Vireo Growth Inc 10-Q for FY2025 Q1
Vireo Growth Inc. (VREOF)
About this 10-Q
Vireo Growth Inc filed this 10-Q on May 9, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).
Headline figures
Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $24.54M
- up 1.9% from $24.09M a year earlier
- Net loss
- $6.51M
- compared with a net loss of $6.71M a year earlier
- Diluted EPS
- -$0.02
- compared with -$0.05 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
British Columbia, |
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(State or other jurisdiction of | | (I.R.S. Employer |
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(Address of principal executive offices) | | (Zip Code) |
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| (Registrant’s telephone number, including area code) | |
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ◻ |
| Accelerated filer | ◻ |
þ | | Smaller reporting company | ||
| | | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of May 7, 2025, the registrant had the following number of shares of each of its classes of registered securities outstanding: Subordinate Voting Shares –
VIREO GROWTH INC.
TABLE OF CONTENTS
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
VIREO GROWTH INC.
CONSOLIDATED BALANCE SHEETS
(In U.S Dollars, unaudited)
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| March 31, | | December 31, | ||
| | 2025 | | 2024 | ||
Assets |
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Current assets: |
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Cash | | $ | | | $ | |
Accounts receivable, net of credit losses of $ | |
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Income tax receivable | | | | |
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Inventory | |
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Prepayments and other current assets | |
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Warrants held | |
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Assets held for sale | |
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Total current assets | |
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Property and equipment, net | |
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Operating lease, right-of-use asset | |
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Intangible assets, net | |
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Deposits | |
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Total assets | | $ | | | $ | |
Liabilities | |
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Current liabilities | |
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Accounts payable and accrued liabilities | | $ | | | $ | |
Long-term debt, current portion | | | — | | | |
Right of use liability | |
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Uncertain tax liability | | | | |
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Liabilities held for sale | |
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Total current liabilities | |
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Right-of-use liability | |
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Other long-term liabilities | | | | | | |
Convertible debt, net | | | | | | |
Long-term debt, net | |
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Total liabilities | | | | | | |
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Commitments and contingencies (refer to Note 16) | |
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Stockholders’ equity (deficiency) | |
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Subordinate Voting Shares ($- par value, unlimited shares authorized; | |
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Multiple Voting Shares ($- par value, unlimited shares authorized; | |
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Additional paid in capital | |
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Accumulated deficit | |
| ( | |
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Total stockholders' equity (deficiency) | | $ | | | $ | |
Total liabilities and stockholders' equity (deficiency) | | $ | | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
3
VIREO GROWTH INC.
CONSOLIDATED STATEMENTS OF NET LOSS AND COMPREHENSIVE LOSS
(In U.S. Dollars, except share amounts, unaudited)
| | | Three Months Ended | ||||
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| | 2025 |
| 2024 | ||
Revenue | | | $ | | | $ | |
Cost of sales | | |
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Product costs | | |
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Inventory valuation adjustments | | |
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Gross profit | | |
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Operating expenses: | | |
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Selling, general and administrative expenses | | |
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Transaction related expenses | | | | | | | — |
Stock-based compensation expenses | | |
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Depreciation | | |
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Amortization | | |
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Total operating expenses | | |
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Income from operations | | |
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Other income (expense): | | |
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Interest expenses, net | | |
| ( | |
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Gain (loss) on disposal of assets | | |
| — | |
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Other income (expenses) | | |
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Other income (expenses), net | | |
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Loss before income taxes | | |
| ( | |
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Current income tax expenses | | |
| ( | |
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Net loss and comprehensive loss | | |
| ( | |
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Net loss per share - basic and diluted | | | $ | ( | | $ | ( |
Weighted average shares used in computation of net loss per share - basic and diluted | | |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
4
VIREO GROWTH INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
(In U.S. Dollars, except share amounts, unaudited)
| | Common Stock | | | | | | | | | | |||||||||||||
| | SVS | | MVS | | Super Voting Shares | | | | | | | | Total | ||||||||||
| | | | | | | | | | | | | | | | | Additional Paid- | | Accumulated | | Stockholders' | |||
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| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount |
| in Capital |
| Deficit |
| Equity (deficiency) | ||||||
Balance, January 1, 2024 | | | | | — |
| | | | — |
| — | | | — | | | | | | ( | | | ( |
Conversion of MVS shares |
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| — |
| ( | |
| — |
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| — | |
| — | |
| — | |
| — |
Stock-based compensation |
| — | | | — | | — | | | — | | — | | | — | | | | | | — | |
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Net Loss |
| — | | | — | | — | | | — | | — | | | — | | | — | | | ( | |
| ( |
Balance at March 31, 2024 |
| | | $ | — |
| | | $ | — |
| — | | $ | — | | $ | | | $ | ( | | $ | ( |
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Balance, January 1, 2025 | | | | | — |
| | | | — |
| — | | | — | | | | | | ( | | | |
Conversion of MVS shares | | | | | — | | ( | | | — | | — | | | — | | | — | | | — | | | — |
Stock-based compensation | | — | | | — | | — | | | — | | — | | | — | | | | | | — | | | |
Stock issuance |
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Net settlement of stock-based compensation | | ( | | | — | | — | | | — | | — | | | — | | | ( | | | — | | | ( |
Options exercised | | | |
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| — | | | | | | — | | | |
Warrants exercised | | | | | — | | — | | | — | | — | | | — | | | | | | — | | | |
Net Loss |
| — | |
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| — | |
| — |
| — | |
| — | |
| — | |
| ( | |
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Balance at March 31, 2025 |
| | | $ | — |
| | | $ | — |
| — | | $ | — | | $ | | | $ | ( | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
5
VIREO GROWTH INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. Dollars, unaudited)
| | Three Months Ended March 31, | ||||
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| 2025 |
| 2024 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | | |
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Net loss | | $ | ( | | $ | ( |
Adjustments to reconcile net loss to net cash used in operating activities: | |
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Inventory valuation adjustments | |
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Depreciation | |
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Depreciation capitalized into inventory | |
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Non-cash operating lease expense | |
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Amortization of intangible assets | |
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Amortization of intangible assets capitalized into inventory | | | | | | |
Stock-based payments | |
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Warrants held | | | | | | ( |
Interest Expense | |
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Accretion of interest on right-of-use finance lease liabilities | |
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Loss (gain) on disposal of assets | | | — | | | |
Change in operating assets and liabilities: | |
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Accounts Receivable | |
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Prepaid expenses | |
| ( | |
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Inventory | |
| ( | |
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Income taxes | | | | | | |
Uncertain tax position liabilities | | | | | | |
Accounts payable and accrued liabilities | |
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Changes in operating lease liabilities | | | ( | |
| ( |
Change in assets and liabilities held for sale | |
| ( | |
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Net cash used in operating activities | | | ( | | | ( |
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CASH FLOWS FROM INVESTING ACTIVITIES: | |
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PP&E Additions | | | ( | | | ( |
Deposits | | | — | | | ( |
Net cash used in investing activities | | | ( | | | ( |
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CASH FLOWS FROM FINANCING ACTIVITIES | | |
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Proceeds from warrant exercises | | | | | | — |
Proceeds from option exercises | | | | | | — |
Debt principal payments | | | ( | | | ( |
Lease principal payments | | | — | | | ( |
Net cash used in financing activities | | | ( | | | ( |
| | | | | | |
Net change in cash | | | ( | | | ( |
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Cash, beginning of period | | | | | | |
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Cash, end of period | | $ | | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
6
VIREO GROWTH INC.
Notes to Unaudited Condensed Consolidated Financial Statements
1. Description of Business and Summary
Vireo Growth Inc. (“Vireo Growth” or the “Company”) (formerly, Goodness Growth Holdings, Inc.) was incorporated under the Alberta Business Corporations Act on November 23, 2004. The Company was previously listed on the Canadian Securities Exchange (the “CSE”) under ticker symbol “GDNS”. On July 8, 2024, the Company changed its name to Vireo Growth Inc., its ticker symbol on the CSE to “VREO” and its ticker symbol on the OTCQX to “VREOF.”
Vireo Growth is a cannabis company whose mission is to provide safe access, quality products and value to its customers while supporting its local communities through active participation and restorative justice programs. Vireo Growth operates cannabis cultivation, production, and dispensary facilities in Maryland, Minnesota, and New York.
While marijuana and CBD-infused products are legal under the laws of several U.S. states (with vastly differing restrictions), the United States Federal Controlled Substances Act classifies all “marijuana” as a Schedule I drug. Under U.S. federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of safety for the use of the drug under medical supervision. Recently some federal officials have attempted to distinguish between medical cannabis use as necessary, but adult-use as “still a violation of federal law.” At the present time, the distinction between “medical marijuana” and “adult-use marijuana” does not exist under U.S. federal law.
Update on Verano Litigation (Note 16)
On October 21, 2022, Vireo Growth commenced an action in the Supreme Court of British Columbia against Verano Holdings Corp. ("Verano") after Verano repudiated the Arrangement Agreement with the Company dated January 31, 2022. The Company is seeking damages, costs and interest, based on Verano's breach of contract and of its duty of good faith and honest performance.
On May 2, 2024, the Company filed a Notice of Application (the "Summary Trial Application") with the Supreme Court of British Columbia seeking summary determination. The Company is seeking substantial damages, specifically $
On June 19, 2024, Verano filed a Notice of Application (the “Preliminary Suitability Application”) seeking orders dismissing the Summary Trial Application on the basis that certain issues in the action are not suitable for summary determination. The Preliminary Suitability Application is currently set for hearing on June 15 and 16, 2025.
Due to uncertainties inherent in litigation, it is not possible for Vireo Growth to predict the timing or final outcome of the legal proceedings against Verano or to determine the amount of damages, if any, that may be awarded.
Merger Agreements with Deep Roots, Proper and Wholesome
On December 18, 2024, we entered into the Merger Agreements with respect the Mergers. Each Merger is an all-share transaction whereby, at the closing of each applicable transaction, (i) a new wholly-owned subsidiary of the Company would merge with and into Deep Roots, (ii) a new wholly-owned subsidiary of the Company would merge with and into Wholesome, and (ii) the Proper entities would each merge with and into new wholly-owned subsidiaries of the Company. None of the Deep Roots Merger, the Proper Mergers or the Wholesome Merger is contingent on the completion of any of the other Mergers (Note 3).
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2. Summary of Significant Accounting Policies
Significant Accounting Policies
The Company’s significant accounting policies are described in Note 2 to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the United States Securities and Exchange Commission (“SEC”) on March 4, 2025, (the "Annual Financial Statements"). There have been no material changes to the Company’s significant accounting policies.
Basis of presentation
The accompanying interim unaudited condensed consolidated financial statements reflect the accounts of the Company. The information included in these statements should be read in conjunction with the Annual Financial Statements. The unaudited condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. In the opinion of management, the financial data presented includes all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. Results of interim periods should not be considered indicative of the results for the full year. These unaudited interim condensed consolidated financial statements include estimates and assumptions of management that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ from these estimates.
Basis of consolidation
These unaudited condensed consolidated financial statements include the accounts of the following entities wholly owned, or effectively controlled by the Company during the period ended March 31, 2025:
Name of entity | Place of incorporation |
HiColor, LLC | Minnesota, USA |
MaryMed, LLC | Maryland, USA |
Mayflower Botanicals, Inc. | Massachusetts, USA |
Vireo Health of Minnesota, LLC | Minnesota, USA |
MJ Distributing C201, LLC | Nevada, USA |
MJ Distributing P132, LLC | Nevada, USA |
Resurgent Biosciences, Inc. | Delaware, USA |
Verdant Grove, Inc. | Massachusetts, USA |
Vireo Health de Puerto Rico, Inc. | Puerto Rico |
Vireo Health of Nevada 1, LLC | Nevada, USA |
Vireo Health of New York, LLC | New York, USA |
Vireo Health of Puerto Rico, LLC | Delaware, USA |
Vireo Health, Inc. | Delaware, USA |
Vireo of Charm City, LLC | Maryland, USA |
Vireo DR Merger Sub Inc. | Delaware, USA |
Vireo WH Merger Sub Inc. | Delaware, USA |
Vireo PR Merger Sub Inc. | Delaware, USA |
Vireo PR Merger Sub II Inc. | Delaware, USA |
2178 State Highway 29A LLC | New York, USA |
XAAS Agro, Inc. | Puerto Rico |
The entities listed are wholly owned or effectively controlled by the Company and have been formed or acquired to support the intended operations of the Company, and all intercompany transactions and balances have been eliminated in the Company's unaudited condensed consolidated financial statements.
8
Recently adopted accounting pronouncements
None.
Net loss per share
Basic net loss per share is computed by dividing reported net loss by the weighted average number of common shares outstanding for the reported period. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock of the Company during the reporting period. Diluted net loss per share is computed by dividing net loss by the sum of the weighted average number of common shares and the number of potential dilutive common share equivalents outstanding during the period. Potential dilutive common share equivalents consist of the incremental common shares issuable upon the exercise of vested share options and the incremental shares issuable upon conversion of the convertible notes. Potential dilutive common share equivalents consist of stock options, warrants, and restricted stock units.
In computing diluted earnings per share, common share equivalents are not considered in periods in which a net loss is reported, as the inclusion of the common share equivalents would be anti-dilutive. The Company recorded a net loss for the three month periods ended March 31, 2025 and 2024, presented in these financial statements, and as such there is no difference between the Company’s basic and diluted net loss per share for these periods.
The anti-dilutive shares outstanding for the three month periods ended March 31, 2025 and 2024, were as follows:
| | Three Months Ended | ||
| | March 31, | ||
| | 2025 |
| 2024 |
Stock options | | |
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Warrants | | |
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RSUs | | | | |
Convertible debt | | | | |
Total | | |
| |
Revenue Recognition
The Company’s primary source of revenue is from wholesale of cannabis products to dispensary locations and direct retail sales to eligible customers at Company-owned dispensaries. Substantially all of the Company’s retail revenue is from the direct sale of cannabis products to adult-use and medical customers.
The following table represents the Company’s disaggregated revenue by source:
| | Three Months Ended | ||||
|
| 2025 |
| 2024 | ||
Retail | | $ | | | $ | |
Wholesale | |
| | |
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Total | | $ | | | $ | |
New accounting pronouncements not yet adopted
None.
9
3. Business Combinations and Dispositions
Acquisitions
On December 18, 2024, Vireo Growth Inc. (the “Company”), entered into Merger Agreements with respect to a business combination with each of (i) Deep Roots Holdings, Inc., a Nevada corporation (“Deep Roots”) (the “Deep Roots Merger”); (ii) Proper Holdings Management, Inc. and NGH Investments, Inc., both Missouri corporations (together, “Proper”) (the “Proper Mergers”); and (iii) WholesomeCo, Inc., a Delaware corporation (“Wholesome”) (the “Wholesome Merger” and, collectively with the Deep Roots Merger and the Proper Mergers, the “Mergers”). Each Merger is an all-share transaction whereby, at the closing of each applicable transaction, (i) a new wholly-owned subsidiary of the Company would merge with and into Deep Roots, (ii) a new wholly-owned subsidiary of the Company would merge with and into Wholesome, and (ii) the Proper entities would each merge with and into new wholly-owned subsidiaries of the Company. None of the Deep Roots Merger, the Proper Mergers or the Wholesome Merger is contingent on the completion of any of the other Mergers. As of March 31, 2025, none of the Merger Transactions have closed, and as such, no financial results of the single-state operators have been presented or consolidated herein.
The consideration to be paid to acquire each of Deep Roots, Proper and Wholesome is based, in each case, in part on an estimated multiple of a 2024 “Reference EBITDA”, which is pro-forma for pending acquisitions as well as planned new retail openings and expansion projects, and a US$
Pursuant to the Merger Agreements, former stockholders of each of Deep Roots, Proper and Wholesome may qualify for earnout payments made with the Company’s subordinate voting shares following December 31, 2026, based on each target’s Adjusted EBITDA (as defined in the applicable Merger Agreement) growth compared to such target’s Reference EBITDA (at a
Each of the Merger Agreements provides for the clawback of up to
In connection with the Wholesome Merger Agreement (as defined herein) and Proper Merger Agreement (as defined herein), the Company will include in the stock merger consideration calculation an amount equal to (i) US$
In connection with each of the Merger Agreements, the Company will enter into an Investor Rights Agreement with the persons receiving the Company’s subordinate voting shares in the Mergers. Each Investor Rights Agreement will require the Company in certain circumstances to prepare and file with the Securities and Exchange Commission (the “SEC”) a
10
registration statement covering the resale of the Company’s subordinate voting shares issued pursuant to the Merger Agreements, in each case following the expiration of the initial 12 month lock-up period following the closing of the transactions under each Merger Agreement. Each Investor Rights Agreement will also provide such persons with certain piggyback registration rights in certain circumstances.
The closing of each of the Mergers is subject to closing conditions and contained in the Merger Agreements. Pursuant to rules adopted by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), a Schedule 14C information statement dated March 21, 2025, was prepared by the Company and filed with the SEC and mailed to the stockholders of the Company relating to stockholder approval of the issuance of the Company’s subordinate voting shares in the Mergers and approvals required under the rules of the Canadian Stock Exchange, which was obtained by written consent of the stockholders.
Assets Held for Sale
As of March 31, 2025, the Company identified property and equipment, deposits, and lease assets and liabilities associated with the businesses in New York, Nevada, and Massachusetts with carrying amounts that are expected to be recovered principally through sale or disposal rather than through continuing use. The sale of these assets and liabilities is highly probable, they can be sold in their immediate condition, and the sales are expected to occur within the next twelve months. As such, these assets and liabilities have been classified as “held for sale.” Management does not believe these divestitures represent a strategic shift that has or will have a major effect on an entity’s operations and financial results, and as such, none of these divestitures are considered a discontinued operation. The carrying value of these net assets did not exceed fair value less expected cost to sell, and as such, the Company recorded
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Assets held for sale |
| March 31, |
| December 31, | ||
| | 2025 | | 2024 | ||
Property and equipment | | $ | | | $ | |
Intangible assets | | | | | | |
Operating lease, right-of-use asset | | | | | | |
Deposits | | | | | | |
Total assets held for sale | | $ | | | $ | |
| | | | | | |
Liabilities held for sale | |
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Right of Use Liability | | $ | | | $ | |
Total liabilities held for sale | | $ | | | $ | |
Current assets and liabilities held by our New York business have not been classified as held for sale. Pre-tax operating losses attributable to the New York business were $
4. Fair Value Measurements
The Company complies with ASC 820, Fair Value Measurements, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability.
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Items measured at fair value on a non-recurring basis
The Company’s non-financial assets, such as prepayments and other current assets, long lived assets, including property and equipment and intangible assets, are measured at fair value when there is an indicator of impairment and are recorded at fair value only when an impairment charge is recognized. No indicators of impairment existed as of March 31, 2025, and therefore
The carrying value of the Company’s accounts receivable, accounts payable, and accrued liabilities approximate their fair value due to their short-term nature, and the carrying value of notes receivable, long-term debt, and convertible debt approximates fair value as they bear a market rate of interest.
The carrying value of the Company’s warrants held utilize Level 3 inputs given there is no market activity for the asset. The inputs used are further described in Note 18.
5. Accounts Receivable
Trade receivables are comprised of the following items:
| | March 31, | | December 31, | ||
|
| 2025 |
| 2024 | ||
Trade receivable, net | | $ | | | $ | |
Tax withholding receivable | | | — | | | |
Other | |
| | |
| |
Total | | $ | | | $ | |
Included in the trade receivables, net balance at March 31, 2025, and December 31, 2024, is an allowance for doubtful accounts of $
6. Inventory
Inventory is comprised of the following items:
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| March 31 | | December 31, | ||
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| 2025 |
| 2024 | ||
Work-in-progress | | $ | | | $ | |
Finished goods | |
| | |
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Other | |
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Total | | $ | | | $ | |
Inventory is written down for any obsolescence, spoilage and excess inventory or when the net realizable value of inventory is less than the carrying value. Inventory valuation adjustments included in cost of sales on the statements of net loss and comprehensive loss is comprised of the following:
| | | | | | |
| | March 31, | ||||
| | 2025 |
| 2024 | ||
Work-in-progress | | $ | | | $ | ( |
Finished goods | |
| | |
| ( |
Total | | $ | | | $ | ( |
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7. Prepayments and other current assets
Prepayments and other current assets are comprised of the following items:
|
| March 31, | | December 31, | ||
|
| 2025 |
| 2024 | ||
Prepaid Insurance | | $ | | | $ | |
Other Prepaid Expenses | |
| | |
| |
Total | | $ | | | $ | |
8. Property and Equipment, Net
Property and equipment, net consisted of the following:
|
| March 31, | | December 31, | ||
|
| 2025 |
| 2024 | ||
Land | | $ | | | $ | |
Buildings and leasehold improvements | |
| | |
| |
Furniture and equipment | |
| | |
| |
Software | |
| | |
| |
Vehicles | |
| | |
| |
Construction-in-progress | |
| | |
| |
Right of use asset under finance lease | |
| | |
| |
| |
| | |
| |
Less: accumulated depreciation | |
| ( | |
| ( |
Total | | $ | | | $ | |
For the three months ended March 31, 2025, and 2024, total depreciation on property and equipment was $
As of March 31, 2025 and 2024, in conjunction with the Company’s held for sale assessment and disposal of certain long-lived assets, the Company evaluated whether property and equipment showed any indicators of impairment, and it was determined that the recoverable amount of certain net assets was above book value. As a result, the Company recorded
13
9. Leases
Components of lease expenses are listed below:
|
| | | | | |
|
| March 31, | | March 31, | ||
|
| 2025 | | 2024 | ||
Finance lease cost | | | | | |
|
Depreciation of ROU assets | | $ | | | $ | |
Interest on lease liabilities | |
| | |
| |
Operating lease costs | |
| | |
| |
Total lease costs | | $ | | | $ | |
Future minimum lease payments (principal and interest) on the leases are as follows:
|
| Operating Leases |
| Finance Leases |
| | | ||
|
| March 31, 2025 |
| March 31, 2025 |
| Total | |||
2025 | | $ | | | $ | | | $ | |
2026 | |
| | |
| | |
| |
2027 | |
| | |
| | |
| |
2028 | |
| | |
| | |
| |
2029 | |
| | |
| | |
| |
Thereafter | |
| | |
| | |
| |
Total minimum lease payments | | $ | | | $ | | | $ | |
Less discount to net present value | | | ( | |
| ( | |
| ( |
Less liabilities held for sale | | | ( | | | ( | | | ( |
Present value of lease liability | | $ | | | $ | | | $ | |
The Company has entered into various lease agreements for the use of buildings used in production and retail sales of cannabis products.
On February 22, 2024, the Company executed a lease for cannabis cultivation and manufacturing facilities. Rent commenced on January 1, 2025, at which time monthly base rent will be $
Supplemental cash flow information related to leases:
|
| Three Months Ended | ||||
|
| March 31, | ||||
|
| 2025 |
| 2024 | ||
Cash paid for amounts included in the measurement of lease liabilities: | | |
|
| |
|
Lease principal payments - finance | | $ | — | | $ | |
Lease principal payments - operating | | | | | | |
Non-cash additions to ROU assets | |
| — | |
| |
Amortization of operating leases | |
| | |
| |
14
Other information about lease amounts recognized in the financial statements:
|
| Three Months Ended |
| | ||
|
| March 31, |
| | ||
|
| 2025 |
| 2024 |
| |
Weighted-average remaining lease term (years) – operating leases | |
| | | ||
Weighted-average remaining lease term (years) – finance leases | |
| | | ||
Weighted-average discount rate – operating leases | | | % | | % | |
Weighted-average discount rate – finance leases | | | % | | % | |
10. Intangibles
Intangible assets are comprised of the following items:
|
| Licenses & Trademarks | |
Balance, December 31, 2023 | | $ | |
Amortization | | | ( |
Balance, December 31, 2024 | | $ | |
Amortization | |
| ( |
Balance, March 31, 2025 | | $ | |
Amortization expense for intangibles was $
The Company estimates that amortization expense will be $
11. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities are comprised of the following items:
|
| March 31, | | December 31, | ||
|
| 2025 |
| 2024 | ||
Accounts payable – trade | | $ | | | $ | |
Accrued Expenses | |
| | |
| |
Taxes payable | |
| | |
| |
Contract liability | |
| | |
| |
Total accounts payable and accrued liabilities | | $ | | | $ | |
12. Long-Term Debt
During 2017 the Company signed a promissory note payable in the amount of $
15
On November 19, 2021, the Company signed a promissory note payable in the amount of $
On March 25, 2021, the Company entered into a credit agreement for a senior secured delayed draw term loan with an aggregate principal amount of up to $
On November 18, 2021, the Company and lenders amended the Credit Facility to provide for an additional loan of $
On January 31, 2022, Vireo Growth and certain of its subsidiaries, as borrowers (collectively, “Borrowers”), entered into a Third Amendment to the Credit Facility (the “Third Amendment”) providing for additional delayed draw term loans of up to $
On March 31, 2023, the Company executed a fifth amendment to its Credit Facility with its senior secured lender, Chicago Atlantic Admin, LLC (the "Agent"), an affiliate of Green Ivy Capital, and a group of lenders. The amended credit facility extends the maturity date on its Delayed Draw Loans to April 30, 2024, through the issuance of
On April 30, 2024, the Company executed a short-term extension of the maturity date on the Credit Facility with the Agent. The Credit Facility was extended until June 14, 2024, matching all other terms of the existing agreement. On June 14, 2024, another short-term extension was executed which extended the maturity date on the Credit Facility to July 31, 2024, matching all other terms of the existing agreement.
On May 21, 2024 the Company executed a $
On July 31, 2024, the Company executed a ninth amendment to the Company’s Credit Facility. The ninth amendment to the Company’s Credit Facility extends the maturity date on the Credit Facility loans to January 29, 2027, adjusts and extends the deadline with respect to the Company’s ongoing disposition of its New York operations through July 31, 2025, and amends certain financial measure definitions and covenants within the agreement. The Company issued
16
Unless otherwise specified, all deferred financing costs are treated as a contra-liability, to be netted against the outstanding loan balance and amortized over the remaining life of the loan. As of March 31, 2025, $
The following table shows a summary of the Company’s long-term debt:
|
| March 31, | | December 31, | ||
|
| 2025 |
| 2024 | ||
Beginning of year | | $ | | | $ | |
Proceeds | |
| — | |
| |
Principal repayments | | | ( | | | ( |
Deferred financing costs | | | ( | | | ( |
PIK interest | | | | | | |
Amortization of deferred financing costs | | | | | | |
End of year | |
| | |
| |
Less: current portion | |
| — | |
| |
Total long-term debt | | $ | | | $ | |
As of March 31, 2025, stated maturities of long-term debt were as follows:
2025 | | $ | — |
2026 | | | |
2027 | | | |
Total | | $ | |
13. Convertible Notes
On July 31, 2024, holders voluntarily converted convertible notes issued in 2023 into
On November 1, 2024, the Company entered into a Joinder and Tenth Amendment to Credit Agreement. The Tenth Amendment provides a convertible note facility (the “New Convertible Notes”) with a maximum principal amount of $
All deferred financing costs are treated as a contra-liability, to be netted against the outstanding loan balance and amortized over the remaining life of the loan. As of March 31, 2025, $
17
The following table shows a summary of the Company’s convertible debt:
|
| March 31, | | December 31, | ||
|
| 2025 |
| 2024 | ||
Beginning of period | | $ | | | $ | |
Proceeds | |
| — | |
| |
Deferred financing costs | | | — | | | ( |
PIK interest | | | — | | | |
Amortization of deferred financing costs | | | | | | |
Conversion | | | | | | ( |
End of period | | $ | | | $ | |
Less: current portion | |
| — | |
| — |
Total convertible debt | | $ | | | $ | |
14. Stockholders’ Equity
Shares
The Company’s certificate of incorporation authorized the Company to issue the following classes of shares with the following par value and voting rights as of March 31, 2025. The liquidation and dividend rights are identical among shares equally in the Company’s earnings and losses on an as converted basis.
|
| Par Value |
| Authorized |
| Voting Rights |
Subordinate Voting Share (“SVS”) |
| |
|
| ||
Multiple Voting Share (“MVS”) |
| |
|
|
Subordinate Voting Shares
Holders of Subordinate Voting Shares are entitled to
Multiple Voting Shares
Holders of Multiple Voting Shares are entitled to votes for each Multiple Voting Share held.
Multiple Voting Shares each have the restricted right to convert to Subordinate Voting Shares subject to adjustments for certain customary corporate changes.
Shares Issued
During the three months ended March 31, 2025,
During the three months ended March 31, 2025, employee stock options were exercised for
During the three months ended March 31, 2025, stock warrants were exercised for
During the three months ended March 31, 2025,
18
During the three months ended March 31, 2024,
15. Stock-Based Compensation
Stock Options
In January 2019, the Company adopted the 2019 Equity Incentive Plan under which the Company may grant incentive stock options, restricted shares, restricted share units, or other awards. Under the terms of the plan, a total of
Options granted under the equity incentive plan were valued using the Black-Scholes option pricing model with the following weighted average assumptions:
|
| Three Months Ended |
| ||
|
| March 31, | | March 31, |
|
|
| 2025 |
| 2024 |
|
Risk-Free Interest Rate | | | % | N/A | |
Weighted Average Exercise Price | $ | | $ | N/A | |
Weighted Average Stock Price | $ | | $ | N/A | |
Expected Life of Options (years) | | | N/A | | |
Expected Annualized Volatility | | | % | N/A | |
Grant Fair Value | $ | | $ | N/A | |
Expected Forfeiture Rate | | N/A |
| N/A | |
Expected Dividend Yield | | N/A |
| N/A | |
Stock option activity for the three months ended March 31, 2025, and for the year ended December 31, 2024, is presented below:
|
| |
| Weighted Average |
| Weighted Avg. | |
| | Number of Options | | Exercise Price | | Remaining Life | |
Balance, December 31, 2023 |
| | | $ | |
| |
Forfeitures |
| ( | |
| |
| — |
Exercised |
| ( | |
| |
| — |
Granted |
| | |
| |
| — |
Options Outstanding at December 31, 2024 |
| | | $ | |
| |
Forfeitures |
| ( | |
| |
| — |
Exercised |
| ( | |
| |
| — |
Granted |
| | |
| |
| — |
Options Outstanding at March 31, 2025 |
| | | $ | |
| |
| | | | | | | |
Options Exercisable at March 31, 2025 |
| | | $ | |
| |
During the three month periods ended March 31, 2025 and 2024, the Company recognized $
19
The Company does not estimate forfeiture rates when calculating compensation expense. The Company records forfeitures as they occur.
Warrants
Subordinate Voting Share (SVS) warrants entitle the holder to purchase
A summary of the warrants outstanding is as follows:
|
| Number of |
| Weighted Average |
| Weighted Average | |
SVS Warrants | | Warrants | | Exercise Price | | Remaining Life | |
Warrants outstanding at December 31, 2023 |
| | | $ | |
| |
Exercised | | ( | | | | | — |
Warrants outstanding at December 31, 2024 | | | | $ | |
| |
Forfeited | | ( | | | | | — |
Exercised | | ( | | | | | — |
Warrants outstanding at March 31, 2025 |
| | | $ | |
| |
| | | | | | | |
Warrants exercisable at December 31, 2024 |
| | | $ | |
| |
|
| Number of |
| Weighted Average |
| Weighted Average | |
SVS Warrants Denominated in C$ | | Warrants | | Exercise Price | | Remaining Life | |
Warrants outstanding at December 31, 2023 and 2024 |
| | | $ | |
| |
Warrants outstanding at March 31, 2025 | | | | $ | | | |
| | | | | | | |
Warrants exercisable at March 31, 2025 |
| | | $ | |
| |
Restricted Stock Units (“RSUs”)
The expense associated with RSUs is based on the closing share price of the Company’s subordinate voting shares on the business day immediately preceding the grant date, adjusted for the absence of future dividends and is amortized on a straight-line basis over the periods during which the restrictions lapse. The Company currently has RSUs that vest over a
A summary of RSUs is as follows:
|
| |
| Weighted Avg. | |
| | Number of Shares | | Fair Value | |
Balance, December 31, 2023 | | | | $ | |
Granted | | | | | |
Forfeitures | | ( | | | |
Balance, December 31, 2024 | | | | | |
Granted | | | | | |
Settled | | ( | | | |
Balance, March 31, 2025 | | | | | |
| | | | | |
Vested at March 31, 2025 | | | | $ | |
20
16. Commitments and Contingencies
Legal proceedings
Verano
On January 31, 2022, the Company entered into the Arrangement Agreement with Verano, pursuant to which Verano was to acquire all of the issued and outstanding shares of Vireo Growth pursuant to a Plan of Arrangement. Subject to the terms and conditions set forth in the Arrangement Agreement and the Plan of Arrangement, holders of Vireo Growth Shares would receive
On October 13, 2022, Vireo Growth received a notice of purported termination of the Arrangement Agreement (the “Notice”) from Verano. The Notice asserted certain breaches of the Arrangement Agreement, including claims the Company’s public filings and communications with respect to its business and ongoing operations were misleading and that the Company breached its representations to Verano under the Arrangement Agreement. Verano also claimed, as a result of such breaches, it is entitled to payment of a $
On October 21, 2022, Vireo Growth commenced an action in the Supreme Court of British Columbia against Verano after Verano wrongfully repudiated the Arrangement Agreement. The Company is seeking damages, costs and interest, based on Verano's breach of contract and of its duty of good faith and honest performance.
On November 14, 2022, Verano filed counterclaims against the Company for the termination fee and transaction expenses described above.
On July 31, 2023, the Company filed a requisition for adjournment of its application filed July 14, 2023, and set for hearing on July 31, 2023 to compel Verano’s compliance with document production based upon the Company’s belief that Verano was engaging in tactics to delay the litigation.
Throughout 2023, the Company served
On May 2, 2024, the Company filed the Summary Trial Application the Supreme Court of British Columbia for summary determination. The Company is seeking substantial damages, specifically US $
On June 19, 2024, Verano filed the Preliminary Suitability Application seeking orders dismissing the Summary Trial Application on the basis that certain issues in the action are not suitable for summary determination. The Preliminary Suitability Application is currently set for hearing on June 15 and 16, 2025.
Due to uncertainties inherent in litigation, it is not possible for Vireo Growth to predict the timing or final outcome of the legal proceedings against Verano or to determine the amount of damages, if any, that may be awarded. The damages sought will be significant and material given that Verano’s breach left the Company in a vulnerable position resulting in the Company being constrained in its ability to fund growth initiatives that were desirable and that its competitors were able to undertake, most notably in Minnesota and New York markets.
21
Lease commitments
The Company leases various facilities, under non-cancelable finance and operating leases, which expire at various dates through September 2041.
17. Selling, General and Administrative Expenses
Selling, general and administrative expenses are comprised of the following items:
| | | | | | |
| | Three Months Ended | ||||
| | 2025 |
| 2024 | ||
Salaries and benefits | | $ | | | $ | |
Professional fees | |
| | |
| |
Insurance expenses | |
| | |
| |
Advertising | | | | | | |
Other expenses | |
| | |
| |
Total | | $ | | | $ | |
18. Other Income (Expense)
The CARES Act provides an employee retention credit (“CARES Employee Retention credit”), which is a refundable tax credit against certain employment taxes of up to $5,000 per employee for eligible employers. The tax credit is equal to 50% of qualified wages paid to employees during a quarter, capped at $10,000 of qualified wages per employee through December 31, 2020. Additional relief provisions were passed by the United States government, which extended and slightly expanded the qualified wage caps on these credits through December 31, 2021. Based on these additional provisions, the tax credit is now equal to 70% of qualified wages paid to employees during a quarter, and the limit on qualified wages per employee has been increased to $10,000 of qualified wages per quarter. The Company applied for and received the tax credit under the CARES Act. During the three months ended March 31, 2025, the Company recorded and received $
On May 25, 2023, the Company and Grown Rogue International, Inc. (“Grown Rogue”) entered into a strategic agreement whereby Grown Rogue will support the Company in the optimization of its cannabis flower products. As part of this strategic agreement Grown Rogue granted the Company
22
19. Segment Reporting
The Company utilized the guidance in ASC 280 to determine how many reportable segments the Company has. We considered various attributes of the overall Company including but not limited to the nature of products and services, the nature of production processes, the types of customers, the regulatory environment, business geography, and the level at which the Chief Operating Decision Maker evaluates the performance and allocates resources. Given the similarities in the types of products, cannabis products in various form factors, the types of customers, retail and wholesale customers, the geography and regulatory environment in which sales are made, the United States, and the Chief Operating Decision Maker, the Chief Executive Officer, assesses performance and allocates resources at the consolidated level, the Company has determined that it only has
The Company’s Chief Executive Officer is the Company’s chief operating decision maker. The chief operating decision maker assesses performance for the cannabis segment and decides how to allocate resources based on operating profit and net income that also is reported on the income statement as consolidated net income. The measure of segment assets is reported on the balance sheet total as consolidated assets. The chief operating decision maker uses net income to evaluate income generated from segment assets in deciding the appropriate capital allocation strategy. A comparison of budgeted results to actual results is also used by the chief operating decision maker to assess business performance.
The Company’s cannabis segment cultivates, processes and distributes medical and adult-use cannabis products in a variety of formats, as well as related accessories in the United States. Revenue is derived from the sale of these products in the United States, and the assets used to produce these products are also held in the United States. The accounting policy for recording revenue, and all other accounting policies, are the same as those described in the summary of significant accounting policies footnote (Note 2).
20. Supplemental Cash Flow Information(1)
|
| March 31, | | March 31, | ||
|
| 2025 |
| 2024 | ||
Cash paid for interest | | $ | | | $ | |
Cash paid for income taxes | |
| — | |
| — |
Change in construction accrued expenses | |
| ( | |
| ( |
| (1) | For supplemental cash flow information related to leases, refer to Note 9. |
21. Financial Instruments
Credit risk
Credit risk is the risk of loss associated with counterparty’s inability to fulfill its payment obligations. The Company’s credit risk is primarily attributable to cash, and accounts receivable. A small portion of cash is held on hand, from which management believes the risk of loss is remote. Receivables relate primarily to wholesale sales. The Company does not have significant credit risk with respect to customers. The Company’s maximum credit risk exposure is equivalent to the carrying value of these instruments. The Company has been granted licenses pursuant to the laws of the states of Maryland, Minnesota, and New York with respect to cultivating, processing, and/or distributing marijuana. Presently, this industry is illegal under United States federal law. The Company has adhered, and intends to continue to adhere, strictly to the applicable state statutes in its operations.
Liquidity risk
The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As of March 31, 2025, the Company’s financial liabilities consist of accounts payable, accrued liabilities, debt,
23
convertible debt, liabilities held for sale, and uncertain tax liabilities. The Company manages liquidity risk by reviewing its capital requirements on an ongoing basis. Historically, the Company’s main source of funding has been additional funding from investors and debt issuances. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity or debt financing.
Legal Risk
Vireo Growth operates in the United States. The U.S. federal government regulates drugs through the Controlled Substances Act (21 U.S.C. § 811), which places controlled substances, including cannabis, in a schedule. Cannabis is classified as a Schedule I drug. Under U.S. federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the U.S., and a lack of accepted safety for the use of the drug under medical supervision. The U.S. Food and Drug Administration has not approved marijuana as a safe and effective drug for any indication. In the U.S. marijuana is largely regulated at the state level. State laws regulating cannabis are in direct conflict with the federal Controlled Substances Act, which makes cannabis use and possession federally illegal.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign currency rates. Given the Company’s financial transactions are rarely denominated in a foreign currency, there is minimal foreign currency risk exposure.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company currently carries variable interest-bearing debt subject to fluctuations in the United States Prime rate. A change of 100 basis points in interest rates during the three months ended March 31, 2025, would have resulted in a corresponding change in the statement of loss and comprehensive loss of $
22. Related Party Transactions
As of March 31, 2025, and December 31, 2024, there were $
Details surrounding the lending relationships between the Company and Chicago Atlantic, are described in Notes 12 and 13.
Our Chief Executive Officer, John Mazarakis, serves as a partner of Chicago Atlantic Group, LP, which is an affiliate of the Agent, our senior secured lender under the Credit Facility. Given his ownership interest in the Agent and its affiliates, Mr. Mazarakis has an approximate
23. Subsequent Events
None.
24
,
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with the financial information and the notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our outlook, plans and strategy for our business and potential financing, includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or “forward-looking information” within the meaning of Canadian securities laws. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “remain,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “would,” “should,” “potential,” “intention,” “strategy,” “strategic,” “approach,” “subject to,” “possible,” “pending,” “if,” or the negative or plural of these words or similar expressions or variations. Such forward-looking statements and forward-looking information are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements or forward-looking information. Factors that could cause or contribute to such differences include, but are not limited to, those identified in this Quarterly Report on Form 10-Q and those discussed in the section titled “Risk Factors” set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, as amended, and in our other SEC and Canadian public filings. Such forward-looking statements reflect our beliefs and opinions on the relevant subject based on information available to us as of the date of this report, and while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements. You should not rely upon forward-looking statements or forward-looking information as predictions of future events. Furthermore, such forward-looking statements or forward-looking information speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements or forward-looking information to reflect events or circumstances after the date of such statements.
Amounts are presented in United States dollars, except as otherwise indicated.
Overview of the Company
Vireo Growth is a cannabis company whose mission is to provide safe access, quality products and value to its customers while supporting its local communities through active participation and restorative justice programs. The Company is evolving with the industry and is in the midst of a transformation to being significantly more customer-centric across its operations, which include cultivation, manufacturing, wholesale and retail business lines. With our core operations strategically located in three limited-license markets through our state-licensed subsidiaries, we cultivate and manufacture cannabis products and distribute these products through our growing network of Green Goods® and other retail dispensaries we own or operate as well as to third-party dispensaries in the markets in which our subsidiaries hold operating licenses.
Operating Segment
We report our operating results in one business segment: the cultivation, production, and sale of cannabis. We cultivate, manufacture, and distribute cannabis products to third parties in wholesale markets and cultivate, manufacture, and sell cannabis products directly to approved patients and adult-use-customers in our owned or operated retail stores.
During the three months ended March 31, 2025, the Company had operating revenue in three states: Maryland, Minnesota, and New York. Retail revenues during the three months ended March 31, 2025 were derived from sales in 14 dispensaries throughout these three states. We had eight operational dispensaries in Minnesota, four in New York, and two in Maryland. Wholesale revenues were derived from sales of products to third parties in Maryland, Minnesota, and New York.
Merger Agreements with Deep Roots, Proper and Wholesome
On December 18, 2024, we entered into the Merger Agreements with respect the Mergers. Each Merger is an all-share transaction whereby, at the closing of each applicable transaction, (i) a new wholly-owned subsidiary of the
25
Company would merge with and into Deep Roots, (ii) a new wholly-owned subsidiary of the Company would merge with and into Wholesome, and (ii) the Proper entities would each merge with and into new wholly-owned subsidiaries of the Company. None of the Deep Roots Merger, the Proper Mergers or the Wholesome Merger is contingent on the completion of any of the other Mergers.
Three months ended March 31, 2025, Compared to Three months ended March 31, 2024
Revenue
We derived our revenue from cultivating, processing, and distributing cannabis products through our fourteen dispensaries in three states and our wholesale sales to third parties in three states. For the three months ended March 31, 2025, 78% of our revenue was generated from retail dispensaries and 22% from the wholesale business. For the three months ended March 31, 2024, 81% of our revenue was generated from retail business and 19% from wholesale business.
For the three months ended March 31, 2025, Minnesota operations contributed approximately 47% of revenues, New York contributed 9%, and Maryland contributed 44%. For the three months ended March 31, 2024, Minnesota operations contributed approximately 46% of revenues, New York contributed 12%, and Maryland contributed 42%.
Revenue for the three months ended March 31, 2025, was $24,540,641, an increase of $453,326 or 2% compared to revenue of $24,087,315 for the three-months ended March 31, 2024. The increase is primarily attributable to increased revenue contributions from the Maryland wholesale business partially offset by the decrease in New York revenues.
Retail revenue for the three months ended March 31, 2025, was $19,233,641 a decrease of $365,799 or 2% compared to retail revenue of $19,599,440 for the three months ended March 31, 2024, primarily due to decreased revenue contributions from the New York business.
Wholesale revenue for the three months ended March 31, 2025, was $5,307,000, an increase of $819,125 compared to wholesale revenue of $4,487,875 for the three months ended March 31, 2024. The increase was primarily due to increased revenue contributions from the Maryland business.
| | Three Months Ended | | | | | |
| ||||
| | March 31, | | | | | |
| ||||
|
| 2025 |
| 2024 |
| $ Change |
| % Change |
| |||
Retail: | | |
|
| |
|
| |
|
|
| |
MN | | $ | 11,209,204 | | $ | 10,977,089 | | $ | 232,115 |
| 2 | % |
NY | |
| 1,205,045 | |
| 1,821,269 | |
| (616,224) |
| (34) | % |
MD | | | 6,819,392 | | | 6,801,082 | | | 18,310 |
| 0 | % |
Total Retail | | $ | 19,233,641 | | $ | 19,599,440 | | $ | (365,799) |
| (2) | % |
| | | | | | | | | | | | |
Wholesale: | |
|
| |
|
| |
|
|
|
| |
MD | | $ | 4,089,238 | |
| 3,353,661 | |
| 735,577 |
| 22 | % |
NY | |
| 936,351 | |
| 1,134,214 | |
| (197,863) |
| (17) | % |
MN | |
| 281,411 | |
| — | |
| 281,411 |
| 100 | % |
Total Wholesale | | $ | 5,307,000 | | $ | 4,487,875 | | $ | 819,125 |
| 18 | % |
| | | | | | | | | | | | |
Total Revenue | | $ | 24,540,641 | | $ | 24,087,315 | | $ | 453,326 |
| 2 | % |
NY | | $ | (2,141,396) | | $ | (2,955,483) | | $ | 814,087 |
| (28) | % |
Total Revenue excluding NY | | $ | 22,399,245 | | $ | 21,131,832 | | $ | 1,267,413 |
| 6 | % |
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Cost of Sales and Gross Profit
Gross profit reflects total net revenue less cost of sales. Cost of sales represents the costs attributable to producing bulk materials and finished goods, which includes direct materials, labor, and certain indirect costs such as depreciation, insurance, utilities and valuation adjustments. Cannabis costs are affected by various state regulations that limit the sourcing and procurement of cannabis product, which may create fluctuations in gross profit over comparative periods as the regulatory environment changes.
Cost of sales are determined from costs related to the cultivation and processing of cannabis and cannabis-derived products as well as the cost of finished goods inventory purchased from third parties and valuation adjustments.
Cost of sales for the three months ended March 31, 2025, was $12,128,329, an increase of $285,441 compared to the three months ended March 31, 2024, of $11,842,888.
Gross profit for the three months ended March 31, 2025, was $12,412,312, representing a gross margin of 51%. This is compared to gross profit for the three months ended March 31, 2024, of $12,244,427 or a 51% gross margin. The increase in gross profit was driven by an increase in sales holding flat margins.
We believe our current production capacity has not been fully realized and we expect future operations to benefit from increased revenue growth reflective of higher demand, increased product output and new product development. However, we expect gradual price compression as markets mature, which could place downward pressure on our retail and wholesale gross margins.
Total Expenses
Total expenses other than the cost of sales consist of selling costs to support customer relationships, marketing, and branding activities. It also includes a significant investment in the corporate infrastructure required to support ongoing business.
Selling costs generally correlate to revenue. In the short-term as a percentage of sales, we expect selling costs to remain relatively flat. However, as anticipated positive regulatory developments in our core markets occur, we expect selling costs as a percentage of sales to decrease via growth in our retail and wholesale channels.
General and administrative expenses also include costs incurred at the corporate offices, primarily related to personnel costs, including salaries, benefits, and other professional service costs, as well as corporate insurance, legal and professional fees associated with being a publicly traded company. We expect general and administrative expenses as a percentage of sales to decrease as we realize revenue growth organically and through anticipated positive regulatory developments in our core markets.
Total expenses for the three months ended March 31, 2025, were $10,436,623 an increase of $2,951,640 compared to total expenses of $7,484,983 for the three months ended March 31, 2024. The increase in total expenses is primarily attributable to a increase in stock-based compensation expense and transaction costs associated with the Merger transactions.
Operating Income before Other Income (Expense) and Income Taxes
Operating income before other income (expense) and provision for income taxes for the three months ended March 31, 2025, was $1,975,689 a decrease of $2,783,755 compared to $4,759,444 for the three months ended March 31, 2024.
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Total Other Expense
Total other expense for the three months ended March 31, 2025, was $6,809,479, a decrease of $716,425 compared to other expense of $7,525,904 for the three months ended March 31, 2024. This change is primarily attributable to increased other income driven by the increasing value of the warrants we hold in Grown Rogue.
Provision for Income Taxes
Income tax expense is recognized based on the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year-end. For the three months ended March 31, 2025, tax expense totaled $1,675,000 compared to tax expense of $3,945,000 for the three months ended March 31, 2024.
NON-GAAP MEASURES
EBITDA is a non-GAAP measure that does not have a standardized definition under the generally accepted accounting principles in the United States of America (“GAAP”). Total Revenues excluding revenues from states where we have divested operations is also a non-GAAP measure that does not have a standardized definition under GAAP. The following information provides reconciliations of the supplemental non-GAAP financial measure EBITDA presented herein to the most directly comparable financial measures calculated and presented in accordance with GAAP. Reconciliations of the supplemental non-GAAP financial measure Total Revenues that excludes revenues from states where we have divested operations presented herein to the most directly comparable financial measures calculated in accordance with GAAP can be found in the tables above where the measure appears. We have provided these non-GAAP financial measures, which are not calculated or presented in accordance with GAAP, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. These supplemental non-GAAP financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believes that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. This supplemental non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented.
| | Three Months Ended | ||||
| | March 31, | ||||
|
| 2025 |
| 2024 | ||
Net income (loss) | | $ | (6,508,790) | | $ | (6,711,460) |
Interest expense, net | |
| 7,599,517 | |
| 8,722,637 |
Income taxes | |
| 1,675,000 | |
| 3,945,000 |
Depreciation & Amortization | |
| 257,134 | |
| 253,581 |
Depreciation and amortization included in cost of sales | |
| 570,040 | |
| 584,958 |
EBITDA (non-GAAP) | | $ | 3,592,901 | | $ | 6,794,716 |
Inventory adjustment | |
| 433,000 | |
| 304,000 |
Grown Rogue termination fee included in cost of goods sold | | | 266,667 | | | — |
Stock-based compensation | |
| 1,460,850 | |
| 179,789 |
Transaction related expenses | | | 1,244,696 | | | — |
Other income | |
| (790,038) | |
| (1,327,879) |
Severance expense | | | 379,916 | | | — |
Loss on disposal of assets | |
| — | |
| 120,856 |
Adjusted EBITDA (non-GAAP) | | $ | 6,587,992 | | $ | 6,071,482 |
Liquidity, Financing Activities During the Period, and Capital Resources
We are an early-stage growth company. We are generating cash from sales and deploying our capital reserves to acquire and develop assets capable of producing additional revenues and earnings over both the immediate and near term. Capital
28
reserves are for capital expenditures and improvements in existing facilities, product development and marketing, customer, supplier, investor, industry relations, and working capital.
Current management forecasts and related assumptions support the view that we can adequately manage the operational needs of the business.
Credit Facility
During 2017 the Company signed a promissory note payable in the amount of $1,010,000. The note bears interest at a rate of 15% per annum with interest payments required on a monthly basis. In 2019 the Company’s promissory note payable in the amount of $1,010,000 was modified to increase the amount payable to $1,110,000. The Company paid the note off in full during the year ended December 31, 2024.
On November 19, 2021, the Company signed a promissory note payable in the amount of $2,000,000 in connection with the acquisition of Charm City Medicus, LLC. The note bears an interest rate of 8% per annum with interest payments due on the last day of each calendar quarter. On November 19, 2023, the Company and lender amended the note. Per the terms of the amendment, the interest rate was modified to 15%, and the Company paid off $1,000,000 of principal. On November 27, 2024, the Company and lender executed the second amendment to the note. Per the terms of the amendment, the maturity date was extended, the interest rate was increased to 18%, and the Company repaid $100,000 in principal. The remaining principal balance of $900,000 was repaid in full during the three months ended March 31, 2025.
On March 25, 2021, the Company entered into a credit agreement for a senior secured delayed draw term loan with an aggregate principal amount of up to $46,000,000 (the “Credit Facility”), and executed a draw of $26,000,000 in principal. The unpaid principal amounts outstanding under the Credit Facility bear interest at a rate of (a) the U.S. prime rate plus 10.375%, payable monthly in cash, and (b) 2.75% per annum paid in kind (“PIK”) interest payable monthly. In connection with the Credit Facility, the Company also pays a monthly credit monitoring fee in the amount of $130,400 which is included in interest expense in the consolidated statements of loss and comprehensive loss for the three months ended March 31, 2025 and 2024.
On November 18, 2021, the Company and lenders amended the Credit Facility to provide for an additional loan of $4,200,000 with a cash interest rate of 15% per annum and PIK interest of 2% per annum and a maturity date of November 29, 2024. Obligations under the Credit Facility are secured by substantially all the assets of the Company.
On January 31, 2022, Vireo Growth and certain of its subsidiaries, as borrowers (collectively, “Borrowers”), entered into a Third Amendment to the Credit Facility (the “Third Amendment”) providing for additional delayed draw term loans of up to $55 million (the “Delayed Draw Loans”). The cash interest rate on the Delayed Draw Loans under the Third Amendment is equal to the U.S. prime rate plus 10.375%, with a minimum required rate of 13.375% per annum, in addition to PIK interest of 2.75% per annum.
On March 31, 2023, the Company executed a fifth amendment to its Credit Facility with its senior secured lender, Chicago Atlantic Admin, LLC (the "Agent"), an affiliate of Green Ivy Capital, and a group of lenders. The amended credit facility extends the maturity date on its Delayed Draw Loans to April 30, 2024, through the issuance of 15,000,000 Subordinate Voting Shares in lieu of a cash extension fee. These 15,000,000 shares were valued at $1,407,903 using a fair value per share of $0.094 and considered a deferred financing cost. The fair value per share reflects a 22% discount to the market price at the time of issuance to account for the four-month trading lock-up imposed on the shares. The amendment also provides the Company with reduced cash outlays by eliminating required amortization of the loan, and requires the Company to divest certain assets to improve its liquidity position and financial performance. The Company has the potential to extend the maturity date on its Delayed Draw Loans up to January 31, 2026 with the satisfaction of certain financial performance-related conditions.
On April 30, 2024, the Company executed a short-term extension of the maturity date on the Credit Facility with the Agent. The Credit Facility was extended until June 14, 2024, matching all other terms of the existing agreement. On June 14, 2024, another short-term extension was executed which extended the maturity date on the Credit Facility to July 31, 2024, matching all other terms of the existing agreement.
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On May 21, 2024 the Company executed a $1,200,000 term loan with the Agent to assist with the purchase of a site for a new dispensary location. The loan bears an interest rate of 12.0% and is due on May 28, 2027. Financing costs of $68,600 were incurred in connection with the closing of the loan.
On July 31, 2024, the Company executed a ninth amendment to the Company’s Credit Facility. The ninth amendment to the Company’s Credit Facility extends the maturity date on the Credit Facility loans to January 29, 2027, adjusts and extends the deadline with respect to the Company’s ongoing disposition of its New York operations through July 31, 2025, and amends certain financial measure definitions and covenants within the agreement. The Company issued 12,500,000 Subordinate Voting Shares to the lenders in consideration for the credit facility amendment. These 12,500,000 shares were valued at $5,387,500 using a fair value per share of $0.431 and considered a deferred financing cost.
Unless otherwise specified, all deferred financing costs are treated as a contra-liability, to be netted against the outstanding loan balance and amortized over the remaining life of the loan. As of March 31, 2025, $5,704,752 (December 31, 2024 - $6,576,985) of deferred financing costs remain unamortized.
Convertible Notes
On July 31, 2024, the holders voluntarily converted convertible notes issued in 2023 into 73,016,061 Subordinate Voting Shares of the Company.
On November 1, 2024, the Company entered into a Joinder and Tenth Amendment to Credit Agreement. The Tenth Amendment provides a convertible note facility (the “New Convertible Notes”) with a maximum principal amount of $10,000,000. The New Convertible Notes mature November 1, 2027, have a cash interest rate of 12.0 percent per year, are convertible into that number of the Company’s subordinate voting shares determined by dividing the outstanding principal amount plus all accrued but unpaid interest on the Convertible Notes on the date of such conversion by a conversion price of $0.625. The Company incurred $145,717 in financing costs in connection with the signing of the Tenth Amendment.
All deferred financing costs are treated as a contra-liability, to be netted against the outstanding loan balance and amortized over the remaining life of the loan. As of March 31, 2025, $125,472 (December 31, 2024 - $137,622) of deferred financing costs remain unamortized.
Cash Used in Operating Activities
Net cash used in operating activities was $3.3 million for the three months ended March 31, 2025, an increase of $2.1 million as compared to $1.2 million for the three months ended March 31, 2024. The increase is primarily attributed to less favorable changes in working capital, particularly assets held for sale, and increased transaction costs associated with the Merger transactions.
Cash Used in Investing Activities
Net cash used in investing activities was $1.1 million for the three months ended March 31, 2025, an increase of $0.1 million compared to net cash used in investing activities of $1.0 million for the three months ended March 31, 2024. The increase is primarily attributable to increased property, plant, and equipment additions relative to the prior year.
Cash Used in Financing Activities
Net cash used in financing activities was $0.9 million for the three months ended March 31, 2025, a change of $0.2 million as compared to $1.1 million used in financing activities in the three months ended March 31, 2024. The change was principally due to decreased debt principal payments during the three months ended March 31, 2025 relative to the prior year quarter.
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Lease Transactions
As of March 31, 2025, we have entered into lease agreements for the use of buildings used in cultivation, production and/or sales of cannabis products in Maryland, Minnesota, and New York.
The lease agreements for all of the retail space used for our dispensary operations are with third-party landlords and remaining duration ranges from 1 to 6 years. These agreements are short-term facility leases that require us to make monthly rent payments as well as funding common area costs, utilities and maintenance. In some cases, we have received tenant improvement funds to assist in the buildout of the space to meet our operating needs. As of March 31, 2025, we operated 14 retail locations secured under these agreements.
We have also entered into sale and leaseback arrangements for our cultivation and processing facilities in Minnesota and New York with a special-purpose real estate investment trust. These leases are long-term agreements that provide, among other things, funds to make certain improvements to the property that will significantly enhance production capacity and operational efficiency of the facility.
Excluding any contracts under one year in duration, the future minimum lease payments (principal and interest) on all our leases are as follows:
| | | | | | | | ||
| | Operating Leases | | Finance Leases | | | | ||
|
| December 31, 2024 |
| December 31, 2024 |
| Total | |||
2024 | | $ | 2,242,480 | | $ | 10,352,595 | | $ | 12,595,075 |
2025 | |
| 2,727,346 | |
| 14,183,661 | |
| 16,911,007 |
2026 | |
| 2,474,144 | |
| 14,606,527 | |
| 17,080,671 |
2027 | |
| 2,254,049 | |
| 15,042,128 | |
| 17,296,177 |
2028 | |
| 1,300,615 | |
| 15,490,852 | |
| 16,791,467 |
Thereafter | |
| 6,523,900 | |
| 203,082,066 | |
| 209,605,966 |
Total minimum lease payments | | $ | 17,522,534 | | $ | 272,757,829 | | $ | 290,280,363 |
Less discount to net present value | | | (5,982,885) | |
| (177,360,043) | |
| (183,342,928) |
Less liabilities held for sale | | | (2,558,483) | | | (86,792,673) | | | (89,351,156) |
Present value of lease liability | | $ | 8,981,166 | | $ | 8,605,113 | | $ | 17,586,279 |
ADDITIONAL INFORMATION
Outstanding Share Data
As of May 7, 2025, we had 367,292,288 shares issued and outstanding on an as converted basis, consisting of the following:
(a) Subordinate Voting Shares
339,475,288 shares issued and outstanding. The holders of Subordinate Voting Shares are entitled to one vote per share at all shareholder meetings. The Company is authorized to issue an unlimited number of no-par value Subordinate Voting Shares.
(b) Multiple Voting Shares
278,170 shares issued and outstanding. The holders of Multiple Voting Shares are entitled to one hundred votes per share at all shareholder meetings. Each Multiple Voting Share is exchangeable for one hundred subordinate voting shares. The Company is authorized to issue an unlimited number of Multiple Voting Shares.
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Options, Warrants, and Convertible Promissory Notes
As of March 31, 2025, we had 30,731,300 employee stock options outstanding, 71,156,247 RSUs outstanding, 3,037,649 Subordinate Voting Share compensation warrants denominated in C$ related to financing activities, and 15,503,937 Subordinate Voting Share compensation warrants outstanding.
Off-Balance Sheet Arrangements
As of the date of this filing, we do not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on our results of operations or financial condition, including, and without limitation, such considerations as liquidity and capital resources.
Critical Accounting Policies and Estimates
There have been no material changes to our critical accounting policies and estimates from the information provided in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our Annual Report on Form 10-K for the year ended December 31, 2024, as amended.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Quantitative and qualitative disclosures about market risk have been omitted as permitted under rules applicable to smaller reporting companies.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the appropriate time periods, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure. We, under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2025, and, based on that evaluation, have concluded that the design and operation of our disclosure controls and procedures were effective as of such date.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
We are involved in various regulatory issues, claims and lawsuits arising in the ordinary course of business, none of which, in the opinion of management, is expected to have a material, adverse effect on our results of operations or financial condition. The information contained in Part I, Item 1. Financial Statement and Supplementary Date - Note 16, "Commitments and Contingencies," under the heading "Legal Proceedings," is incorporated by reference into this Item 1.
32
Item 1A. Risk Factors
Not applicable.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended March 31, 2025, 7,201 Multiple Voting Shares were converted into 720,100 Subordinate Voting Shares for no additional consideration pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”).
During the three months ended March 31, 2025, stock warrants were exercised for 265,626 Subordinate Voting Shares pursuant to Section 4 (a)(2) of the Securities Act. Proceeds from these transactions were $38,516.
Except as noted above or as previously reported, there were no unregistered sales of equity securities or repurchase of equity securities occurred during the three months ended March 31, 2025.
Item 5. Other Information
Insider Trading Arrangements
During the three months ended March 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended)
33
Item 6. Exhibits
Exhibit |
| Description of Exhibit |
| ||
2.2 | | |
| | |
2.3 | | |
| | |
2.4 | | |
| | |
2.5 | | |
| | |
2.6 | | |
| | |
2.7 | | |
| | |
10.88 | | |
| | |
10.89 | | |
| | |
10.90 | | |
| | |
31.1 | | Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer |
| ||
31.2 | | Rule 13a-14(a)/15d-14(a) certification of Chief Financial Officer |
| | |
32.1 | | Section 1350 certification, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| ||
101 | | Includes the following financial and related information from Vireo Growth’s Quarterly Report on Form 10-Q as of and for the quarter ended March 31, 2025, formatted in Inline Extensible Business Reporting Language (iXBRL): (1) the Consolidated Balance Sheets, (2) the Consolidated Statements of Income, (3) the Consolidated Statements of Comprehensive Income, (4) the Consolidated Statements of Changes in Stockholders’ Equity, (5) the Consolidated Statements of Cash Flows, and (6) Notes to Consolidated Financial Statements. |
| | |
104 | | The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL. |
34
SIGNATURES
Pursuant to requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| VIREO GROWTH INC. (Registrant) | ||
| | | |
Date: May 9, 2025 | By: | /s/ John Mazarakis | |
| | Name: | John Mazarakis |
| | Title: | Chief Executive Officer and Co-Executive Chairman (principal executive officer) |
| | | |
Date: May 9, 2025 | By: | /s/ Tyson Macdonald | |
| | Name: | Tyson Macdonald |
| | Title: | Chief Financial Officer (principal financial officer) |
Date: May 9, 2025 | By: | /s/ Joseph Duxbury | |
| | Name: | Joseph Duxbury |
| | Title: | Chief Accounting Officer (principal accounting officer) |
35
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, John Mazarakis, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Vireo Growth Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 9, 2025
By: /s/ John Mazarakis
John Mazarakis
Chief Executive Officer
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Tyson Macdonald, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Vireo Growth Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 9, 2025
By:/s/ Tyson Macdonald
Tyson Macdonald
Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the report of Vireo Growth Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ John Mazarakis
John Mazarakis
Title: Chief Executive Officer
Date: May 9, 2025
/s/ Tyson Macdonald |
Tyson Macdonald |
Title: Chief Financial Officer |
Date: May 9, 2025 |