | Chief Executive Officer and Director | ||||
| Derek Watson | 54 | Chief Financial Officer | ||||
| Jesse Channon | 40 | President | ||||
| Bryan Olson | 51 | Chief Human Resources Officer | ||||
| David Sirolly | 50 | Chief Legal Officer and General Counsel | ||||
Director and Executive Officer Biographies
Michael Abbott, Chairman and Director
Michael Abbott co-founded Cannabist Company in 2012 and served as Executive Director and Chairman until 2023 when he became non-Executive Director and Chairman. Mr. Abbott joined Swiss Bank Corporation in 1990 as an Associate in Equity Capital Markets and was transferred to the Bank’s Chicago branch in 1993 to work with SBC O’Connor. In 1996, Mr. Abbott joined Goldman Sachs as a Vice President in the Convertible Trading and Sales Department and later led its Structured Product Trading and Origination Group. Mr. Abbott co-founded the foreign exchange trading hedge fund, Elysium Capital, in 2002. In 2006, he became Chief Executive Officer and head of the investment committee of Robeco Sage, a multibillion-dollar fund of hedge funds. He was also appointed Chief Investment Officer of the Cornell University endowment in 2010. In 2012, he became a Managing Director at the Raptor Group, a single family office based out of Boston and New York City. Mr. Abbott started his professional career in 1983 as a London police officer. Mr. Abbott has served as a director of Target Global Acquisition I Corp. (Nasdaq: TGAAU), a special purpose acquisition company, since 2021. He is also currently a director of GBM Securities, a UK-based broker dealer. Mr. Abbott matriculated at King’s College London’s School of Law, graduating in 1990 with a Bachelor of Laws degree. He previously served on the Advisory Counsel of King’s College London Business School and now serves as Chair of the Advisory Counsel of King’s College London Law School. He was conferred a Fellowship of King’s College, London in December 2020.
Frank Savage, Director
Frank Savage served as the Managing Partner of Savage Holdings, LLC, a global financial services company and has previously held senior positions at Citibank, Equitable Life Assurance Corp. (now AXA Inc.) and Alliance Capital Management International as its Chairman. He served on the board of directors of Bloomberg L.P., and served on the boards of a number of corporations and non-profit organizations, including Lockheed Martin, Inc. and Qualcomm Inc. Mr. Savage earned a Bachelor of Arts degree from Howard University, a Master of Arts degree from the Johns Hopkins Nitze School of Advanced International Studies, and was the recipient of an Honorary Doctorate of Humane Letters from Hofstra University and an honorary Doctor of Humanities degree from Howard University. He serves as Chair Emeritus of Howard University and Trustee Emeritus of The Johns Hopkins University.
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James A.C. Kennedy, Director
In December 2015, James A.C. Kennedy resigned from his role as President and Chief Executive Officer of T. Rowe Price Group, a global investment management organization, serving institutions and individuals around the world and retired from T. Rowe Price in March 2016. Mr. Kennedy spent 38 years with T. Rowe Price, including nine years as CEO, during which time the firm’s assets more than doubled to $763 billion. Previously Mr. Kennedy served as an investment analyst, as Director of Research, and as Head of Equities at the firm. Mr. Kennedy also served on the Board of T. Rowe Price for 20 years. Prior to earning his MBA at Stanford University, Mr. Kennedy participated in the Financial Management training program at General Electric. Mr. Kennedy previously served on the board of United Airlines Holdings, Inc., from 2016 to 2024.
Jonathan P. May, Lead Independent Director
Jonathan May has served as Co-Founder and Managing Director of Floresta Ventures, LLC since March 2016. Floresta invests, owns and operates restaurant and retail concepts. He is also a co-founder and managing director of Floresta Partners, LLC, a consulting firm focusing on growing multi-unit restaurant and retail concepts. Prior to forming Floresta, Mr. May was Executive Director of Natural Capital Partners Holdings LLC. NCPH works with corporations to measure their environmental impact and deliver solutions for positive impact on carbon, renewable energy, water, biodiversity and communities. Previously Mr. May was a founder and Managing Director of Catalytic Capital LLC, a private equity firm focused on growing retail and consumer branded companies. Before co-founding Catalytic Capital, Mr. May was Senior Vice President of Corporate Development for Triarc Companies, Inc. where he was responsible for merger identification and execution, corporate finance, and strategic planning. Mr. May also served as Chief Executive Officer of Arby’s, Inc., where he managed the growth of 3,400 restaurants comprising $2.5 billion of global system-wide sales. Mr. May held a variety of strategic and operating roles at Arby’s before becoming CEO. Mr. May was the Lead Independent Director of INDUS Realty Trust, Inc., a publicly traded real estate company until it was sold in 2023. He is also a Director of Bridgewater Chocolate, LLC, a private chocolate manufacturer and retailer. Mr. May formerly was a board member of Sneaker Villa and Marketwatch.com.
Jeff Clarke, Director
Jeff Clarke is the Chief Executive Officer of Insurity, Inc, a private company in the software and services industry. Mr. Clarke also serves as Executive Chairman of Doxim, Inc. a private company in the printing industry where he previously served as interim Chief Executive Officer. Prior to this, Mr. Clarke served as Executive Chairman and interim Chief Executive Officer of FTD, LLC, a private company in the online florist industry. Prior to this, Mr. Clarke served as Chief Executive Officer of Eastman Kodak Company, Chief Executive Officer of Travelport, Inc, Chief Executive Officer of CA Software, Executive Vice President of Hewlett Packard Company and Chief Financial Officer of Compaq Computer. Mr. Clarke currently serves as a member of the board of directors of Co-Pilot IQ, a private company, Ellipsis Health, a private company, Target Global, Inc, a special purpose acquisition company (NASDAQ:TGAAF) and Travelport, Inc., a private company. Mr. Clarke has formally served on several public company boards of directors including Autodesk, Compuware, Emerge Technology Acquisition Company, Mondee, Inc. Orbitz Worldwide, Red Hat and UTStarcom. He earned his MBA from Northeastern University and now serves as a Northeastern University Trustee.
Alison Worthington, Director
Alison Worthington is an innovative Chief Marketing Officer and Board Director with nearly three decades of experience transforming brands, product portfolios and P&Ls to deliver growth and ROI. Ms. Worthington has held multiple senior level operating roles at Coca-Cola, Starbucks, Microsoft, Method and Lyra Health. A founder of Worthington Growth Partners, she advises executive teams and investors of high growth tech, consumer, life sciences and health care companies like GoPro, Ancestry and HealthJoy to accelerate their vision. An active board member, Ms. Worthington previously helped reposition Generate Life Sciences for a successful sale to Cooper Companies. She earned an MBA from the Harvard Graduate School of Business Administration and an AB in Economics from Smith College.
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Julie Hill, Director
Julie Hill has spent more than two decades serving on a range of private and public corporate boards of directors. Most recently, Ms. Hill was a member of the board of directors of Anthem, a Fortune 50 company and the largest U.S. health insurance company by member. She was a member of the board of trustees of Lord Abbett, a $225 billion New Jersey-based mutual fund management firm, from 2003 to 2023. She was also previously on the board of Lend Lease, based in Sydney, Australia, a $9 billion international construction, development, investment and management firm, publicly traded on the Australian exchange, and Holcim (U.S.), the U.S. operation of a Swiss company, as well as several other public corporate boards. Prior to her last 20 years serving on boards of directors, she founded and ran multiple companies, mostly in the real estate investment and development industry, and was a senior executive at numerous publicly traded companies, including Mobil Land, a division of Mobil Oil, and UK-based Costain Group. Ms. Hill is currently Chair of the Board of Trustees of the University of California at Irvine (UCI), and is a board member of Leaders’ Quest, and the Alliance for SoCal Innovation. She is a member of the International Women’s Forum and Los Angeles Trusteeship, and is a prior member of the Women’s Leadership Board of the Kennedy School of Government at Harvard. She earned a Bachelor of Arts degree in English from UCLA, and a master’s degree in marketing from the University of Georgia.
Dr. Rosemary Mazanet, Director
Rosemary Mazanet began advising the Company in 2013 and then joined its Scientific Advisory Board as its Chair in 2015 before becoming the Company’s Chief Scientific Officer in 2017. In September 2023, Dr. Mazanet transitioned from Chief Scientific Officer to a director of the Company. Since 2013, she has played an integral role of developing groundbreaking form factors specifically for palliative care, such as pressed tablets. She also oversaw the creation of the seminal cannabis observational database that has provided analysis used in peer-reviewed journals, such as JAMA and the Journal of Palliative Medicine and by many of the nation’s leading academic and medical institutions such as National Institutes of Health, Columbia University, New York University, Mount Sinai, University of Southern California, and RAND Corporation. Dr. Mazanet began her career in Internal Medicine and Oncology at the Brigham and Women’s Hospital and the Dana Farber Cancer Institute before starting at Amgen in the early 1990s as the head of Clinical Research. Following her time at Amgen, she moved into public equity in 1998 when she joined Oracle Partners LLC in New York as a General Partner. Since that time, she has been a presence in public and private equity biotech and specialty pharma investments. Since 2021, Dr. Mazanet has been a director for Oncternal Therapeutics (NASDAQ: ONCT) and is Head of the Nominating & Governance Committee. During 2024, she also previously served as a director at Kairos Pharma Ltd. (NYSE: KAPA). In addition to the Company’s Board of Directors, Dr. Mazanet is also an Emeritus Trustee at the University of Pennsylvania School of Medicine and the Co-Chair of the Leonard Davis Institute Executive Advisory Board at The Wharton School of the University of Pennsylvania. Dr. Mazanet graduated magna cum laude from the University of Virginia and completed her graduate work at the University of Pennsylvania Medical School and Harvard Medical School.
David Hart, Chief Executive Officer and Director
David Hart joined The Cannabist Company in 2016 and became Chief Operating Officer in 2018 and Chief Executive Officer in 2024. Mr. Hart joined the board of directors of The Cannabist Company in June 2024. Prior to joining The Cannabist Company, Mr. Hart served as Chief Operating Officer of Abyrx, a venture capital-backed medical device company that developed, manufactured and commercialized a portfolio of intraoperative cross specialty hemostats. Prior to his time at Abyrx, Mr. Hart was Chief Financial Officer and Chief Investment Officer at Alpine Capital, a family investment office for the Ranawat Orthopedic Group at the Hospital for Special Surgery, where he was responsible for capital allocations, direct private investments and all healthcare investments. Mr. Hart was formerly Partner and Head of Healthcare Equity Investments at Apelles Investment Management. Mr. Hart started his career in the financial services industry in the Mergers and Acquisitions groups at Thomas Weisel Partners and Duff & Phelps. Mr. Hart has an MBA from Columbia University and is a graduate of Duke University, where he was a member of the Men’s Varsity Golf Team.
Derek Watson, Chief Financial Officer
Derek Watson joined The Cannabist Company in January 2022 as Chief Financial Officer. Prior to joining the Company, Mr. Watson served as the Chief Financial and Commercial Officer at Tastes on the Fly, a private equity-backed national consumer retail company based in California, from September 2018 to January 2022. He has also held Chief Financial Officer roles at two other consumer companies, Starr Restaurants, from April 2016 to March 2018, and Samba Brands, and as Chief Financial Officer and Vice President of Strategic Initiatives at Schindler Elevator, the U.S. subsidiary of Schindler Holding AG (SCHN.SW). Mr. Watson began his career at KPMG where he spent 20 years providing audit and consulting services, including as a Partner and Practice Leader, and served private and Fortune 500 companies across a variety of industries while based in London, Prague, New York, and Philadelphia. He has experience in a range of leadership roles covering strategy, investor relations, information technology, tax, treasury, accounting, FP&A, operational improvement, and risk management. Mr. Watson is a Fellow at the Culinary Institute of America, a Board Member with the Queen Elizabeth Memorial Garden in New York and has served as a Board Advisor to a number of entrepreneurial start-ups. Mr. Watson is a Chartered Accountant with the ICAEW, holds an undergraduate degree in Finance & Accounting from Kingston University, London and an MBA from Columbia University.
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Jesse Channon, President
Jesse Channon joined The Cannabist Company in December 2019 as Chief Growth Officer, became Chief Commercial Officer in 2023 and President in 2024. Mr. Channon is an accomplished leader with over a decade of experience in digital marketing, consumer targeting, grassroots campaigns and social media, having advised and worked with some of the largest brands and agencies in the world, including Microsoft, AT&T, Honda, Starbucks, NBC, Red Bull and more. A member of the founding team at PageLever, a Y Combinator-backed company, Mr. Channon oversaw all revenue and partnerships, working with companies such as YouTube, Intel and Toyota to build one of the first real-time applications on Facebook’s API and earning certification in the first wave of Preferred Marketing Developers. In 2013, PageLever sold to Unified, a New York City-based Ad Tech company, where Mr. Channon spent six years on the senior management team. After Unified, Mr. Channon served as chief revenue officer for Social Native, a custom content marketplace. He serves on the Entrepreneurship Advisory Board for the Harbert School of Business at Auburn University, the Marketing Board for UJA in New York City and mentors first-time founders of early stage start-ups.
Bryan Olson, Chief Human Resources Officer
Bryan Olson joined The Cannabist Company as Chief Human Capital Officer in 2017. In 2020, Mr. Olson became the Company’s Chief People and Administrative Officer. In 2024, Mr. Olson transitioned to Chief Human Resources Officer of the Company, serving in a non-employee consultant capacity. Mr. Olson is also the Chief Administrative Officer of Ceres Coin, LLC (a privately held company) where he is serving in a non-employee consultant capacity. Prior to joining The Cannabist Company, Mr. Olson was the Chief Human Resource Officer for global law firm K&L Gates and previously held senior HR executive positions at Aetna and United Technologies Corporation. Mr. Olson is a former practicing employee benefits and executive compensation attorney at Skadden Arps and started his career at Fidelity Investments.
David Sirolly, Chief Legal Officer and General Counsel
David Sirolly joined The Cannabist Company in 2021 as Chief Legal Officer and General Counsel. Prior to joining The Cannabist Company, Mr. Sirolly served as General Counsel, Corporate and Chief Compliance Officer of Integra LifeSciences Corporation, a publicly-traded global medical technology company, since 2010. Over his 11-year career at Integra, he held a variety of legal and compliance leadership roles which included accountability for corporate governance, securities laws, finance initiatives, healthcare compliance, employment law, litigation as well as legal support for a commercial division and information technology. Prior to Integra, Mr. Sirolly was Assistant General Counsel of ValueClick, Inc. (now Conversant, Inc.), a publicly-traded digital media company. David began his legal career at the international law firm of Hogan & Hartson LLP (now Hogan Lovells) based in Washington DC. At Hogan, he focused on supporting medical device and pharmaceutical manufacturers on complex legal and regulatory matters. Mr. Sirolly also spent several years at a leading regional law firm in Pennsylvania working on civil and administrative litigation. Mr. Sirolly has a JD from the University of Virginia School of Law and a degree in economics from Duke University.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires the Company’s directors, executive officers, and persons who own more than 10% of the Company’s Common Shares to file initial reports of ownership and changes in ownership of the Company’s Common Shares with the SEC. These individuals are required by the regulations of the SEC to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of Forms 3, 4 and 5 and amendments thereto furnished to the Company during the fiscal year ended December 31, 2024, including those reports that we have filed on behalf of our directors and Section 16 officers, no director, Section 16 officer, beneficial owner of more than 10% of the outstanding common stock of the Company, or any other person subject to Section 16 of the Exchange Act, failed to file with the SEC on a timely basis during the fiscal year ended December 31, 2024, except that due to an administrative error, (i) Nicholas Vita had one late Form 4 filing (constituting one late transaction), (ii) Jesse Channon had one late Form 4 filing (constituting two late transactions) and one late transaction reported on Form 5, (iii) Jeff Clarke had one late Form 4 filing (constituting two late transactions), (iv) David Sirolly had one late transaction reported on Form 5, (v) Derek Watson had one late transaction reported on Form 5, (vi) David Hart had two late transactions reported on Form 5 and (vii) Bryan Olson had two late transactions reported on Form 5.
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Code of Ethics
The Board of Directors has adopted a Code of Ethics that applies to our principal executive officer, principal financial officer and principal accounting officer, as well as all other employees and directors. Our Code of Ethics is available on our website at https://investors.cannabistcompany.com/corporate-governance/governance-overview.
Insider Trading Policy
The Company adopted an Insider Trading Policy and procedures governing the purchase, sale, and/or other dispositions of our securities by directors, officers and employees, that are reasonably designed to promote compliance with insider trading laws, rules and regulations. The Insider Trading Policy is filed as Exhibit 19 hereto. In addition, with regard to the Company’s trading in its own securities, it is the Company’s policy to comply with the federal securities laws.
Audit Committee
The Board believes that the composition of the Audit Committee reflects financial literacy and expertise. Currently, all members of the Audit Committee have been determined by the Board to be “independent” and “financially literate” as such terms are defined under the corporate governance rules of the Nasdaq Capital Market (“Nasdaq”). The Audit Committee consists of Jeff Clarke, Jonathan P. May and Frank Savage. The Board has made these determinations based on the education as well as breadth and depth of experience of each member of the Audit Committee. The Board has also determined that all members of the Audit Committee meets the SEC definition of an audit committee financial expert.
ITEM 11. EXECUTIVE COMPENSATION.
Executive Compensation
Summary Compensation Table
The following table sets forth all compensation paid to or earned by the named executive officers (the “NEOs”) of the Company in the last two fiscal years.
| Non-equity Incentive Plan Compensation ($) |
Long- term Incentive Plans |
|||||||||||||||||||||||||||
| Name and Principal Position |
Year | Salary ($) |
Share-Based Awards(4)(5)(6) ($) |
Annual Incentive Plans |
Long- term Incentive Plans |
All Other Compensation(7) ($) |
Total Compensation ($) |
|||||||||||||||||||||
| David Hart |
2024 | $ | 496,557 | $ | 644,000 | $ | 255,000 | $ | — | $ | 600 | $ | 1,396,157 | |||||||||||||||
| CEO and Director (1) |
2023 | $ | 375,000 | $ | 1,145,455 | $ | 175,000 | $ | — | $ | 12,200 | $ | 1,707,655 | |||||||||||||||
| Jesse Channon |
2024 | $ | 408,852 | $ | 364,000 | $ | 209,100 | $ | — | $ | — | $ | 981,952 | |||||||||||||||
| President (2) |
2023 | $ | 347,917 | $ | 763,636 | $ | 162,500 | $ | — | $ | — | $ | 1,274,053 | |||||||||||||||
| Derek Watson |
2024 | $ | 370,000 | $ | 280,000 | $ | 122,100 | $ | — | $ | 15,573 | $ | 787,673 | |||||||||||||||
| CFO |
||||||||||||||||||||||||||||
| Nicholas Vita |
2024 | $ | 19,126 | $ | — | $ | — | $ | — | $ | 1,934,615 | $ | 1,953,741 | |||||||||||||||
| Former CEO & Director(3) |
2023 | $ | 500,000 | $ | — | $ | — | $ | — | $ | 20,000 | $ | 520,000 | |||||||||||||||
Notes:
| (1) | Mr. Hart was promoted to Chief Executive Officer of the Company effective January 15, 2024. |
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| (2) | Mr. Channon was promoted to President of the Company effective January 15, 2024. |
| (3) | Mr. Vita retired from his position as Chief Executive Officer of the Company effective January 15, 2024 and continued to serve as a member of the Board of Directors until June 25, 2024. |
| (4) | 2024 share-based award values converted to USD based on exchange rate at date of grant of 1 CAD: 0.737542; 2023 share-based award values converted to USD based on exchange rate at date of grant of 1 CAD: 0.743230. |
| (5) | For 2024, reflects annual share-based awards, specifically 1,495,000 RSUs and 805,000 PSUs granted to Mr. Hart, 845,000 RSUs and 455,000 PSUs granted to Mr. Channon, and 650,000 RSUs and 350,000 PSUs granted to Mr. Watson. |
| (6) | For 2023, reflects annual share-based awards, specifically 2,727,273 RSUs granted to Mr. Hart, and 1,818,182 RSUs granted to Mr. Channon. |
| (7) | For 2024, reflects (i) Company 401(k) contribution of $600 for Mr. Hart and $15,573 for Mr. Watson and (ii) cash severance of $1,934,615 to Mr. Vita, which will be payable $80,608.97 per month for 24 months, pursuant to the terms of the Vita Release Agreement (see “Termination and Change of Control Benefits” section for all compensation related terms in connection with Mr. Vita’s transition to non-employee director and separation from the Company). For 2023, reflects (i) tax planning reimbursements of $20,000 for Mr. Vita and (ii) Company 401(k) contribution of $12,200 for Mr. Hart. |
Outstanding Equity Awards Table
The following table sets forth information concerning the option-based and share-based awards granted to the Company’s NEOs that were outstanding as of December 31, 2024.
| Share-based Awards | ||||||||
| Name and Principal Position | Number of Shares or Units of Shares That Have Not Vested(4)(5) (#) |
Market or Payout Value of Share- Based Awards That Have Not Vested(4)(5) ($) |
||||||
| David Hart |
||||||||
| CEO and Director (1) |
4,282,612 | $ | 299,783 | |||||
| Jesse Channon |
||||||||
| President(2) |
2,628,664 | $ | 184,006 | |||||
| Derek Watson |
||||||||
| CFO |
2,323,470 | $ | 162,643 | |||||
| Nicholas Vita |
||||||||
| Director and Former CEO(3) |
— | — | ||||||
Notes:
| (1) | Mr. Hart was promoted to Chief Executive Officer of the Company effective January 15, 2024. |
| (2) | Mr. Channon was promoted to President of the Company effective January 15, 2024. |
| (3) | Mr. Vita retired from his position as Chief Executive Officer of the Company effective January 15, 2024 and continued to serve as a member of the Board of Directors until June 25, 2024. Upon the end of his service on the Board of Directors, Mr. Vita forfeited all outstanding equity that had not previously vested. |
| (4) | For outstanding PSUs whose performance has been certified, reflects number of shares eligible to vest; for outstanding PSUs whose performance has not yet been certified, reflects target number of shares. |
| (5) | Market value of unvested share-based awards and vested but undistributed share-based awards calculated based on the closing share price on December 31, 2024 (converted to USD based on an exchange rate of 1 CAD: 0.695786 USD). |
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Termination and Change of Control Benefits
Other than as described herein, the Company does not have any contract, agreement, plan or arrangement that provides for payments to a NEO at, following, or in connection with a termination (whether voluntary, involuntary or constructive), resignation, retirement, a change of control of the Company or a change in a NEO’s responsibilities. Note that the dollar value of potential accelerated equity in connection with a qualifying termination or change of control reflects an exchange rate of 1 CAD: 0.695786 USD.
David Hart
On March 11, 2024, the Company entered into a new employment agreement with Mr. Hart in connection with his promotion to the role of Chief Executive Officer, (the “Hart Agreement”). The Hart Agreement may be terminated at any time by Mr. Hart or the Company. In the event of termination without cause of Mr. Hart’s employment or Mr. Hart resigns for good reason in connection with a change of control, Mr. Hart shall receive (i) an amount equal to twenty-four (24) months of Mr. Hart’s then base salary, plus target bonus, paid over such 24-month period in installments on the Company’s regular payroll schedule following the termination date; and (ii) the Company shall pay its share of Mr. Hart’s health insurance premiums to continue Mr. Hart’s health insurance coverage for eighteen (18) months beyond the termination date. The change of control payments and benefits that would be made to Mr. Hart are conditioned on and subject to Mr. Hart signing and not rescinding the Hart Agreement, a non-disclosure agreement and an effective, general release of all claims in favor of the Company within no greater than 60 days following the termination date. Upon a qualifying termination in connection with a change of control, all of Mr. Hart’s outstanding RSUs and PSUs will vest in full; PSUs will vest based on actual performance if performance has been determined or is reasonably determinable as of the change of control event, otherwise will vest at target. The total estimated incremental payments, payables and benefits to Mr. Hart upon a qualifying termination in connection with a change of control, as if such event occurred on the last business day of the Company’s most recently completed financial year, is $2,178,518, with Mr. Hart’s health insurance coverage continuing for eighteen (18) months from the termination date. In the event of a change in control without a qualifying termination, Mr. Hart’s outstanding RSUs and PSUs from grants made in fiscal year 2022 and fiscal year 2023 will vest in full; PSUs will vest based on actual performance if performance has been determined or is reasonably determinable as of the change of control event, otherwise will vest at target. The total estimated incremental payments, payables and benefits to Mr. Hart in the event of a change of control without a qualifying termination, as if such event occurred on the last business day of the Company’s most recently completed financial year, is $136,057.
In the event that the Company terminates Mr. Hart’s employment without cause or Mr. Hart resigns for good reason (other than due to a change of control), Mr. Hart shall receive (i) an amount equal to eighteen (18) months of Mr. Hart’s then base salary, plus target bonus, paid over such 18-month period in installments on the Company’s regular payroll schedule following the termination date; and the Company shall pay its share of Mr. Hart’s health insurance premiums to continue Mr. Hart’s health insurance coverage for eighteen (18) months beyond the termination date. The severance payments and benefits that would be made to Mr. Hart are conditioned on and subject to Mr. Hart signing and not rescinding the Hart Agreement, a non-disclosure agreement and an effective, general release of all claims in favor of the Company within no greater than 60 days following the termination date. Upon an involuntary termination without cause, Mr. Hart’s outstanding RSUs and PSUs will be forfeited. The total estimated incremental payments and payables to Mr. Hart in the event of termination of his employment without cause or if Mr. Hart resigns for good reason (other than due to a change of control), as if such event occurred on the last business day of the Company’s most recently completed financial year, is $1,416,235, with Mr. Hart’s health insurance coverage continuing for eighteen (18) months from the termination date.
Jesse Channon
On March 11, 2024, the Company entered into a new employment agreement with Mr. Channon in connection with his promotion to the role of President (the “Channon Agreement”). The Channon Agreement may be terminated at any time by Mr. Channon or the Company. In the event of termination without cause of Mr. Channon’s employment in connection with a change of control, Mr. Channon shall receive (i) an amount equal to eighteen (18) months of Mr. Channon’s then base salary, plus target bonus, paid over such 18-month period in installments on the Company’s regular payroll schedule following the termination date; and (ii) the Company shall pay its share of Mr. Channon’s health insurance premiums to continue Mr. Channon’s health insurance coverage for eighteen (18) months beyond the termination date. The change of control payments and benefits that would be made to Mr. Channon are conditioned on and subject to Mr. Channon signing and not rescinding the Channon Agreement, a non-disclosure agreement and an effective, general release of all claims in favor of the Company within no greater than 60 days following the termination date. Upon a qualifying termination in connection with a change of control, all of Mr. Channon’s outstanding RSUs and PSUs will vest in full; PSUs will vest based on actual performance if performance has been determined or is reasonably determinable as of the change of control event, otherwise will vest at target. The total estimated incremental payments, payables and benefits to Mr. Channon upon a qualifying termination in connection with a change of control, as if such event occurred on the last business day of the Company’s most recently completed financial year, is $1,350,570, with Mr. Channon’s health
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insurance coverage continuing for eighteen (18) months from the termination date. In the event of a change in control without a qualifying termination, Mr. Channon’s outstanding RSUs and PSUs from grants made in fiscal year 2022 and fiscal year 2023 will vest in full; PSUs will vest based on actual performance if performance has been determined or is reasonably determinable as of the change of control event, otherwise will vest at target. The total estimated incremental payments, payables and benefits to Mr. Channon in the event of a change of control without a qualifying termination, as if such event occurred on the last business day of the Company’s most recently completed financial year, is $91,189.
In the event that the Company terminates Mr. Channon’s employment without cause (other than due to a change of control), Mr. Channon shall receive (i) an amount equal to eighteen (18) months of Mr. Channon’s then base salary, plus target bonus, paid over such 18-month period in installments on the Company’s regular payroll schedule following the termination date; and the Company shall pay its share of Mr. Channon’s health insurance premiums to continue Mr. Channon’s health insurance coverage for eighteen (18) months beyond the termination date. The severance payments and benefits that would be made to Mr. Channon are conditioned on and subject to Mr. Channon signing and not rescinding the Channon Agreement, a non-disclosure agreement and an effective, general release of all claims in favor of the Company within no greater than 60 days following the termination date. Upon an involuntary termination without cause, Mr. Channon’s outstanding RSUs and PSUs will be forfeited. The total estimated incremental payments and payables to Mr. Channon in the event of termination of his employment without cause (other than due to a change of control), as if such event occurred on the last business day of the Company’s most recently completed financial year, is $1,166,564, with Mr. Channon’s health insurance coverage continuing for eighteen (18) months from the termination date.
Derek Watson
On January 24, 2022, the Company entered into an employment agreement with Mr. Watson (the “Watson Agreement”). The Watson Agreement may be terminated at any time by Mr. Watson or the Company. In the event of termination without cause of Mr. Watson’s employment in connection with a change of control, Mr. Watson shall receive (i) an amount equal to eighteen (18) months of Mr. Watson’s then base salary, plus target bonus, paid over such 18-month period in installments on the Company’s regular payroll schedule following the termination date; and (ii) the Company shall pay its share of Mr. Watson’s health insurance premiums to continue Mr. Watson’s health insurance coverage for eighteen (18) months beyond the termination date. The change of control payments and benefits that would be made to Mr. Watson are conditioned on and subject to Mr. Watson signing and not rescinding the Watson Agreement, a non-disclosure agreement and an effective, general release of all claims in favor of the Company within no greater than 60 days following the termination date. Upon a qualifying termination in connection with a change of control, all of Mr. Watson’s outstanding RSUs and PSUs will vest in full; PSUs will vest based on actual performance if performance has been determined or is reasonably determinable as of the change of control event, otherwise will vest at target. The total estimated incremental payments, payables and benefits to Mr. Watson upon a qualifying termination in connection with a change of control, as if such event occurred on the last business day of the Company’s most recently completed financial year, is $1,022,893, with Mr. Watson’s health insurance coverage continuing for eighteen (18) months from the termination date. In the event of a change in control without a qualifying termination, Mr. Watson’s outstanding RSUs and PSUs from grants made in fiscal year 2022 and fiscal year 2023 will vest in full; PSUs will vest based on actual performance if performance has been determined or is reasonably determinable as of the change of control event, otherwise will vest at target. The total estimated incremental payments, payables and benefits to Mr. Watson in the event of a change of control without a qualifying termination, as if such event occurred on the last business day of the Company’s most recently completed financial year, is $92,643.
In the event that the Company terminates Mr. Watson’s employment without cause (other than due to a change of control), Mr. Watson shall receive (i) an amount equal to twelve (12) months of Mr. Watson’s then base salary, plus target bonus, paid over such 12-month period in installments on the Company’s regular payroll schedule following the termination date; and the Company shall pay its share of Mr. Watson’s health insurance premiums to continue Mr. Watson’s health insurance coverage for twelve (12) months beyond the termination date. The severance payments and benefits that would be made to Mr. Watson are conditioned on and subject to Mr. Watson signing and not rescinding the Watson Agreement, a non-disclosure agreement and an effective, general release of all claims in favor of the Company within no greater than 60 days following the termination date. Upon an involuntary termination without cause, Mr. Watson’s outstanding RSUs and PSUs will be forfeited. The total estimated incremental payments and payables to Mr. Watson in the event of termination of his employment without cause (other than due to a change of control), as if such event occurred on the last business day of the Company’s most recently completed financial year, is $573,500, with Mr. Watson’s health insurance coverage continuing for twelve (12) months from the termination date.
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Nicholas Vita
On April 26, 2019, the Company entered into an employment agreement with Mr. Vita (the “Vita Employment Agreement”), which provided for certain payments to Mr. Vita upon termination or change of control. On March 13, 2024, in connection with Mr. Vita’s retirement as Chief Executive Officer of the Company, the Vita Employment Agreement was terminated, and the Company and Mr. Vita entered into a separation and release of claims agreement (the “Vita Release Agreement”). The Vita Release Agreement provides for vesting of Mr. Vita’s outstanding equity awards, valued at $698,056 at time of his retirement (per the Vita Release Agreement, any unvested equity awards that were outstanding following the conclusion of Vita’s service on the Board of Directors on June 25, 2024 were forfeited), and severance payments of $80,608.97 per month for 24 months.
Director Compensation
The following table sets forth all compensation paid to or earned by each non-employee director of the Company during the fiscal year ended December 31, 2024.
| Name (1) |
Fees Earned or Paid in Cash(2) ($) |
Share-Based Awards(3)(4) ($) |
Option-Based Awards ($) |
Non-Equity Incentive Plan Compensation ($) |
All Other Compensation ($) |
Total Compensation ($) |
||||||||||||||||||
| Jeff Clarke |
$ | 59,500 | $ | 153,000 | $ | — | $ | — | $ | — | $ | 212,500 | ||||||||||||
| Julie Hill |
$ | 45,000 | $ | 153,000 | $ | — | $ | — | $ | — | $ | 198,000 | ||||||||||||
| James A.C. Kennedy |
$ | 59,500 | $ | 153,000 | $ | — | $ | — | $ | — | $ | 212,500 | ||||||||||||
| Jonathan P. May |
$ | 72,000 | $ | 153,000 | $ | — | $ | — | $ | — | $ | 225,000 | ||||||||||||
| Frank Savage |
$ | 51,500 | $ | 153,000 | $ | — | $ | — | $ | — | $ | 204,500 | ||||||||||||
| Alison Worthington |
$ | 38,500 | $ | 153,000 | $ | — | $ | — | $ | — | $ | 191,500 | ||||||||||||
Notes:
| (1) | Mr. Abbott and Dr. Mazanet did not receive any compensation for their roles as non-employee directors in the fiscal year ending December 31, 2024. Mr. Vita did not receive any compensation for his role as a non-employee director while serving on the Board of Directors from January 15, 2024 until June 25, 2024. |
| (2) | Reflects annual cash retainer for Board service and, as applicable, additional cash retainer for Lead Director and additional cash retainer for Committee chairs and members. |
| (3) | Share-based award values converted to USD based on exchange rate at date of grant of 1 CAD: 0.730896 USD. |
| (4) | Reflects annual RSU awards, specifically 805,264 RSUs granted to each of Mr. Clarke, Ms. Hill, Mr. Kennedy, Mr. May, Mr. Savage, and Ms. Worthington. |
Policies and Practices for Granting Certain Equity Awards
The Compensation Committee of the Board is responsible for the review and approval of our policies and practices with respect to granting equity awards. The Compensation Committee typically targets the second quarter of the fiscal year, shortly after the annual meeting of shareholders and the release of the first quarter financial results, for granting annual stock awards to eligible recipients, absent an extraordinary event. The Compensation Committee believes this aligns timing of equity grants with the planning of annual salary increases (also in the second quarter of our fiscal year), allowing a holistic view of total compensation.
The Compensation Committee seeks to structure equity grants so that they are awarded during an open window period as designated by the Company’s Insider Trading Policy, or, if Compensation Committee approval is provided during a non-window period, are typically made effective on the first business day following our press release with respect to financial results for the prior quarter. This policy is intended to ensure that options are awarded at a time when the exercise price fully reflects all recently disclosed information. In the case of new hires eligible to receive equity grants, grants are generally made on the first business day of the month following the date the individual commences employment.
All grants to executive officers are approved by the Compensation Committee itself and not pursuant to any delegated authority.
The Company never had any programs, policies, or practices which are intended to time stock option grants with the release of material, non-public information in a manner that would provide advantageous option exercise prices to grant recipients. Option exercise prices are, in all cases, equal to the closing price of the Common Shares on the date of grant.
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During fiscal 2024, the Company did not award options to any NEO in the period beginning four business days before and ending one business day after the filing of a Form 10-Q or Form 10-K, or the filing or furnishing of a Form 8-K that discloses material nonpublic information.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended December 31, 2024, Frank Savage, James A.C. Kennedy, Alison Worthington and Jonathan P. May served as members of the Compensation Committee.
None of the Company’s executive officers served as a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served as a director of the Company or on the Compensation Committee, during fiscal 2024. None of the Company’s executive officers served as a director of another entity, one of whose executive officers served on the Compensation Committee, during fiscal 2024.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth the expected beneficial ownership of the Company’s securities as of April 28, 2025 for (i) each member of the Board of Directors, (ii) each NEO, (iii) each person known to the Company and expected to be the beneficial owner of more than 5% of the Company’s securities and (iv) the members of the Board and the NEOs as a group. Beneficial ownership is determined according to the rules of the SEC. Generally, a person has beneficial ownership of a security if the person possesses sole or shared voting or investment power of that security, including any securities that a person has the right to acquire beneficial ownership within 60 days. Except as indicated, all shares of the Company’s securities will be owned directly, and the person or entity listed as the beneficial owner has sole voting and investment power. The address for each director and executive officer is c/o The Cannabist Company Holdings Inc., 321 Billerica Rd., Suite 204, Chelmsford, Massachusetts 01824.
| Common Shares | Proportionate | Total (2) | ||||||||||||||||||||||
| Name, Position and Address of Beneficial Owner |
Number Beneficially Owned |
% of Total Common Shares(1) |
Number Beneficially Owned |
% of Total Proportionate Voting Shares |
Total Number of Capital Stock Beneficially Owned |
% of Total Capital Stock |
||||||||||||||||||
| Michael Abbott, Chairman and Director |
2,402,764 | * | — | — | 2,402,764 | * | ||||||||||||||||||
| Frank Savage, Director |
557,188 | * | — | — | 557,188 | * | ||||||||||||||||||
| James A.C. Kennedy, Director |
2,380,553 | * | — | — | 2,380,553 | * | ||||||||||||||||||
| Jonathan P. May, Director |
547,895 | * | 29,468 | 39.89 | % | 3,494,695 | * | |||||||||||||||||
| Jeff Clarke, Director |
1,112,038 | * | 47 | * | 1,116,738 | * | ||||||||||||||||||
| Alison Worthington, Director |
473,940 | * | — | — | 473,940 | * | ||||||||||||||||||
| Julie Hill, Director |
512,451 | * | — | — | 512,451 | * | ||||||||||||||||||
| Dr. Rosemary Mazanet, Director |
2,524,087 | * | — | — | 2,524,087 | * | ||||||||||||||||||
| David Hart, Chief Executive Officer & Director |
3,609,943 | * | — | — | 3,609,943 | * | ||||||||||||||||||
| Bryan Olson, Chief Human Resources Officer |
1,837,468 | * | — | — | 1,837,468 | * | ||||||||||||||||||
| Jesse Channon, President |
2,083,453 | * | — | — | 2,083,453 | * | ||||||||||||||||||
| Derek Watson, Chief Financial Officer |
1,291,695 | * | — | — | 1,291,695 | * | ||||||||||||||||||
| David Sirolly, Chief Legal Officer and General Counsel |
1,131,741 | * | — | — | 1,131,741 | * | ||||||||||||||||||
| All Board directors and named executive officers as a group |
20,465,216 | 4.33 | % | 29,515 | 39.95 | % | 23,416,716 | 4.88 | % | |||||||||||||||
Notes:
| (1) | The information provided is based upon 472,417,036 Common Shares outstanding as of April 28, 2025. |
| (2) | Includes Proportionate Voting Shares on an as converted basis. |
| * | Less than 1% |
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Equity Compensation Plans
The following table sets forth the number of Common Shares to be issued upon exercise of outstanding convertible securities, the weighted-average exercise price of such outstanding convertible securities and the number of Common Shares remaining available for future issuance under equity compensation plans as at December 31, 2024.
| Plan Category |
Number of Common Shares to be issued upon exercise of outstanding securities(1) |
Weighted-average exercise price of outstanding securities |
Number of Common Shares remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)(2) |
|||||||||
| Equity compensation plans approved by Shareholders |
27,816,512 | — | 18,261,595 | |||||||||
| Equity compensation plans not approved by Shareholders |
— | — | — | |||||||||
| Total |
27,816,512 | — | 18,261,595 | |||||||||
Notes:
| (1) | The 27,816,512 shares of Common Stock to be issued upon exercise of outstanding securities, warrants and rights consists of (i) 1,043,438 shares that may be issued upon the vesting of PSUs and (ii) 26,773,074 shares that may be issued upon the vesting of RSUs. For outstanding PSUs whose performance has been certified, reflects number of shares eligible to vest; for outstanding PSUs whose performance has not yet been certified, reflects target number of shares. |
| (2) | Convertible securities remaining as of December 31, 2024. |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Related Party Transaction Policy
The Company has not adopted a related party transaction policy.
Transactions with Related Persons
Except as set forth below, since the beginning of the last fiscal year, there have been none and there are no currently proposed transactions in which the Company was or is to be a participant and the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest.
On August 6, 2024, the Company entered into a Fractional CHRO Engagement Agreement (the “Engagement Agreement”) with ourCHRO, LLC (“ourCHRO”), pursuant to which the Company engaged Bryan Olson to serve as the Chief Human Resources Officer of the Company in a non-employee consultant capacity, allocating 50% of his working time to the Company. Mr. Olson joined the Company as an employee in 2017 and served, among other positions, as its Chief People and Administrative Officer and, most recently, as its Chief Human Resources Officer. Mr. Olson transitioned to a non-employee consultant on August 6, 2024.
Pursuant to the Engagement Agreement, the Company will pay our CHRO $26.250 per month. In addition, the parties agreed that any outstanding unvested equity awards previously granted to Mr. Olson will continue to vest during the term of the Engagement Agreement. Mr. Olson will also be eligible to participate in the Company’s discretionary executive bonus plan for 2024 based on a performance period from January 1, 2024 to July 31, 2024 (the “Bonus Performance Term”), with a target bonus of 55% of Mr. Olson’s salary in effect during the Bonus Performance Term. The initial term of the Engagement Agreement is from August 6, 2024 to August 5, 2025 and may continue until terminated on its terms.
During the year ended December 31, 2024, the Company paid our CHRO $131,250 pursuant to the Engagement Agreement.
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Promoters
No person or company has been at any time during the past five fiscal years a promoter of the Company.
Director Independence
For purposes of this Annual Report on Form 10-K, the independence of our directors is determined under the corporate governance rules of the Nasdaq Capital Market (“Nasdaq”). While we are not listed on Nasdaq, we believe Nasdaq rules represent corporate governance best practices. The independence rules of Nasdaq include a series of objective tests, including that an “independent” person will not be employed by us and will not be engaged in various types of business dealings with us. In addition, the Board is required to make a subjective determination as to each person that no material relationship exists with the Company either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company. It has been determined that six of our directors are independent persons under the independence rules of Nasdaq: Frank Savage, James A.C. Kennedy, Jonathan P. May, Jeff Clarke, Alison Worthington and Julie Hill. Michael Abbott is not considered independent as he is the former Executive Chairman of the Company. David Hart is not considered independent as he is the Chief Executive Officer of the Company. Rosemary Mazanet is not considered independent because she was previously employed as the Chief Scientific Officer of the Company.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The following table sets forth fees paid to the Company’s auditors, PKF O’Connor Davies LLP and the prior auditors, Davidson & Company LLP, for 2024 and 2023, respectively, for audit and non-audit services. All of the services described below were approved in accordance with the Company’s pre-approval policy, which is described in the next section.
| PKF O’Connor Davies LLP |
Davidson & Company LLP | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Audit fees (1) |
$ | 895,000 | — | — | $ | 1,365,000 | ||||||||||
| Audit-related fees (2) |
$ | 60,000 | — | $ | 108,375 | $ | 147,784 | |||||||||
| Tax fees (3) |
— | — | — | $ | 5,775 | |||||||||||
| All other fees (4) |
— | — | $ | 26,969 | $ | 32,841 | ||||||||||
Notes:
| (1) | “Audit Fees” include the aggregate professional fees paid to the external auditors for the audit of the annual consolidated financial statements and other annual regulatory audits and filings. |
| (2) | “Audit Related Fees” includes the aggregate fees paid to the external auditors for services related to the audit services, including reviewing quarterly financial statements and management’s discussion thereon and conferring with the Board and Audit Committee regarding financial reporting and accounting standards. |
| (3) | “Tax Fees” include the aggregate fees paid to external auditors for tax compliance, tax advice, tax planning and advisory services, including namely preparation of tax returns. |
| (4) | “Other Fees” include fees for assurance procedures in connection with filings statements and information circulars and services related to underwriter’s due diligence. |
Pre-Approval Policies and Procedures
The Company’s Audit Committee has a policy related to pre-approval of all audit and permissible non-audit services to be provided by the independent registered public accounting firm. Pursuant to this policy, the Audit Committee must pre-approve all services provided by the independent registered public accounting firm. Pre-approvals for classes of services are granted at the start of each fiscal year and are applicable for such year. As provided under the Sarbanes-Oxley Act of 2002 and the SEC’s rules, the Audit Committee, in its discretion, may delegate to one or more of its members the authority to address certain requests for pre-approval in between regularly scheduled meetings of the Audit Committee, and such pre-approval decisions are reported to the Audit Committee at its next regular meeting. The policy is designed to help ensure that there is no delegation by the Audit Committee of authority or responsibility for pre-approval decisions to management.
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PART IV
ITEM 15. EXHIBITS, AND FINANCIAL STATEMENT SCHEDULES.
(a)(1) Financial Statements
See the Index to Financial Statement listed on page F-1 of the Form 10-K.
(a)(2) Financial Statement Schedules
Schedules have been omitted because they are not applicable, not material or because the information is included in the consolidated financial statements or the notes thereto.
(a)(3) Exhibits
The exhibits are incorporated by reference from the Exhibit Index attached hereto.
ITEM 16. FORM 10-K SUMMARY.
None.
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EXHIBIT INDEX
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| * | Filed herewith. |
| ‡ | Document has been furnished, is not deemed filed and is not to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, irrespective of any general incorporation language contained in any such filing. |
| # | Management contract, compensatory plan or arrangement required to be filed pursuant to Item 601(b)(10)(iii)(A) of Regulation S-K. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, on April 30, 2025.
| THE CANNABIST COMPANY HOLDINGS INC. |
| /s/ David Hart |
| By: David Hart Title: Chief Executive Officer and Director |
| /s/ Derek Watson |
| By: Derek Watson Title: Chief Financial Officer |
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated and on the dates indicated.
| Name and Signature |
Title |
Date | ||
| /s/ David Hart |
Chief Executive Officer and Director | April 30, 2025 | ||
| David Hart | ||||
| /s/ Derek Watson |
Chief Financial Officer (Principal Financial and Accounting Officer) |
April 30, 2025 | ||
| Derek Watson | ||||
| * |
Chairman and Director | April 30, 2025 | ||
| Michael Abbott | ||||
| * |
Director | April 30, 2025 | ||
| Frank Savage | ||||
| * |
Director | April 30, 2025 | ||
| James A.C. Kennedy | ||||
| * |
Director | April 30, 2025 | ||
| Jonathan P. May | ||||
| * |
Director | April 30, 2025 | ||
| Jeff Clarke | ||||
| * |
Director | April 30, 2025 | ||
| Alison Worthington | ||||
| * |
Director | April 30, 2025 | ||
| Julie Hill | ||||
| * |
Director | April 30, 2025 | ||
| Dr. Rosemary Mazanet | ||||
| * By: | /s/ David Hart | |
| David Hart | ||
| Attorney-in-fact |
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| F-2 | ||||
F-3 |
||||
| F-4 | ||||
| F-5 | ||||
| F-6 | ||||
| F-7 | ||||
| F-9 | ||||
(PCAOB ID:731) |
Chartered Professional Accountants |
December 31, 2024 |
December 31, 2023 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash |
$ | $ | ||||||
Accounts receivable, net of allowances of $ |
||||||||
Inventory |
||||||||
Prepaid expenses and other current assets |
||||||||
Notes receivable |
||||||||
Assets held for sale |
||||||||
Total current assets |
$ | $ | ||||||
Property and equipment, net |
||||||||
Right of use assets - operating leases, net |
||||||||
Right of use assets - finance leases, net |
||||||||
Intangible assets, net |
||||||||
Investments |
||||||||
Deferred taxes |
||||||||
Notes receivable |
||||||||
Other non-current assets |
||||||||
Total assets |
$ | $ | ||||||
Liabilities and Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued expenses and other current liabilities |
||||||||
Income tax payable |
||||||||
Current portion of lease liability - operating leases |
||||||||
Current portion of lease liability - finance leases |
||||||||
Current portion of long-term debt, net |
||||||||
Liabilities held for sale |
||||||||
Total current liabilities |
||||||||
Long-term debt, net |
||||||||
Long-term lease liability - operating leases |
||||||||
Long-term lease liability - finance leases |
||||||||
Derivative liability |
||||||||
Other long-term liabilities |
||||||||
Total liabilities |
||||||||
Commitments and contingencies |
||||||||
Stockholders’ Equity: |
||||||||
Common Stock, no par value, unlimited shares authorized as of December 31, 2024 and December 31, 2023, respectively, |
||||||||
Preferred Stock, no par value, unlimited shares authorized as of December 31, 2024 and December 31, 2023, respectively, |
||||||||
Proportionate voting shares, no par value, unlimited shares authorized as of December 31, 2024 and December 31, 2023, respectively; |
||||||||
Additional paid-in-capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Equity attributable to The Cannabist Company Holdings Inc. |
( |
) | ||||||
Non-controlling interest |
( |
) | ( |
) | ||||
Total equity |
( |
) | ||||||
Total liabilities and equity |
$ | $ | ||||||
Year Ended |
||||||||||||
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||
Revenues, net of discounts |
$ | $ | $ | |||||||||
Cost of sales related to inventory production |
( |
) | ( |
) | ( |
) | ||||||
Cost of sales related to business combination fair value adjustments to inventory |
( |
) | ||||||||||
Gross Margin |
||||||||||||
Goodwill impairment |
( |
) | ( |
) | ||||||||
Intangible impairment |
( |
) | ( |
) | ( |
) | ||||||
Fixed asset impairment |
( |
) | ( |
) | ||||||||
Selling, general and administrative expenses |
( |
) | ( |
) | ( |
) | ||||||
Total operating cost |
( |
) | ( |
) | ( |
) | ||||||
Loss from operations |
( |
) | ( |
) | ( |
) | ||||||
Other expense: |
||||||||||||
Interest (expense) income on leases, net |
( |
) | ( |
) | ( |
) | ||||||
Interest (expense) income, net |
( |
) | ( |
) | ( |
) | ||||||
Other (expense) income, net |
( |
) | ||||||||||
Total other expense |
( |
) | ( |
) | ( |
) | ||||||
Loss before provision for income taxes |
( |
) | ( |
) | ( |
) | ||||||
Income tax (expense) benefit |
( |
) | ( |
) | ||||||||
Net loss and comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||
Net income (loss) attributable to non-controlling interests |
( |
) | ||||||||||
Net loss attributable to shareholders |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Weighted-average number of shares used in earnings per share - basic and diluted |
||||||||||||
Loss attributable to shares (basic and diluted) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Common Shares |
Proportionate Voting Shares |
Additional Paid-in Capital |
Accumulated Deficit |
Total the Cannabist Company Holdings Inc. Shareholders’ Equity |
Non-Controlling Interest |
Total Equity |
||||||||||||||||||||||
Balance as of December 31, 2021 |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||
Equity-based compensation (1) |
— | — | — | |||||||||||||||||||||||||
Warrants exercised |
— | — | — | |||||||||||||||||||||||||
Issuance of shares in connection with acquisitions |
— | — | — | |||||||||||||||||||||||||
Cancellation of restricted stock awards |
— | ( |
) | — | — | — | — | — | ||||||||||||||||||||
Conversion between classes of shares |
( |
) | — | — | — | — | — | |||||||||||||||||||||
Non-controlling interest buyout |
— | — | — | ( |
) | ( |
) | — | ||||||||||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||
Balance as of December 31, 2022 |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||
Equity-based compensation (1) |
— | — | — | |||||||||||||||||||||||||
Warrants exercised |
— | — | — | — | — | — | ||||||||||||||||||||||
Issuance of shares |
— | — | — | |||||||||||||||||||||||||
Conversion between classes of shares |
( |
) | — | — | — | — | — | |||||||||||||||||||||
Distributions to non-controlling interest holders |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Deconsolidation of subsidiary |
— | — | — | |||||||||||||||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||||
Balance as of December 31, 2023 |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||
Equity-based compensation (1) |
— | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||
Conversion of convertible notes |
— | — | — | |||||||||||||||||||||||||
Legal Settlement |
— | — | — | |||||||||||||||||||||||||
Conversion between classes of shares |
( |
) | — | — | — | — | — | |||||||||||||||||||||
Distributions |
— | — | — | ( |
) | ( |
) | — | ( |
) | ||||||||||||||||||
Deconsolidation of subsidiary |
— |
— |
— |
— | — | ( |
) | ( |
) | |||||||||||||||||||
Net loss |
— |
— |
— |
( |
) | ( |
) | ( |
) | |||||||||||||||||||
Balance as of December 31, 2024 |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||||||||||||||
| (1) | The amounts shown are net of any shares withheld by the Company to satisfy certain tax withholdings in connection with vesting of equity-based awards. |
| Year ended | ||||||||||||
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||
Cash flows from operating activities: |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||||||
Depreciation and amortization |
||||||||||||
Equity-based compensation |
( |
) | ||||||||||
Debt amortization expense |
||||||||||||
Provision for obsolete inventory and other assets |
||||||||||||
Goodwill impairment charges |
||||||||||||
Intangible impairment charges |
||||||||||||
Impairment on fixed assets |
||||||||||||
(Gain) loss on disposal group |
( |
) | ||||||||||
Earnout adjustment |
||||||||||||
(Gain) on remeasurement of contingent consideration |
( |
) | ||||||||||
Deferred taxes |
( |
) | ( |
) | ( |
) | ||||||
Change in fair value of derivative liability |
( |
) | ( |
) | ||||||||
Change in investment fair value |
||||||||||||
Legal Settlement |
( |
) | ||||||||||
Other |
( |
) | ||||||||||
Changes in operating assets and liabilities, net of acquisitions |
||||||||||||
Accounts receivable |
( |
) | ( |
) | ||||||||
Inventory |
( |
) | ( |
) | ||||||||
Prepaid expenses and other current assets |
( |
) | ||||||||||
Notes receivable |
||||||||||||
Other assets |
||||||||||||
Accounts payable |
( |
) | ||||||||||
Accrued expenses and other current liabilities |
( |
) | ( |
) | ( |
) | ||||||
Income taxes payable |
||||||||||||
Other long-term liabilities |
( |
) | ( |
) | ||||||||
Net cash (used) / provided by in operating activities |
$ | ( |
) | $ | $ | ( |
) | |||||
Cash flows from investing activities: |
||||||||||||
Cash paid for acquisitions, net of cash acquired / Cash acquired due to acquisition |
||||||||||||
Purchases of property and equipment |
( |
) | ( |
) | ( |
) | ||||||
Cash paid for other assets |
( |
) | ||||||||||
Proceeds from sale of property, net |
||||||||||||
Proceeds from sale of license |
||||||||||||
Cash received (paid) on deposits, net |
( |
) | ||||||||||
Net proceeds from sale of business |
||||||||||||
Net cash provided by / (used) in investing activities |
$ | $ | ( |
) | $ | ( |
) | |||||
Cash flows from financing activities: |
||||||||||||
Proceeds from issuance of convertible debt |
||||||||||||
Proceeds from issuance of debt and warrants |
||||||||||||
Proceeds from mortgage note |
||||||||||||
Payment of debt issuance costs |
( |
) | ( |
) | ( |
) | ||||||
Repayment of debt |
( |
) | ( |
) | ( |
) | ||||||
Repayment of acquisition related real estate notes and note payable |
( |
) | ||||||||||
Repayment of sellers note |
( |
) | ( |
) | ( |
) | ||||||
Repayment of mortgage notes |
( |
) | ( |
) | ||||||||
Payment of lease liabilities |
( |
) | ( |
) | ( |
) | ||||||
Issuance of common shares |
||||||||||||
| Year ended | ||||||||||||
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||
Costs of issuance of common shares |
( |
) | ||||||||||
Exercise of warrants |
||||||||||||
Distributions to non-controlling interests |
( |
) | ( |
) | ||||||||
Taxes paid on equity based compensation |
( |
) | ( |
) | ( |
) | ||||||
Net cash (used in) / provided by financing activities |
$ | ( |
) | $ | ( |
) | $ | |||||
Net (decrease)/increase in cash |
( |
) | ( |
) | ( |
) | ||||||
Cash and restricted cash at beginning of the year |
||||||||||||
Cash and restricted cash at end of year |
$ | $ | $ | |||||||||
Supplemental disclosure of cash flow information: |
||||||||||||
Cash paid for interest on other obligations |
$ | $ | $ | |||||||||
Cash paid for income taxes |
$ | $ | $ | |||||||||
Reconciliation of cash and cash equivalents and restricted cash: |
||||||||||||
Cash |
$ | $ | $ | |||||||||
Restricted cash |
$ | $ | $ | |||||||||
Cash and restricted cash, end of year |
$ | $ | $ | |||||||||
Supplemental disclosure of non-cash investing and financing activities: |
||||||||||||
Non-cash fixed asset additions within accounts payable and accrued expenses |
$ | ( |
) | $ | ( |
) | $ | |||||
Discount on issuance of convertible debt |
$ | $ | $ | |||||||||
Reduction in debt from debt to equity conversion |
$ | ( |
) | $ | $ | |||||||
Increase in equity from debt to equity conversion |
$ | $ | $ | |||||||||
Equity issued for legal settlement |
$ | $ | $ | |||||||||
Debt incurred issued in connection with acquisition of property, plant and equipment |
$ | $ | $ | |||||||||
Derivative liability recognized upon issuance of convertible debt |
$ | $ | $ | |||||||||
Deconsolidation of subsidiary |
$ | ( |
) | $ | $ | |||||||
Assets held for sale |
$ | $ | ( |
) | $ | |||||||
Liabilities held for sale |
$ | $ | $ | ( |
) | |||||||
1. |
OPERATIONS OF THE COMPANY |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||
Colorado |
% | % | % | |||||||||
Ohio |
% | * | * | |||||||||
Virginia |
% | % | % | |||||||||
New Jersey |
% | % | * | |||||||||
| * | State’s revenue is not greater than or equal to 10% of the total consolidated revenue during the specific period. |
Estimated Useful life |
||||
Buildings |
||||
Furniture and fixtures |
||||
Equipment |
||||
Computers and software |
||||
Leasehold improvements |
Shorter of the life of the lease or economic life | |||
Estimated Useful life |
||||
Licenses and Permits |
||||
Trademarks and Tradenames |
||||
Customer relationships |
||||
Year Ended |
||||||||||||
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||
Dispensary |
$ | $ | $ | |||||||||
Cultivation and wholesale |
||||||||||||
Other |
||||||||||||
| $ | $ | $ | ||||||||||
| (1) | Estimated useful lives, impairment considerations and amortization of property and equipment, intangible assets – |
| (2) | Goodwill and intangible asset impairment testing require management to make estimates in the impairment testing model. On at least an annual basis, the Company assesses whether goodwill is impaired. Impairment of definite long-lived assets is influenced by judgment in defining a reporting unit and determining the indicators of impairment, and estimates used to measure impairment losses. |
| (3) | The reporting unit’s fair value is determined using discounted future cash flow models, which incorporate assumptions regarding future events, specifically future cash flows, growth rates and discount rates. |
| (4) | Stock-based compensation – |
| (5) | Deferred taxes- Valuation allowance estimates on deferred tax assets. |
3. |
REVERSE TAKEOVER TRANSACTION |
4. |
INVENTORY |
December 31, 2024 |
December 31, 2023 |
|||||||
Accessories and supplies |
$ | $ | ||||||
Work-in-process |
||||||||
Finished goods - dried cannabis, concentrate and edible products |
||||||||
Total inventory |
$ | $ | ||||||
5. |
CURRENT AND LONG-TERM DEBT |
December 31, 2024 |
December 31, 2023 |
|||||||
2026 Notes |
$ | $ | ||||||
Term debt |
||||||||
2027 Convertible Notes |
||||||||
2025 Convertible Notes |
||||||||
Mortgage Note |
||||||||
Acquisition related promissory notes |
||||||||
Unamortized debt discount |
( |
) | ( |
) | ||||
Unamortized deferred financing costs |
( |
) | ( |
) | ||||
Total debt, net |
||||||||
Less current portion, net* |
( |
) | ( |
) | ||||
Long-term portion |
$ | $ | ||||||
| * | The current portion of the debt includes scheduled payments on the mortgage notes, acquisition related promissory notes and acquisition related notes payable, net of corresponding portions of the unamortized debt discount and unamortized deferred financing costs. |
| * | by January 31, 2024, transfer $ |
| * | provided that the five-day volume weighted average price of the Common Shares on the Exchange is greater than C$ |
| * | provided that the February Exchange is completed and the daily volume weighted average price of the Common Shares on Cboe is greater than C$ |
| * | The first agreement provides for a $ |
| * | The second agreement provides for a $ |
2025 |
2026 |
2027 |
2028 |
2029 |
Thereafter |
Total |
||||||||||||||||||||||
2027 Convertible Notes |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
2025 Convertible Notes |
||||||||||||||||||||||||||||
2026 Notes |
||||||||||||||||||||||||||||
Mortgages Notes |
||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
Balance, January 1 |
Borrowing |
Acquisition related |
Conversion/Exchanges |
Repayments |
Balance, December 31 |
|||||||||||||||||||
Term debt |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||
2025 Convertible Notes |
( |
) | ( |
) | ||||||||||||||||||||
Mortgages Notes |
( |
) | ||||||||||||||||||||||
2026 Notes |
||||||||||||||||||||||||
2027 Convertible Notes |
( |
) | ||||||||||||||||||||||
Acquisition related promissory notes |
( |
) | ||||||||||||||||||||||
| $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Balance, January 1 |
Borrowing |
Acquisition related |
Conversion/Exchanges |
Repayments |
Balance, December 31 |
|||||||||||||||||||
Term debt |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||
2025 Convertible Notes |
||||||||||||||||||||||||
Mortgages Notes |
( |
) | ||||||||||||||||||||||
2023 Convertible Notes |
( |
) | ||||||||||||||||||||||
2026 Notes |
||||||||||||||||||||||||
Acquisition related real estate notes |
( |
) | ||||||||||||||||||||||
Acquisition related promissory notes |
( |
) | ||||||||||||||||||||||
Acquisition related note payable |
( |
) | ||||||||||||||||||||||
| $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Year Ended |
||||||||||||
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||
Interest expense on debt |
$ | $ | $ | |||||||||
Amortization of debt discount |
$ | $ | $ | |||||||||
Amortization of debt premium |
$ | $ | $ | ( |
) | |||||||
Amortization of debt issuance costs |
$ | $ | $ | |||||||||
Other interest (expense) income, net |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Total interest expense, net |
$ | $ | $ | |||||||||
6. |
ACCOUNTS RECEIVABLE, NET |
December 31, 2024 |
December 31, 2023 |
|||||||
Trade accounts receivable |
$ | $ | ||||||
Other receivables |
||||||||
Total trade accounts and other receivables |
||||||||
Less: allowance for credit losses |
( |
) | ( |
) | ||||
Accounts receivable, net |
$ | $ | ||||||
December 31, 2024 |
December 31, 2023 |
|||||||
Allowance for credit losses as of January 1, |
$ | ( |
) | $ | ( |
) | ||
Provision |
( |
) | ( |
) | ||||
Charge-offs and recoveries |
||||||||
Other adjustments |
( |
) | ||||||
Allowance for credit losses as of December 31, |
$ | ( |
) | $ | ( |
) | ||
7. |
PROPERTY AND EQUIPMENT |
December 31, 2024 |
December 31, 2023 |
|||||||
Land and buildings |
$ | $ | ||||||
Furniture and fixtures |
||||||||
Equipment |
||||||||
Computers and software |
||||||||
Leasehold improvements |
||||||||
Construction in process |
||||||||
Total property and equipment, gross |
||||||||
Less: Accumulated depreciation |
( |
) | ( |
) | ||||
Total property and equipment, net |
$ | $ | ||||||
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||
Total depreciation expense |
$ | $ | $ | |||||||||
Included in: |
||||||||||||
Costs of sales related to inventory production |
$ | $ | $ | |||||||||
Selling, general and administrative expenses |
$ | $ | $ | |||||||||
Land and buildings |
Furniture and fixtures |
Equipment |
Computers and software |
Leasehold improvements |
Construction in process |
Total |
||||||||||||||||||||||
Cost |
||||||||||||||||||||||||||||
Balance, December 31, 2023 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Additions |
||||||||||||||||||||||||||||
Impairments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Disposals |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Transferred from assets held for sale |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Other transfers |
( |
) | ||||||||||||||||||||||||||
Balance, December 31, 2024 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Land and buildings |
Furniture and fixtures |
Equipment |
Computers and software |
Leasehold improvements |
Construction in process |
Total |
||||||||||||||||||||||
Accumulated depreciation |
||||||||||||||||||||||||||||
Balance, December 31, 2023 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | |||||||||
Depreciation |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Impairments |
||||||||||||||||||||||||||||
Disposals |
||||||||||||||||||||||||||||
Transferred from assets held for sale |
||||||||||||||||||||||||||||
Balance, December 31, 2024 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | |||||||||
Land and buildings |
Furniture and fixtures |
Equipment |
Computers and software |
Leasehold improvements |
Construction in process |
Total |
||||||||||||||||||||||
Cost |
||||||||||||||||||||||||||||
Balance, December 31, 2022 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Additions |
||||||||||||||||||||||||||||
Impairments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Disposals |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||
Transferred to assets held for sale |
||||||||||||||||||||||||||||
Other transfers |
( |
) | ||||||||||||||||||||||||||
Balance, December 31, 2023 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Land and buildings |
Furniture and fixtures |
Equipment |
Computers and software |
Leasehold improvements |
Construction in process |
Total |
||||||||||||||||||||||
Accumulated depreciation |
||||||||||||||||||||||||||||
Balance, December 31, 2022 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | |||||||||
Depreciation |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Disposals |
||||||||||||||||||||||||||||
Transferred to assets held for sale |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Balance, December 31, 2023 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | |||||||||
8. |
PREPAID EXPENSES AND OTHER CURRENT ASSETS |
December 31, 2024 |
December 31, 2023 |
|||||||
Prepaid expenses |
$ | |||||||
Short term deposits |
||||||||
Other current assets |
||||||||
Excise and sales tax receivable |
||||||||
Prepaid taxes |
||||||||
Prepaid expenses and other current assets |
$ | $ | ||||||
9. |
OTHER NON-CURRENT ASSETS |
December 31, 2024 |
December 31, 2023 |
|||||||
Long term deposits |
$ | $ | ||||||
Long term tax receivable |
||||||||
Investment in affiliates |
||||||||
Restricted cash |
||||||||
Other non-current assets |
$ | $ | ||||||
10. |
NOTES RECEIVABLES |
December 31, 2024 |
December 31, 2023 |
|||||||
Long term portion |
$ | $ | ||||||
Short term portion |
||||||||
Note receivables |
$ | $ | ||||||
Note payable by |
Rate of Interest |
As on December 31, 2023 |
Payment made during the year |
Additions |
As on December 31, 2024 |
|||||||||||||||
SFL Investment Holding, LLC and Mint Florida Holdings LLC |
% | $ | $ | $ | $ | |||||||||||||||
Flor Medicinal LLC |
% | |||||||||||||||||||
CC R&M Operations, LLC |
% | ( |
) | |||||||||||||||||
CC VA Holdco LLC |
% | ( |
) | |||||||||||||||||
The Forest Springville, LLC |
% | |||||||||||||||||||
Balboa Boulevard Building |
% | ( |
) | |||||||||||||||||
Total |
$ | $ | ( |
) | $ | $ | ||||||||||||||
11. |
SHAREHOLDERS’ EQUITY |
12. |
WARRANTS |
December 31, 2024 |
December 31, 2023 |
|||||||||||||||
Expiration |
Number of Shares Issued and Exercisable |
Exercise Price (Canadian Dollars) |
Number of Shares Issued and Exercisable |
Exercise Price (Canadian Dollars) |
||||||||||||
September 21, 2026 |
$ | $ | ||||||||||||||
October 1, 2025 |
||||||||||||||||
April 26, 2024 |
||||||||||||||||
| $ | $ | |||||||||||||||
Warrants |
Weighted average (Canadian Dollars) |
Warrants |
Weighted average (U.S. Dollars) |
|||||||||||||
Balance as of December 31, 2022 |
— |
— |
||||||||||||||
Issued |
||||||||||||||||
Exercised |
( |
) | — | |||||||||||||
Expired |
( |
) | — | — | ||||||||||||
Balance as of December 31, 2023 |
— |
— |
||||||||||||||
Expired |
( |
) | — | — | ||||||||||||
Balance as of December 31, 2024 |
$ |
$ |
— |
$ |
— |
|||||||||||
13. |
SHARE-BASED PAYMENT ARRANGEMENTS |
Shares |
Weighted-Average Grant Date Fair Value |
|||||||
Unvested, December 31, 2022 |
$ | |||||||
Granted |
||||||||
Vested |
( |
) | ||||||
Forfeited |
( |
) | ||||||
Unvested, December 31, 2023 |
||||||||
Granted |
||||||||
Vested |
( |
) | ||||||
Forfeited |
( |
) | ||||||
Unvested, December 31, 2024 |
$ | |||||||
Year ended |
||||||||||||
(Dollars in thousands) |
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
|||||||||
Share-based compensation |
$ | $ | $ | |||||||||
December 31, 2024 |
December 31, 2023 |
|||||||
Unrecognized compensation costs |
$ | $ | ||||||
Weighted average period over which compensation cost will be recognized (in years) |
||||||||
Maximum term relating to outstanding RSUs (in years) |
||||||||
Shares |
Weighted-Average Grant Date Fair Value |
|||||||
Unvested, December 31, 2022 |
||||||||
Vested |
( |
) | ||||||
Forfeited |
( |
) | ||||||
Unvested, December 31, 2023 |
||||||||
Granted |
||||||||
Vested |
( |
) | ||||||
Forfeited |
( |
) | ||||||
Unvested, December 31, 2024 |
||||||||
Year ended |
||||||||||||
(Dollars in thousands) |
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
|||||||||
Share-based compensation |
$ | ( |
) | $ | ( |
) | $ | |||||
December 31, 2024 |
December 31, 2023 |
|||||||
Unrecognized compensation costs |
$ | $ | ||||||
Weighted average period over which compensation cost will be recognized (in years) |
||||||||
Maximum term relating to outstanding PSUs (in years) |
||||||||
14. |
INCOME TAXES |
Year Ended |
||||||||||||
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||
Current tax expense |
||||||||||||
Federal |
$ | $ | $ | |||||||||
State |
||||||||||||
Total current tax expense |
||||||||||||
Deferred tax expense (benefit) |
||||||||||||
Foreign |
( |
) | ( |
) | ( |
) | ||||||
Federal |
( |
) | ( |
) | ( |
) | ||||||
State |
( |
) | ( |
) | ( |
) | ||||||
Total deferred tax expense (benefit) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Change in Valuation Allowance - US |
( |
) | ||||||||||
Change in Valuation Allowance - Foreign |
||||||||||||
Provision (benefit) for income taxes |
$ | $ | $ | ( |
) | |||||||
Year Ended |
||||||||||||||||||||||||
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||||||||||||||
Loss before provision for income taxes |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||
Tax using the company’s domestic tax rate |
( |
) | % | ( |
) | % | ( |
) | % | |||||||||||||||
Tax effect of: |
||||||||||||||||||||||||
State taxes, net of federal benefits |
( |
%) | ( |
) | % | ( |
) | % | ||||||||||||||||
280E limitations |
( |
)% | ( |
)% | ( |
)% | ||||||||||||||||||
Non-deductible partnership income |
( |
)% | ( |
)% | ( |
)% | ||||||||||||||||||
Other Permanent Tax Differences |
( |
)% | ( |
%) | ( |
) | % | |||||||||||||||||
Share-based compensation |
( |
)% | ( |
)% | ( |
)% | ||||||||||||||||||
Change in tax status |
% | |||||||||||||||||||||||
Other items |
( |
)% | ( |
)% | ||||||||||||||||||||
Provision to Return Adjustment |
( |
)% | ( |
) | ( |
)% | ||||||||||||||||||
Goodwill impairment |
% | ( |
)% | ( |
)% | |||||||||||||||||||
| $ | ( |
)% | $ | ( |
%) | $ | ( |
) | % | |||||||||||||||
Year Ended |
||||||||||||
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||
Deferred Tax Assets |
||||||||||||
Net Operating Loss Carryforwards |
$ | $ | $ | |||||||||
Derivative liability |
||||||||||||
Inventory |
||||||||||||
Stock Based Compensation |
||||||||||||
Capitalized Expenses |
||||||||||||
Reserves |
||||||||||||
Right of Use Assets |
||||||||||||
Sale Leaseback |
||||||||||||
Other Assets |
||||||||||||
Gross Deferred Tax Assets |
||||||||||||
Valuation Allowance |
( |
) | ( |
) | ( |
) | ||||||
Total Deferred Tax Assets, net |
$ | $ | $ | |||||||||
Deferred Tax Liabilities |
||||||||||||
Property, Plant and Equipment |
$ | $ | $ | ( |
) | |||||||
Intangibles |
( |
) | ( |
) | ( |
) | ||||||
Accruals |
( |
) | ( |
) | ( |
) | ||||||
Debt discount |
( |
) | ( |
) | ( |
) | ||||||
Right of Use Liabilities |
( |
) | ( |
) | ( |
) | ||||||
Gross Deferred Tax Liabilities |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Net Deferred Tax Liabilities |
$ | — | $ | — | $ | |||||||
Net Deferred Tax Assets |
$ | $ | $ | — | ||||||||
Balance as of December 31, 2021 |
$ | |||
Reductions for Expiration of Statute of Limitations |
( |
) | ||
Balance as of December 31, 2022 |
||||
Reductions for Expiration of Statute of Limitations |
( |
) | ||
Balance as of December 31, 2023 |
||||
Increases (Decreases) for prior years |
||||
Reductions for Expiration of Statute of Limitations |
( |
) | ||
Balance as of December 31, 2024 |
$ | |||
15. |
EARNINGS PER SHARE |
Year Ended |
||||||||||||
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||
Numerator: |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Less: Net loss attributable to non-controlling interests |
( |
) | ||||||||||
Net loss attributable to shareholders |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Denominator: |
||||||||||||
Weighted average shares outstanding - basic and diluted |
||||||||||||
Loss per share - basic and diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Year Ended |
||||||||||||
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||
Convertible Debt |
||||||||||||
16. |
LEASING ACTIVITIES |
December 31, 2024 |
December 31, 2023 |
|||||||
Weighted Average Remaining Lease Term |
||||||||
Operating leases |
||||||||
Finance leases |
||||||||
Weighted Average Discount Rate |
||||||||
Operating leases |
% | % | ||||||
Finance leases |
% | % | ||||||
Operating |
Finance |
|||||||
Year Ending December 31: |
||||||||
2025 |
$ | $ | ||||||
2026 |
||||||||
2027 |
||||||||
2028 |
||||||||
2029 |
||||||||
Thereafter |
||||||||
Total lease payments |
||||||||
Less: interest |
( |
) | ( |
) | ||||
Present value of lease liabilities |
$ | $ | ||||||
December 31, 2024 |
December 31, 2023 |
|||||||
Operating lease expense |
$ | $ | ||||||
Included in |
||||||||
Cost of sales |
||||||||
Selling, general and administrative expenses |
||||||||
Finance lease costs: |
||||||||
Amortization of lease assets included in cost of sales |
||||||||
Amortization of lease assets included in selling, general and administrative costs |
||||||||
Interest on lease liabilities included in interest (expense) income, net |
||||||||
Total lease costs |
$ | $ | ||||||
December 31, 2024 |
December 31, 2023 |
|||||||
Cash paid for amounts included in the measurement of lease liabilities: |
||||||||
Operating cash flows from operating leases |
$ | $ | ||||||
Operating cash flows from finance leases |
||||||||
Financing cash flows from finance leases |
||||||||
Lease assets obtained in exchange for lease obligations: |
||||||||
Operating leases |
||||||||
Finance leases |
||||||||
Lease assets obtained in business acquisitions |
||||||||
Operating leases |
$ | $ | ||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
December 31, 2024 |
||||||||||||||||
Investment securities |
$ | $ | $ | $ | ||||||||||||
Total assets |
$ | $ | $ | $ | ||||||||||||
Derivative liability |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||
Total liabilities |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||
December 31, 2023 |
||||||||||||||||
Derivative liability |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||
| $ | $ | $ | ( |
) | $ | ( |
) | |||||||||
Financial asset/financial liability |
Valuation techniques |
Significant unobservable inputs |
Relationship of unobservable inputs to fair value | |||
| Derivative liability | Market approach | Conversion Period | Increase or decrease in conversion period will result in an increase or decrease in fair value. |
19. |
GOODWILL AND INTANGIBLE ASSETS |
Goodwill |
Licenses |
Trademarks |
Customer Relationships |
Total |
||||||||||||||||
Cost |
||||||||||||||||||||
As of December 31, 2023 |
$ | — | $ | $ | $ | $ | ||||||||||||||
Impairment |
— | ( |
) | ( |
) | — | ( |
) | ||||||||||||
Sale |
— | ( |
) | — | — | ( |
) | |||||||||||||
Available for sale |
— | ( |
) | — | — | ( |
) | |||||||||||||
As of December 31, 2024 |
$ | — | $ | |
$ | $ | $ | |||||||||||||
Goodwill |
Licenses |
Trademarks |
Customer Relationships |
Total |
||||||||||||||||
Accumulated Amortization |
||||||||||||||||||||
As of December 31, 2023 |
$ | — | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||
Sale |
— | — | — | |||||||||||||||||
Available for sale |
— | |||||||||||||||||||
Amortization |
— | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
As of December 31, 2024 |
$ | — | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||
Goodwill |
Licenses |
Trademarks |
Customer Relationships |
Total |
||||||||||||||||
Cost |
||||||||||||||||||||
As of December 31, 2022 |
$ | $ | $ | $ | $ | |||||||||||||||
Impairment |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Disposals |
— | ( |
) | — | — | ( |
) | |||||||||||||
As of December 31, 2023 |
$ | $ | $ | $ | $ | |||||||||||||||
Goodwill |
Licenses |
Trademarks |
Customer Relationships |
Total |
||||||||||||||||
Accumulated Amortization |
||||||||||||||||||||
As of December 31, 2022 |
$ | — | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||
Amortization |
— | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
As of December 31, 2023 |
$ | — | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||
Goodwill impairment testing |
||||||||
| Colorado | California | |||||||
Significant estimates used by management |
||||||||
Years of cash flows before terminal value |
||||||||
Discount rate |
% | % | ||||||
Terminal value multiple / rate |
% | % | ||||||
| i. | Cash flows: Estimated cash flows were projected based on actual operating results from internal sources as well as industry and market trends. Estimated cash flows are primarily driven by sales volumes, selling prices and operating costs. The forecasts are extended to a total of five years (and a terminal year thereafter); |
| ii. | Terminal value growth rate: The terminal growth rate was based on historical and projected consumer price inflation, historical and projected economic indicators, and projected industry growth; |
| iii. | Corporate overhead allocation and the eventual reappeal of Schedule 208E. |
| iv. | Post-tax discount rate: The post-tax discount rate is reflective of the reporting unit’s Weighted Average Cost of Capital (“WACC”). The WACC was estimated based on the risk-free rate, equity risk premium, beta adjustment to the equity risk premium based on a direct comparison approach, an unsystematic risk premium, and after-tax cost of debt based on corporate bond yields; and |
| v. | Tax rate: The tax rates used in determining the future cash flows were those substantively enacted at the respective valuation date. |
| • | The Company performed the aforementioned sensitivity analyses as follows: |
| • | If revenues for all years were to decrease 10% |
| • | If EBITDA is reduced by 5% each year |
| • | If the discount rate changes +2 and +5% |
| • | In addition, the Company ran a sensitivity on the terminal value multiple as well: |
| • | If the terminal value multiple is reduced -2 and -5% |
Goodwill impairment testing |
||||||||
| Colorado | California | |||||||
Significant estimates used by management |
||||||||
Years of cash flows before terminal value |
||||||||
Discount rate |
% | % | ||||||
Terminal value multiple / rate |
% | % | ||||||
Year Ended |
||||||||||||
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||
Goodwill impairment |
$ | $ | $ | |||||||||
Amortization expenses |
||||||||||||
Future estimated amortization expense: |
Amount |
|||
2025 |
$ | |||
2026 |
||||
2027 |
||||
2028 |
||||
2029 |
||||
2029 and thereafter |
||||
Total |
$ | |||
20. |
NET ASSETS HELD FOR SALE |
December 31, 2024 |
December 31, 2023 |
|||||||
Cash |
$ | $ | ||||||
Accounts receivable |
||||||||
Inventory |
||||||||
Prepaid expenses and other current assets |
||||||||
Property, plant and equipment |
||||||||
Right-of-use |
||||||||
Right of use assets - finance leases, net |
||||||||
Intangible assets, net |
||||||||
Assets held for sale |
$ |
$ |
||||||
Accounts payable and other liabilities |
( |
) | ( |
) | ||||
Lease liabilities |
( |
) | ( |
) | ||||
Liabilities held for sale |
$ |
( |
) |
$ |
( |
) | ||
Assets held for Sale |
Held for Sale Entities |
|||
Balance at December 31, 2022 |
$ | |||
Transferred in/(out) |
( |
) | ||
Balance at December 31, 2023 |
||||
Transferred in/(out) |
||||
Balance at December 31, 2024 |
$ | |||
Liabilities associated with assets held for sale |
Held for Sale Entities |
|||
Balance at December 31, 2022 |
$ | |||
Transferred in/(out) |
( |
) | ||
Balance at December 31, 2023 |
||||
Transferred in/(out) |
||||
Balance at December 31, 2024 |
$ | |||
21. |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
December 31, 2024 |
December 31, 2023 |
|||||||
Taxes - property and other |
$ | $ | ||||||
Other accrued expenses |
||||||||
Payroll liabilities |
||||||||
Other current liabilities |
||||||||
Accrued expenses and other current liabilities |
$ | $ | ||||||
22. |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
Year ended |
||||||||||||
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||
Salaries and benefits |
$ | $ | $ | |||||||||
Professional fees |
||||||||||||
Depreciation and amortization |
||||||||||||
Operating facilities costs |
||||||||||||
Operating office and general expenses |
||||||||||||
Advertising and promotion |
||||||||||||
Other fees and expenses |
||||||||||||
Total selling, general and administrative expenses |
$ | $ | $ | |||||||||
23. |
OTHER EXPENSE (INCOME), NET |
Year ended |
||||||||||||
December 31, 2024 |
December 31, 2023 |
December 31, 2022 |
||||||||||
Change in fair value of the derivative liability |
$ | $ | ( |
) | $ | ( |
) | |||||
Change in fair value of the investment in Verano |
||||||||||||
(Gain) on remeasurement of contingent consideration |
( |
) | ( |
) | ||||||||
(Gain) loss on disposal group |
( |
) | ||||||||||
Loss on held-for-sale |
||||||||||||
Earnout adjustment |
||||||||||||
Loss on Restructuring |
||||||||||||
Other (income) expense, net |
( |
) | ( |
) | ||||||||
Rental income |
( |
) | ( |
) | ( |
) | ||||||
Total other expense (income), net |
$ | ( |
) | $ | $ | ( |
) | |||||
24. |
NON-CONTROLLING INTERESTS |
Venture Forth |
Columbia Care Arizona- Tempe |
Columbia Care Delaware |
Columbia Care Puerto Rico |
Columbia Care Maryland |
Columbia Care Eastern Virginia |
Columbia Care International HoldCo |
Columbia Care New Jersey |
Access Bryant |
Columbia Care Ohio |
Columbia Care Missouri |
Other |
Green Leaf Medical Inc. |
Total |
|||||||||||||||||||||||||||||||||||||||||||
Summarized balance sheet |
December 31, 2024 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current assets |
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Current liabilities |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | $ | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||||
Current net assets (liabilities) |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-current assets |
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Non-current liabilities |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | $ | ( |
) | ( |
) | |||||||||||||||||||||||||||||||||||||||
Non-current net assets (liabilities) |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||||
Accumulated NCI |
$ | $ | $ | $ | $ | ( |
) | $ | $ | $ | $ | ( |
) | $ | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||||||||||
Venture Forth |
Columbia Care Arizona- Tempe |
Columbia Care Delaware |
Columbia Care Puerto Rico |
Columbia Care Maryland |
Columbia Care Eastern Virginia |
Columbia Care International HoldCo |
Columbia Care New Jersey |
Access Bryant |
Columbia Care Ohio |
Columbia Care Missouri |
Other |
Green Leaf Medical Inc. |
Total |
|||||||||||||||||||||||||||||||||||||||||||
Summarized balance sheet |
December 31, 2023 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current assets |
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Current liabilities |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Current net assets (liabilities) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Non-current assets |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-current liabilities |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Non-current net assets (liabilities) |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||
Accumulated NCI |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | ( |
) | $ | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||||||||
Venture Forth |
Columbia Care Arizona- Tempe |
Columbia Care Delaware |
Columbia Care Puerto Rico |
Columbia Care Maryland |
Columbia Care Florida |
Columbia Care Eastern Virginia |
Columbia Care International HoldCo |
Columbia Care New Jersey |
Access Bryant |
Leafy Greens |
Columbia Care Ohio |
Columbia Care Missouri |
Green Leaf Medical Inc. |
Other |
Total |
|||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 |
$ |
( |
) |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
$ |
( |
) |
$ |
$ |
$ |
( |
) | ||||||||||||||||||||||||||||||||||
Net income (loss) attributable to NCI |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other adjustments |
( |
) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2022 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to NCI |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other adjustments |
( |
) | ( |
) | ( |
) | ( |
) | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2023 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
$ |
$ |
( |
) |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
( |
) | ||||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to NCI |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other adjustments |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2024 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
( |
) | ||||||||||||||||||||||||||||||||||||||||
| * | Represents non-controlling interests acquired as a result of the Green Leaf Transaction. |
25. |
DIVESTITURES |
| Year ended | ||||||||||||
2024 |
2023 |
2022 |
||||||||||
Arizona |
||||||||||||
Revenue |
$ | $ | $ | |||||||||
Expense |
||||||||||||
District of Columbia |
||||||||||||
Revenue |
||||||||||||
Expense |
||||||||||||
Eastern Virginia |
||||||||||||
Revenue |
||||||||||||
Expense |
||||||||||||
Florida |
||||||||||||
Revenue |
||||||||||||
Expense |
||||||||||||
Utah |
||||||||||||
Revenue |
||||||||||||
Expense |
||||||||||||
Missouri |
||||||||||||
Revenue |
||||||||||||
Expense |
||||||||||||
Venture Forth |
||||||||||||
Revenue |
||||||||||||
Expense |
||||||||||||
Total |
||||||||||||
Revenue |
||||||||||||
Expense |
$ | $ | $ | |||||||||
26. |
SUBSEQUENT EVENTS |
| • | On January 15, 2025, the Company completed the sale of a non-operating facility in DE for gross proceeds of $ |
| • | On February 27, 2025, the Company entered into a support agreement (the “ Support Agreement Supporting Noteholders 2025 Debt Transaction 2025 Notes 2026 Notes 2027 Notes Senior Notes to options available to the Company upon payment of a New Senior Notes New Convertible Notes New Notes |