10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended June 30, 2019

[  ] 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 0-54433

MARIMED INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	27-4672745
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

10 Oceana Way

Norwood, MA 02062

(Address of Principal Executive Offices)

617-795-5140

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None. 

Title of each class	Ticker symbol(s)	Name of each exchange on which registered
Not Applicable.	Not Applicable.	Not Applicable.

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. Yes [X] No [  ]

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [  ]

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 [X]
Non-accelerated filer [  ]	Smaller reporting company [X]
	Emerging growth company [X]

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 [  ] No [X]

As of August 9, 2019, 218,045,067 shares of the Issuer’s Common Stock were outstanding.

MariMed Inc.

Table of Contents

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of June 30, 2019 (Unaudited) and December 31, 2018	3
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2019 and 2018 (Unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2019 and 2018 (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018 (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	39
Item 4.	Controls and Procedures	39
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Signatures		41

2

MariMed Inc.

Condensed Consolidated Balance Sheets

	June 30,			December 31,
	2019			2018
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	3,530,213		$	4,104,315
Accounts receivable, net		8,662,045			5,376,966
Accounts receivable from related party, net		25,177,845			-
Due from third parties		2,862,681			3,860,377
Deferred rents receivable		2,047,914			2,096,384
Notes receivable, current portion		821,524			51,462
Inventory		4,783,596			90,460
Other current assets		170,189			128,552
Total current assets		48,056,007			15,708,516
Property and equipment, net		37,603,881			34,099,864
Intangibles		3,423,751			185,000
Investments		35,662,106			1,672,163
Notes receivable, less current portion		2,470,867			1,092,376
Debentures receivable		-			30,000,000
Right-of-use assets under operating leases		6,042,970			-
Right-of-use assets under finance leases		70,989			-
Due from related parties		-			119,781
Other assets		345,905			82,924
Total assets	$	133,676,476		$	82,960,624
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	2,169,363		$	3,915,430
Accrued expenses		3,920,742			1,588,368
Deferred rents payable		-			105,901
Notes payable		20,844,176			3,877,701
Mortgages payable, current portion		238,386			188,231
Operating lease liabilities, current portion		647,379			-
Finance lease liabilities, current portion		23,112			-
Due to related parties		77,157			276,311
Unearned revenue from related party		3,162,967			-
Total current liabilities		31,083,282			9,951,942
Mortgages payable, less current portion		7,219,413			7,348,581
Debentures payable		6,736,429			3,557,440
Operating lease liabilities, less current portion		5,662,845			-
Finance lease liabilities, less current portion		48,874			-
Other liabilities		100,200			338,200
Total liabilities		50,851,043			21,196,163
Stockholders’ equity:
Series A convertible preferred stock, $0.001 par value; 50,000,000 shares authorized at June 30, 2019 and December 31, 2018; no shares issued or outstanding at June 30, 2019 and December 31, 2018		-			-
Common stock, $0.001 par value; 500,000,000 shares authorized at June 30, 2019 and December 31, 2018; 215,591,103 and 211,013,043 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively		215,591			211,013
Common stock subscribed but not issued; 752,260 and 97,136 shares at June 30, 2019 and December 31, 2018, respectively		2,080,000			169,123
Additional paid-in capital		100,621,830			87,180,165
Accumulated deficit		(20,921,933	)		(25,575,808	)
Noncontrolling interests		829,945			(220,032	)
Total stockholders’ equity		82,825,433			61,764,461
Total liabilities and stockholders’ equity	$	133,676,476		$	82,960,624

See accompanying notes to condensed consolidated financial statements.

3

MariMed Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Revenues	$	3,657,798		$	2,937,325		$	7,173,614		$	5,020,275
Revenues from related party		22,014,878			-			22,014,878			-
Total revenues		25,672,676			2,937,325			29,188,492			5,020,275
Cost of revenues		16,745,553			913,357			18,000,343			1,802,226
Gross profit		8,927,123			2,023,968			11,188,149			3,218,049
Operating expenses:
Personnel		825,130			284,886			1,498,504			469,557
Marketing and promotion		76,060			77,943			194,959			129,704
General and administrative		2,676,454			1,220,103			4,357,476			2,486,798
Total operating expenses		3,577,644			1,582,932			6,050,939			3,086,059
Operating income (loss)		5,349,479			441,036			5,137,210			131,990
Non-operating income (expenses):
Interest expense		(2,619,460	)		(286,258	)		(4,560,007	)		(602,519	)
Interest income		64,345			19,072			346,754			38,906
Loss on debt settlements		-			(563,119	)		-			(1,776,960	)
Equity in earnings of investments		(45,465	)		-			1,912,942			-
Other		2,948,917			(3,600	)		2,948,917			(3,600	)
Total non-operating income (expenses)		348,337			(833,905	)		648,606			(2,344,173	)
Income (loss) before income taxes		5,697,816			(392,869	)		5,785,816			(2,212,183	)
Provision for income taxes		974,584			(189	)		984,595			12,407
Net income (loss)	$	4,723,232		$	(392,680	)	$	4,801,221		$	(2,224,590	)
Net income (loss) attributable to noncontrolling interests		46,147			69,287			147,346			132,520
Net income (loss) attributable to MariMed Inc.	$	4,677,085		$	(461,967	)	$	4,653,875		$	(2,357,110	)
Net income (loss) per share
Basic	$	0.022		$	(0.002	)	$	0.022		$	(0.013	)
Diluted	$	0.020		$	(0.002	)	$	0.020		$	(0.013	)
Weighted average common shares outstanding
Basic		213,319,149			186,645,833			211,510,986			182,746,858
Diluted		232,828,964			186,645,833			231,020,801			182,746,858

See accompanying notes to condensed consolidated financial statements.

4

MariMed Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

	Series A Convertible Preferred Stock Subscribed But Not Issued						Common Stock				Common Stock Subscribed But Not Issued						Additional Paid-In		Accumulated			Non-Controlling			Total Stockholders’
	Shares			Amount			Shares		Par Value		Shares			Amount			Capital		Deficit			Interests			Equity
Balances at December 31, 2017		500,000		$	500			176,850,331	$	176,850		1,000,000		$	370,000		$	22,256,060	$	(11,971,740	)	$	175,490		$	11,007,160
Sales of common stock		-			-			10,111,578		10,112		-			-			8,450,891		-			-			8,461,003
Conversion of Series A preferred stock		(500,000	)		(500	)		970,988		971		-			-			33,573		-			-			34,044
Issuance of subscribed shares		-			-			1,000,000		1,000		(1,000,000	)		(370,000	)		369,000		-			-			-
iRollie acquisition		-			-			-		-		264,317			600,000			-		-			-			600,000
Settlement of obligations		-			-			1,313,901		1,314		2,010,922			1,971,600			1,471,846		-			-			3,444,760
Exercise of options		-			-			300,000		300		-			-			38,700		-			-			39,000
Exercise of warrants		-			-			1,235,768		1,236		32,083			12,833			105,383		-			-			119,452
Amortization of option and warrant issuances		-			-			-		-		-			-			6,863,609		-			-			6,863,609
Retirement of promissory notes		-			-			1,679,486		1,679		-			-			2,091,524		-			-			2,093,203
Distributions		-			-			-		-		-			-			-		-			(325,824	)		(325,824	)
Net income (loss)		-			-			-		-		-			-			-		(2,357,110	)		132,520			(2,224,590	)
Balances at June 30, 2018		-		$	-			193,462,052	$	193,462		2,307,322		$	2,584,433		$	41,680,586	$	(14,328,850	)	$	(17,814	)	$	30,111,815

	Series A Convertible Preferred Stock Subscribed But Not Issued				Common Stock				Common Stock Subscribed But Not Issued						Additional Paid-In			Accumulated			Non-Controlling			Total Stockholders’
	Shares		Amount		Shares		Par Value		Shares			Amount			Capital			Deficit			Interests			Equity
Balances at December 31, 2018		-	$	-		211,013,043	$	211,013		97,136		$	169,123		$	87,180,165		$	(25,575,808	)	$	(220,032	)	$	61,764,461
Sales of common stock		-		-		799,995		800		-			-			2,599,200			-			-			2,600,000
Issuance of subscribed shares		-		-		97,136		97		(97,136	)		(169,123	)		169,026			-			-			-
MediTaurus acquisition		-		-		-		-		752,260			2,080,000			-			-			1,200,000			3,280,000
Terrace investment		-		-		500,000		500		-			-			1,589,500			-			-			1,590,000
Harvest payment		-		-		1,000,000		1,000		-			-			(1,000	)		-			-			-
Exercise of options		-		-		358,446		359		-			-			12,641			-			-			13,000
Exercise of warrants		-		-		666,104		666		-			-			601,776			-			-			602,442
Amortization of option and warrant issuances		-		-		-		-		-			-			2,458,941			-			-			2,458,941
Beneficial conversion feature on debentures		-		-		-		-		-			-			3,384,980			-			-			3,384,980
Conversion of debentures payable		-		-		1,156,379		1,156		-			-			2,626,601			-			-			2,627,754
Distributions		-		-		-		-		-			-			-			-			(297,369	)		(297,369	)
Net income (loss)		-		-		-		-		-			-			-			4,653,875			147,346			4,801,221
Balances at June 30, 2019		-	$	-		215,591,103	$	215,591		752,260		$	2,080,000		$	100,621,830		$	(20,921,933	)	$	829,945		$	82,825,433

The above statements do not show a column for Series A convertible stock as the balances are zero and there is no activity in the periods presented. See accompanying notes to condensed consolidated financial statements.

5

MariMed Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended June 30,
	2019			2018
Cash flows from operating activities:
Net income (loss) attributable to MariMed Inc.	$	4,653,875		$	(2,357,110	)
Net income (loss) attributable to noncontrolling interests		147,346			132,520
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation		171,125			253,713
Amortization of intangibles		107,917			-
Amortization of stock option and warrant issuances		1,943,976			977,808
Amortization of beneficial conversion feature		2,281,687			-
Amortization of original issue discount		28,920			-
Equity issued to settle obligations		-			3,444,760
Loss on preferred stock conversions		-			34,044
Loss on debt settlements		-			818,204
Equity in earnings of investments		(1,912,941	)		-
Changes in operating assets and liabilities:
Accounts receivable, net		(3,279,717	)		(1,666,587	)
Accounts receivable from related party, net		(25,177,845	)		-
Due from third parties		141,783			(1,177,734	)
Deferred rents receivable		48,470			(496,908	)
Inventory		(4,173,386	)		-
Other current assets		(41,637	)		(44,870	)
Other assets		(262,981	)		22,139
Accounts payable		(1,746,067	)		2,029
Accrued expenses		1,652,508			246,810
Deferred rents payable		(105,901	)		-
Operating lease payments		267,253			-
Finance lease interest payments		(1,824	)		-
Unearned revenue from related party		3,162,967			-
Other liabilities		(238,000	)		-
Net cash provided by (used in) operating activities		(22,332,472	)		188,818
Cash flows from investing activities:
Purchase of property and equipment		(3,668,398	)		(5,663,585	)
MediTaurus acquisition		(171,003	)		-
Investment in notes receivable		(1,550,000	)		(100,000	)
Interest on notes receivable		117,006			22,125
Due from related parties		119,781			-
Net cash used in investing activities		(5,152,614	)		(5,741,460	)
Cash flows from financing activities:
Issuance of common stock		2,600,000			8,461,003
Issuance of promissory notes		17,000,000			-
Payments on promissory notes		-			(700,000	)
Proceeds from issuance of debentures		7,275,000			-
Proceeds from mortgages		-			1,998,360
Payments on mortgages		(79,012	)		(56,452	)
Exercise of stock options		13,000			39,000
Exercise of warrants		602,442			119,451
Due to related parties		(199,154	)		(196,000	)
Finance lease principal payments		(3,923	)
Distributions		(297,369	)		(325,825	)
Net cash provided by financing activities		26,910,984			9,339,537
Net change to cash and cash equivalents		(574,102	)		3,786,895
Cash and cash equivalents at beginning of period		4,104,315			1,290,231
Cash and cash equivalents at end of period	$	3,530,213		$	5,077,126
Supplemental disclosure of cash flow information:
Cash paid for interest	$	787,028		$	553,206
Cash paid for taxes	$	10,011		$	12,596
Non-cash activities:
Conversion of debentures receivable	$	30,000,000		$	-
Operating lease right-of-use assets and liabilities	$	6,981,772		$	-
Finance lease right-of-use assets and liabilities	$	77,773		$	-
Conversions of debentures payable	$	2,626,759		$	-
Beneficial conversion feature on debentures payable	$	3,384,980		$	-
Discount on debentures payable	$	928,724		$	-
Discount on promissory notes	$	600,621		$	-
MediTaurus acquisition	$	2,500,000		$	-
Terrace investment	$	1,590,000		$	-
Harvest payment	$	1,000		$	-
Conversion of notes receivable to investment	$	257,687		$	-
Issuance of common stock associated with subscriptions	$	169,123		$	-
Conversion of advances to notes receivable	$	855,913		$	-
Equity issued to settle debt	$	-		$	1,275,000

See accompanying notes to condensed consolidated financial statements.

6

MariMed Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

MariMed Inc. (the “Company”), a Delaware corporation, is a multi-state organization in the emerging legal cannabis and hemp industries. During 2018, the Company made a strategic decision to transition from a management and advisory firm that provides cannabis licensing, operational consulting and real estate services, to a direct owner of cannabis licenses and operator of seed-to-sale operations. Further, in recognition of the growing demand for hemp-derived cannabidiol (“CBD”), the Company made a strategic investment in GenCanna Global Inc., one of the largest industrial hemp growers in the United States.

To date, the Company’s cannabis business has secured, on behalf of itself and its clients, 12 cannabis licenses across six states—two in Delaware, two in Illinois, one in Nevada, one in Rhode Island, three in Maryland and three in Massachusetts. The Company has developed in excess of 300,000 square feet of state-of-the-art, regulatory-compliant facilities for the cultivation, production, and dispensing of legal cannabis and cannabis-infused products, located in all of the aforementioned states, except Rhode Island. Along with operational oversight of these facilities, the Company provides its clients with license procurement, business development, human resources, accounting, and other corporate and administrative services.

The Company’s plan is to seek to acquire the ownership of all of its cannabis clients who currently lease the majority of the Company’s facilities, and ultimately consolidate these entities under the MariMed banner. The Company has started the consolidation process which is at various stages of completion. For example, in Massachusetts, the Company successfully converted its cannabis-licensed client from a non-profit entity to a for-profit corporation with the Company as the sole shareholder, as described in further detail below. In every state, the Company’s acquisition efforts will be subject to that particular state’s laws governing cannabis license ownership, and accordingly, there is no assurance that the Company will be successful in fully implementing its plan.

Additionally, the Company licenses its own brands of precision-dosed, cannabis- and hemp-infused products to treat specific medical conditions or to achieve a certain effect. These products are licensed under the brand names Kalm Fusion™, Nature’s Heritage™, Betty’s Eddies™, and Florance™. The Company also has exclusive sublicensing rights in certain states to distribute Lucid Mood™ vaporizer pens, DabTabs™ vaporization tablets infused with cannabis concentrates, the Binske^® line of cannabis products made from premium artisan ingredients, and the clinically tested medicinal cannabis strains developed in Israel by Tikun Olam™.

The Company’s stock is quoted on the OTCQB market under the ticker symbol MRMD.

The Company was incorporated in January 2011 under the name Worlds Online Inc. Initially, the Company developed and managed online virtual worlds. By early 2014, this line of business effectively ceased operating, and the Company pivoted into the legal cannabis industry.

Summary Transaction Timeline

The following is a chronological summary of the major transactions undertaken by the Company.

These transactions are disclosed in further detail in Note 3 – Acquisitions, in Note 4 – Investments, and Note 8 – Notes Receivable.

May 2014 – The Company, through its subsidiary MariMed Advisors Inc., acquired Sigal Consulting LLC, a company operating in the medical cannabis industry. This transaction was accounted for as a purchase acquisition where the Company was both the legal and accounting acquirer.

October 2017 – The Company acquired the intellectual property, formulations, recipes, proprietary equipment, knowhow, and other certain assets of Betty’s Eddies™, a brand of cannabis-infused fruit chews.

April 2018 – The Company acquired iRollie LLC, a manufacturer of branded cannabis products and accessories for consumers, and custom product and packaging for companies in the cannabis industry.

7

August 2018 – The Company exchanged cash and stock to acquire a 23% ownership interest in an entity that developed Sprout, a customer relationship management and marketing platform for companies in the cannabis industry.

August to October 2018 – The Company loaned $300,000 to Healer LLC, an entity that provides cannabis education, dosage programs, and products developed by Dr. Dustin Sulak, an integrative medicine physician and nationally renowned cannabis practitioner. In 2019, the Company loaned Healer an additional $500,000.

October 2018 – The Company entered into a purchase agreement to acquire its two cannabis-licensed clients, KPG of Anna LLC and KPG of Harrisburg LLC, currently operating medical marijuana dispensaries in the state of Illinois. The Company has not yet received legislative approval – required for all ownership changes of cannabis licensees – and therefore these entities were not consolidated into the Company’s financial statements as of June 30, 2019. The Company anticipates approval will be obtained, and the transaction consummated, by the end of 2019.

October 2018 – The Company’s cannabis-licensed client with cultivation and dispensary operations in Massachusetts, ARL Healthcare Inc. (“ARL”), filed a plan of entity conversion with the state to convert from a non-profit entity to a for-profit corporation, with the Company as the sole shareholder of the for-profit corporation. On November 30, 2018, the conversion plan was approved by the Massachusetts Secretary of State, and effective December 1, 2018, ARL was consolidated into the Company as a wholly-owned subsidiary.

November 2018 – The Company issued a letter of intent to acquire The Harvest Foundation LLC, its cannabis-licensed client with cultivation operations in the state of Nevada. The parties entered into a purchase agreement governing the transaction in August 2019. The Company has not yet received state approval for the acquisition, and therefore this entity was not consolidated into the Company’s financial statements as of June 30, 2019. The Company anticipates approval will be obtained, and the transaction consummated, by the end of 2019.

December 2018 – The Company entered into a memorandum of understanding to acquire Kind Therapeutics USA LLC, its cannabis-licensed client in the state of Maryland. The parties expect the merger agreement to be finalized, and the transaction approved by the state in the early part of 2020.

January 2019 – The Company entered into an agreement with Maryland Health & Wellness Center Inc. (“MHWC”), an entity that has been pre-approved for a cannabis dispensing license, to provide MHWC with a construction loan in connection with the buildout of MHWC’s proposed dispensary. Upon the two-year anniversary of final state approval of MHWC’s dispensing license, the Company shall have the right, subject to state approval, to convert the promissory note underlying the construction loan into a 20% ownership interest of MHWC.

January 2019 – The Company converted a note receivable from Chooze Corp., an entity that develops environmentally conscious CBD- and THC-infused products, into a 2.7% ownership interest in the entity.

January 2019 – The Company established MariMed Hemp Inc., a wholly-owned subsidiary to develop, market, and distribute hemp-based CBD brands and products, and to provide hemp producers with bulk quantities of hemp genetics and biomass (“MariMed Hemp”).

February 2019 – The Company converted its $30 million purchase of subordinated secured convertible debentures of GenCanna Global Inc., a producer and distributor of industrial hemp, CBD formulations, hemp genetics, and hemp products (“GenCanna”), into a 33.5% ownership interest in GenCanna.

May 2019 – The Company extended loans totaling $750,000 to Atalo Holdings Inc., an agriculture and biotechnology firm specializing in research, development, and production of industrial hemp and hemp-based CBD products.

May 2019 – The Company issued 500,000 shares of its common stock to purchase an 8.95% interest in Terrace Inc., a Canadian entity that develops and acquires international cannabis assets.

June 2019 – the Company entered into a purchase agreement to acquire MediTaurus LLC, a company established by Dr. Jokubas Ziburkas, a PhD in neuroscience and a leading authority on hemp-based CBD and the endocannabinoid system. Meditaurus operates in the United States and Europe and has developed proprietary CBD formulations sold under its Florance™ brand.

July 2019 – The Company entered into a licensing agreement for the exclusive manufacturing and distribution in seven eastern states of the Binske^® portfolio of products, a brand known for utilizing best-in-class proprietary strains and craft ingredients in its edibles, concentrates, vaporizers, and topicals.

Significant Transactions in the Current Period

During the quarter ended June 30, 2019, the Company entered into several hemp seed sale transactions with GenCanna whereby the Company acquired large quantities of top-grade feminized hemp seeds with proven genetics at volume discounts that it sold to GenCanna at market rates. The seeds met the U.S. government’s definition of federally legal industrial hemp, which was descheduled as a controlled substance and classified as an agricultural commodity upon the signing of the 2018 Farm Bill.

The Company purchased approximately $3.3 million of hemp seed inventory in the quarter ended March 31, 2019, and an additional $16.7 million in the quarter ended June 30, 2019, which the Company sold and delivered to GenCanna for approximately $25.2 million. The seeds are to be harvested in the fall of 2019, and accordingly the Company provided GenCanna with extended payment terms, with full payments to be made by December 2019 after the crop is harvested. The payments by GenCanna are not contingent upon the harvest.

As required by the relevant accounting guidance, the Company has classified the $25.2 million due from GenCanna as a receivable from a related party, with $22,0 million recognized as revenue from a related party for the six months ended June 30, 2019, and $3.2 million recorded under Unearned Revenue From Related Party on the balance sheet. When GenCanna makes its payments to the Company in December 2019, the amount in Unearned Revenue From Related Party will be recognized as revenue. This deferral of revenue represents the Company’s ownership portion of the profit on these transactions of 33.5% (the percentage of GenCanna that the Company currently owns).

To fund the seed purchases, the Company borrowed $17.0M, which is included in Notes Payable on the balance sheet as of June 30, 2019 and further discussed in Note 11 – Debt.

Towards the end of the second quarter of 2019, and in early third quarter of 2019, the Company purchased approximately $5.0 million of additional hemp seed inventory which it sold and delivered to GenCanna for approximately $8 million in the third quarter of 2019. The Company continues to explore opportunities to continue such seed sale transactions in the future.

8

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

In accordance with GAAP, these interim statements do not contain all of the disclosures normally required in annual statements. In addition, the results of operations of interim periods are not necessarily indicative of the results of operations to be expected for the full year. Accordingly, these interim financial statements should be read in conjunction with the Company’s most recent audited annual financial statements and accompanying notes for the year ended December 31, 2018.

Certain reclassifications have been made to prior periods’ data to conform to the current period presentation. These reclassifications had no effect on reported income (losses) or cash flows.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of MariMed Inc. and the following majority-owned subsidiaries:

Subsidiary:	Percentage Owned
MariMed Advisors Inc.		100.0	%
Mia Development LLC		89.5	%
Mari Holdings IL LLC		60.0	%
Mari Holdings MD LLC		97.4	%
Mari Holdings NV LLC		100.0	%
Hartwell Realty Holdings LLC		100.0	%
iRollie LLC		100.0	%
ARL Healthcare Inc.		100.0	%
MariMed Hemp Inc.		100.0	%
MediTaurus LLC		70.0	%

Intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts within the financial statements and disclosures thereof. Actual results could differ from these estimates or assumptions.

Cash Equivalents

The Company considers all highly liquid investments with a maturity date of three months or less to be cash equivalents. The fair values of these investments approximate their carrying values.

The Company’s cash and cash equivalents are maintained with recognized financial institutions located in the United States. In the normal course of business, the Company may carry balances with certain financial institutions that exceed federally insured limits. The Company has not experienced losses on balances in excess of such limits and management believes the Company is not exposed to significant risks in that regard.

Accounts Receivable

Accounts receivable consist of trade receivables and are carried at their estimated collectible amounts.

The Company provides credit to its clients in the form of payment terms. The Company limits its credit risk by performing credit evaluations of its clients and maintaining a reserve, if deemed necessary, for potential credit losses. Such evaluations include the review of a client’s outstanding balances with consideration towards such client’s historical collection experience, as well as prevailing economic and market conditions and other factors. Based on such evaluations, the Company recorded a reserve of $250,000 and $150,000 at June 30, 2019 and December 31, 2018, respectively.

9

Inventory

Inventory is carried at the lower of cost or net realizable value, with the cost being determined on a first-in, first-out (FIFO) basis. The Company periodically reviews physical inventory and will record a reserve for excess and/or obsolete inventory if necessary. As of the date of this report, no reserve was deemed necessary.

Investments

The Company classifies its investments as available-for-sale-investments. Investments are comprised of equity holding of private companies. These investments are recorded at fair value on the Company’s consolidated balance sheet, with changes to fair value, if any, included in comprehensive income. Investments are evaluated for other-than-temporary impairment and are written down if such impairments are deemed to have occurred.

Revenue Recognition

On January 1, 2018, the Company adopted the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 606, Revenue from Contract with Customers, as amended by subsequently issued Accounting Standards Updates. This revenue standard requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to in exchange for those goods or services. The recognition of revenue is determined by performing the following consecutive steps:

● Identify the contract(s) with a customer;

● Identify the performance obligations in the contract(s);

● Determine the transaction price;

● Allocate the transaction price to the performance obligations in the contract(s); and

● Recognize revenue as the performance obligation is satisfied.

Additionally, when another party is involved in providing goods or services to the Company’s clients, a determination is made as to who—the Company or the other party—is acting in the capacity as the principal in the sale transaction, and who is merely the agent arranging for goods or services to be provided by the other party.

The Company is typically considered the principal if it controls the specified good or service before such good or service is transferred to its client. The Company may also be deemed to be the principal even if it engages another party (an agent) to satisfy some of the performance obligations on its behalf, provided the Company (i) takes on certain responsibilities, obligations and risks, (ii) possesses certain abilities and discretion, or (iii) other relevant indicators of the sale. If deemed an agent, the Company would not recognize revenue for the performance obligations it does not satisfy.

The adoption of this standard did not have a significant impact on the Company’s consolidated operating results, and accordingly no restatement has been made to prior period reported amounts.

The Company’s main sources of revenue are comprised of the following:

● Real Estate – rental income and additional rental fees from leasing of the Company’s regulatory-compliant legal cannabis facilities to its clients, which are cannabis-licensed operating companies. Rental income is generally a fixed amount per month that escalates over the respective lease terms, while additional rental fees are based on a percentage of tenant revenues that exceed a specified amount.

● Management – fees for providing the Company’s cannabis clients with corporate services and operational oversight of their cannabis cultivation, production, and dispensary operations. These fees are based on a percentage of such clients’ revenue, and are recognized after services have been performed.

● Supply Procurement – the Company maintains volume discounts with top national vendors of cultivation and production resources, supplies, and equipment, which the Company acquires and resells to its clients or third parties within the cannabis industry. The Company recognizes this revenue after the acceptance of goods by the purchaser.

● Licensing – revenue from the sale of precision-dosed, cannabis-infused products, such as Kalm Fusion™ and Betty’s Eddies™, to legal dispensaries throughout the United States. The recognition of this revenue occurs when the products are delivered.

● Consulting – fees from third-parties parties where the Company provides assistance in securing cannabis licenses, and advisory services in the areas of facility design and development, and cultivation and dispensing best practices. These fees are recognized as the services are performed.

● Product Sales – direct sales of cannabis, hemp, and products derived from these plants. During the quarter ended June 30,2019, the Company commenced the direct sale of acquired hemp seed inventory. As the Company continues to explore opportunities to continue such sales, significant product sales are expected to be generated from (i) the distribution of the Company’s acquired and developing hemp-derived CBD product lines, and (ii) the dispensary and wholesale operations of ARL in Massachusetts and of the Company’s planned cannabis-licensee acquisitions in Illinois, Maryland, and Nevada. This revenue will be recognized when products are delivered or at retail points-of-sale.

10

Research and Development Costs

Research and development costs are charged to operations as incurred.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation, with depreciation recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term, if applicable. When assets are retired or disposed, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income. Repairs and maintenance are charged to expense in the period incurred.

The estimated useful lives of property and equipment are generally as follows: buildings and building improvements, seven to thirty-nine years; tenant improvements, the remaining duration of the related lease; furniture and fixtures, seven years; machinery and equipment, five to ten years. Land is not depreciated.

The Company’s property and equipment are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undiscounted basis. An impairment loss is measured based on the excess of the asset’s carrying amount over its estimated fair value.

Impairment analyses are based on management’s current plans, intended holding periods and available market information at the time the analyses are prepared. If these criteria change, the Company’s evaluation of impairment losses may be different and could have a material impact to the consolidated financial statements.

For the six months ended June 30, 2019 and 2018, based on its impairment analyses, the Company did not have any impairment losses.

Leases

The consolidated financial statements reflect the Company’s adoption of ASC 842, Leases, as amended by subsequent accounting standards updates, utilizing the modified retrospective transition approach which calls for applying the new standard to all of the Company’s leases effective January 1, 2019, which is the effective date of adoption.

ASC 842 is intended to improve financial reporting of leasing transactions. The most prominent change from previous accounting guidance is the requirement to recognize right-of-use assets and lease liabilities for the rights and obligations created by operating leases in which the Company is the lessee that extend more than twelve months on the balance sheet. The Company elected the package of practical expedients permitted under ASC 842. Accordingly, the Company accounted for its existing operating leases that commenced before the effective date as operating leases under the new guidance without reassessing (i) whether the contracts contain a lease, (ii) the classification of the leases (iii) the accounting for indirect costs as defined in ASC 842.

The Company determines if an arrangement is a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Non-lease components within lease agreements are accounted for separately. Right-of-use assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term, utilizing the Company’s incremental borrowing rate. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of its fixed assets and other assets in accordance with ASC 360-10-15, Impairment or Disposal of Long-Lived Assets. Impairment of long-lived assets is recognized when the net book value of such assets exceeds their expected cash flows, in which case the assets are written down to fair value, which is determined based on discounted future cash flows or appraised values.

Fair Value of Financial Instruments

The Company follows the provisions of ASC 820, Fair Value Measurement, to measure the fair value of its financial instruments, and ASC 825, Financial Instruments, for disclosures on the fair value of its financial instruments. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by ASC 820 are:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Pricing inputs that are generally observable inputs and not corroborated by market data.

11

The carrying amounts of the Company’s financial assets and liabilities, such as cash and accounts payable approximate their fair values due to the short maturity of these instruments.

The fair value of option and warrant issuances are determined using the Black-Scholes pricing model and employing several inputs such as the expected life of instrument, the exercise price, the expected risk-free interest rate, the expected dividend yield, the value of the Company’s common stock on issuance date, and the expected volatility of such common stock. The following table summarizes the range of inputs used by the Company during the six months ended June 30, 2019 and 2018:

	Six Months Ended June 30,
	2019		2018
Life of instrument		3.0 years		2.8 to 5.0 years
Volatility factors		1.059 to 1.106		1.020 to 2.086
Risk-free interest rates		1.76% to 2.28%		1.92% to 2.94%
Dividend yield		0%		0%

The expected life of an instrument is calculated using the simplified method pursuant to Staff Accounting Bulletin Topic 14, Share-Based Payment, which allows for using the mid-point between the vesting date and expiration date. The volatility factors are based on the historical two-year movement of the Company’s common stock prior to an instrument’s issuance date. The risk-free interest rate is based on U.S. Treasury rates with maturity periods similar to the expected instruments life on the issuance date.

The Company amortizes the fair value of option and warrant issuances on a straight-line basis over the requisite service period of each instrument.

Extinguishment of Liabilities

The Company accounts for extinguishment of liabilities in accordance with ASC 405-20, Extinguishments of Liabilities. When the conditions for extinguishment are met, the liabilities are written down to zero and a gain or loss is recognized.

Stock-Based Compensation

The Company accounts for stock-based compensation using the fair value method as set forth in ASC 718, Compensation—Stock Compensation, which requires a public entity to measure the cost of employee services received in exchange for an equity award based on the fair value of the award on the grant date, with limited exceptions. Such value will be incurred as compensation expense over the period an employee is required to provide service in exchange for the award, usually the vesting period. No compensation cost is recognized for equity awards for which employees do not render the requisite service.

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Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits for the six months ended June 30, 2019 and 2018.

Related Party Transactions

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

In accordance with ASC 850, the Company’s financial statements include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business, as well as transactions that are eliminated in the preparation of financial statements.

Comprehensive Income

The Company reports comprehensive income and its components following guidance set forth by ASC 220, Comprehensive Income, which establishes standards for the reporting and display of comprehensive income and its components in the consolidated financial statements. There were no items of comprehensive income applicable to the Company during the period covered in the financial statements.

Earnings Per Share

Earnings per common share is computed pursuant to ASC 260, Earnings Per Share. Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income by the sum of the weighted average number of shares of common stock outstanding plus the weighted average number of potentially dilutive securities during the period.

As of June 30, 2019 and 2018, there were 18,655,107 and 12,508,932, respectively, of potentially dilutive securities in the form of options and warrants. Also as of such dates, there were $350,000 and $250,000, respectively, of convertible promissory notes, and $13.75 million and zero, respectively, of convertible debentures payable, that were potentially dilutive, whose conversion into common stock is based on a discount to the market value of common stock on or about the future conversion date. Utilizing the June 30, 2019 closing stock price of the Company’s common stock, all such dilutive securities were convertible into 19,509,815 shares of common stock. Such share amount was included in the number of weighted average common shares outstanding on a diluted basis, and in the calculation of diluted net income per share for the three and six months ended June 30, 2019, as shown in the statement of operations.

Commitments and Contingencies

The Company follows ASC 450, Contingencies, which requires the Company to assess the likelihood that a loss will be incurred from the occurrence or non-occurrence of one or more future events. Such assessment inherently involves an exercise of judgment. In assessing possible loss contingencies from legal proceedings or unasserted claims, the Company evaluates the perceived merits of such proceedings or claims, and of the relief sought or expected to be sought.

If the assessment of a contingency indicates that it is probable that a material loss will be incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

While not assured, management does not believe, based upon information available at this time, that a loss contingency will have material adverse effect on the Company’s financial position, results of operations or cash flows.

13

Beneficial Conversion Features on Convertible Debt

Convertible instruments that are not bifurcated as a derivative pursuant to ASC 815, Derivatives and Hedging, and not accounted for as a separate equity component under the cash conversion guidance are evaluated to determine whether their conversion prices create an embedded beneficial conversion feature at inception, or may become beneficial in the future due to potential adjustments.

A beneficial conversion feature is a nondetachable conversion feature that is “in-the-money” at the commitment date. The in-the-money portion, also known as the intrinsic value of the option, is recorded in equity, with an offsetting discount to the carrying amount of convertible debt to which it is attached. The discount is amortized to interest expense over the life of the debt with adjustments to amortization upon full or partial conversions of the debt.

Risk and Uncertainties

The Company is subject to risks common to companies operating within the legal and medical marijuana industries, including, but not limited to, federal laws, government regulations and jurisdictional laws.

Noncontrolling Interests

Noncontrolling interests represent third-party minority ownership of the Company’s consolidated subsidiaries. Net income attributable to noncontrolling interests is shown in the consolidated statements of operations; and the value of net assets owned by noncontrolling interests are presented as a component of equity within the balance sheets.

Off Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Recent Accounting Pronouncements

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which enhances and clarifies the guidance on the classification and presentation of restricted cash in the statement of cash flows. This ASU was adopted effective January 1, 2019 with no impact to the Company’s financial statements and related disclosures.

In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvement to Nonemployee Share-Based Payment Accounting, which is part of the FASB’s simplification initiative to maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. This update, which provides consistency in the accounting for share-based payments to nonemployees with that of employees, was adopted effective January 1, 2019 with no material impact to the Company’s financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) which simplifies goodwill impairment testing by requiring that such periodic testing be performed by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures, which is effective for fiscal years, including interim periods, beginning after December 15, 2019.

In addition to the above, the Company has reviewed all other recently issued, but not yet effective, accounting pronouncements, and does not believe the future adoption of any such pronouncements will have a material impact on its financial condition or the results of its operations.

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NOTE 3 – ACQUISITIONS

Sigal Consulting LLC

In May 2014, the Company, through its subsidiary MariMed Advisors Inc., acquired Sigal Consulting LLC from its ownership group which included the current CEO and CFO of the Company (the “Sigal Ownership Group”). The purchase price received by the Sigal Ownership Group was comprised of (i) 31,954,236 shares of common stock valued at approximately $5,913.000, representing 50% of the Company’s outstanding shares on the closing date, (ii) options to purchase three million shares of the Company’s common stock, expiring in September 2019 with exercise prices ranging from $0.15 to $0.35, and valued at approximately $570,000, and (iii) a 49% ownership interest in MariMed Advisors Inc. The excess of purchase price over the book value of the acquired entity was recorded as goodwill, which was subsequently impaired in full and written down to zero.

In June 2017, the remaining 49% interest of MariMed Advisors Inc. was acquired by the Company in exchange for an aggregate 75 million shares of common stock issued to the Sigal Ownership Group.

Betty’s Eddies™

In October 2017, the Company acquired the intellectual property, formulations, recipes, proprietary equipment, know-how, and other certain assets of the Betty’s Eddies™ brand of cannabis-infused fruit chews, from Icky Enterprises LLC, a company partially owned by an officer of the company (“Icky”). The purchase price was $140,000 plus 1,000,000 shares of the Company’s common stock valued at $370,000 based on the price of the common stock on the date of the agreement.

The acquisition was accounted for in accordance with ASC 10, Business Combinations. The following table summarizes the allocation of the purchase price to the fair value of the assets acquired on the acquisition date:

Inventory	$	46,544
Machinery and equipment		130,255
Goodwill		333,201
Total fair value of consideration	$	510,000

The goodwill balance of approximately $333,000 was written off in 2018.

As part of the agreement between the parties, Icky is entitled to receive royalties based on a percentage of the Company’s sales of the Betty’s Eddies™ product line, commencing at 25% and decreasing to 2.5% as certain sales thresholds are met. For the six months ended June 30, 2019 and 2018, such royalties approximated $85,000 and $14,000, respectively.

iRollie LLC

Effective April 2018, the Company entered into a purchase agreement whereby 264,317 shares of the Company’s common stock were exchanged for 100% of the ownership interests of iRollie LLC, a manufacturer of branded cannabis products and accessories for consumers, and custom product and packaging for companies in the cannabis industry. The Company acquired, among other assets, iRollie’s entire product line, service offerings, client list, and intellectual property, and hired its two co-founders.

The acquisition was accounted for in accordance with ASC 10. The shares of Company common stock, valued at approximately $280,000, were issued to iRollie’s former owners in December 2018, at which time the Company adjusted the total goodwill generated by the transaction. The following table summarizes the allocation of the purchase price to the fair value of the assets acquired:

Cash and cash equivalents	$	13,494
Goodwill		266,682
Total fair value of consideration	$	280,176

Prior to the acquisition, iRollie had not been generating positive cash flow as a stand-alone entity, and in conformity with relevant accounting guidance, the goodwill was written off.

15

ARL Healthcare Inc.

In October 2018, the Company’s cannabis-licensed client in Massachusetts, ARL Healthcare Inc. (“ARL”), filed a plan of entity conversion with the state to convert from a non-profit entity to a for-profit corporation, with the Company as the sole shareholder of the for-profit corporation. ARL holds three cannabis licenses from the state of Massachusetts for the cultivation, production and dispensing of cannabis.

On November 30, 2018, the conversion plan was approved by the Massachusetts Secretary of State, and effective December 1, 2018, ARL was consolidated into the Company as a wholly-owned subsidiary.

The acquisition was accounted for in accordance with ASC 10, Business Combinations. The following table summarizes the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed on the acquisition date:

Equipment	$	21,000
Cannabis licenses		185,000
Accounts payable		(120,689	)
Due to related parties		(92,765	)
Total identifiable net assets		(7,454	)
Goodwill		731,902
Total fair value of consideration	$	724,448

The total consideration paid by the Company was equal to the forgiveness of amounts owed to the Company by ARL. Accordingly, the transaction gave rise to goodwill of approximately $732,000, which the Company wrote off. The cannabis licenses acquired was included in the balance of Intangibles within the asset section of the Company’s balance sheet at December 31, 2018. This intangible asset is being amortized over its estimated useful life, and at June 30, 2019, the carrying value less amortization was approximately $77,000.

KPG of Anna LLC and KPG of Harrisburg LLC

In October 2018, the Company entered into a purchase agreement to acquire 100% of the ownership interests of KPG of Anna LLC and KPG of Harrisburg LLC, the Company’s two cannabis-licensed clients that operate medical marijuana dispensaries in the state of Illinois (both entities collectively, the “KPGs”), from the current ownership group of the KPGs (the “Sellers”). As part of this transaction, the Company will also acquire the Sellers’ ownership interests of Mari Holdings IL LLC, the Company’s subsidiary which owns the real estate in which the KPGs’ dispensaries are located (“Mari-IL”).

The purchase price of 1,000,000 shares of the Company’s common stock shall be issued to the Sellers upon the closing of the transaction, which is dependent upon, among other closing conditions, the approval by the Illinois Department of Financial and Professional Regulation. Such approval is expected to be received by the end of 2019. After the transaction is effectuated, the KPGs and Mari-IL will be wholly-owned subsidiaries of the Company.

As of June 30, 2019, the Company had not yet received the state approval for the transaction, and therefore the operations of the KPGs were not consolidated into the Company’s financial statements at such date. The Company anticipates that approval will be obtained, and the transaction consummated, by the end of 2019. When that occurs, the Company will consolidate the acquired entities in accordance with ASC 10.

The Harvest Foundation LLC

In November 2018, the Company issued a letter of intent to acquire 100% of the ownership interests of The Harvest Foundation LLC, the Company’s cannabis-licensed client in the state of Nevada (“Harvest”). In August 2019, the parties entered into a purchase agreement governing the transaction. The acquisition is conditioned upon the appropriate legislative approval of the transaction, which is expected to occur by the end of 2019. Accordingly, the operations of Harvest have not been consolidated for the six months ended June 30, 2019.

The purchase price is comprised of the issuance of (i) 1,000,000 shares of the Company’s common stock, in the aggregate, to two owners of Harvest, as a good faith deposit upon execution of the purchase agreement, (ii) $1.2 million of the Company’s common stock at closing, based on the closing price of the common stock on the day prior to state approval of the transaction, and (iii) warrants to purchase 400,000 shares of the Company’s common stock at an exercise price equal to the closing price of the Company’s common stock on the day prior to state approval of the transaction, In June 2019, the Company issued the aggregate 1,000,000 shares of common stock to the two owners of Harvest  as a good faith deposit. These shares are restricted and will be returned to the Company in the event the transaction does not close by a certain date. As the transaction has not been consummated, the issued shares were recorded at par value within the Stockholders’ Equity section of the balance sheet at June 30, 2019.

Kind Therapeutics USA LLC

In December 2018, the Company entered into a memorandum of understanding to merge with its cannabis-licensed client in Maryland, Kind Therapeutics USA LLC. A merger agreement is currently being drafted for this transaction, which is intended to qualify as a tax-deferred reorganization under the Internal Revenue Code. The parties expect the merger agreement to be finalized, and the transaction approved by the state legislature in 2020.

MediTaurus LLC

In May 2019, the Company entered into a purchase agreement to acquire Meditaurus LLC, a company established by Dr. Jokubas Ziburkas, a PhD in neuroscience and a leading authority on CBD and its interactions with the brain and endocannabinoid system. Meditaurus currently operates in the United States and Europe and has developed proprietary CBD formulations sold under its Florance™ brand.

Pursuant to the purchase agreement, the Company acquired 70% of MediTaurus on June 1, 2019, and will acquire the remaining 30% of MediTaurus on June 1, 2020. The purchase price for the initial 70% was $2.8 million, comprised of cash payments totaling $720,000 and 752,260 shares of the Company’s common stock valued at $2,080,000. The purchase price of the remaining 30%, payable in cash or stock at the Company’s option, shall be equal to a defined percentage of the Company’s receipts from the licensing of certain MediTaurus technology and products that existing on June 1, 2019 (all such technology and products, the “MT Property”). For a period of ten years following June 1, 2020, certain former members of MediTaurus shall be paid a royalty on the Company’s receipts from the licensing of MT Property, with the royalty percentage commencing at 10% and decreasing to 2% over time.

The acquisition was accounted for in accordance with ASC 10. The following table summarizes the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed on the acquisition date:

Cash and cash equivalents	$	128,997
Accounts receivable		5,362
Inventory		519,750
Tradename and customer lists		3,346,668
Accounts payable		(777	)
Total value of MediTaurus		4,000,000
Noncontrolling interests in MediTaurus		(1,200,000	)
Total fair value of consideration	$	2,800,000

The tradename and customer lists acquired were included the balance of Intangibles within the asset section of the Company’s balance sheet at June 30, 2019. A valuation of MediTaurus is currently pending; the useful lives of the intangible assets will be disclosed after the valuation is completed

As part of the transaction, the Company hired Dr. Ziburkas as the Company’s Chief Innovation Officer, as well as other members of the MediTaurus executive team.

AgriMed Industries of PA LLC

In July 2018, the Company entered into a purchase agreement to acquire 100% of the ownership interests of AgriMed Industries of PA LLC (“AgriMed”), an entity that holds a license from the state of Pennsylvania for the cultivation of cannabis. The purchase price was comprised of $8 million, payable in stock and cash, and the assumption of certain liabilities of AgriMed. In February 2019, the Company commenced legal proceedings against AgriMed seeking specific performance of the purchase agreement.

In May 2019, the dispute between the parties was resolved through the cash payment to the Company of $3.1 million and other good and valuable consideration, in exchange for the Company relinquishing its rights under the purchase agreement and releasing its claims against AgriMed. The net amount of approximately $2,949,000, representing the cash payment less legal fees and writeoffs of assets and supplies, was recorded in Other Non-Operating Income in the Company’s consolidated statement of operations for the six months ended June 30, 2019.

16

NOTE 4 – INVESTMENTS

At June 30, 2019 and December 31, 2018, the Company’s investments were comprised of the following:

	June 30, 2019		December 31, 2018
GenCanna Global Inc.	$	32,234,403	$	-
Terrace Inc.		1,590,000		-
CVP Worldwide LLC		1,080,016		1,172,163
Iconic Ventures Inc.		500,000		500,000
Chooze Corp.		257,687		-
Total investments	$	35,662,106	$	1,672,163

GenCanna Global Inc.

During 2018, in a series of transactions, the Company purchased $30 million of subordinated secured convertible debentures (the “GC Debentures”) of GenCanna. In February 2019, the Company converted the GC Debentures, plus unpaid accrued interest of approximately $229,000 through the conversion date, into common stock of GenCanna equal to a 33.5% ownership interest in GenCanna on a fully diluted basis.

The investment has been accounted for under the equity method. Accordingly, the Company recorded equity in earnings of approximately $2.0 million based on its percentage equity interest in GenCanna’s net income from the date of conversion through June 30, 2019.

Among other provisions of the subscription agreement governing the GC Debentures, the Company agreed to fund a $10 million employee bonus pool should GenCanna meet certain 2019 operating targets, and the Company’s CEO was appointed to GenCanna’s board. Additionally, pursuant to a rights agreement, the Company was granted certain rights including the rights of inspection, financial information, and participation in future security offerings of GenCanna.

Terrace Inc.

In May 2019, the Company issued 500,000 shares of its common stock, valued at $1.59 million on the date of issuance, to purchase an 8.95% interest in Terrace Inc., a Canadian entity that develops and acquires international cannabis assets. The Company was not given a board seat, nor does it have the ability to exert operational or financial control over the entity. In accordance with ASC 321, Investments – Equity Securities, the Company elected the measurement alternative to value this equity investment without a readily determinable fair value. Under this alternative measurement election, the investment is recorded at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment in Terrace. Following the Company’s purchase, there has been no impairment to this investment, nor any observable price declines to investments in Terrace. Accordingly, this investment was carried at its cost of $1.59 million at June 30, 2019.

The Company will continue to apply the alternative measurement guidance until this investment does not qualify to be so measured. The Company may subsequently elect to measure this investment at fair value, and if so, shall measure all identical or similar investments in Terrace at fair value. Any subsequent changes in fair value shall be recognized in net income.

CVP Worldwide LLC

In August 2018, the Company invested $300,000, of a total contracted cash investment of $500,000, and issued 378,259 shares of its common stock, valued at approximately $915,000, in exchange for a 23% ownership in CVP Worldwide LLC (“CVP”). CVP has developed a customer relationship management and marketing platform, branded under the name Sprout, which is specifically designed for companies in the cannabis industry.

The Company shall assist in the ongoing development and design of Sprout, and in marketing Sprout to companies within the cannabis industry. The Company shall earn a percentage share of Sprout’s revenues generated from sales (i) to the Company’s clients, and (ii) by the Company to third parties. As of June 30, 2019, no revenue was earned by the Company.

The investment has been accounted under the equity method. In 2018, the Company recorded a charge to net income of approximately $43,000 based on its equity in CVP’s net loss during the period of the Company’s ownership. Such amount reduced the carrying value of the investment to approximately $1,172,000 at December 31, 2018. For the six months ended June 30, 2019, the Company recorded a charge of approximately $92,000 representing the Company’s equity in CVP’s net loss during this period, further reducing the carrying value of the investment to approximately $1,080,000 at June 30, 2019.

Iconic Ventures Inc.

In December 2018, the Company purchased 2,500,000 shares of common stock of Iconic Ventures Inc. (“Iconic”) for an aggregate price of $500,000. Iconic has developed DabTabs™, a unique solution for cannabinoid vaporization via a convenient portable tablet that provides precisely measured dosing and acts as a storage system for full spectrum extracts, concentrates and distillates.

The Company’s investment equates to a current ownership percentage in Iconic of approximately 10%. The Company was not given a board seat, nor does it have the ability to exert operational or financial control over the entity. In accordance with ASC 321, the Company elected the measurement alternative to value this equity investment without a readily determinable fair value. Following the Company’s purchase, there has been no impairment to this investment, nor any observable price changes to investments in Iconic. Accordingly, this investment was carried at $500,000 at June 30, 2019 and December 31, 2018.

The Company will continue to apply the alternative measurement guidance until this investment does not qualify to be so measured. The Company may subsequently elect to measure this investment at fair value, and if so, shall measure all identical or similar investments in Iconic at fair value. Any subsequent changes in fair value shall be recognized in net income.

Chooze Corp.

In January 2019, the entire principal and accrued interest balance of a note receivable from Chooze Corp. of approximately $258,000 was converted into a 2.7% equity interest in Chooze. In accordance with ASC 321, the Company elected the measurement alternative to value this equity investment without a readily determinable fair value. Following the Company’s purchase, there has been no impairment to this investment, nor any observable price changes to investments in the entity. Accordingly, this investment was carried at approximately $258,000 at June 30, 2019.

The Company will continue to apply the alternative measurement guidance until this investment does not qualify to be so measured. The Company may subsequently elect to measure this investment at fair value, and if so, shall measure all identical or similar investments in Chooze at fair value. Any subsequent changes in fair value shall be recognized in net income.

Binske^®

In July 2019, the Company entered into a licensing agreement for the exclusive manufacturing and distribution in seven eastern states of the Binske^® portfolio of products, a brand known for utilizing best-in-class proprietary strains and craft ingredients in its edibles, concentrates, vaporizers, and topicals. In consideration for the license and other rights, the Company shall pay a royalty of 10.0% to 12.5% of gross revenue, as defined, derived from the sale of Binske^® products, subject to an annual minimum royalty. No such gross revenue was generated as of June 30, 2019.

Vitiprints

In August 2019, the Company terminated the license agreement it had entered into in August 2018 for the use of a patented technology to produce and distribute cannabis products with precise dosing and at increased economies (“Vitiprints”). The licensing agreement had an initial term of five years, and required the Company to make a non-refundable payment of $250,000 which the Company charged to Cost of Revenues in August 2018. No royalties were payable from the Vitiprints license agreement as of June 30, 2019.

17

NOTE 5 – DEFERRED RENTS RECEIVABLE

The Company is the lessor under several operating leases which contain rent holidays, escalating rents over time, options to renew, requirements to pay property taxes, insurance and/or maintenance costs, and contingent rental payments based on a percentage of monthly tenant revenues. The Company is not the lessor to any finance leases.

The Company recognizes fixed rental receipts from such lease agreements on a straight-line basis over the expected lease term. Differences between amounts received and amounts recognized are recorded under Deferred Rents Receivable on the balance sheet. Contingent rentals are recognized only after tenants’ revenues are finalized and if such revenues exceed certain minimum levels.

The Company leases the following owned properties:

● Delaware – a 45,000 square foot facility purchased in September 2016 and built into a cannabis cultivation, processing, and dispensary facility which is leased to a cannabis-licensed client occupying 100% of the space under a 20-year triple net lease expiring in 2035.

● Illinois – two 3,400 square foot free-standing retail dispensaries in the cities of Anna and Harrisburg and leased to two licensed cannabis dispensary clients each under a 20-year lease expiring in 2036.

● Maryland – a 180,000 square foot former manufacturing facility purchased January 2017 and rehabilitated by the Company into a cultivation and processing facility which is leased to a licensed cannabis client under a 20-year triple net lease that started in January 2018.

● Massachusetts – a 138,000 square foot industrial property of which approximately half of the available square footage is leased to a non-cannabis manufacturing company under a five-year lease.

The Company subleases the following property:

● Delaware – 4,000 square feet of retail space in a multi-use building space which the Company developed into a cannabis dispensary which is subleased to its cannabis-licensed client under a under a five-year triple net lease with a five-year option to extend.

As of June 30, 2019 and December 31, 2018, cumulative fixed rental receipts under such leases approximated $7.5 million and $5.4 million, respectively, compared to revenue recognized on a straight-line basis of approximately $9.5 million and $7.5 million. Accordingly, the deferred rents receivable balances at June 30, 2019 and December 31, 2018 approximated $2.0 million and $2.1 million, respectively.

Future minimum rental receipts for non-cancelable leases and subleases as of June 30, 2019 were:

2019	$	2,071,161
2020		4,222,040
2021		4,368,640
2022		4,293,999
2023		3,997,651
Thereafter		48,942,935
Total	$	67,896,427

NOTE 6 – DUE FROM THIRD PARTIES

At June 30, 2019 and December 31, 2018, the following amounts were advanced by the Company to its cannabis-licensed clients primarily for working capital purposes:

	June 30, 2019		December 31, 2018
Kind Therapeutics USA Inc. (Maryland licensee)	$	1,590,016	$	2,679,496
KPG of Anna LLC (Illinois licensee)		81,066		482,700
KPG of Harrisburg LLC (Illinois licensee)		46,516		449,385
Harvest Foundation LLC (Nevada licensee)		1,145,083		248,796
Total due from third parties	$	2,862,681	$	3,860,377

When a client is able to organically fund its ongoing operations, such client will issue a promissory note to the Company for the cumulative advances made up to that point, which will then be paid down monthly over a period of time. The Company has successfully employed this strategy in the past, and accordingly, in January 2019, KPG of Anna LLC and KPG of Harrisburg LLC issued promissory notes to the Company as further described in Note 7 – Notes Receivable.

18

NOTE 7 – NOTES RECEIVABLE

At June 30, 2019 and December 31, 2018, notes receivable were comprised of the following:

	June 30, 2019		December 31, 2018
First State Compassion Center	$	553,791	$	578,723
Healer LLC		822,015		307,429
Atalo Holdings Inc.		755,113		-
KPG of Anna LLC		447,712		-
KPG of Harrisburg LLC		402,878		-
Maryland Health & Wellness Center Inc.		310,882		-
Chooze Corp.		-		257,687
Total notes receivable		3,292,391		1,143,839
Notes receivable, current portion		821,524		51,462
Notes receivable, less current portion	$	2,470,867	$	1,092,377

The Company loaned approximately $700,000 to First State Compassion Center, its Delaware cannabis-licensee client, during the period of October 2015 to April 2016. In May 2016, this client issued a 10-year promissory note, as amended, to the Company bearing interest at a compounded rate of 12.5% per annum. The monthly payments of approximately $10,100 will continue through April 2026, at which time the note will be fully paid down. At June 30, 2019 and December 31, 2018, the current portion of this note was approximately $55,000 and $51,000, respectively, and included in Note Receivable, Current Portion on the balance sheets.

In May 2019, the Company loaned $750,000 to Atalo Holdings Inc., an agriculture and biotechnology firm specializing in research, development, and production of industrial hemp and hemp-based CBD products (“Atalo”). The loans bear interest at 6% per annum, with principal and interest payable on the earlier of April 3, 2020 or the date on which the Company acquires at least 25% of Atalo’s outstanding capital stock, in which case the principal and interest due shall be credited toward Company’s purchase price for such capital stock. In July 2019, the Company loaned an additional $230,000 to Atalo under the same terms as the initial loans.

During the period August to October 2018, the Company loaned $300,000 to Healer LLC, an entity that provides cannabis education, dosage programs, and products developed by Dr. Dustin Sulak, an integrative medicine physician and nationally renowned cannabis practitioner. In 2019, the Company loaned Healer an additional $500,000. The loans bear interest at 6% per annum, with principal and interest payable on the maturity dates which are three years from the loan date.

In January 2019, KPG of Anna LLC and KPG of Harrisburg LLC each issued a promissory note to the Company in the amount of approximately $451,000 and $405,000, respectively, representing the advances made by the Company to these entities through December 31, 2018. The notes bear interest at 12% per annum, with monthly principal and interest payments due through December 2038. At June 30, 2019, the current portion of these notes approximated $12,000 in the aggregate.

In January 2019, the Company entered into an agreement with Maryland Health & Wellness Center Inc. (“MHWC”), an entity that has been pre-approved for a cannabis dispensing license, to provide MHWC with a construction loan in connection with the buildout of MHWC’s proposed dispensary. The Company also entered into a consulting services agreement to provide MHWC with advisory and oversight services over a three-year period relating to the development, administration, operation, and management of MHWC’s proposed dispensary in Maryland. The construction loan bears interest at 8% per annum, with principal and interest payable in January 2020, provided however, upon the two-year anniversary of final state approval of MHWC’s dispensing license, the Company shall have the right, subject to state approval, to convert the promissory note underlying the construction loan into a 20% ownership interest of MHWC. This conversion right of the Company shall be terminated if the consulting services agreement is terminated.

During the period from May to October 2018, the Company loaned $250,000 to Chooze Corp. bearing interest at 8% per annum and maturing in 2021. In January 2019, the entire principal and accrued interest balance of approximately $258,000 was converted into a 2.7% ownership interest in Chooze.

NOTE 8 – INVENTORY/UNEARNED REVENUE FROM RELATED PARTY

During the six months ended June 30, 2019, MariMed Hemp purchased $20 million of hemp seeds for its wholesale hemp distribution business and to develop hemp-derived CBD products. The seeds meet the U.S. government’s definition of federally legal industrial hemp, which was descheduled as a controlled substance and classified as an agricultural commodity upon the signing of the 2018 Farm Bill. As previously disclosed in Note 1 – Organization and Description of Business, As of June 30, 2019, MariMed Hemp sold approximately $15.7 million of seeds to GenCanna, a related party, at market value which generated approximately $25.2 million of receipts. The seeds are to be harvested by October 2019, and accordingly the Company provided GenCanna with extended payment terms, allowing full payments to be made by December 2019.

As required by the relevant accounting guidance, the Company classified the $25.2 million of billings to GenCanna as a receivable from a related party, with $22,0 million recognized as revenue from a related party for the six months ended June 30, 2019, and $3.2 million recorded under Unearned Revenue From Related Party on the balance sheet. When GenCanna makes its payments to the Company in December 2019, the amount in Unearned Revenue From Related Party will be recognized as revenue.

At June 30, 2019, inventory was comprised of approximately $4.3 million of hemp seeds, and approximately $520,000 of hemp oil extract and products acquired in the MediTaurus transaction disclosed in Note 3 – Acquisitions. At December 31, 2018, inventory was comprised of product packaging and other collateral.

NOTE 9 – DEBENTURES RECEIVABLE

As detailed in Note 4 – Investments, the Company converted the GC Debentures into a 33.5% ownership interest in GenCanna in February 2019. Prior to conversion, the GC Debentures bore interest at a compounded rate of 9% per annum and had an original maturity of three years from issuance. For the year ended December 31, 2018, the Company earned and received interest income of approximately $502,000 on the GC Debentures.

NOTE 10 – PROPERTY AND EQUIPMENT

At June 30, 2019 and December 31, 2018, property and equipment consisted of the following:

	June 30, 2019			December 31, 2018
Land	$	3,392,710		$	3,392,710
Buildings and building improvements		14,513,538			13,566,144
Tenant improvements		5,625,882			5,348,882
Furniture and fixtures		143,237			114,160
Machinery and equipment		2,057,059			1,632,351
Construction in progress		14,473,474			12,205,447
		40,205,900			36,259,694
Less: accumulated depreciation		(2,602,019	)		(2,159,830	)
Property and equipment, net	$	37,603,881		$	34,099,864

During the six months ended June 30, 2019 and 2018, additions to property and equipment were approximately $3.9 million and $5.7 million, respectively.

The 2018 additions were primarily comprised of (i) the buildout of properties in Hagerstown, MD, New Bedford, MA, and Middleborough, MA, and (ii) improvements to the Lewes, DE facility. The 2019 additions consisted primarily of (i) the commencement of construction in Milford, DE, (ii) the continued buildout of properties in Hagerstown, MD, New Bedford, MA, and Middleborough, MA, and (iii) improvements to the Wilmington, DE and Las Vegas, NV properties.

The December 31, 2018 construction in progress balance of approximately $12.2 million was primarily comprised of (i) New Bedford, MA building, improvements and machinery of approximately $9.8 million and (ii) Middleborough, MA building, improvements and fixtures of approximately $2.4 million. The additions to construction in progress during the six months ended June 30, 2019 of approximately $2.3 million consisted of continuing buildout and machinery for the New Bedford, MA and Middleborough, MA properties, and the commencement of construction in Milford, DE.

Depreciation expense for the six months ended June 30, 2019 and 2018 was approximately $471,000 and $254,000, respectively.

19

NOTE 11 – DEBT

Mortgages Payable

At June 30, 2019 and December 31, 2018, mortgage balances, including accrued but unpaid interest, were comprised of the following:

	June 30, 2019			December 31, 2018
Bank of New England – Massachusetts property	$	4,877,624		$	4,895,000
Bank of New England – Delaware property		1,742,619			1,791,736
DuQuoin State Bank – Illinois properties		837,556			850,076
Total mortgages payable		7,457,799			7,536,812
Mortgages payable, current portion		(238,386	)		(188,231	)
Mortgages payable, less current portion	$	7,219,413		$	7,348,581

In November 2017, the Company entered into a 10-year mortgage agreement with Bank of New England for the purchase of a 138,000 square foot industrial property in New Bedford, Massachusetts, within which the Company has built a 70,000 square foot cannabis cultivation and processing facility that is leased to ARL. This mortgage was personally guaranteed by the Company’s CEO and CFO. From the start of the mortgage through May 2019, the Company was required to make monthly payments of interest-only at a rate equal to the prime rate plus 2%, with a floor of 6.25% per annum. From May 2019 to May 2024, the Company shall make principal and interest payments at a rate equal to the prime rate on May 2, 2019 plus 2%, with a floor of 6.25% per annum. Principal and interest payments shall continue from May 2024 through the end of the lease at a rate equal to the prime rate on May 2, 2024 plus 2%, with a floor of 6.25% per annum. The outstanding principal balance on this mortgage was approximately $4,877,000 and $4,895,000 on June 30, 2019 and December 31, 2018, respectively, of which approximately $110,000 and $63,000, respectively, was current.

The Company maintains a second mortgage with Bank of New England, also personally guaranteed by the Company’s CEO and CFO, for the 2016 purchase of a 45,070 square foot building in Wilmington, Delaware which was developed into a cannabis seed-to-sale facility and is currently leased to the Company’s cannabis-licensed client in the state. The mortgage matures in 2031 with monthly principal and interest payments at a rate of 5.25% per annum through September 2021, and thereafter the rate adjusting every five years to the then prime rate plus 1.5% with a floor of 5.25% per annum. At June 30, 2019 and December 31, 2018, the outstanding principal balance on this mortgage was approximately $1,743,000 and $1,792,000, respectively, of which approximately $105,000 and $102,000, respectively, was current.

In 2016, the Company entered into a mortgage agreement with DuQuoin State Bank (“DSB”) for the purchase of two properties which the Company developed into two 3,400 square foot free-standing retail dispensaries that are currently leased to the KPGs. On May 5^th of each year, this mortgage is due to be repaid unless it is renewed for another year at a rate determined at the discretion of DSB’s executive committee. The mortgage was renewed in May 2019 at a rate of 8.5% per annum. At June 30, 2019 and December 31, 2018, the outstanding principal balance on this mortgage was approximately $838,000 and $850,000, respectively, of which approximately $23,000 was current in both periods.

Notes Payable

In June 2019, MariMed Hemp issued a $10 million secured promissory note to an unaffiliated party (the “$10M Note”). On the maturity date in January 2020, or earlier at MariMed Hemp’s discretion, the principal balance shall be repaid plus a payment of $1.5 million. At June 30, 2019, the pro-rata portion, based on the term of the note, of such payment approximated $162,000 and was charged to interest expense. The $10M Note is secured by the Company’s right, title, and interest in certain property relative to the seed sale transactions with GenCanna, previously disclosed in Note 1 – Organization and Description of Business. The $10M Note imposes certain covenants, all of which were complied with as of June 30, 2019.

As part of the $10M Note transaction, the Company issued three-year warrants to purchase 375,000 shares of common stock at an exercise price of $4.50 per share to the holder of the $10M Note. The fair value of these warrants on the issuance date of approximately $601,000 was recorded as a discount to the $10M Note. Approximately $65,000 of the warrant discount was amortized to interest expense in June 2018. Accordingly, the carrying value of the $10M Note approximated $9.46 million at June 30, 2019.

In April 2019, MariMed Hemp issued a $1 million secured promissory note to an unaffiliated party maturing in December 2019. The note is secured by the collateral assignment of certain receivables from GenCanna (the “Secured Receivables”) and certain obligations of GenCanna to MariMed Hemp arising from the seed sale transactions previously disclosed in Note 1 – Organization and Description of Business. The principal balance plus a payment of $180,000 shall be due in full on the earlier of the maturity date or three business days after MariMed Hemp’s receipt of payment by GenCanna of the Secured Receivables. Such payment date can be extended by the noteholder for an additional three months with proper notice; and if extended, the noteholder shall receive an additional payment of $30,000. At June 30, 2019, the pro-rata portion, based on the term of the note, of the $180,000 payment approximated $52,000 and was charged to interest expense. MariMed Hemp can elect to repay the note in whole or in part without penalty, provided the noteholder is given proper notice and MariMed Hemp is not in default of the note agreement. Upon such election, the entire payment of $180,000 shall be deemed earned by and due to the noteholder.

In March 2019, the Company raised $6 million from the issuance of a secured promissory note maturing in December 2019 and bearing interest at the rate of 13% per annum, with interest payable monthly. Such note is secured by the collateral assignment of certain receivables from and obligations of GenCanna to MariMed Hemp arising from the seed sale transactions previously disclosed in Note 1 – Organization and Description of Business The Company may elect to prepay the note in whole or part without penalty upon three business days’ notice and with payment of all interest through the maturity date. The Company may extend the maturity date by up to three months upon thirty days’ notice prior to the maturity date with an extension fee payment to the note holder of $300,000. At June 30, 2019, the carrying value of this note was $6 million.

In September 2018, the Company raised $3 million from the issuance of a secured promissory note bearing interest at the rate of 10% per annum, with interest payable monthly. The note is due and payable in September 2019, however the Company may elect to prepay the note in whole or part at any time after December 17, 2018 without premium or penalty. The Company issued three-year warrants, which were attached to this promissory note, to the lender’s designees to purchase 750,000 shares of the Company’s common stock at an exercise price of $1.80 per share. The Company recorded a discount on the note of approximately $1,511,000 from the allocation of note proceeds to the warrants based on the fair value of such warrants on the issuance date. Approximately $882,000 of the warrant discount was amortized to interest expense during 2018, and the remaining $629,000 was amortized during 2019. The carrying value of this note was $3 million at June 30, 2019 and approximately $2.37 million, net of remaining warrant discount of $629,000, at December 31, 2018.

During 2018, holders of previously issued promissory notes with principal balances of $1,075,000 converted such promissory notes into 1,568,375 shares of common stock at conversion prices ranging from $0.65 to $0.90 per share. The conversions resulted in the recording of non-cash losses of approximately $829,000 in the aggregate, based on the market value of the common stock on the conversion dates. No conversions occurred during the six months ended June 30, 2019

During 2018, the Company issued 2,596,313 shares of its common stock and subscriptions on 79,136 shares of its common stock to retire promissory notes with principal balances of $7,495,000 and approximately $95,000 of accrued interest. The Company recorded non-cash losses of approximately $2.5 million based on the fair value of the common stock on the retirement dates. No retirements were made during the six months ended June 30, 2019.

During 2018 the Company repaid $700,000 of promissory notes. No repayments of promissory notes occurred during the six months ended June 30, 2019.

The aggregate scheduled maturities of the Company’s total debt outstanding, inclusive of the promissory notes and mortgages described within this Note 12 – Debt, and the convertible debentures described in the following Note 12 – Debentures Payable, as of June 30, 2019 were:

2019	$	10,496,536
2020		16,495,007
2021		7,762,293
2022		280,348
2023		299,689
Thereafter		6,262,463
Total		41,596,336
Less discounts		(6,557,932	)
	$	35,038,404

20

NOTE 12 – DEBENTURES PAYABLE

In October and November 2018, pursuant to a securities purchase agreement (the “SPA”), the Company sold an aggregate of $10,000,000 of convertible debentures bearing interest at the rate of 6% per annum that mature two years from issuance, with a 1% issue discount to an accredited investor, resulting in net proceeds to the Company of $9,900,000 (the “$10M Debentures”).

The holder of the $10M Debentures (the “Holder”) has the right at any time to convert all or a portion of the $10M Debenture, along with accrued and unpaid interest, into the Company’s common stock at conversion prices equal to 80% of a calculated average, as determined in the $10M Debentures, of the daily volume-weighted price during the ten consecutive trading days preceding the date of conversion. Notwithstanding this conversion right, the Holder shall limit conversions in any given month to certain agreed-upon values based on the conversion price, and the Holder shall also be limited from beneficially owning more than 4.99% of the Company’s outstanding common stock (potentially further limiting the Holder’s conversion right).

The Company shall have the right to redeem all or a portion of the $10M Debentures, along with accrued and unpaid interest, at a 10% premium, provided however that the Company first provide advance written notice to the Holder of its intention to make a redemption, with the Holder allowed to affect certain conversions of the $10M Debentures during such notice period.

Upon a change in control transaction, as defined in the $10M Debentures, the Holder may require the Company to redeem all or a portion of the $10M Debentures at a price equal to 110% of the principal amount of the $10M Debentures plus all accrued and unpaid interest thereon. So long as the $10M Debentures are outstanding, in the event the Company enters into a Variable Rate Transaction (“VRT”), as defined in the SPA, the Holder may cause the Company to revise the terms of the $10M Debentures to match the terms of the convertible security of such VRT.

As part of issuance of the $10M Debentures, the Company issued three-year warrants to the Holder to purchase 324,675 shares of its common stock at exercise prices of $3.50 and $5.50 per share (the “Initial Warrants”). The fair value of the Initial Warrants of approximately $1,057,000 was recorded as a discount to the carrying amount of the $10M Debentures.

Pursuant to the terms of a registration rights agreement with the Holder, entered into concurrently with the SPA and the $10M Debentures, the Company agreed to provide the Holder with customary registration rights with respect to any potential shares issued pursuant to the terms of the SPA, the $10M Debentures, and the Warrants.

Subsequent to the consummation of the SPA and related agreements, the Company and the Holder executed an addendum to the SPA whereby the Holder agreed to that it would not undertake a conversion of all or a portion of the $10M Debentures that would require the Company to issue more shares than the amount of available authorized shares at the time of conversion, which amount of authorized shares shall not be less than the current authorized number of 500 million shares of common stock. Such addendum eliminated the requirement to bifurcate and account for the conversion feature of the $10M Debentures as a derivative.

Based on the conversion prices of the $10M Debentures in relation to the market value of the Company’s common stock, the $10M Debentures provided the Holder with a beneficial conversion feature, as the embedded conversion option was in-the-money on the commitment date. The intrinsic value of the beneficial conversion feature of approximately $5,570,000 was recorded as a discount to the carrying amount of the $10M Debentures, with an offset to additional paid-in-capital.

In May 2019, the Company sold an additional $5,000,000 of convertible debentures bearing interest at the rate of 6% per annum that mature two years from issuance, with a 1% issue discount, resulting in net proceeds to the Company of $4,950,000, and (the “$5M Debentures”). In June 2019, the Company sold an additional $2,500,000 of convertible debentures that mature two years from issuance, with a 7% issue discount, resulting in net proceeds to the Company of $2,350,000 (the “$2.5M Debentures,” and together with the $5M Debentures, the “$7.5M Debentures”).

The $7.5M Debentures were sold to the Holder of the $10M Debentures. The terms of the $7.5M Debentures are consistent with the terms of the $10M Debentures, except that (i) no interest shall accrue on the $2.5M Debentures, (ii) the issue discount on the $2.5M Debentures is 7%, compared to 1% on the $10M Debentures and $5M Debentures, and (iii) other small variations, most notably a cap on the conversion price. The SPA, registration rights agreement, and addendum to the SPA were all amended and restated to incorporate the $7.5M Debentures.

As part of issuance of the $7.5M Debentures, the Company issued three-year warrants to the Holder to purchase 550,000 shares of common stock an exercise price of $5.00 per share (the “Additional Warrants”). The fair value of the Additional Warrants of approximately $929,000 was recorded as a discount to the carrying amount of the $7.5M Debentures.

Based on the conversion prices of the $7.5M Debentures in relation to the market value of the Company’s common stock, the $7.5M Debentures provided the Holder with a beneficial conversion feature, as the embedded conversion option was in-the-money on the commitment date. The intrinsic value of the beneficial conversion feature of approximately $3,385,000 was recorded as a discount to the carrying amount of the $7.5M Debentures, with an offset to additional paid-in-capital.

In November and December 2018, the Holder converted, in two separate transactions, an aggregate of $1,400,000 of principal and approximately $36,000 of accrued interest into 524,360 shares of common stock at conversion prices of $2.23 and $3.04 per share. In January 2019, the Holder converted, in three separate transactions, an aggregate of $600,000 of principal and approximately $97,000 of accrued interest into 233,194 shares of common stock at conversion prices ranging from $2.90 to $3.06 per share. In April and June 2019, the Holder converted, in four separate transactions, an aggregate of $1,750,000 of principal and approximately $181,000 of accrued interest into 923,185 shares of common stock at conversion prices ranging from $1.74 to $2.74 per share.

During the six months ended June 30, 2019, amortization of the beneficial conversion features, after adjustment for the conversions, approximated $2,282,000; amortization of the discounts from the Initial Warrants and Additional Warrants (together, the “Total Warrants”) approximated $320,000; and the amortization of original issue discounts approximated $29,000. This amortization was charged to interest expense. Additionally, accrued interest expense for such period approximated $280,000.

At June 30, 2019, the aggregate outstanding principal balance on the $10M Debentures and the $7.5M Debentures (together, the “$17.5M Debentures”) was $13,750,000. Also on such date, the unamortized balances of the beneficial conversion feature, the Total Warrants discount, and original issue discounts were approximately $5,152,000, $1,575,000, and $287,000, respectively. Accordingly, at June 30, 2019, the carrying value of the $17.5M Debentures was approximately $6,736,000.

At December 31, 2018, the outstanding principal balance on the $10M Debentures was $8,600,000. Also on such date, the unamortized balances of the beneficial conversion feature, Initial Warrants discount, and original issue discounts were approximately $4,048,000, $966,000, and $91,000, respectively, and accrued and unpaid interest was approximately $62,000. Accordingly, at December 31, 2018, the carrying value of the $10M Debentures was approximately $3.6 million.

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NOTE 13 – EQUITY

Preferred Stock

In January 2018, all 500,000 shares of subscribed Series A convertible preferred stock were converted into 970,988 shares of common stock at a conversion price of $0.55 per share. The Company recorded a non-cash loss on conversion of approximately $34,000 based on the market value of the common stock on the conversion date.

The Series A convertible preferred stock accrues an annual dividend of 6% until conversion. The preferred stock is convertible, along with any accrued dividends, into common stock at a twenty-five percent discount to the selling price of the common stock in a qualified offering, as defined in the subscription agreement. In addition, the Company has the ability to force the conversion of preferred stock at such time the Company has a market capitalization in excess of $50 million for ten consecutive trading days. In such event, the conversion price shall be a 25% discount to the average closing price of the Company’s common stock over the ten trading days prior to the Company’s notice of its intent to convert.

Common Stock

During the six months ended June 30, 2019, the Company sold 799,995 shares of common stock at a price of $3.25 per share, resulting in total proceeds of $2.6 million. During the same period in 2018, the Company sold 10,111,578 shares of common stock, at prices ranging from $0.50 to $1.30 per share, resulting in total proceeds of approximately $8.5 million.

During the six months ended June 30, 2019 and 2018, the Company issued 97,136 and 1,000,000 common shares, respectively, associated with previously issued subscriptions on common stock with a value of approximately $169,000 and $370,000, respectively.

During the six months ended June 30, 2018, the Company issued 1,313,901 common shares in exchange for services rendered by third-parties or to otherwise settle outstanding obligations. Based on the market value of the common stock on the dates of issuance, the Company recorded non-cash losses on these settlements of approximately $959,000. Also during such period, the Company issued 1,679,486 common shares to retire $1,175,000 of promissory notes. Based on the market value of the stock on the retirement dates, the Company recorded non-cash losses of approximately $918,000. No common shares were issued during the same period in 2019 to settle obligations or retire promissory notes.

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As previously disclosed in Note 3 – Acquisitions, the Company issued 1,000,000 shares of common stock to the owners of Harvest.

As previously disclosed in Note 4 – Investments, the Company issued 500,000 shares of common stock to purchase a minority interest in Terrace.

As previously disclosed in Note 12 – Debentures Payable, during the six months ended June 30, 2019, the holder of the $17.5M Debentures converted $2,350,000 of principal and approximately $278,000 of accrued interest into 1,156,379 shares of common stock.

As further disclosed in Note 14 – Stock Options, during the six months ended June 30, 2019 and 2018, 358,446 and 300,000 shares of common stock, respectively, were issued in connection with the exercise of stock options.

As further disclosed in Note 15 – Warrants, during the six months ended June 30, 2019 and 2018, warrants to purchase 666,104 and 1,235,768 shares of common stock were exercised.

Common Stock Issuance Obligations

At June 30, 2019, the Company was obligated to issue 752,260 shares of common stock, valued at $2,080,000, as part of the purchase price for MediTaurus, as previously disclosed in Note 3 – Acquisitions. These shares will be subsequently issued in the third quarter of 2019.

At December 31, 2018, the Company was obligated to issue: (a) 79,136 shares of common stock, valued at approximately $95,000, related to the settlement of a previously issued promissory note with a principal balance of $50,000 and accrued interest of $1,454; and (b) 18,000 shares of common stock, valued at approximately $74,000, for the payment of rent for a leased property in Massachusetts for the months of September 2018 through January 2019. Such shares were subsequently issued in the first quarter of 2019.

At June 30, 2018, the Company was obligated to issue: (a) 264,317 shares of common stock to in connection with the acquisition of iRollie LLC, as disclosed in Note 3 – Acquisitions; (b) 32,083 shares of common stock in connection with the exercise of a warrant, (c) 2,001,641 shares of common stock to settle $1,951,600 of vendor invoices; and (d) 9,281 shares of common stock, valued at approximately $20,000, for the payment of rent on a leased property in Massachusetts for the months of May and June 2018. All such shares were issued subsequent to the June 30, 2018 quarter end.

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NOTE 14 – STOCK OPTIONS

In January 2018, the Company granted options to purchase 1.45 million shares of common stock to the Company’s board members at exercise prices ranging from $0.14 to $0.77, vesting over a six-month period, and expiring between December 2020 and December 2022. The fair value of these options on grant date of approximately $458,000 was fully amortized by June 30, 2018. No stock options were granted to board members during the six months ended June 30, 2019.

In May 2018, the Company granted five-year options to purchase 200,000 shares of common stock to an employee with an exercise price of $0.90 per share. As of June 30, 2018, the Company amortized approximately $28,000 of the total adjusted fair value of this grant of approximately $208,000. In December 2018, 150,000 of these options were forfeited prior to their vesting dates. Approximately $50,000 of the fair value had been amortized through the forfeiture date, and as a result, approximately $158,000 will not be amortized. No options were granted to employees during the six months ended June 30, 2019.

During the six months ended June 30, 2019 and 2018, options to purchase 520,000 and 700,000 shares of common stock, respectively, were exercised at exercise prices ranging from $0.08 to $0.77 per share in 2019, and $0.08 to $0.63 per share in 2018. Of the options exercised in 2019, 350,000 were exercised on a cashless basis by two board members with the exercise prices paid via the surrender of 139,985 shares of common stock. Of the options exercised in 2018, 400,000 were exercised by a board member on a cashless basis with the exercise price paid via the surrender of 98,000 shares of common stock.

During the six months ended June 30, 2018, options to purchase 300,000 were forfeited, of which 200,000 had been owned by two board members. There were no forfeitures in 2019

Stock options outstanding and exercisable as of June 30, 2019 were:

Exercise Price		Shares Under Option				Remaining
per Share		Outstanding		Exercisable		Life in Years
$	0.080		100,000		100,000		0.47
$	0.130		200,000		200,000		1.00
$	0.140		100,000		100,000		0.50
$	0.140		550,000		550,000		1.51
$	0.150		1,000,000		1,000,000		0.25
$	0.250		1,000,000		1,000,000		0.25
$	0.330		50,000		50,000		1.69
$	0.350		1,000,000		1,000,000		0.25
$	0.450		190,000		190,000		2.26
$	0.630		300,000		300,000		2.51
$	0.770		200,000		200,000		3.51
$	0.900		50,000		50,000		3.87
$	0.950		50,000		10,000		3.51
$	2.320		300,000		60,000		4.20
$	2.450		2,000,000		2,000,000		3.48
$	2.500		100,000		25,000		4.16
$	2.650		200,000		100,000		4.24
$	2.850		75,000		-		3.45
$	2.850		100,000		-		4.45
$	3.000		25,000		-		4.47
$	3.725		200,000		-		4.45
			7,790,000		6,935,000

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NOTE 15 – WARRANTS

During the six months ended June 30, 2019, in conjunction with the $7.5M Debentures previously disclosed in Note 12 – Debentures Payable, the Company issued three-year warrants to purchase 550,000 shares of common stock at an exercise price of $5.00 per share. The fair value of these warrants at issuance approximated $929,000, with approximately $57,000 of this amount amortized to interest expense during the period and the remainder to be amortized over the two-year term of the $7.5M Debentures. Also during this period, the Company issued three-year warrants to purchase 375,000 shares of common stock at an exercise price of $4.50 per share as part of the $10M Note transaction previously disclosed in Note 11 – Debt. The fair value of these warrants at issuance approximated $601,000, with approximately $65,000 of this amount amortized to interest expense during the period and the remainder to be amortized by the January 2020 maturity date of the $10M Note.

During the six months ended June 30, 2018, the Company issued warrants to purchase 4,239,000 shares of common stock at exercise prices ranging from $0.30 to $2.25 per share. Of these warrants, (i) 470,000 warrants were issued in exchange for services previously rendered to the Company, with expiration dates of three and five years from issuance, at a fair value of approximately $433,000 which was charged to compensation expense during the period, (ii) 237,500 warrants issued in conjunction with a promissory note, expiring in April 2021, at a fair value of approximately $198,200 which was charged to interest expense during the period, and (iii) 3,531,500 three-year warrants issued as part of the sale of common stock, at a fair value of at issuance of approximately $4.5 million that was charged to additional paid-in capital.

During the six months ended June 30, 2019 and 2018, warrants to purchase 666,104 and 1,425,379 shares of common stock, respectively, were exercised at exercise prices ranging from $0.12 to $1.75 per share in 2019 and $0.10 to $0.50 per share in 2018.

At June 30, 2019 and 2018, warrants to purchase 10,865,107 and 7,058,932 shares of common stock, respectively, were outstanding at exercise prices ranging from $0.15 to $5.50 per share in 2019 and $0.10 to $2.25 per share in 2018.

NOTE 16 – REVENUES

For the six months ended June 30, 2019 and 2018, the Company’s revenues were comprised of the following major categories:

	Six months ended June 30,
		2019		2018
Real estate	$	3,442,024	$	2,731,364
Management		1,194,791		754,038
Supply procurement		1,906,399		1,241,834
Licensing		568,127		281,557
Product sales		1,880		-
Product sales from related party		22,014,879		-
Other		60,392		11,482
Total revenues	$	29,188,492	$	5,020,275

For the six months ended June 30, 2019, revenue from three clients represented 95% of total revenues. One of these clients was GenCanna, a related party, with whom the Company conducted the seed sale transactions previously disclosed in Note 1 – Organization and Description of Business. The amount under Product Sales From Related Party shown in the table above represents the total revenues from these transactions with GenCanna through June 30, 2019.

For the six months ended June 30, 2018, revenue from two clients comprised 75% of total revenues.

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NOTE 17 – RELATED PARTY TRANSACTIONS

During the quarter ended June 30, 2019, the Company entered into several hemp seed sale transactions with GenCanna, a related party, whereby the Company acquired large quantities of top-grade feminized hemp seeds with proven genetics at volume discounts that it sold to GenCanna at market rates. As previously disclosed in Note 1 – Organization and Description of Business, the Company classified the $25.2 million due from GenCanna as a receivable from a related party, with $22,0 million recognized as revenue from a related party for the six months ended June 30, 2019, and $3.2M recorded under Unearned Revenue From Related Party on the balance sheet. When GenCanna makes its payments to the Company in December 2019, the amount in Unearned Revenue From Related Party will be recognized as revenue.

As disclosed in Note 3 – Acquisitions, the current CEO and CFO of the Company were part of the ownership group from whom Sigal Consulting LLC was acquired in May 2014. The 49% ownership in the Company’s subsidiary, MariMed Advisors Inc., which this ownership group acquired as part of the purchase price, was acquired by the Company from this ownership group in June 2017 in exchange for 75 million shares of the Company’s common stock.

In October 2017, the Company acquired certain assets of the Betty’s Eddies™ brand of cannabis-infused products, as disclosed in Note 3 – Acquisitions, from a company that was minority-owned by the Company’s chief operating officer.

As disclosed in Note 11 – Debt, the Company’s two mortgages with Bank of New England are personally guaranteed by the Company’s CEO and CFO.

In January 2018, the Company granted options to purchase 1.45 million shares of common stock to the Company’s board members at exercise prices ranging from $0.14 to $0.77 and expiring between December 2020 and December 2022. Also during this month, options to purchase 200,000 were forfeited by board members. During the six months ended June 30, 2019 and 2018, options to purchase 350,000 and 400,000 shares of common stock, respectively, were exercised by board members on a cashless basis with the exercise prices paid via the surrender of 139,985 shares of common stock in 2019 and 98,000 shares of common stock in 2018. All of the option transactions referred to in this paragraph have been previously disclosed in Note 14 – Stock Options.

The Company’s current corporate offices are leased from a company owned by a related party under a 10-year lease that commenced August 2018 and contains a five-year extension option. Previous to this lease, the Company’s former corporate offices were also leased from a company owned by a related party. For the six months ended June 30, 2019 and 2018, expenses incurred under these leases approximated $34,000 and $6,000, respectively.

The outstanding Due To Related Parties balances at June 30, 2019 and December 31, 2018 of approximately $77,000 and $276,000, respectively, were comprised of amounts owed of approximately (i) zero and $81,000 in respectively to the Company’s CEO and CFO, (ii) $17,000 and $135,000, respectively, to two companies partially owned by these officers, and (iii) $60,000 in both periods to two shareholders of the Company. Such amounts owed are not subject to repayment schedules and are expected to be repaid during 2019.

The outstanding Due From Related Parties balance at December 31, 2018 of approximately $120,000 was comprised of an advance to a company partially owned by the Company’s CEO and CFO. This amount was entirely offset by advances from such related parties. At June 30, 2019, there were no amounts due from related parties.

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NOTE 18 – COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company is the lessee under five operating leases and three finance leases. These leases contain rent holidays and customary escalations of lease payments for the type of facilities being leased. The Company recognizes rent expense on a straight-line basis over the expected lease term, including cancelable option periods which the Company fully expects to exercise. Certain leases require the payment of property taxes, insurance and/or maintenance costs in addition to the rent payments.

The details of the Company’s operating lease agreements are as follows:

● Delaware – 4,000 square feet of retail space in a multi-use building under a five-year lease that commenced in October 2016 and contains a five-year option to extend the term. The Company developed the space into a cannabis dispensary which is subleased to its cannabis-licensed client.

● Delaware – a 100,000 square foot warehouse leased in March 2019 that the Company intends to construct into a cultivation and processing facility to be subleased to the same Delaware client. The lease term is 10 years, with an option to extend the term for three additional five-year periods.

● Nevada – 10,000 square feet of an industrial building that the Company has built-out into a cannabis cultivation facility and plans to rent to its cannabis-licensed client under a sub-lease which will be coterminous with this lease expiring in 2024.

● Massachusetts – 10,000 square feet of office space which the Company utilizes as its corporate offices under a 10-year lease with a related party expiring in 2028 which contain a 5-year extension option.

● Maryland – a 2,700 square foot 2-unit apartment under a lease that expires in July 2020 with an option to renew for a two-year term.

The Company leases machinery and office equipment under finance leases that expire in February 2022 through June 2024 with such terms being a major part of the economic useful life of the leased property.

The components of lease expense for the six months ended June 30, 2019 were as follows:

Operating lease cost	$	339,478
Finance lease cost:
Amortization of right-of-use assets	$	6,744
Interest on lease liabilities		1,824
Total finance lease cost	$	8,568

The weighted average remaining lease term for operating leases is 9.7 years, and for the finance lease is 3.9 years. The weighted average discount rate used to determine the right-of-use assets and lease liabilities was 7.5% for all leases.

Future minimum lease payments as of June 30, 2019 under all non-cancelable operating leases having an initial or remaining term of more than one year were:

	Operating Leases			Finance Lease
2019	$	230,744		$	11,556
2020		917,444			23,112
2021		1,008,227			23,112
2022		949,535			11,823
2023		910,166			10,451
Thereafter		5,139,851			3,229
Total lease payments		9,155,967		$	83,282
Less: imputed interest		(2,845,742	)		(11,296	)
	$	6,310,224		$	71,986

Terminated Employment Agreement

An employment agreement with Thomas Kidrin, the former CEO of the Company, that provided Mr. Kidrin with salary, car allowances, stock options, life insurance, and other employee benefits, was terminated by the Company in 2017. The Company maintained an accrual of approximately $1,043,000 at June 30, 2019 and December 31, 2018 for any amounts that may be owed under this agreement, although the Company contends that such agreement is not valid.

In July 2019, Mr. Kidrin, also a former director of the Company, filed a complaint in the Massachusetts Superior Court, alleging that the Company breached the employment agreement and failed to pay all wages owed to him, and requesting compensatory damages, attorney fees, costs, and interest. To date, Mr. Kidrin has not served the complaint upon the Company. The Company believes that the allegations are without merit and will vigorously defend this matter when Mr. Kidrin makes service upon it.

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NOTE 19 – SUBSEQUENT EVENTS

Seed Transactions

In July 2019, the Company delivered and billed GenCanna an additional $8.0 million for hemp seeds that were purchased by the Company for approximately $5.0 million. The seeds are to be harvested in the fall of 2019, and accordingly, the Company provided GenCanna with extended payment terms, with the full payment to be made in December 2019 after the crop is harvested. The accounting treatment of these sales were consistent with that of the original seed sale transactions as previously disclosed in Note – 1 Organization and Description of Business.

Licensing Agreement

In July 2019, as previously disclosed in Note 4 – Investments, the Company entered into a licensing agreement for the exclusive manufacturing and distribution in seven eastern states of the Binske^® portfolio of products, a brand known for utilizing best-in-class proprietary strains and craft ingredients in its edibles, concentrates, vaporizers, and topicals.

Debentures Payable

In July 2019, the Holder of the $17.5M Debentures converted, in two separate transactions, an aggregate of $2,750,000 of principal and approximately $17,000 of accrued interest into 2,435,144 shares of common stock at conversion prices of $1.08 and $1.70 per share.

Note Receivable

In July 2019, the Company loaned an additional $230,000 to Atalo, pursuant a promissory note to the Company that bears interest at 6% per annum, with principal and interest payable on the earlier of April 3, 2020 or the date on which the Company acquires at least 25% of Atalo’s outstanding capital stock, in which case the principal and interest due shall be credited toward Company’s purchase price for such capital stock.

Equity

In July 2019, the Company issued three-year warrants to purchase 125,000 shares of common stock at an exercise price of $1.71 per share. Also during this month, the Company issued options to purchase 100,000 shares of common stock to an employee at an exercise price of $1.34 per share, expiring five years from issuance date.

In July and August, the Company issued an aggregate of 18,820 shares of common stock to two employees.

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Item 2. Management’s Discussions and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

When used in this form 10-Q and in future filings by the Company with the Commission, the words or phrases such as “anticipate,” “believe,” “could,” “should,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on any such forward looking statements, each of which speak only as of the date made. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company has no obligation to publicly release the result of any revisions which may be made to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different. These factors include, but are not limited to, changes that may occur to general economic and business conditions; changes in current pricing levels that we can charge for our services or which we pay to our suppliers and business partners; changes in political, social and economic conditions in the jurisdictions in which we operate; changes to laws and regulations that pertain to our products and operations; and increased competition.

The following discussion should be read in conjunction with the unaudited financial statements and related notes which are included under Item 1.

We do not undertake to update our forward-looking statements or risk factors to reflect future events or circumstances.

Overview

General

MariMed Inc. (“we”, “our”, “us”, “MariMed” or the “Company”) is a leader in the legal cannabis and hemp industries. The Company’s stock is quoted on the OTCQB market under the ticker symbol, MRMD.

We are industry experts in the development, operation, management and optimization of cannabis cultivation, production and dispensing facilities. These facilities, located in multiple states, are leased to our clients who are entities that have been awarded legal and medical marijuana licenses by multiple states.

Since entering the cannabis industry, the Company has demonstrated an excellent track record in managing state-of-the-art, regulatory-compliant facilities for the cultivation, production, and dispensing of legal cannabis and cannabis-infused products. We provide industry-leading expertise and consultative services in all aspects of cannabis licensing procurement, including ongoing management oversight or real estate services to five independent operations in five states – Delaware, Illinois, Maryland, Nevada and Massachusetts.

We acquire land and/or real estate for the purpose of developing state-of-the-art, regulatory-compliant legal cannabis facilities. These facilities are designed to be models of excellence in horticultural principals, cannabis production, product development and dispensary operations. Along with operational oversight, we provide our clients with legal, accounting, human resources, and other corporate and administrative services.

The Company has secured, on behalf of its clients, 12 cannabis licenses across six states — two in Delaware, two in Illinois, one in Nevada, one in Rhode Island, three in Maryland and three in Massachusetts. We have client operating facilities that are opened or under development in the cities of Wilmington, Lewes, and Milford in Delaware; the cities of Anna and Harrisburg in Illinois; Clark county in Nevada; Arundel county and the city of Hagerstown in Maryland; and the cities of New Bedford and Middleborough in Massachusetts. In total, we have developed in excess of 300,000 square feet of seed-to-sale cannabis facilities.

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In 2018, we began a transition from being a management and advisory firm that provides cannabis licensing, operational consulting and real estate services to being primarily a direct owner of cannabis licenses and operator of seed-to-sale operations. In Massachusetts, we successfully converted a cannabis-licensed client from a non-profit entity to a for-profit corporation with the Company as the sole shareholder. This is described in further detail below.

The Company has implemented a plan to consolidate the ownership of the five remaining client operating entities under the MariMed banner. The consolidation process is at various stages of completion due to the respective state laws governing cannabis license ownership. Once the consolidation is completed, we will own, manage and operate cultivation, manufacturing and retail dispensary operations in six states. Moreover, we plan to leverage our success in providing management oversight in these markets to expand into other states, while focusing on regulatory compliance, efficiency and product performance.

Over our short history, we have developed an excellent reputation for strong management in the cannabis industry. As a management company, MariMed’s clients have thrived and succeeded in their respective markets. Our goal is to continue this success as we transition from a manager and advisor to an owner of cannabis licenses and operator of cannabis businesses.

Recognizing the emergence of the global hemp market, in late 2018 we purchased $30 million of subordinated secured convertible debentures (the “GC Debentures”) from GenCanna Global USA, Inc., a leading producer and distributor of industrial hemp, CBD formulations, and hemp genetics (“GenCanna”). In February 2019, we converted the GC Debentures, plus accrued interest, into a 33.5% ownership interest in GenCanna on a fully diluted basis. Additionally, the Company established a wholly owned subsidiary, MariMed Hemp Inc., in January 2019 to market and distribute hemp-derived CBD products across several vertical markets.

We have also developed precision-dosed cannabis- and hemp-infused products designed for specific medical conditions and related symptoms. These products are licensed under Company-owned brands such as Kalm Fusion™, Betty’s Eddies™, Nature’s Heritage™ and Florance™, in the form of dissolvable strips, tablets, powders, microwaveable popcorn, fruit chews, and with more varieties in development. The Company also sublicenses several top brands including Lucid Mood™ disposable vape pens, , and DabTabs™ revolutionary vaporization tablets infused with cannabis concentrates, the Binske^® line of cannabis products made from premium artisan ingredients, and the clinically tested medicinal cannabis strains developed in Israel by Tikun Olam™. We plan to continue licensing the best brands and products in the industry for distribution through our owned and client owned dispensaries across the country.

Over its short history, the Company has developed an excellent reputation for strong management in the cannabis industry. As a management company, MariMed’s clients have thrived and succeeded in their respective markets. The Company’s goal is to continue this success as it transitions from a manager and advisor to an owner of cannabis licenses and operator of cannabis businesses. The Company’s strengths can be summarized as follows:

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Professional Management

We have had considerable success writing award-winning applications for clients applying for licenses in new and established legal cannabis states; creating and developing defined business, operating and security plans; sourcing real estate for cannabis facilities in receptive municipalities; and raising capital to purchase and develop facilities. These skills are important as the Company expands its footprint into new states on a direct ownership basis.

Development of State-of-the-Art Cannabis Facilities and Operations

We have constructed numerous cannabis facilities in several states utilizing and developing industry “best practices” in all of our facilities, and our clients’ seed-to-sale operations in multiple states are examples of operational excellence under our proven management processes and practices.

Cannabis Brand Creation

We have developed unique brands of precision-dosed cannabis-infused products which are currently licensed and distributed in cannabis-legal states. Going forward, the Company intends to continue expanding both its brand portfolio and the licensing of its branded products into additional states.

Investment in Hemp Production, Branding, and Distribution

Our direct ownership in GenCanna, which we believe will become one of the largest hemp producers in the United States by the year 2020, will help ensure the Company has access to a safe and reliable source of hemp-based CBD. The market for hemp-based CBD products is expected to grow significantly over the next several years.

With the creation of the wholly-owned subsidiary MariMed Hemp in early 2019, the Company has started to make inroads into the branding and distribution of hemp-derived CBD products. With its acquisition in February 2019 of MediTaurus and its Florance™ brand, the Company is starting to leverage the GenCanna relationship and grow the revenue base for hemp-derived CBD products.

Technological and Scientific Innovation

We are diligent in identifying and reviewing the latest sciences and processes applicable to the cultivation, distillation, production, packaging, securing, and distribution of cannabis and cannabis-infused products. We have obtained the highest quality cannabis strains and genetics. We are at the leading edge of patient education and physician outreach for cannabis, and we seek strategic relationships with companies that are at the forefront of extraction and distillation.

Consolidation Plans

The Company’s strategic shift involves the acquisition of the business operations and licenses of entities to which the Company provides advisory and real estate services. The following is an overview of the consolidation process:

Massachusetts

The Company successfully converted ARL Healthcare Inc. (“ARL”), its cannabis-licensed client, from a non-profit entity to a for-profit corporation with the Company as the sole shareholder. The Company now owns ARL and its cannabis licenses for cannabis cultivation, production and dispensing, with rights for up to nine statewide locations in both the medical and adult-use programs. The Company has recently completed construction of a 70,000 square foot state-of-the-art cultivation and production facility for ARL in New Bedford within the Company’s 138,000 square foot facility purchased in 2017. ARL’s manufactured cannabis products will be sold to licensed dispensaries throughout the state serving both the medical and adult-use markets.

The Company also owns a 22,700 square foot building in Middleborough in which a 10,000 square foot dispensary is planned to be open for business in by the end of 2019. Furthermore, the Company intends to open two more dispensaries in the Boston area also by the end of 2019.

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Maryland

In December 2018, the Company entered into a memorandum of understanding to acquire Kind Therapeutics USA Inc. (“Kind”), its cannabis-licensed client that holds licenses for the cultivation, production, and dispensing of medical cannabis. The parties are finalizing a merger document to effectuate the transaction which is conditioned on the approval by the Maryland Medical Cannabis Commission, which is expected to occur in 2020. Until then, the Company will continue to provide management and operational advisory services to Kind, whose operations are conducted within a 100,000 square foot cultivation and manufacturing facility within a Company-owed 180,000 square foot industrial building in Hagerstown. The large production capacity of this facility will enable the Company to take full advantage of a robust Maryland market consisting of over 100 planned dispensaries, most of which are not attached to a specific cultivator. Additionally, the Company has contracted to purchase a 9,000 square foot building in Anne Arundel County for the development of a dispensary, currently scheduled to open in late 2020.

Illinois

In October 2018, the Company entered into a purchase agreement to acquire the ownership interests of KPG of Anna LLC and KPG of Harrisburg LLC, the Company’s two cannabis-licensed clients that operate Company-built and owned medical marijuana dispensaries in the state of Illinois (both entities collectively, the “KPGs”), from the current ownership group of the KPGs. As part of this transaction, the Company will also acquire this ownership group’s interests in Mari Holdings IL LLC, the Company’s subsidiary which owns the real estate in which the KPGs’ dispensaries are located. The Company is currently awaiting approval for this transaction from the state, which is expected to be received in the near future. Additionally, the state is in the process of legalizing adult-use cannabis and will permit the Company to expand into two additional locations when such legalization occurs.

Nevada

In November 2018, the Company issued a letter of intent to acquire 100% of the ownership interests of The Harvest Foundation LLC, the Company’s cannabis-licensed client in the state of Nevada (“Harvest”). In August, the parties entered into a purchase agreement governing the transaction. The acquisition is conditioned upon the approval of the state cannabis commission which is in process. Harvest holds both medical and adult-use cannabis licenses, and operates in approximately 10,000 square feet of an industrial building that the Company leases and has built out into a cannabis cultivation facility.

Delaware

Delaware currently is a not-for-profit state with regard to the ownership of cannabis licenses. The Company provides comprehensive management and real estate services to First State Compassion Center (“FSCC”), the Company’s cannabis-licensed client which was awarded Delaware’s first ever seed-to-sale medical cannabis license, and owns two out of the four statewide licenses.

FSCC operates out of a Company-owned 47,000 square foot seed-to-sale facility in Wilmington, and a Company-leased 4,000 square foot retail location in Lewes. The Company has recently signed a lease with an option to purchase a 100,000 square foot building in Milford, with plans to build another cultivation and production facility to serve the state’s growing patient count.

The state is expected to allow “for-profit” ownership of cannabis licenses in the near future, at which time the Company will look to acquire FSCC and obtain ownership of the licenses and operations

Rhode Island

Rhode Island currently is a not-for-profit state with regard to the ownership of cannabis licenses. The Company is in negotiations to purchase the real estate which is leased to its cannabis-licensed client, the Thomas C. Slater Compassion Center (“Slater”), and to acquire, subject to state approval, the management company that oversees Slater’s operations. After these transactions are completed, the Company will generate real estate and management fees until the state allows “for-profit” ownership, which is expected to occur in 2020. At that time, the Company will seek to acquire Slater’s cannabis licenses and operations.

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New Operations – Completed Transactions & Current Activities

GenCanna Global Inc.

In late 2018, the Company purchased the GC Debentures from GenCanna. In February 2019, the Company converted the GC Debentures plus accrued interest through the conversion date into common shares of GenCanna representing a 33.5% ownership interest in GenCanna on a fully diluted basis, and our CEO, Robert Fireman was appointed to GenCanna’s board of directors.

In December 2018, the 2018 Farm Bill (the “Farm Bill”) became law in the United States. Under the Farm Bill, industrial and commercial hemp is no longer classified as a Schedule I controlled substance, and explicitly allows interstate hemp commerce which will enable its legal transport and delivery across state lines.

GenCanna, based in Winchester, Kentucky, focuses on growing hemp with superior genetics and creating hemp-based products in accordance with the highest quality standards such as GMP (Good Manufacturing Practices) to ensure that wholesalers and consumers receive a consistent high-quality product to meet their wellness needs. GenCanna has also become a thought leader in the hemp industry, working closely with federal and local governmental regulatory authorities.

In 2019 GenCanna has expanded acreage of hemp farming and production of compliant CBD oils, isolates, and infused products, making it one of the largest producers of these products in the country.

MariMed Hemp

To leverage its investment in GenCanna, the Company established MariMed Hemp Inc. in January 2019, a wholly-owned subsidiary to develop, market, and distribute hemp-based CBD brands and products to different classes of retailers and direct to consumers. In addition, this company will be developing and acquiring top quality genetics and biomass to resell to growers and processors.

The rapid growth of legal cannabis and hemp-derived CBD markets presents a global paradigm shift and challenges to medical professionals and consumers who seek scientific knowledge and research regarding medical cannabis and hemp. Accordingly, in addition to the aforementioned objectives, one of MariMed Hemp’s priorities will be to provide credible research-based information about the health benefits of cannabis and hemp to medical providers and their patients, many of whom express a strong and growing appetite for knowledge on this topic. Armed with this knowledge, such healthcare professionals and consumers will be able to effectively and safely choose from a broad, and potentially confusing, range of cannabis products.

As part of its education initiative, the Company is assembling a Scientific Advisory Board (the “SAB”), that includes some of the world’s leading scientists and researchers focused on the scientific application of cannabis and hemp for health and wellness. The SAB’s goals will include the development of strategies to address the most widespread and debilitating medical and dietary conditions through the utilization of cannabis- and hemp-based therapies.

MediTaurus

To facilitate our drive for greater science and education, the Company acquired Meditaurus LLC in June 2019. Meditaurus was established by Dr. Jokubas Ziburkas, a leading authority on hemp-based CBD and the endocannabinoid system. Dr. Ziburkas holds a PhD in Neuroscience, and currently serves as Associate Professor of Neuroscience at the University of Houston, where his research focused on cannabinoid actions in the brain and novel treatments for neurological disorders. He has published over 20 peer-reviewed articles and book chapters, and is regarded as a thought leader in the global cannabis industry.

Meditaurus has developed proprietary formulations for hemp-derived CBD, and currently operates in Lithuania and Texas. Its Florance™ brand, recently launched in Germany, is marketed globally on their website. This transaction includes the commitment of Dr. Ziburkas to become the Chief Innovation Officer of MariMed, and to assist MariMed Hemp Inc. in the marketing and distribution of Florance™ and newly-developed products throughout the United States and Europe.

Pipeline Transactions

MariMed is actively pursuing other growth opportunities to expand its asset portfolio in the hemp and cannabis industries. While no assurance can be given that any of these opportunities will materialize, the Company is currently in various stages of dialog to invest in or acquire several domestic and foreign entities, along with such entities’ licenses, brands and operations.

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Corporate History

The Company was originally incorporated in the state of Delaware in January 2011 as a wholly-owned subsidiary of Worlds Inc. (formerly Worlds.com Inc.) under the name Worlds Online Inc. In May 2011, Worlds Inc. spun-off of the Company to its stockholders. At its inception, the Company operated online virtual environments which did not gain traction with users.

In early 2014, the Company transitioned its operational focus to the emerging cannabis industry. In order to quickly gain traction into this new space, in May 2014, the Company, through its wholly-owned subsidiary MariMed Advisors Inc., acquired Sigal Consulting LLC (“Sigal”), a company operating in the cannabis industry.

The purchase price paid to the former owners of Sigal consisted of (i) an aggregate amount of the Company’s common stock equal to 50% of the outstanding shares on the closing date of September 29, 2014, (ii) options to purchase three million shares of the Company’s common stock, exercisable over five years with exercise prices ranging from $0.15 to $0.35, and (iii) a 49% ownership interest in MariMed Advisors Inc.

During the first half of calendar 2017, the Company changed its name to MariMed Inc. and its ticker symbol to MRMD. Also during this period, the number of authorized shares of the Company’s common and preferred stock were increased to 500 million and 50 million, respectively, and the Company purchased the remaining 49% interest in MariMed Advisors Inc. in exchange for 75 million shares of common stock.

In July 2017, Robert Fireman was named as the Company’s CEO and President, and Jon R. Levine as the CFO, Treasurer, and Secretary.

In October 2017, the Company acquired the intellectual property, formulations, recipes, proprietary equipment, know-how, and other certain assets of the Betty’s Eddies™ brand of cannabis-infused fruit chews.

In May 2018, the Company acquired iRollie LLC, a manufacturer of branded cannabis products and accessories for consumers, and custom product and packaging for companies in the cannabis industry.

In July 2018, the Company entered into a purchase agreement to acquire AgriMed Industries of PA LLC (“AgriMed”), an entity that holds a Pennsylvania license for the cultivation of cannabis and cannabis products that can be wholesaled to medical marijuana dispensaries within the state. In February 2019, the Company filed a complaint against AgriMed for specific performance of their obligations under the purchase agreement. The parties are currently in discussions to resolve this matter.

In August 2018, the Company purchased a 23% ownership interest in CVP Worldwide LLC d/b/a Sprout, an entity that provides a customer relationship management and marketing platform, branded under the name Sprout, specifically designed for companies in the cannabis industry.

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During the period September 2018 to November 2018, in a series of investments, the Company purchased an aggregate of $30 million of subordinated secured convertible debentures of GenCanna. In February 2019, the Company converted the debentures plus accrued interest through the conversion date into a 33.5% equity interest on a fully diluted basis.

In October 2018, the Company entered into a purchase agreement to acquire KPG of Anna LLC and KPG of Harrisburg LLC, the Company’s two cannabis-licensed clients that operate medical marijuana dispensaries in the state of Illinois (both entities collectively, the “KPGs”). As part of this transaction, the Company will also acquire the remaining minority interests of Mari Holdings IL LLC, the Company’s subsidiary that owns the real estate where the KPGs’ two dispensaries are located, from the KPGs’ current ownership group. The parties are currently awaiting state approval of the transaction which is expected to be received in April 2019.

In October 2018, the Company’s cannabis-licensed client in Massachusetts, ARL Healthcare Inc. (“ARL”), filed a plan of entity conversion with the state to convert from a non-profit entity to a for-profit corporation, with the Company as the sole shareholder of the for-profit corporation. ARL holds three cannabis licenses from the state of Massachusetts for the cultivation, production and dispensing of cannabis. In November 2018, the Company received written confirmation of state approval of the conversion plan from the state, making ARL a wholly-owned subsidiary of the Company.

In November 2018, the Company issued a letter of intent to acquire The Harvest Foundation LLC, the Company’s client awarded a cannabis license for cultivation in the state of Nevada. In August 2019, the parties entered into a purchase agreement governing the transaction. The acquisition is conditional upon state approval which is expected to occur by the end of 2019.

In December 2018, the Company made a $500,000 investment in Iconic Ventures Inc. which has developed DabTabs™, a revolutionary product that consists of a convenient portable tablet that delivers precise dosing and acts as a storage system for full spectrum cannabinoid vaporization. Additionally, the Company secured the exclusive distribution rights for six states and is in the process of beginning distribution in the state of Maryland.

In December 2018, the Company executed a memorandum of understanding to merge with its cannabis-licensed client in Maryland, Kind Therapeutics LLC. A merger agreement is currently being drafted for this transaction, which is intended to qualify as a tax-deferred reorganization under the Internal Revenue Code. The parties expect the merger agreement to be finalized, and the transaction approved by the state legislature in 2019.

In January 2019, the Company entered into an agreement with Maryland Health & Wellness Center Inc. (“MHWC”), an entity that has been pre-approved for a cannabis dispensing license, to provide MHWC with a construction loan in connection with the buildout of MHWC’s proposed dispensary location. Upon the two-year anniversary of final state approval of MHWC’s dispensing license, the Company shall have the right, subject to state approval, to convert the promissory note underlying the construction loan into 20% ownership of MHWC. The Company also entered into a consulting services agreement to provide MHWC with advisory and oversight services over a three-year period relating to the development, administration, operation, and management of MHWC’s proposed dispensary in Maryland.

In January 2019, the Company converted a note receivable from Chooze Corp., an entity that develops CBD- and THC-infused products without debilitating side effects, into a 2.7% ownership interest in the entity.

In January 2019, the Company established MariMed Hemp Inc., a wholly-owned subsidiary to develop, market, and distribute hemp-based CBD brands and products, and to provide hemp producers with bulk quantities of hemp genetics and biomass.

In February 2019, the Company converted its $30 million purchase of subordinated secured convertible debentures of GenCanna into a 33.5% ownership interest.

In May 2019, the Company extended loans totaling $750,000 to Atalo Holdings Inc., an agriculture and biotechnology firm specializing in research, development, and production of industrial hemp and hemp-based CBD products.

In May 2019, the Company issued 500,000 shares of its common stock to purchase an 8.95% interest in Terrace Inc., a Canadian entity that develops and acquires international cannabis assets.

In June 2019, the Company executed a purchase agreement to acquire MediTaurus LLC, a company established by Dr. Jokubas Ziburkas, a PhD in neuroscience and a leading authority on hemp-based CBD and the endocannabinoid system. MediTaurus operates in the United States and Europe and has developed proprietary CBD formulations sold under its Florance™ brand.

In July 2019, the Company entered into a licensing agreement for the exclusive manufacturing and distribution in seven eastern states of the Binske^® portfolio of products, a brand known for utilizing best-in-class proprietary strains and craft ingredients in its edibles, concentrates, vaporizers, and topicals.

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Significant Transactions in the Current Period

During the quarter ended June 30, 2019, the Company entered into several hemp seed sale transactions with GenCanna whereby the Company acquired large quantities of top-grade feminized hemp seeds with proven genetics at volume discounts that it sold to GenCanna at market rates. The seeds met the U.S. government’s definition of federally legal industrial hemp, which was descheduled as a controlled substance and classified as an agricultural commodity upon the signing of the 2018 Farm Bill.

The Company purchased approximately $3.3 million of hemp seed inventory in the quarter ended March 31, 2019, and an additional $16.7 million in the quarter ended June 30, 2019, which the Company sold and delivered to GenCanna for approximately $25.2 million. The seeds are to be harvested in the fall of 2019, and accordingly the Company provided GenCanna with extended payment terms, with full payments to be made by December 2019 after the crop is harvested.

As required by the relevant accounting guidance, the Company has classified the $25.2 million due from GenCanna as a receivable from a related party, with $22,0 million recognized as revenue from a related party for the six months ended June 30, 2019, and $3.2 million recorded under Unearned Revenue From Related Party on the balance sheet. When GenCanna makes its payments to the Company in December 2019, the amount in Unearned Revenue From Related Party will be recognized as revenue.

To fund the seed purchases, the Company borrowed $17.0M, which is included in Notes Payable on the balance sheet as of June 30, 2019 and further discussed in Note 11 – Debt.

Towards the end of the second quarter of 2019, and in early third quarter of 2019, the Company purchased approximately $5.0 million of additional hemp seed inventory which it sold and delivered to GenCanna for approximately $8 million in the third quarter of 2019. The Company continues to explore opportunities to continue such seed sale transactions in the future.

Revenues

Our revenues are currently comprised of the following primary categories:

Management – We receive fees for providing comprehensive oversight of our clients’ entire cannabis cultivation, production, and dispensary operations. Along with this oversight, we provide human resources, legal, accounting, sales, marketing, and reporting services.

Real Estate – Our state-of-the-art, regulatory-compliant legal cannabis facilities are leased to our cannabis-licensed clients over 20-year lease terms. We generate rental income from occupancy, tenant improvements, equipment rentals, and additional rental income based on the success of the cannabis licensees.

Licensing – We derive licensing revenue from the sale by the licensees of our branded precision-dosed cannabis-infused products, such as Kalm Fusion™ and Betty’s Eddies™, to legal dispensaries throughout the country.

Consulting – We assist third parties in securing cannabis licenses, and provide advisory services in the areas of facility design and development, and cultivation and dispensing best practices

Supply Procurement – We have established large volume discounts with top national vendors of cultivation and production supplies and equipment, which we acquire and resell at competitive prices to our cannabis-licensed clients with a reasonable markup.

Product Sales – Our direct sales of cannabis, hemp, and products derived from these plants will be classified under this revenue category. During the quarter ended June 30, 2019, we commenced the direct sale of acquired hemp seed inventory. As the Company continues to explore opportunities to continue such sales, significant product sales are expected to be generated from (i) the distribution of the Company’s acquired and developing hemp-derived CBD product lines, and (ii) the dispensary and wholesale operations of ARL in Massachusetts and of the Company’s planned cannabis-licensee acquisitions in Illinois, Maryland, and Nevada.

Expenses

We classify our expenses into three broad categories:

● cost of revenues, which includes the direct costs associated with the generation of our revenues;

● operating expenses, which include the sub-categories of personnel, marketing and promotion, and general and administrative; and

● non-operating income and expenses, which include the sub-categories of interest expense, interest income, non-cash losses on debt settlements and equity in earnings of our non-consolidated investments, and other one-one gains or losses.

Liquidity and Capital Resources

During the six months ended June 30, 2019, we raised $2.6 million from the issuance of common stock, $17.0 million from the issuance of promissory notes, and approximately $7.3 million from the issuance of convertible debentures. Please refer to the notes accompanying our condensed consolidated financial statements at June 30, 2019 for further discussion on these transactions.

These funds will be used to execute on our strategy to become a direct cultivator, producer, and dispenser of cannabis and cannabis-related products, continue the development of our facilities, and expand our hemp seed wholesale operations and branded licensing business. We continue to require and negotiate for additional sources of capital, although there can be no assurance that any such capital will be available on terms that are acceptable to us.

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RESULTS OF OPERATIONS

Three months ended June 30, 2019 compared to three months ended June 30, 2018

Total revenues for the three months ended June 30, 2019 climbed to approximately $25.7 million from approximately $2.9 million for the same period in 2018, a year-over-year increase of approximately $22.8 million. This substantial increase was primarily due to the hemp seed sale transactions with GenCanna, a related party, whereby the Company acquired large quantities of top-grade feminized hemp seeds with proven genetics at volume discounts that it sold to GenCanna at market rates (the “Seed Transactions”). The Seed Transactions have been discussed in further detail in Note 1 – Organization of Description of Business of the Company’s financial statements included in Part I of this filing. Revenue generated from the Seed Transactions commenced in the second quarter of 2019 and approximated $22.0 million during this period. The increase in revenues was also, to a lesser degree, attributable to the growth of management fees and supplemental rents, both of which are earned by the Company based on a percentage of revenue generated by the Company’s cannabis-licensed clients, increased supply procurement services provided to the Company’s cannabis-licensee client in Maryland in 2019, and the expansion of licensing revenue associated with the Company’s branded products.

Cost of revenues rose in line with the aforementioned increase to revenues, from approximately $913,000 for the three months ended June 30, 2018 to approximately $16.7 million for the three months ended June 30, 2019. This increase was primarily due to the cost of hemp seeds incurred by the Company as part of the Seed Transactions which approximated $15.7 million. As a percentage of revenue, cost of revenues in the current quarter associated with the Seed Transactions was 71%, higher than the contracted cost of 60%, due to the deferral of profits required by the accounting guidance and effected via an approximate $3.2 million reduction of the recognized revenue, such reduction based on the Company’s ownership percentage of GenCanna. Apart from the Seed transactions, cost of revenues as a percentage of revenue decreased from 31% in 2018 to 28% in 2019, demonstrating the Company’s continued leveraging of its infrastructure to generate higher margins in its core business.

As a result of the foregoing, gross profit expanded from approximately $2.0 million in 2018 to approximately $8.9 million in 2019, a three-fold increase. Although gross profit as a percentage of revenue declined from 69% to 35%, this was expected based on the 30% contracted margin and the required accounting treatment of the Seed Transactions discussed above. Looking at the recurring business on its own, gross profit as a percentage of revenues increased from 69% to 72%.

Personnel expense increased to approximately $825,000 for the three months ended June 30, 2019 from approximately $285,000 for the same period a year ago. The increase was primarily the result of the hiring of additional staff to support (i) higher levels of revenue and (ii) our expansion into a direct owner of cannabis licenses and operator of seed-to-sale operations.

Marketing and promotion costs decreased slightly to approximately $76,000 for the three months ended June 30, 2019 from approximately $78,000 for the same period a year ago. The minimal change reflects the Company’s decision to curb public relations and related costs after a significant increase of such costs in the first quarter of 2019.

General and administrative costs increased to approximately to $2.7 million for the three months ended June 30, 2019 from approximately $1.2 million for the same period a year ago. The year over year increase is primarily due to a higher level of legal costs and travel expenses in the current quarter associated with the consolidation of our cannabis-licensee clients, settlement of the AgriMed matter, Terrace investment, acquisition of MediTaurus, and other merger activity which has yet to close. The increase is also the result of (i) higher utilities, real estate taxes, security, and other costs from operating an increased number of active facilities, and (ii) non-cash increases in a receivable allowance and in depreciation and amortization.

As a result of the above, the Company generated operating income of approximately $5.3 million for the three months ended June 30, 2019, compared with an operating loss of approximately $441,000 for the same period in 2018.

Non-operating income and expenses improved from a net negative balance of approximately $834,000 for the three months ended June 30, 2018 to a net positive balance of approximately $348,000 for the three months ended June 30, 2019. This favorable swing was primarily due to the net settlement proceeds from the AgriMed matter as disclosed in Note 3 – Acquisitions, offset by (i) increases to interest expense from the additional promissory notes issued during the quarter, such notes being issued to finance the seed transactions with GenCanna as disclosed in Note 1 – Organization and Description of Business, (ii) non-cash amortization of warrant issuances, and (iii) non-cash amortization of the beneficial conversion feature on the $7.5M Debentures as disclosed in Note 12 – Debentures Payable.

As a result of the foregoing, the Company generated net income of approximately $4.7 million for the three months ended June 30, 2019, compared with a net loss of approximately $393,000 for the same period in 2018.

Six months ended June 30, 2019 compared to six months ended June 30, 2018

Total revenues for the six months ended June 30, 2019 expanded to approximately $29.2 million compared with $5.0 million from the same period a year ago, a year-over-year increase of approximately $24.2 million. This considerable increase was principally due to the hemp seed sale transactions with GenCanna, a related party, whereby the Company acquired large quantities of top-grade feminized hemp seeds with proven genetics at volume discounts that it sold to GenCanna at market rates (the “Seed Transactions”). The Seed Transactions have been discussed in further detail in Note 1 – Organization of Description of Business of the Company’s financial statements included in Part I of this filing. Revenue generated from the Seed Transactions commenced in the second quarter of 2019 and approximated $22.0 million through June 30, 2019. The increase in revenues was also, to a lesser degree, attributable to (i) higher rental income from our Maryland facility, (ii) increased supply procurement services provided to cannabis licensees and third parties, (iii) expanded supplemental rents from our Delaware facility, and (iv) additional management fees from Kind in Maryland.

Cost of revenues increased in line with the aforementioned growth in revenues, from approximately $1.8 million for the six months ended June 30, 2018 to approximately $18.0 million for the six months ended June 30, 2019. This increase was primarily due to the cost of hemp seeds incurred by the Company as part of the Seed Transactions which approximated $15.7 million. As a percentage of revenue, cost of revenues associated with the Seed Transactions was 71%, higher than the contracted cost of 60%, due to the deferral of profits required by the accounting guidance and effected via an approximate $3.2 million reduction of the recognized revenue, such reduction based on the Company’s ownership percentage of GenCanna. Apart from the Seed transactions, cost of revenues as a percentage of revenue decreased from 36% in 2018 to 32% in 2019, as the Company continued to leverage its infrastructure to generate higher margins in its recurring business.

Accordingly, gross profit increased from approximately $3.2 million in 2018 to approximately $11.2 million in 2019. Although gross profit as a percentage of revenue declined from 64% to 38.3%, this was expected based on the 30% contracted margin and the required accounting treatment of the Seed Transactions discussed above. Looking at the core business on its own, gross profit as a percentage of revenues 64% to 68%.

Personnel expense increased to approximately $1.5 million for the six months ended June 30, 2019 from $470,000 for the same period a year ago. The increase was primarily the result of the hiring of additional staff to support (i) higher levels of revenue and (ii) our expansion into direct cannabis and hemp operations.

Marketing and promotion costs increased from approximately $130,000 for the six months ended June 30, 2018 to approximately $195,000 for the six months ended June 30, 2019. Despite the increase, these costs were maintained by the Company at a consistent 3% of revenues in both periods.

General and administrative costs increased to approximately $4.4 million for the six months ended June 30, 2019 from approximately $2.5 million for the same period a year ago. The year over year increase is primarily due to a higher level of legal costs and travel expenses in the current period associated with the consolidation of our cannabis-licensee clients, settlement of the AgriMed matter, Terrace investment, acquisition of MediTaurus, and other merger activity which has yet to close. The increase is also the result of (i) higher utilities, real estate taxes, security, and other costs from operating an increased number of active facilities, and (ii) non-cash increases in depreciation and amortization.

Non-operating income and expenses improved from a net negative balance of approximately $2.3 million for the six months ended June 30, 2018 to a net positive balance of approximately $649,000 for the six months ended June 30, 2019. This favorable swing was primarily due to (i) the net settlement proceeds from the AgriMed matter as disclosed in Note 3 – Acquisitions and (ii) the Company’s equity in earnings of GenCanna as disclosed in Note 4 – Investments, offset by (x) increases to interest expense from additional promissory notes issued during the period, primarily to fund the seed transactions with GenCanna as disclosed in Note 1 – Organization and Description of Business, (y) non-cash amortization of warrant issuances, and (z) non-cash amortization of the beneficial conversion feature on the $7.5M Debentures as disclosed in Note 12 – Debentures Payable.

As a result of the foregoing, the Company generated net income of approximately $4.8 million incurred during the six months ended June 30, 2019 compared with a net loss of approximately $2.2 million incurred during the six months ended June 30, 2018.

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Subsequent Events

Seed Transactions

In July 2019, the Company delivered and billed GenCanna an additional $8.0 million for hemp seeds that were purchased by the Company for approximately $5.0 million. The seeds are to be harvested in the fall of 2019, and accordingly, the Company provided GenCanna with extended payment terms, with the full payment to be made in December 2019 after the crop is harvested. The accounting treatment of these sales were consistent with that of the original seed sale transactions as previously disclosed in Note – 1 Organization and Description of Business.

Licensing Agreement

In July 2019, as previously disclosed in Note 4 – Investments, the Company entered into a licensing agreement for the exclusive manufacturing and distribution in seven eastern states of the Binske^® portfolio of products, a brand known for utilizing best-in-class proprietary strains and craft ingredients in its edibles, concentrates, vaporizers, and topicals.

Debentures Payable

In July 2019, the Holder of the $17.5M Debentures converted, in two separate transactions, an aggregate of $2,750,000 of principal and approximately $17,000 of accrued interest into 2,435,144 shares of common stock at conversion prices of $1.08 and $1.70 per share.

Note Receivable

In July 2019, the Company loaned an additional $230,000 to Atalo, pursuant a promissory note to the Company that bears interest at 6% per annum, with principal and interest payable on the earlier of April 3, 2020 or the date on which the Company acquires at least 25% of Atalo’s outstanding capital stock, in which case the principal and interest due shall be credited toward Company’s purchase price for such capital stock.

Equity

In July 2019, the Company issued three-year warrants to purchase 125,000 shares of common stock at an exercise price of $1.71 per share. Also during this month, the Company issued options to purchase 100,000 shares of common stock to an employee at an exercise price of $1.34 per share, expiring five years from issuance date.

In July and August, the Company issued an aggregate of 18,820 shares of common stock to two employees.

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Item 3. Quantitative and Qualitative Disclosure About Market Risk

As a smaller reporting company, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Management’s Evaluation of Our Disclosure Controls and Procedures

Under the supervision and with the participation of our management, our principal executive officer and our principal financial officer, we are responsible for conducting an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, 2019. Disclosure controls and procedures means that the material information required to be included in our SEC reports is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared. Based on this evaluation, and in light of the weaknesses in our internal control over financial reporting described below, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of June 30, 2019.

The ineffectiveness of our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) was due to an insufficient degree of segregation of duties amongst our accounting and financial reporting personnel, and the lack of a formalized and complete set of policy and procedure documentation evidencing our system of internal controls over financial reporting. These factors lead to certain adjustments which had been reflected in our audited financial statements as of December 31, 2018. These weaknesses are not uncommon in a company of our size due to personnel and financial limitations.

During 2019, we have started to work to remediate the material weaknesses identified above, which has included the hiring of an accounting and financial professional with experience in the implementation of GAAP and SEC reporting requirements, and discussion with several independent accounting and auditing firms regarding the retention of such a firm to review, document, and test for effectiveness our internal controls over financial reporting.

Additionally, we expect to continue remediation efforts throughout 2019 by the engagement of accounting consultants as needed to provide expertise on specific areas of the accounting guidance, the continued hiring of individuals with appropriate experience in internal controls over financial reporting, and the modification to our accounting processes and enhancement to our financial controls including the ongoing testing of such controls. Our financial position will determine the extent to which such efforts can be made.

Our management will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements. All internal control systems, no matter how well designed, have inherent limitations which may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Changes in Internal Control Over Financial Reporting

Other than as described above, there has been no change in our internal control over financial reporting during the period to which this report relates that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

39

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

In July 2019, Thomas Kidrin, the former chief executive officer and a former director of the Company, filed a complaint in the Massachusetts Superior Court, Suffolk County, captioned Thomas Kidrin v. MariMed Inc., et. al., Civil Action No. 19-2173D. In the complaint, Mr. Kidrin alleges that the Company failed to pay all wages owed to him and breached his employment agreement, dated August 30, 2012, and requests compensatory damages, attorney fees, costs, and interest. To date, Mr. Kidrin has not served the complaint upon the Company. The Company believes that the allegations are without merit and will vigorously defend this matter when Mr. Kidrin makes service upon it.

Item 1A. Risk Factors

As a smaller reporting company, we are not required to provide the information required by this Item. However, limited information regarding our risk factors appears in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations under the caption Forward-Looking Statements contained in this Quarterly Report on Form 10-Q and in Item 1A. RISK FACTORS of our Annual Report on Form 10-K for the year ended December 31, 2018. There have been no material changes from the risk factors previously disclosed in such Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the six months ended June 30, 2019, the Company sold 799,995 shares of common stock at a price of $3.25 per share, resulting in total proceeds of $2.6 million. These funds will be used to fund the Company’s operations, continue the development of its facilities, and expand its hemp seed wholesale operations and branded licensing business.

In June 2019, the Company issued an aggregate of 1,000,000 shares of common stock to two owners of Harvest.

In July 2019, the Company issued three-year warrants to purchase 125,000 shares of common stock at an exercise price of $1.71 per share. Also during this month, the Company issued options to purchase 100,000 shares of common stock to an employee at an exercise price of $1.34 per share, expiring five years from issuance date.

In July and August, the Company issued an aggregate of18,820 shares of common stock to two employees.

The securities described above were issued to accredited investors in private transactions not involving a public offering or the payment of commissions. The sales of the securities were deemed to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon Sections 4(a)(2) and 4(a)(5) of the Securities Act and Regulation D promulgated thereunder.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosure

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit No.	Description
3.1	Certificate of Incorporation of the Registrant. (Incorporated by reference from Registration Statement on Form 10-12G (File No. 000-54433) filed on June 9, 2011.)
3.1.1	Amended Certificate of Incorporation of the Registrant. (Incorporated by reference from Annual Report on Form 10-K filed on April 17, 2017.)
3.2	Bylaws – Restated as Amended. (Incorporated by reference from Registration Statement on Form 10-12G (File No. 000-54433) filed on June 9, 2011.)
31.1	Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer. (Filed herewith.)
31.2	Rule 13a-14(a)/15d-14(a) Certifications of Chief Financial Officer. (Filed herewith.)
32.1	Section 1350 Certifications of Chief Executive Officer (Furnished, not filed, in accordance with item 601(32)(ii) of Regulation S-K.)
32.2	Section 1350 Certifications of Chief Financial Officer (Furnished, not filed, in accordance with item 601(32)(ii) of Regulation S-K.)

101.INS XBRL	Instance Document (Filed herewith.)
101.SCH XBRL	Taxonomy Extension Schema (Filed herewith.)
101.CAL XBRL	Taxonomy Extension Calculation Linkbase (Filed herewith.)
101.DEF XBRL	Taxonomy Extension Definition Linkbase (Filed herewith.)
101.LAB XBRL	Taxonomy Extension Label Linkbase (Filed herewith.)
101.PRE XBRL	Taxonomy Extension Presentation Linkbase (Filed herewith.)

40

SIGNATURES

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

Date: August 9, 2019

MARIMED INC.
By:	/s/ Robert Fireman
	Robert Fireman
	President and Chief Executive Officer (Principal Executive Officer)
By:	/s/ Jon R. Levine
	Jon R. Levine
	Chief Financial Officer (Principal Financial Officer)

41

INDEX TO EXHIBITS

Exhibit No.	Description
3.1	Certificate of Incorporation of the Registrant. (Incorporated by reference from Registration Statement on Form 10-12G (File No. 000-54433) filed on June 9, 2011.)
3.1.1	Amended Certificate of Incorporation of the Registrant. (Incorporated by reference from Annual Report on Form 10-K filed on April 17, 2017.)
3.2	Bylaws – Restated as Amended. (Incorporated by reference from Registration Statement on Form 10-12G (File No. 000-54433) filed on June 9, 2011.)
31.1	Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer. (Filed herewith.)
31.2	Rule 13a-14(a)/15d-14(a) Certifications of Chief Financial Officer. (Filed herewith.)
32.1	Section 1350 Certifications of Chief Executive Officer (Furnished, not filed, in accordance with item 601(32)(ii) of Regulation S-K.)
32.2	Section 1350 Certifications of Chief Financial Officer (Furnished, not filed, in accordance with item 601(32)(ii) of Regulation S-K.)
101.INS XBRL	Instance Document (Filed herewith.)
101.SCH XBRL	Taxonomy Extension Schema (Filed herewith.)
101.CAL XBRL	Taxonomy Extension Calculation Linkbase (Filed herewith.)
101.DEF XBRL	Taxonomy Extension Definition Linkbase (Filed herewith.)
101.LAB XBRL	Taxonomy Extension Label Linkbase (Filed herewith.)
101.PRE XBRL	Taxonomy Extension Presentation Linkbase (Filed herewith.)

42

EX-31.1

EXHIBIT 31.1

Certifications

I, Robert Fireman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MariMed 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 controls 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 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 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: August 9, 2019

/s/ Robert Fireman

Robert Fireman

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

Certifications

I, Jon R. Levine, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MariMed 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 controls 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 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 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: August 9, 2019

/s/ Jon R. Levine

Jon R. Levine

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

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 Quarterly Report of MariMed Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert Fireman, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, based on my 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 result of operations of the Company.

Date: August 9, 2019	/s/ Robert Fireman
	Robert Fireman
	Chief Executive Officer (Principal Executive Officer)

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

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 Quarterly Report of MariMed Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jon R. Levine, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, based on my 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 result of operations of the Company.

Date: August 9, 2019	/s/ Jon R. Levine
	Jon R. Levine
	Chief Financial Officer (Principal Financial Officer)

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 09, 2019
Document And Entity Information
Entity Registrant Name	MARIMED INC.
Entity Central Index Key	0001522767
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Reporting Status Current	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		218,045,067
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019

XML

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 3,530,213	$ 4,104,315
Accounts receivable, net	8,662,045	5,376,966
Accounts receivable from related party, net	25,177,845
Due from third parties	2,862,681	3,860,377
Deferred rents receivable	2,047,914	2,096,384
Notes receivable, current portion	821,524	51,462
Inventory	4,783,596	90,460
Other current assets	170,189	128,552
Total current assets	48,056,007	15,708,516
Property and equipment, net	37,603,881	34,099,864
Intangibles	3,423,751	185,000
Investments	35,662,106	1,672,163
Notes receivable, less current portion	2,470,867	1,092,376
Debentures receivable		30,000,000
Right-of-use assets under operating leases	6,042,970
Right-of-use assets under finance leases	70,989
Due from related parties		119,781
Other assets	345,905	82,924
Total assets	133,676,476	82,960,624
Current liabilities:
Accounts payable	2,169,363	3,915,430
Accrued expenses	3,920,742	1,588,368
Deferred rents payable		105,901
Notes payable	20,844,176	3,877,701
Mortgages payable, current portion	238,386	188,231
Operating lease liabilities, current portion	647,379
Finance lease liabilities, current portion	23,112
Due to related parties	77,157	276,311
Unearned revenue from related party	3,162,967
Total current liabilities	31,083,282	9,951,942
Mortgages payable, less current portion	7,219,413	7,348,581
Debentures payable	6,736,429	3,557,440
Operating lease liabilities, less current portion	5,662,845
Finance lease liabilities, less current portion	48,874
Other liabilities	100,200	338,200
Total liabilities	50,851,043	21,196,163
Stockholders' equity:
Series A convertible preferred stock, $0.001 par value; 50,000,000 shares authorized at June 30, 2019 and December 31, 2018; no shares issued or outstanding at June 30, 2019 and December 31, 2018
Common stock, $0.001 par value; 500,000,000 shares authorized at June 30, 2019 and December 31, 2018; 215,591,103 and 211,013,043 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively	215,591	211,013
Common stock subscribed but not issued; 752,260 and 97,136 shares at June 30, 2019 and December 31, 2018, respectively	2,080,000	169,123
Additional paid-in capital	100,621,830	87,180,165
Accumulated deficit	(20,921,933)	(25,575,808)
Noncontrolling interests	829,945	(220,032)
Total stockholders' equity	82,825,433	61,764,461
Total liabilities and stockholders' equity	$ 133,676,476	$ 82,960,624

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Series A convertible preferred stock, par value	$ 0.001	$ 0.001
Series A convertible preferred stock, shares authorized	50,000,000	50,000,000
Series A convertible preferred stock, shares issued
Series A convertible preferred stock, shares outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	215,591,103	211,013,043
Common stock, shares outstanding	215,591,103	211,013,043
Common stock, shares subscribed but unissued	752,260	97,136

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Revenues	$ 3,657,798	$ 2,937,325	$ 7,173,614	$ 5,020,275
Revenues from related party	22,014,878		22,014,878
Total revenues	25,672,676	2,937,325	29,188,492	5,020,275
Cost of revenues	16,745,553	913,357	18,000,343	1,802,226
Gross profit	8,927,123	2,023,968	11,188,149	3,218,049
Operating expenses:
Personnel	825,130	284,886	1,498,504	469,557
Marketing and promotion	76,060	77,943	194,959	129,704
General and administrative	2,676,454	1,220,103	4,357,476	2,486,798
Total operating expenses	3,577,644	1,582,932	6,050,939	3,086,059
Operating income (loss)	5,349,479	441,036	5,137,210	131,990
Non-operating income (expenses):
Interest expense	(2,619,460)	(286,258)	(4,560,007)	(602,519)
Interest income	64,345	19,072	346,754	38,906
Loss on debt settlements		(563,119)		(1,776,960)
Equity in earnings of investments	(45,465)		1,912,942
Other	2,948,917	(3,600)	2,948,917	(3,600)
Total non-operating income (expenses)	348,337	(833,905)	648,606	(2,344,173)
Income (loss) before income taxes	5,697,816	(392,869)	5,785,816	(2,212,183)
Provision for income taxes	974,584	(189)	984,595	12,407
Net income (loss)	4,723,232	(392,680)	4,801,221	(2,224,590)
Net income (loss) attributable to noncontrolling interests	46,147	69,287	147,346	132,520
Net income (loss) attributable to MariMed Inc.	$ 4,677,085	$ (461,967)	$ 4,653,875	$ (2,357,110)
Net income (loss) per share
Basic	$ 0.022	$ (0.002)	$ 0.022	$ (0.013)
Diluted	$ 0.02	$ (0.002)	$ 0.02	$ (0.013)
Weighted average common shares outstanding
Basic	213,319,149	186,645,833	211,510,986	182,746,858
Diluted	232,828,964	186,645,833	231,020,801	182,746,858

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Series A Convertible Preferred Stock Subscribed But Not Issued [Member]	Common Stock [Member]	Common Stock Subscribed But Not Issued [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Non-Controlling Interests [Member]	Total
Balance at Dec. 31, 2017	$ 500	$ 176,850	$ 370,000	$ 22,256,060	$ (11,971,740)	$ 175,490	$ 11,007,160
Balance, shares at Dec. 31, 2017	500,000	176,850,331	1,000,000
Sales of common stock		$ 10,112		8,450,891			8,461,003
Sales of common stock, shares		10,111,578
Conversion of Series A preferred stock	$ (500)	$ 971		33,573			34,044
Conversion of Series A preferred stock, shares	(500,000)	970,988
Issuance of subscribed shares		$ 1,000	$ (370,000)	369,000
Issuance of subscribed shares, shares		1,000,000	(1,000,000)
iRollie acquisition			$ 600,000				600,000
iRollie acquisition, shares			264,317
Settlement of obligations		$ 1,314	$ 1,971,600	1,471,846			3,444,760
Settlement of obligations, shares		1,313,901	2,010,922
Exercise of options		$ 300		38,700			39,000
Exercise of options, shares		300,000
Exercise of warrants		$ 1,236	$ 12,833	105,383			119,452
Exercise of warrants, shares		1,235,768	32,083
Amortization of option and warrant issuances				6,863,609			6,863,609
Retirement of promissory notes		$ 1,679		2,091,524			2,093,203
Retirement of promissory notes, shares		1,679,486
Distributions						(325,824)	(325,824)
Net income (loss)					(2,357,110)	132,520	(2,224,590)
Balance at Jun. 30, 2018		$ 193,462	$ 2,584,433	41,680,586	(14,328,850)	(17,814)	30,111,815
Balance, shares at Jun. 30, 2018		193,462,052	2,307,322
Balance at Dec. 31, 2017	$ 500	$ 176,850	$ 370,000	22,256,060	(11,971,740)	175,490	11,007,160
Balance, shares at Dec. 31, 2017	500,000	176,850,331	1,000,000
Balance at Dec. 31, 2018		$ 211,013	$ 169,123	87,180,165	(25,575,808)	(220,032)	61,764,461
Balance, shares at Dec. 31, 2018		211,013,043	97,136
Sales of common stock		$ 800		2,599,200			2,600,000
Sales of common stock, shares		799,995
Issuance of subscribed shares		$ 97	$ (169,123)	169,026
Issuance of subscribed shares, shares		97,136	(97,136)
Exercise of options		$ 359		12,641			13,000
Exercise of options, shares		358,446
Exercise of warrants		$ 666		601,776			602,442
Exercise of warrants, shares		666,104
Amortization of option and warrant issuances				2,458,941			2,458,941
Distributions						(297,369)	(297,369)
MediTaurus acquisition			$ 2,080,000			1,200,000	3,280,000
MediTaurus acquisition, shares			752,260
Terrace investment		$ 500		1,589,500			1,590,000
Terrace investment, shares		500,000
Harvest payment		$ 1,000		(1,000)
Harvest payment, shares		1,000,000
Beneficial conversion feature on debentures				3,384,980			3,384,980
Conversion of debentures payable		$ 1,156		2,626,602			2,627,754
Conversion of debentures payable, shares		1,156,379
Net income (loss)					4,653,875	147,346	4,801,221
Balance at Jun. 30, 2019		$ 215,591	$ 2,080,000	$ 100,621,831	$ (20,921,933)	$ 829,945	$ 82,825,433
Balance, shares at Jun. 30, 2019		215,591,103	752,260

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Cash flows from operating activities:
Net income (loss) attributable to MariMed Inc.	$ 4,677,085	$ (461,967)	$ 4,653,875	$ (2,357,110)
Net income (loss) attributable to noncontrolling interests	46,147	69,287	147,346	132,520
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation			171,125	253,713
Amortization of intangibles			107,917
Amortization of stock option and warrant issuances			1,943,976	977,808
Amortization of beneficial conversion feature			2,281,687
Amortization of original issue discount			28,920
Equity issued to settle obligations				3,444,760
Loss on preferred stock conversions				34,044
Loss on debt settlements		(563,119)		(1,776,960)
Equity in earnings of investments	45,465		(1,912,942)
Changes in operating assets and liabilities:
Accounts receivable, net			(3,279,717)	(1,666,587)
Accounts receivable from related party, net			(25,177,845)
Due from third parties			141,783	(1,177,734)
Deferred rents receivable			48,470	(496,908)
Inventory			(4,173,386)
Other current assets			(41,637)	(44,870)
Other assets			(262,981)	22,139
Accounts payable			(1,746,067)	2,029
Accrued expenses			1,652,508	246,810
Deferred rents payable			(105,901)
Operating lease payments			267,253
Finance lease interest payments			(1,824)
Unearned revenue from related party			3,162,967
Other liabilities			(238,000)
Net cash provided by (used in) operating activities			(22,332,472)	188,818
Cash flows from investing activities:
Purchase of property and equipment			(3,668,398)	(5,663,585)
MediTaurus acquisition			(171,003)
Investment in notes receivable			(1,550,000)	(100,000)
Interest on notes receivable			117,006	22,125
Due from related parties			119,781
Net cash used in investing activities			(5,152,614)	(5,741,460)
Cash flows from financing activities:
Issuance of common stock			2,600,000	8,461,003
Issuance of promissory notes			17,000,000
Payments on promissory notes				(700,000)
Proceeds from issuance of debentures			7,275,000
Proceeds from mortgages				1,998,360
Payments on mortgages			(79,012)	(56,452)
Exercise of stock options			13,000	39,000
Exercise of warrants			602,442	119,451
Due to related parties			(199,154)	(196,000)
Finance lease principal payments			(3,923)
Distributions			(297,369)	(325,825)
Net cash provided by financing activities			26,910,984	9,339,537
Net change to cash and cash equivalents			(574,102)	3,786,895
Cash and cash equivalents at beginning of period			4,104,315	1,290,231	$ 1,290,231
Cash and cash equivalents at end of period	$ 3,530,213	$ 5,077,126	3,530,213	5,077,126	$ 4,104,315
Supplemental disclosure of cash flow information:
Cash paid for interest			787,028	553,206
Cash paid for taxes			10,011	12,596
Non-cash activities:
Conversion of debentures receivable			30,000,000
Operating lease right-of-use assets and liabilities			6,981,772
Finance lease right-of-use assets and liabilities			77,773
Conversions of debentures payable			2,626,759
Beneficial conversion feature on debentures payable			3,384,980
Discount on debentures payable			928,724
Discount on promissory notes			600,621
MediTaurus acquisition			2,500,000
Terrace investment			1,590,000
Harvest payment			1,000
Conversion of notes receivable to investment			257,687
Issuance of common stock associated with subscriptions			169,123
Conversion of advances to notes receivable			855,913
Equity issued to settle debt				$ 1,275,000

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Organization and Description of Business

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Organization and Description of Business

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

MariMed Inc. (the “Company”), a Delaware corporation, is a multi-state organization in the emerging legal cannabis and hemp industries. During 2018, the Company made a strategic decision to transition from a management and advisory firm that provides cannabis licensing, operational consulting and real estate services, to a direct owner of cannabis licenses and operator of seed-to-sale operations. Further, in recognition of the growing demand for hemp-derived cannabidiol (“CBD”), the Company made a strategic investment in GenCanna Global Inc., one of the largest industrial hemp growers in the United States.

To date, the Company’s cannabis business has secured, on behalf of itself and its clients, 12 cannabis licenses across six states—two in Delaware, two in Illinois, one in Nevada, one in Rhode Island, three in Maryland and three in Massachusetts. The Company has developed in excess of 300,000 square feet of state-of-the-art, regulatory-compliant facilities for the cultivation, production, and dispensing of legal cannabis and cannabis-infused products, located in all of the aforementioned states, except Rhode Island. Along with operational oversight of these facilities, the Company provides its clients with license procurement, business development, human resources, accounting, and other corporate and administrative services.

The Company’s plan is to seek to acquire the ownership of all of its cannabis clients who currently lease the majority of the Company’s facilities, and ultimately consolidate these entities under the MariMed banner. The Company has started the consolidation process which is at various stages of completion. For example, in Massachusetts, the Company successfully converted its cannabis-licensed client from a non-profit entity to a for-profit corporation with the Company as the sole shareholder, as described in further detail below. In every state, the Company’s acquisition efforts will be subject to that particular state’s laws governing cannabis license ownership, and accordingly, there is no assurance that the Company will be successful in fully implementing its plan.

Additionally, the Company licenses its own brands of precision-dosed, cannabis- and hemp-infused products to treat specific medical conditions or to achieve a certain effect. These products are licensed under the brand names Kalm Fusion™, Nature’s Heritage™, Betty’s Eddies™, and Florance™. The Company also has exclusive sublicensing rights in certain states to distribute Lucid Mood™ vaporizer pens, DabTabs™ vaporization tablets infused with cannabis concentrates, the Binske^® line of cannabis products made from premium artisan ingredients, and the clinically tested medicinal cannabis strains developed in Israel by Tikun Olam™.

The Company’s stock is quoted on the OTCQB market under the ticker symbol MRMD.

The Company was incorporated in January 2011 under the name Worlds Online Inc. Initially, the Company developed and managed online virtual worlds. By early 2014, this line of business effectively ceased operating, and the Company pivoted into the legal cannabis industry.

Summary Transaction Timeline

The following is a chronological summary of the major transactions undertaken by the Company.

These transactions are disclosed in further detail in Note 3 – Acquisitions, in Note 4 – Investments, and Note 8 – Notes Receivable.

May 2014 – The Company, through its subsidiary MariMed Advisors Inc., acquired Sigal Consulting LLC, a company operating in the medical cannabis industry. This transaction was accounted for as a purchase acquisition where the Company was both the legal and accounting acquirer.

October 2017 – The Company acquired the intellectual property, formulations, recipes, proprietary equipment, knowhow, and other certain assets of Betty’s Eddies™, a brand of cannabis-infused fruit chews.

April 2018 – The Company acquired iRollie LLC, a manufacturer of branded cannabis products and accessories for consumers, and custom product and packaging for companies in the cannabis industry.

August 2018 – The Company exchanged cash and stock to acquire a 23% ownership interest in an entity that developed Sprout, a customer relationship management and marketing platform for companies in the cannabis industry.

August to October 2018 – The Company loaned $300,000 to Healer LLC, an entity that provides cannabis education, dosage programs, and products developed by Dr. Dustin Sulak, an integrative medicine physician and nationally renowned cannabis practitioner. In 2019, the Company loaned Healer an additional $500,000.

October 2018 – The Company entered into a purchase agreement to acquire its two cannabis-licensed clients, KPG of Anna LLC and KPG of Harrisburg LLC, currently operating medical marijuana dispensaries in the state of Illinois. The Company has not yet received legislative approval – required for all ownership changes of cannabis licensees – and therefore these entities were not consolidated into the Company’s financial statements as of June 30, 2019. The Company anticipates approval will be obtained, and the transaction consummated, by the end of 2019.

October 2018 – The Company’s cannabis-licensed client with cultivation and dispensary operations in Massachusetts, ARL Healthcare Inc. (“ARL”), filed a plan of entity conversion with the state to convert from a non-profit entity to a for-profit corporation, with the Company as the sole shareholder of the for-profit corporation. On November 30, 2018, the conversion plan was approved by the Massachusetts Secretary of State, and effective December 1, 2018, ARL was consolidated into the Company as a wholly-owned subsidiary.

November 2018 – The Company issued a letter of intent to acquire The Harvest Foundation LLC, its cannabis-licensed client with cultivation operations in the state of Nevada. The parties entered into a purchase agreement governing the transaction in August 2019. The Company has not yet received state approval for the acquisition, and therefore this entity was not consolidated into the Company’s financial statements as of June 30, 2019. The Company anticipates approval will be obtained, and the transaction consummated, by the end of 2019.

December 2018 – The Company entered into a memorandum of understanding to acquire Kind Therapeutics USA LLC, its cannabis-licensed client in the state of Maryland. The parties expect the merger agreement to be finalized, and the transaction approved by the state in the early part of 2020.

January 2019 – The Company entered into an agreement with Maryland Health & Wellness Center Inc. (“MHWC”), an entity that has been pre-approved for a cannabis dispensing license, to provide MHWC with a construction loan in connection with the buildout of MHWC’s proposed dispensary. Upon the two-year anniversary of final state approval of MHWC’s dispensing license, the Company shall have the right, subject to state approval, to convert the promissory note underlying the construction loan into a 20% ownership interest of MHWC.

January 2019 – The Company converted a note receivable from Chooze Corp., an entity that develops environmentally conscious CBD- and THC-infused products, into a 2.7% ownership interest in the entity.

January 2019 – The Company established MariMed Hemp Inc., a wholly-owned subsidiary to develop, market, and distribute hemp-based CBD brands and products, and to provide hemp producers with bulk quantities of hemp genetics and biomass (“MariMed Hemp”).

February 2019 – The Company converted its $30 million purchase of subordinated secured convertible debentures of GenCanna Global Inc., a producer and distributor of industrial hemp, CBD formulations, hemp genetics, and hemp products (“GenCanna”), into a 33.5% ownership interest in GenCanna.

May 2019 – The Company extended loans totaling $750,000 to Atalo Holdings Inc., an agriculture and biotechnology firm specializing in research, development, and production of industrial hemp and hemp-based CBD products.

May 2019 – The Company issued 500,000 shares of its common stock to purchase an 8.95% interest in Terrace Inc., a Canadian entity that develops and acquires international cannabis assets.

June 2019 – the Company entered into a purchase agreement to acquire MediTaurus LLC, a company established by Dr. Jokubas Ziburkas, a PhD in neuroscience and a leading authority on hemp-based CBD and the endocannabinoid system. Meditaurus operates in the United States and Europe and has developed proprietary CBD formulations sold under its Florance™ brand.

July 2019 – The Company entered into a licensing agreement for the exclusive manufacturing and distribution in seven eastern states of the Binske^® portfolio of products, a brand known for utilizing best-in-class proprietary strains and craft ingredients in its edibles, concentrates, vaporizers, and topicals.

Significant Transactions in the Current Period

During the quarter ended June 30, 2019, the Company entered into several hemp seed sale transactions with GenCanna whereby the Company acquired large quantities of top-grade feminized hemp seeds with proven genetics at volume discounts that it sold to GenCanna at market rates. The seeds met the U.S. government’s definition of federally legal industrial hemp, which was descheduled as a controlled substance and classified as an agricultural commodity upon the signing of the 2018 Farm Bill.

The Company purchased approximately $3.3 million of hemp seed inventory in the quarter ended March 31, 2019, and an additional $16.7 million in the quarter ended June 30, 2019, which the Company sold and delivered to GenCanna for approximately $25.2 million. The seeds are to be harvested in the fall of 2019, and accordingly the Company provided GenCanna with extended payment terms, with full payments to be made by December 2019 after the crop is harvested. The payments by GenCanna are not contingent upon the harvest.

As required by the relevant accounting guidance, the Company has classified the $25.2 million due from GenCanna as a receivable from a related party, with $22,0 million recognized as revenue from a related party for the six months ended June 30, 2019, and $3.2 million recorded under Unearned Revenue From Related Party on the balance sheet. When GenCanna makes its payments to the Company in December 2019, the amount in Unearned Revenue From Related Party will be recognized as revenue. This deferral of revenue represents the Company’s ownership portion of the profit on these transactions of 33.5% (the percentage of GenCanna that the Company currently owns).

To fund the seed purchases, the Company borrowed $17.0M, which is included in Notes Payable on the balance sheet as of June 30, 2019 and further discussed in Note 11 – Debt.

Towards the end of the second quarter of 2019, and in early third quarter of 2019, the Company purchased approximately $5.0 million of additional hemp seed inventory which it sold and delivered to GenCanna for approximately $8 million in the third quarter of 2019. The Company continues to explore opportunities to continue such seed sale transactions in the future.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

In accordance with GAAP, these interim statements do not contain all of the disclosures normally required in annual statements. In addition, the results of operations of interim periods are not necessarily indicative of the results of operations to be expected for the full year. Accordingly, these interim financial statements should be read in conjunction with the Company’s most recent audited annual financial statements and accompanying notes for the year ended December 31, 2018.

Certain reclassifications have been made to prior periods’ data to conform to the current period presentation. These reclassifications had no effect on reported income (losses) or cash flows.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of MariMed Inc. and the following majority-owned subsidiaries:

Subsidiary:	Percentage Owned
MariMed Advisors Inc.		100.0	%
Mia Development LLC		89.5	%
Mari Holdings IL LLC		60.0	%
Mari Holdings MD LLC		97.4	%
Mari Holdings NV LLC		100.0	%
Hartwell Realty Holdings LLC		100.0	%
iRollie LLC		100.0	%
ARL Healthcare Inc.		100.0	%
MariMed Hemp Inc.		100.0	%
MediTaurus LLC		70.0	%

Intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts within the financial statements and disclosures thereof. Actual results could differ from these estimates or assumptions.

Cash Equivalents

The Company considers all highly liquid investments with a maturity date of three months or less to be cash equivalents. The fair values of these investments approximate their carrying values.

The Company’s cash and cash equivalents are maintained with recognized financial institutions located in the United States. In the normal course of business, the Company may carry balances with certain financial institutions that exceed federally insured limits. The Company has not experienced losses on balances in excess of such limits and management believes the Company is not exposed to significant risks in that regard.

Accounts Receivable

Accounts receivable consist of trade receivables and are carried at their estimated collectible amounts.

The Company provides credit to its clients in the form of payment terms. The Company limits its credit risk by performing credit evaluations of its clients and maintaining a reserve, if deemed necessary, for potential credit losses. Such evaluations include the review of a client’s outstanding balances with consideration towards such client’s historical collection experience, as well as prevailing economic and market conditions and other factors. Based on such evaluations, the Company recorded a reserve of $250,000 and $150,000 at June 30, 2019 and December 31, 2018, respectively.

Inventory

Inventory is carried at the lower of cost or net realizable value, with the cost being determined on a first-in, first-out (FIFO) basis. The Company periodically reviews physical inventory and will record a reserve for excess and/or obsolete inventory if necessary. As of the date of this report, no reserve was deemed necessary.

Investments

The Company classifies its investments as available-for-sale-investments. Investments are comprised of equity holding of private companies. These investments are recorded at fair value on the Company’s consolidated balance sheet, with changes to fair value, if any, included in comprehensive income. Investments are evaluated for other-than-temporary impairment and are written down if such impairments are deemed to have occurred.

Revenue Recognition

On January 1, 2018, the Company adopted the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 606, Revenue from Contract with Customers, as amended by subsequently issued Accounting Standards Updates. This revenue standard requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to in exchange for those goods or services. The recognition of revenue is determined by performing the following consecutive steps:

● Identify the contract(s) with a customer;

● Identify the performance obligations in the contract(s);

● Determine the transaction price;

● Allocate the transaction price to the performance obligations in the contract(s); and

● Recognize revenue as the performance obligation is satisfied.

Additionally, when another party is involved in providing goods or services to the Company’s clients, a determination is made as to who—the Company or the other party—is acting in the capacity as the principal in the sale transaction, and who is merely the agent arranging for goods or services to be provided by the other party.

The Company is typically considered the principal if it controls the specified good or service before such good or service is transferred to its client. The Company may also be deemed to be the principal even if it engages another party (an agent) to satisfy some of the performance obligations on its behalf, provided the Company (i) takes on certain responsibilities, obligations and risks, (ii) possesses certain abilities and discretion, or (iii) other relevant indicators of the sale. If deemed an agent, the Company would not recognize revenue for the performance obligations it does not satisfy.

The adoption of this standard did not have a significant impact on the Company’s consolidated operating results, and accordingly no restatement has been made to prior period reported amounts.

The Company’s main sources of revenue are comprised of the following:

● Real Estate – rental income and additional rental fees from leasing of the Company’s regulatory-compliant legal cannabis facilities to its clients, which are cannabis-licensed operating companies. Rental income is generally a fixed amount per month that escalates over the respective lease terms, while additional rental fees are based on a percentage of tenant revenues that exceed a specified amount.

● Management – fees for providing the Company’s cannabis clients with corporate services and operational oversight of their cannabis cultivation, production, and dispensary operations. These fees are based on a percentage of such clients’ revenue, and are recognized after services have been performed.

● Supply Procurement – the Company maintains volume discounts with top national vendors of cultivation and production resources, supplies, and equipment, which the Company acquires and resells to its clients or third parties within the cannabis industry. The Company recognizes this revenue after the acceptance of goods by the purchaser.

● Licensing – revenue from the sale of precision-dosed, cannabis-infused products, such as Kalm Fusion™ and Betty’s Eddies™, to legal dispensaries throughout the United States. The recognition of this revenue occurs when the products are delivered.

● Consulting – fees from third-parties parties where the Company provides assistance in securing cannabis licenses, and advisory services in the areas of facility design and development, and cultivation and dispensing best practices. These fees are recognized as the services are performed.

● Product Sales – direct sales of cannabis, hemp, and products derived from these plants. During the quarter ended June 30,2019, the Company commenced the direct sale of acquired hemp seed inventory. As the Company continues to explore opportunities to continue such sales, significant product sales are expected to be generated from (i) the distribution of the Company’s acquired and developing hemp-derived CBD product lines, and (ii) the dispensary and wholesale operations of ARL in Massachusetts and of the Company’s planned cannabis-licensee acquisitions in Illinois, Maryland, and Nevada. This revenue will be recognized when products are delivered or at retail points-of-sale.

Research and Development Costs

Research and development costs are charged to operations as incurred.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation, with depreciation recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term, if applicable. When assets are retired or disposed, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income. Repairs and maintenance are charged to expense in the period incurred.

The estimated useful lives of property and equipment are generally as follows: buildings and building improvements, seven to thirty-nine years; tenant improvements, the remaining duration of the related lease; furniture and fixtures, seven years; machinery and equipment, five to ten years. Land is not depreciated.

The Company’s property and equipment are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undiscounted basis. An impairment loss is measured based on the excess of the asset’s carrying amount over its estimated fair value.

Impairment analyses are based on management’s current plans, intended holding periods and available market information at the time the analyses are prepared. If these criteria change, the Company’s evaluation of impairment losses may be different and could have a material impact to the consolidated financial statements.

For the six months ended June 30, 2019 and 2018, based on its impairment analyses, the Company did not have any impairment losses.

Leases

The consolidated financial statements reflect the Company’s adoption of ASC 842, Leases, as amended by subsequent accounting standards updates, utilizing the modified retrospective transition approach which calls for applying the new standard to all of the Company’s leases effective January 1, 2019, which is the effective date of adoption.

ASC 842 is intended to improve financial reporting of leasing transactions. The most prominent change from previous accounting guidance is the requirement to recognize right-of-use assets and lease liabilities for the rights and obligations created by operating leases in which the Company is the lessee that extend more than twelve months on the balance sheet. The Company elected the package of practical expedients permitted under ASC 842. Accordingly, the Company accounted for its existing operating leases that commenced before the effective date as operating leases under the new guidance without reassessing (i) whether the contracts contain a lease, (ii) the classification of the leases (iii) the accounting for indirect costs as defined in ASC 842.

The Company determines if an arrangement is a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Non-lease components within lease agreements are accounted for separately. Right-of-use assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term, utilizing the Company’s incremental borrowing rate. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of its fixed assets and other assets in accordance with ASC 360-10-15, Impairment or Disposal of Long-Lived Assets. Impairment of long-lived assets is recognized when the net book value of such assets exceeds their expected cash flows, in which case the assets are written down to fair value, which is determined based on discounted future cash flows or appraised values.

Fair Value of Financial Instruments

The Company follows the provisions of ASC 820, Fair Value Measurement, to measure the fair value of its financial instruments, and ASC 825, Financial Instruments, for disclosures on the fair value of its financial instruments. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by ASC 820 are:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Pricing inputs that are generally observable inputs and not corroborated by market data.

The carrying amounts of the Company’s financial assets and liabilities, such as cash and accounts payable approximate their fair values due to the short maturity of these instruments.

The fair value of option and warrant issuances are determined using the Black-Scholes pricing model and employing several inputs such as the expected life of instrument, the exercise price, the expected risk-free interest rate, the expected dividend yield, the value of the Company’s common stock on issuance date, and the expected volatility of such common stock. The following table summarizes the range of inputs used by the Company during the six months ended June 30, 2019 and 2018:

	Six Months Ended June 30,
	2019		2018
Life of instrument		3.0 years		2.8 to 5.0 years
Volatility factors		1.059 to 1.106		1.020 to 2.086
Risk-free interest rates		1.76% to 2.28%		1.92% to 2.94%
Dividend yield		0%		0%

The expected life of an instrument is calculated using the simplified method pursuant to Staff Accounting Bulletin Topic 14, Share-Based Payment, which allows for using the mid-point between the vesting date and expiration date. The volatility factors are based on the historical two-year movement of the Company’s common stock prior to an instrument’s issuance date. The risk-free interest rate is based on U.S. Treasury rates with maturity periods similar to the expected instruments life on the issuance date.

The Company amortizes the fair value of option and warrant issuances on a straight-line basis over the requisite service period of each instrument.

Extinguishment of Liabilities

The Company accounts for extinguishment of liabilities in accordance with ASC 405-20, Extinguishments of Liabilities. When the conditions for extinguishment are met, the liabilities are written down to zero and a gain or loss is recognized.

Stock-Based Compensation

The Company accounts for stock-based compensation using the fair value method as set forth in ASC 718, Compensation—Stock Compensation, which requires a public entity to measure the cost of employee services received in exchange for an equity award based on the fair value of the award on the grant date, with limited exceptions. Such value will be incurred as compensation expense over the period an employee is required to provide service in exchange for the award, usually the vesting period. No compensation cost is recognized for equity awards for which employees do not render the requisite service.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits for the six months ended June 30, 2019 and 2018.

Related Party Transactions

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

In accordance with ASC 850, the Company’s financial statements include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business, as well as transactions that are eliminated in the preparation of financial statements.

Comprehensive Income

The Company reports comprehensive income and its components following guidance set forth by ASC 220, Comprehensive Income, which establishes standards for the reporting and display of comprehensive income and its components in the consolidated financial statements. There were no items of comprehensive income applicable to the Company during the period covered in the financial statements.

Earnings Per Share

Earnings per common share is computed pursuant to ASC 260, Earnings Per Share. Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income by the sum of the weighted average number of shares of common stock outstanding plus the weighted average number of potentially dilutive securities during the period.

As of June 30, 2019 and 2018, there were 18,655,107 and 12,508,932, respectively, of potentially dilutive securities in the form of options and warrants. Also as of such dates, there were $350,000 and $250,000, respectively, of convertible promissory notes, and $13.75 million and zero, respectively, of convertible debentures payable, that were potentially dilutive, whose conversion into common stock is based on a discount to the market value of common stock on or about the future conversion date. Utilizing the June 30, 2019 closing stock price of the Company’s common stock, all such dilutive securities were convertible into 19,509,815 shares of common stock. Such share amount was included in the number of weighted average common shares outstanding on a diluted basis, and in the calculation of diluted net income per share for the three and six months ended June 30, 2019, as shown in the statement of operations.

Commitments and Contingencies

The Company follows ASC 450, Contingencies, which requires the Company to assess the likelihood that a loss will be incurred from the occurrence or non-occurrence of one or more future events. Such assessment inherently involves an exercise of judgment. In assessing possible loss contingencies from legal proceedings or unasserted claims, the Company evaluates the perceived merits of such proceedings or claims, and of the relief sought or expected to be sought.

If the assessment of a contingency indicates that it is probable that a material loss will be incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

While not assured, management does not believe, based upon information available at this time, that a loss contingency will have material adverse effect on the Company’s financial position, results of operations or cash flows.

Beneficial Conversion Features on Convertible Debt

Convertible instruments that are not bifurcated as a derivative pursuant to ASC 815, Derivatives and Hedging, and not accounted for as a separate equity component under the cash conversion guidance are evaluated to determine whether their conversion prices create an embedded beneficial conversion feature at inception, or may become beneficial in the future due to potential adjustments.

A beneficial conversion feature is a nondetachable conversion feature that is “in-the-money” at the commitment date. The in-the-money portion, also known as the intrinsic value of the option, is recorded in equity, with an offsetting discount to the carrying amount of convertible debt to which it is attached. The discount is amortized to interest expense over the life of the debt with adjustments to amortization upon full or partial conversions of the debt.

Risk and Uncertainties

The Company is subject to risks common to companies operating within the legal and medical marijuana industries, including, but not limited to, federal laws, government regulations and jurisdictional laws.

Noncontrolling Interests

Noncontrolling interests represent third-party minority ownership of the Company’s consolidated subsidiaries. Net income attributable to noncontrolling interests is shown in the consolidated statements of operations; and the value of net assets owned by noncontrolling interests are presented as a component of equity within the balance sheets.

Off Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Recent Accounting Pronouncements

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which enhances and clarifies the guidance on the classification and presentation of restricted cash in the statement of cash flows. This ASU was adopted effective January 1, 2019 with no impact to the Company’s financial statements and related disclosures.

In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvement to Nonemployee Share-Based Payment Accounting, which is part of the FASB’s simplification initiative to maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. This update, which provides consistency in the accounting for share-based payments to nonemployees with that of employees, was adopted effective January 1, 2019 with no material impact to the Company’s financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) which simplifies goodwill impairment testing by requiring that such periodic testing be performed by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures, which is effective for fiscal years, including interim periods, beginning after December 15, 2019.

In addition to the above, the Company has reviewed all other recently issued, but not yet effective, accounting pronouncements, and does not believe the future adoption of any such pronouncements will have a material impact on its financial condition or the results of its operations.

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Acquisitions

6 Months Ended

Jun. 30, 2019

Business Combinations [Abstract]

Acquisitions

NOTE 3 – ACQUISITIONS

Sigal Consulting LLC

In May 2014, the Company, through its subsidiary MariMed Advisors Inc., acquired Sigal Consulting LLC from its ownership group which included the current CEO and CFO of the Company (the “Sigal Ownership Group”). The purchase price received by the Sigal Ownership Group was comprised of (i) 31,954,236 shares of common stock valued at approximately $5,913.000, representing 50% of the Company’s outstanding shares on the closing date, (ii) options to purchase three million shares of the Company’s common stock, expiring in September 2019 with exercise prices ranging from $0.15 to $0.35, and valued at approximately $570,000, and (iii) a 49% ownership interest in MariMed Advisors Inc. The excess of purchase price over the book value of the acquired entity was recorded as goodwill, which was subsequently impaired in full and written down to zero.

In June 2017, the remaining 49% interest of MariMed Advisors Inc. was acquired by the Company in exchange for an aggregate 75 million shares of common stock issued to the Sigal Ownership Group.

Betty’s Eddies™

In October 2017, the Company acquired the intellectual property, formulations, recipes, proprietary equipment, know-how, and other certain assets of the Betty’s Eddies™ brand of cannabis-infused fruit chews, from Icky Enterprises LLC, a company partially owned by an officer of the company (“Icky”). The purchase price was $140,000 plus 1,000,000 shares of the Company’s common stock valued at $370,000 based on the price of the common stock on the date of the agreement.

The acquisition was accounted for in accordance with ASC 10, Business Combinations. The following table summarizes the allocation of the purchase price to the fair value of the assets acquired on the acquisition date:

Inventory	$	46,544
Machinery and equipment		130,255
Goodwill		333,201
Total fair value of consideration	$	510,000

The goodwill balance of approximately $333,000 was written off in 2018.

As part of the agreement between the parties, Icky is entitled to receive royalties based on a percentage of the Company’s sales of the Betty’s Eddies™ product line, commencing at 25% and decreasing to 2.5% as certain sales thresholds are met. For the six months ended June 30, 2019 and 2018, such royalties approximated $85,000 and $14,000, respectively.

iRollie LLC

Effective April 2018, the Company entered into a purchase agreement whereby 264,317 shares of the Company’s common stock were exchanged for 100% of the ownership interests of iRollie LLC, a manufacturer of branded cannabis products and accessories for consumers, and custom product and packaging for companies in the cannabis industry. The Company acquired, among other assets, iRollie’s entire product line, service offerings, client list, and intellectual property, and hired its two co-founders.

The acquisition was accounted for in accordance with ASC 10. The shares of Company common stock, valued at approximately $280,000, were issued to iRollie’s former owners in December 2018, at which time the Company adjusted the total goodwill generated by the transaction. The following table summarizes the allocation of the purchase price to the fair value of the assets acquired:

Cash and cash equivalents	$	13,494
Goodwill		266,682
Total fair value of consideration	$	280,176

Prior to the acquisition, iRollie had not been generating positive cash flow as a stand-alone entity, and in conformity with relevant accounting guidance, the goodwill was written off.

ARL Healthcare Inc.

In October 2018, the Company’s cannabis-licensed client in Massachusetts, ARL Healthcare Inc. (“ARL”), filed a plan of entity conversion with the state to convert from a non-profit entity to a for-profit corporation, with the Company as the sole shareholder of the for-profit corporation. ARL holds three cannabis licenses from the state of Massachusetts for the cultivation, production and dispensing of cannabis.

On November 30, 2018, the conversion plan was approved by the Massachusetts Secretary of State, and effective December 1, 2018, ARL was consolidated into the Company as a wholly-owned subsidiary.

The acquisition was accounted for in accordance with ASC 10, Business Combinations. The following table summarizes the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed on the acquisition date:

Equipment	$	21,000
Cannabis licenses		185,000
Accounts payable		(120,689	)
Due to related parties		(92,765	)
Total identifiable net assets		(7,454	)
Goodwill		731,902
Total fair value of consideration	$	724,448

The total consideration paid by the Company was equal to the forgiveness of amounts owed to the Company by ARL. Accordingly, the transaction gave rise to goodwill of approximately $732,000, which the Company wrote off. The cannabis licenses acquired was included in the balance of Intangibles within the asset section of the Company’s balance sheet at December 31, 2018. This intangible asset is being amortized over its estimated useful life, and at June 30, 2019, the carrying value less amortization was approximately $77,000.

KPG of Anna LLC and KPG of Harrisburg LLC

In October 2018, the Company entered into a purchase agreement to acquire 100% of the ownership interests of KPG of Anna LLC and KPG of Harrisburg LLC, the Company’s two cannabis-licensed clients that operate medical marijuana dispensaries in the state of Illinois (both entities collectively, the “KPGs”), from the current ownership group of the KPGs (the “Sellers”). As part of this transaction, the Company will also acquire the Sellers’ ownership interests of Mari Holdings IL LLC, the Company’s subsidiary which owns the real estate in which the KPGs’ dispensaries are located (“Mari-IL”).

The purchase price of 1,000,000 shares of the Company’s common stock shall be issued to the Sellers upon the closing of the transaction, which is dependent upon, among other closing conditions, the approval by the Illinois Department of Financial and Professional Regulation. Such approval is expected to be received by the end of 2019. After the transaction is effectuated, the KPGs and Mari-IL will be wholly-owned subsidiaries of the Company.

As of June 30, 2019, the Company had not yet received the state approval for the transaction, and therefore the operations of the KPGs were not consolidated into the Company’s financial statements at such date. The Company anticipates that approval will be obtained, and the transaction consummated, by the end of 2019. When that occurs, the Company will consolidate the acquired entities in accordance with ASC 10.

The Harvest Foundation LLC

In November 2018, the Company issued a letter of intent to acquire 100% of the ownership interests of The Harvest Foundation LLC, the Company’s cannabis-licensed client in the state of Nevada (“Harvest”). In August 2019, the parties entered into a purchase agreement governing the transaction. The acquisition is conditioned upon the appropriate legislative approval of the transaction, which is expected to occur by the end of 2019. Accordingly, the operations of Harvest have not been consolidated for the six months ended June 30, 2019.

The purchase price is comprised of the issuance of (i) 1,000,000 shares of the Company’s common stock, in the aggregate, to two owners of Harvest, as a good faith deposit upon execution of the purchase agreement, (ii) $1.2 million of the Company’s common stock at closing, based on the closing price of the common stock on the day prior to state approval of the transaction, and (iii) warrants to purchase 400,000 shares of the Company’s common stock at an exercise price equal to the closing price of the Company’s common stock on the day prior to state approval of the transaction, In June 2019, the Company issued the aggregate 1,000,000 shares of common stock to the two owners of Harvest  as a good faith deposit. These shares are restricted and will be returned to the Company in the event the transaction does not close by a certain date. As the transaction has not been consummated, the issued shares were recorded at par value within the Stockholders’ Equity section of the balance sheet at June 30, 2019.

Kind Therapeutics USA LLC

In December 2018, the Company entered into a memorandum of understanding to merge with its cannabis-licensed client in Maryland, Kind Therapeutics USA LLC. A merger agreement is currently being drafted for this transaction, which is intended to qualify as a tax-deferred reorganization under the Internal Revenue Code. The parties expect the merger agreement to be finalized, and the transaction approved by the state legislature in 2020.

MediTaurus LLC

In May 2019, the Company entered into a purchase agreement to acquire Meditaurus LLC, a company established by Dr. Jokubas Ziburkas, a PhD in neuroscience and a leading authority on CBD and its interactions with the brain and endocannabinoid system. Meditaurus currently operates in the United States and Europe and has developed proprietary CBD formulations sold under its Florance™ brand.

Pursuant to the purchase agreement, the Company acquired 70% of MediTaurus on June 1, 2019, and will acquire the remaining 30% of MediTaurus on June 1, 2020. The purchase price for the initial 70% was $2.8 million, comprised of cash payments totaling $720,000 and 752,260 shares of the Company’s common stock valued at $2,080,000. The purchase price of the remaining 30%, payable in cash or stock at the Company’s option, shall be equal to a defined percentage of the Company’s receipts from the licensing of certain MediTaurus technology and products that existing on June 1, 2019 (all such technology and products, the “MT Property”). For a period of ten years following June 1, 2020, certain former members of MediTaurus shall be paid a royalty on the Company’s receipts from the licensing of MT Property, with the royalty percentage commencing at 10% and decreasing to 2% over time.

The acquisition was accounted for in accordance with ASC 10. The following table summarizes the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed on the acquisition date:

Cash and cash equivalents	$	128,997
Accounts receivable		5,362
Inventory		519,750
Tradename and customer lists		3,346,668
Accounts payable		(777	)
Total value of MediTaurus		4,000,000
Noncontrolling interests in MediTaurus		(1,200,000	)
Total fair value of consideration	$	2,800,000

The tradename and customer lists acquired were included the balance of Intangibles within the asset section of the Company’s balance sheet at June 30, 2019. A valuation of MediTaurus is currently pending; the useful lives of the intangible assets will be disclosed after the valuation is completed

As part of the transaction, the Company hired Dr. Ziburkas as the Company’s Chief Innovation Officer, as well as other members of the MediTaurus executive team.

AgriMed Industries of PA LLC

In July 2018, the Company entered into a purchase agreement to acquire 100% of the ownership interests of AgriMed Industries of PA LLC (“AgriMed”), an entity that holds a license from the state of Pennsylvania for the cultivation of cannabis. The purchase price was comprised of $8 million, payable in stock and cash, and the assumption of certain liabilities of AgriMed. In February 2019, the Company commenced legal proceedings against AgriMed seeking specific performance of the purchase agreement.

In May 2019, the dispute between the parties was resolved through the cash payment to the Company of $3.1 million and other good and valuable consideration, in exchange for the Company relinquishing its rights under the purchase agreement and releasing its claims against AgriMed. The net amount of approximately $2,949,000, representing the cash payment less legal fees and writeoffs of assets and supplies, was recorded in Other Non-Operating Income in the Company’s consolidated statement of operations for the six months ended June 30, 2019.

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Investments

6 Months Ended

Jun. 30, 2019

Schedule of Investments [Abstract]

Investments

NOTE 4 – INVESTMENTS

At June 30, 2019 and December 31, 2018, the Company’s investments were comprised of the following:

	June 30, 2019		December 31, 2018
GenCanna Global Inc.	$	32,234,403	$	-
Terrace Inc.		1,590,000		-
CVP Worldwide LLC		1,080,016		1,172,163
Iconic Ventures Inc.		500,000		500,000
Chooze Corp.		257,687		-
Total investments	$	35,662,106	$	1,672,163

GenCanna Global Inc.

During 2018, in a series of transactions, the Company purchased $30 million of subordinated secured convertible debentures (the “GC Debentures”) of GenCanna. In February 2019, the Company converted the GC Debentures, plus unpaid accrued interest of approximately $229,000 through the conversion date, into common stock of GenCanna equal to a 33.5% ownership interest in GenCanna on a fully diluted basis.

The investment has been accounted for under the equity method. Accordingly, the Company recorded equity in earnings of approximately $2.0 million based on its percentage equity interest in GenCanna’s net income from the date of conversion through June 30, 2019.

Among other provisions of the subscription agreement governing the GC Debentures, the Company agreed to fund a $10 million employee bonus pool should GenCanna meet certain 2019 operating targets, and the Company’s CEO was appointed to GenCanna’s board. Additionally, pursuant to a rights agreement, the Company was granted certain rights including the rights of inspection, financial information, and participation in future security offerings of GenCanna.

Terrace Inc.

In May 2019, the Company issued 500,000 shares of its common stock, valued at $1.59 million on the date of issuance, to purchase an 8.95% interest in Terrace Inc., a Canadian entity that develops and acquires international cannabis assets. The Company was not given a board seat, nor does it have the ability to exert operational or financial control over the entity. In accordance with ASC 321, Investments – Equity Securities, the Company elected the measurement alternative to value this equity investment without a readily determinable fair value. Under this alternative measurement election, the investment is recorded at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment in Terrace. Following the Company’s purchase, there has been no impairment to this investment, nor any observable price declines to investments in Terrace. Accordingly, this investment was carried at its cost of $1.59 million at June 30, 2019.

The Company will continue to apply the alternative measurement guidance until this investment does not qualify to be so measured. The Company may subsequently elect to measure this investment at fair value, and if so, shall measure all identical or similar investments in Terrace at fair value. Any subsequent changes in fair value shall be recognized in net income.

CVP Worldwide LLC

In August 2018, the Company invested $300,000, of a total contracted cash investment of $500,000, and issued 378,259 shares of its common stock, valued at approximately $915,000, in exchange for a 23% ownership in CVP Worldwide LLC (“CVP”). CVP has developed a customer relationship management and marketing platform, branded under the name Sprout, which is specifically designed for companies in the cannabis industry.

The Company shall assist in the ongoing development and design of Sprout, and in marketing Sprout to companies within the cannabis industry. The Company shall earn a percentage share of Sprout’s revenues generated from sales (i) to the Company’s clients, and (ii) by the Company to third parties. As of June 30, 2019, no revenue was earned by the Company.

The investment has been accounted under the equity method. In 2018, the Company recorded a charge to net income of approximately $43,000 based on its equity in CVP’s net loss during the period of the Company’s ownership. Such amount reduced the carrying value of the investment to approximately $1,172,000 at December 31, 2018. For the six months ended June 30, 2019, the Company recorded a charge of approximately $92,000 representing the Company’s equity in CVP’s net loss during this period, further reducing the carrying value of the investment to approximately $1,080,000 at June 30, 2019.

Iconic Ventures Inc.

In December 2018, the Company purchased 2,500,000 shares of common stock of Iconic Ventures Inc. (“Iconic”) for an aggregate price of $500,000. Iconic has developed DabTabs™, a unique solution for cannabinoid vaporization via a convenient portable tablet that provides precisely measured dosing and acts as a storage system for full spectrum extracts, concentrates and distillates.

The Company’s investment equates to a current ownership percentage in Iconic of approximately 10%. The Company was not given a board seat, nor does it have the ability to exert operational or financial control over the entity. In accordance with ASC 321, the Company elected the measurement alternative to value this equity investment without a readily determinable fair value. Following the Company’s purchase, there has been no impairment to this investment, nor any observable price changes to investments in Iconic. Accordingly, this investment was carried at $500,000 at June 30, 2019 and December 31, 2018.

The Company will continue to apply the alternative measurement guidance until this investment does not qualify to be so measured. The Company may subsequently elect to measure this investment at fair value, and if so, shall measure all identical or similar investments in Iconic at fair value. Any subsequent changes in fair value shall be recognized in net income.

Chooze Corp.

In January 2019, the entire principal and accrued interest balance of a note receivable from Chooze Corp. of approximately $258,000 was converted into a 2.7% equity interest in Chooze. In accordance with ASC 321, the Company elected the measurement alternative to value this equity investment without a readily determinable fair value. Following the Company’s purchase, there has been no impairment to this investment, nor any observable price changes to investments in the entity. Accordingly, this investment was carried at approximately $258,000 at June 30, 2019.

The Company will continue to apply the alternative measurement guidance until this investment does not qualify to be so measured. The Company may subsequently elect to measure this investment at fair value, and if so, shall measure all identical or similar investments in Chooze at fair value. Any subsequent changes in fair value shall be recognized in net income.

Binske^®

In July 2019, the Company entered into a licensing agreement for the exclusive manufacturing and distribution in seven eastern states of the Binske^® portfolio of products, a brand known for utilizing best-in-class proprietary strains and craft ingredients in its edibles, concentrates, vaporizers, and topicals. In consideration for the license and other rights, the Company shall pay a royalty of 10.0% to 12.5% of gross revenue, as defined, derived from the sale of Binske^® products, subject to an annual minimum royalty. No such gross revenue was generated as of June 30, 2019.

Vitiprints

In August 2019, the Company terminated the license agreement it had entered into in August 2018 for the use of a patented technology to produce and distribute cannabis products with precise dosing and at increased economies (“Vitiprints”). The licensing agreement had an initial term of five years, and required the Company to make non-refundable payment of $250,000 which the Company charged to Cost of Revenues in August 2018. No royalties were payable from the Vitiprints license agreement as of June 30, 2019.

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Deferred Rents Receivable

6 Months Ended

Jun. 30, 2019

Revenue Recognition and Deferred Revenue [Abstract]

Deferred Rents Receivable

NOTE 5 – DEFERRED RENTS RECEIVABLE

The Company is the lessor under several operating leases which contain rent holidays, escalating rents over time, options to renew, requirements to pay property taxes, insurance and/or maintenance costs, and contingent rental payments based on a percentage of monthly tenant revenues. The Company is not the lessor to any finance leases.

The Company recognizes fixed rental receipts from such lease agreements on a straight-line basis over the expected lease term. Differences between amounts received and amounts recognized are recorded under Deferred Rents Receivable on the balance sheet. Contingent rentals are recognized only after tenants’ revenues are finalized and if such revenues exceed certain minimum levels.

The Company leases the following owned properties:

● Delaware – a 45,000 square foot facility purchased in September 2016 and built into a cannabis cultivation, processing, and dispensary facility which is leased to a cannabis-licensed client occupying 100% of the space under a 20-year triple net lease expiring in 2035.

● Illinois – two 3,400 square foot free-standing retail dispensaries in the cities of Anna and Harrisburg and leased to two licensed cannabis dispensary clients each under a 20-year lease expiring in 2036.

● Maryland – a 180,000 square foot former manufacturing facility purchased January 2017 and rehabilitated by the Company into a cultivation and processing facility which is leased to a licensed cannabis client under a 20-year triple net lease that started in January 2018.

● Massachusetts – a 138,000 square foot industrial property of which approximately half of the available square footage is leased to a non-cannabis manufacturing company under a five-year lease.

The Company subleases the following property:

● Delaware – 4,000 square feet of retail space in a multi-use building space which the Company developed into a cannabis dispensary which is subleased to its cannabis-licensed client under a under a five-year triple net lease with a five-year option to extend.

As of June 30, 2019 and December 31, 2018, cumulative fixed rental receipts under such leases approximated $7.5 million and $5.4 million, respectively, compared to revenue recognized on a straight-line basis of approximately $9.5 million and $7.5 million. Accordingly, the deferred rents receivable balances at June 30, 2019 and December 31, 2018 approximated $2.0 million and $2.1 million, respectively.

Future minimum rental receipts for non-cancelable leases and subleases as of June 30, 2019 were:

2019	$	2,071,161
2020		4,222,040
2021		4,368,640
2022		4,293,999
2023		3,997,651
Thereafter		48,942,935
Total	$	67,896,427

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Due from Third Parties

6 Months Ended

Jun. 30, 2019

Due From Third Parties

Due from Third Parties

NOTE 6 – DUE FROM THIRD PARTIES

At June 30, 2019 and December 31, 2018, the following amounts were advanced by the Company to its cannabis-licensed clients primarily for working capital purposes:

	June 30, 2019		December 31, 2018
Kind Therapeutics USA Inc. (Maryland licensee)	$	1,590,016	$	2,679,496
KPG of Anna LLC (Illinois licensee)		81,066		482,700
KPG of Harrisburg LLC (Illinois licensee)		46,516		449,385
Harvest Foundation LLC (Nevada licensee)		1,145,083		248,796
Total due from third parties	$	2,862,681	$	3,860,377

When a client is able to organically fund its ongoing operations, such client will issue a promissory note to the Company for the cumulative advances made up to that point, which will then be paid down monthly over a period of time. The Company has successfully employed this strategy in the past, and accordingly, in January 2019, KPG of Anna LLC and KPG of Harrisburg LLC issued promissory notes to the Company as further described in Note 7 – Notes Receivable.

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Notes Receivable

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Notes Receivable

NOTE 7 – NOTES RECEIVABLE

At June 30, 2019 and December 31, 2018, notes receivable were comprised of the following:

	June 30, 2019		December 31, 2018
First State Compassion Center	$	553,791	$	578,723
Healer LLC		822,015		307,429
Atalo Holdings Inc.		755,113		-
KPG of Anna LLC		447,712		-
KPG of Harrisburg LLC		402,878		-
Maryland Health & Wellness Center Inc.		310,882		-
Chooze Corp.		-		257,687
Total notes receivable		3,292,391		1,143,839
Notes receivable, current portion		821,524		51,462
Notes receivable, less current portion	$	2,470,867	$	1,092,377

The Company loaned approximately $700,000 to First State Compassion Center, its Delaware cannabis-licensee client, during the period of October 2015 to April 2016. In May 2016, this client issued a 10-year promissory note, as amended, to the Company bearing interest at a compounded rate of 12.5% per annum. The monthly payments of approximately $10,100 will continue through April 2026, at which time the note will be fully paid down. At June 30, 2019 and December 31, 2018, the current portion of this note was approximately $55,000 and $51,000, respectively, and included in Note Receivable, Current Portion on the balance sheets.

In May 2019, the Company loaned $750,000 to Atalo Holdings Inc., an agriculture and biotechnology firm specializing in research, development, and production of industrial hemp and hemp-based CBD products (“Atalo”). The loans bear interest at 6% per annum, with principal and interest payable on the earlier of April 3, 2020 or the date on which the Company acquires at least 25% of Atalo’s outstanding capital stock, in which case the principal and interest due shall be credited toward Company’s purchase price for such capital stock. In July 2019, the Company loaned an additional $230,000 to Atalo under the same terms as the initial loans.

During the period August to October 2018, the Company loaned $300,000 to Healer LLC, an entity that provides cannabis education, dosage programs, and products developed by Dr. Dustin Sulak, an integrative medicine physician and nationally renowned cannabis practitioner. In 2019, the Company loaned Healer an additional $500,000. The loans bear interest at 6% per annum, with principal and interest payable on the maturity dates which are three years from the loan date.

In January 2019, KPG of Anna LLC and KPG of Harrisburg LLC each issued a promissory note to the Company in the amount of approximately $451,000 and $405,000, respectively, representing the advances made by the Company to these entities through December 31, 2018. The notes bear interest at 12% per annum, with monthly principal and interest payments due through December 2038. At June 30, 2019, the current portion of these notes approximated $12,000 in the aggregate.

In January 2019, the Company entered into an agreement with Maryland Health & Wellness Center Inc. (“MHWC”), an entity that has been pre-approved for a cannabis dispensing license, to provide MHWC with a construction loan in connection with the buildout of MHWC’s proposed dispensary. The Company also entered into a consulting services agreement to provide MHWC with advisory and oversight services over a three-year period relating to the development, administration, operation, and management of MHWC’s proposed dispensary in Maryland. The construction loan bears interest at 8% per annum, with principal and interest payable in January 2020, provided however, upon the two-year anniversary of final state approval of MHWC’s dispensing license, the Company shall have the right, subject to state approval, to convert the promissory note underlying the construction loan into a 20% ownership interest of MHWC. This conversion right of the Company shall be terminated if the consulting services agreement is terminated.

During the period from May to October 2018, the Company loaned $250,000 to Chooze Corp. bearing interest at 8% per annum and maturing in 2021. In January 2019, the entire principal and accrued interest balance of approximately $258,000 was converted into a 2.7% ownership interest in Chooze.

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Inventory/Unearned Revenue From Related Party

6 Months Ended

Jun. 30, 2019

Inventory Disclosure [Abstract]

Inventory/Unearned Revenue From Related Party

NOTE 8 – INVENTORY/UNEARNED REVENUE FROM RELATED PARTY

During the six months ended June 30, 2019, MariMed Hemp purchased $20 million of hemp seeds for its wholesale hemp distribution business and to develop hemp-derived CBD products. The seeds meet the U.S. government’s definition of federally legal industrial hemp, which was descheduled as a controlled substance and classified as an agricultural commodity upon the signing of the 2018 Farm Bill. As previously disclosed in Note 1 – Organization and Description of Business, As of June 30, 2019, MariMed Hemp sold approximately $15.7 million of seeds to GenCanna, a related party, at market value which generated approximately $25.2 million of receipts. The seeds are to be harvested by October 2019, and accordingly the Company provided GenCanna with extended payment terms, allowing full payments to be made by December 2019.

As required by the relevant accounting guidance, the Company classified the $25.2 million of billings to GenCanna as a receivable from a related party, with $22,0 million recognized as revenue from a related party for the six months ended June 30, 2019, and $3.2 million recorded under Unearned Revenue From Related Party on the balance sheet. When GenCanna makes its payments to the Company in December 2019, the amount in Unearned Revenue From Related Party will be recognized as revenue.

At June 30, 2019, inventory was comprised of approximately $4.3 million of hemp seeds, and approximately $520,000 of hemp oil extract and products acquired in the MediTaurus transaction disclosed in Note 3 – Acquisitions. At December 31, 2018, inventory was comprised of product packaging and other collateral.

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Debentures Receivable

6 Months Ended

Jun. 30, 2019

Debentures Receivable

Debentures Receivable

NOTE 9 – DEBENTURES RECEIVABLE

As detailed in Note 4 – Investments, the Company converted the GC Debentures into a 33.5% ownership interest in GenCanna in February 2019. Prior to conversion, the GC Debentures bore interest at a compounded rate of 9% per annum and had an original maturity of three years from issuance. For the year ended December 31, 2018, the Company earned and received interest income of approximately $502,000 on the GC Debentures.

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Property and Equipment

6 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Property and Equipment

NOTE 10 – PROPERTY AND EQUIPMENT

At June 30, 2019 and December 31, 2018, property and equipment consisted of the following:

	June 30, 2019			December 31, 2018
Land	$	3,392,710		$	3,392,710
Buildings and building improvements		14,513,538			13,566,144
Tenant improvements		5,625,882			5,348,882
Furniture and fixtures		143,237			114,160
Machinery and equipment		2,057,059			1,632,351
Construction in progress		14,473,474			12,205,447
		40,205,900			36,259,694
Less: accumulated depreciation		(2,602,019	)		(2,159,830	)
Property and equipment, net	$	37,603,881		$	34,099,864

During the six months ended June 30, 2019 and 2018, additions to property and equipment were approximately $3.9 million and $5.7 million, respectively.

The 2018 additions were primarily comprised of (i) the buildout of properties in Hagerstown, MD, New Bedford, MA, and Middleborough, MA, and (ii) improvements to the Lewes, DE facility. The 2019 additions consisted primarily of (i) the commencement of construction in Milford, DE, (ii) the continued buildout of properties in Hagerstown, MD, New Bedford, MA, and Middleborough, MA, and (iii) improvements to the Wilmington, DE and Las Vegas, NV properties.

The December 31, 2018 construction in progress balance of approximately $12.2 million was primarily comprised of (i) New Bedford, MA building, improvements and machinery of approximately $9.8 million and (ii) Middleborough, MA building, improvements and fixtures of approximately $2.4 million. The additions to construction in progress during the six months ended June 30, 2019 of approximately $2.3 million consisted of continuing buildout and machinery for the New Bedford, MA and Middleborough, MA properties, and the commencement of construction in Milford, DE.

Depreciation expense for the six months ended June 30, 2019 and 2018 was approximately $471,000 and $254,000, respectively.

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Debt

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Debt

NOTE 11 – DEBT

Mortgages Payable

At June 30, 2019 and December 31, 2018, mortgage balances, including accrued but unpaid interest, were comprised of the following:

	June 30, 2019			December 31, 2018
Bank of New England – Massachusetts property	$	4,877,624		$	4,895,000
Bank of New England – Delaware property		1,742,619			1,791,736
DuQuoin State Bank – Illinois properties		837,556			850,076
Total mortgages payable		7,457,799			7,536,812
Mortgages payable, current portion		(238,386	)		(188,231	)
Mortgages payable, less current portion	$	7,219,413		$	7,348,581

In November 2017, the Company entered into a 10-year mortgage agreement with Bank of New England for the purchase of a 138,000 square foot industrial property in New Bedford, Massachusetts, within which the Company has built a 70,000 square foot cannabis cultivation and processing facility that is leased to ARL. This mortgage was personally guaranteed by the Company’s CEO and CFO. From the start of the mortgage through May 2019, the Company was required to make monthly payments of interest-only at a rate equal to the prime rate plus 2%, with a floor of 6.25% per annum. From May 2019 to May 2024, the Company shall make principal and interest payments at a rate equal to the prime rate on May 2, 2019 plus 2%, with a floor of 6.25% per annum. Principal and interest payments shall continue from May 2024 through the end of the lease at a rate equal to the prime rate on May 2, 2024 plus 2%, with a floor of 6.25% per annum. The outstanding principal balance on this mortgage was approximately $4,877,000 and $4,895,000 on June 30, 2019 and December 31, 2018, respectively, of which approximately $110,000 and $63,000, respectively, was current.

The Company maintains a second mortgage with Bank of New England, also personally guaranteed by the Company’s CEO and CFO, for the 2016 purchase of a 45,070 square foot building in Wilmington, Delaware which was developed into a cannabis seed-to-sale facility and is currently leased to the Company’s cannabis-licensed client in the state. The mortgage matures in 2031 with monthly principal and interest payments at a rate of 5.25% per annum through September 2021, and thereafter the rate adjusting every five years to the then prime rate plus 1.5% with a floor of 5.25% per annum. At June 30, 2019 and December 31, 2018, the outstanding principal balance on this mortgage was approximately $1,743,000 and $1,792,000, respectively, of which approximately $105,000 and $102,000, respectively, was current.

In 2016, the Company entered into a mortgage agreement with DuQuoin State Bank (“DSB”) for the purchase of two properties which the Company developed into two 3,400 square foot free-standing retail dispensaries that are currently leased to the KPGs. On May 5^th of each year, this mortgage is due to be repaid unless it is renewed for another year at a rate determined at the discretion of DSB’s executive committee. The mortgage was renewed in May 2019 at a rate of 8.5% per annum. At June 30, 2019 and December 31, 2018, the outstanding principal balance on this mortgage was approximately $838,000 and $850,000, respectively, of which approximately $23,000 was current in both periods.

Notes Payable

In June 2019, MariMed Hemp issued a $10 million secured promissory note to an unaffiliated party (the “$10M Note”). On the maturity date in January 2020, or earlier at MariMed Hemp’s discretion, the principal balance shall be repaid plus a payment of $1.5 million. At June 30, 2019, the pro-rata portion, based on the term of the note, of such payment approximated $162,000 and was charged to interest expense. The $10M Note is secured by the Company’s right, title, and interest in certain property relative to the seed sale transactions with GenCanna, previously disclosed in Note 1 – Organization and Description of Business. The $10M Note imposes certain covenants, all of which were complied with as of June 30, 2019.

As part of the $10M Note transaction, the Company issued three-year warrants to purchase 375,000 shares of common stock at an exercise price of $4.50 per share to the holder of the $10M Note. The fair value of these warrants on the issuance date of approximately $601,000 was recorded as a discount to the $10M Note. Approximately $65,000 of the warrant discount was amortized to interest expense in June 2018. Accordingly, the carrying value of the $10M Note approximated $9.46 million at June 30, 2019.

In April 2019, MariMed Hemp issued a $1 million secured promissory note to an unaffiliated party maturing in December 2019. The note is secured by the collateral assignment of certain receivables from GenCanna (the “Secured Receivables”) and certain obligations of GenCanna to MariMed Hemp arising from the seed sale transactions previously disclosed in Note 1 – Organization and Description of Business. The principal balance plus a payment of $180,000 shall be due in full on the earlier of the maturity date or three business days after MariMed Hemp’s receipt of payment by GenCanna of the Secured Receivables. Such payment date can be extended by the noteholder for an additional three months with proper notice; and if extended, the noteholder shall receive an additional payment of $30,000. At June 30, 2019, the pro-rata portion, based on the term of the note, of the $180,000 payment approximated $52,000 and was charged to interest expense. MariMed Hemp can elect to repay the note in whole or in part without penalty, provided the noteholder is given proper notice and MariMed Hemp is not in default of the note agreement. Upon such election, the entire payment of $180,000 shall be deemed earned by and due to the noteholder.

In March 2019, the Company raised $6 million from the issuance of a secured promissory note maturing in December 2019 and bearing interest at the rate of 13% per annum, with interest payable monthly. Such note is secured by the collateral assignment of certain receivables from and obligations of GenCanna to MariMed Hemp arising from the seed sale transactions previously disclosed in Note 1 – Organization and Description of Business The Company may elect to prepay the note in whole or part without penalty upon three business days’ notice and with payment of all interest through the maturity date. The Company may extend the maturity date by up to three months upon thirty days’ notice prior to the maturity date with an extension fee payment to the note holder of $300,000. At June 30, 2019, the carrying value of this note was $6 million.

In September 2018, the Company raised $3 million from the issuance of a secured promissory note bearing interest at the rate of 10% per annum, with interest payable monthly. The note is due and payable in September 2019, however the Company may elect to prepay the note in whole or part at any time after December 17, 2018 without premium or penalty. The Company issued three-year warrants, which were attached to this promissory note, to the lender’s designees to purchase 750,000 shares of the Company’s common stock at an exercise price of $1.80 per share. The Company recorded a discount on the note of approximately $1,511,000 from the allocation of note proceeds to the warrants based on the fair value of such warrants on the issuance date. Approximately $882,000 of the warrant discount was amortized to interest expense during 2018, and the remaining $629,000 was amortized during 2019. The carrying value of this note was $3 million at June 30, 2019 and approximately $2.37 million, net of remaining warrant discount of $629,000, at December 31, 2018.

During 2018, holders of previously issued promissory notes with principal balances of $1,075,000 converted such promissory notes into 1,568,375 shares of common stock at conversion prices ranging from $0.65 to $0.90 per share. The conversions resulted in the recording of non-cash losses of approximately $829,000 in the aggregate, based on the market value of the common stock on the conversion dates. No conversions occurred during the six months ended June 30, 2019

During 2018, the Company issued 2,596,313 shares of its common stock and subscriptions on 79,136 shares of its common stock to retire promissory notes with principal balances of $7,495,000 and approximately $95,000 of accrued interest. The Company recorded non-cash losses of approximately $2.5 million based on the fair value of the common stock on the retirement dates. No retirements were made during the six months ended June 30, 2019.

During 2018 the Company repaid $700,000 of promissory notes. No repayments of promissory notes occurred during the six months ended June 30, 2019.

The aggregate scheduled maturities of the Company’s total debt outstanding, inclusive of the promissory notes and mortgages described within this Note 12 – Debt, and the convertible debentures described in the following Note 12 – Debentures Payable, as of June 30, 2019 were:

2019	$	10,496,536
2020		16,495,007
2021		7,762,293
2022		280,348
2023		299,689
Thereafter		6,262,463
Total		41,596,336
Less discounts		(6,557,932	)
	$	35,038,404

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Debentures Payable

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Debentures Payable

NOTE 12 – DEBENTURES PAYABLE

In October and November 2018, pursuant to a securities purchase agreement (the “SPA”), the Company sold an aggregate of $10,000,000 of convertible debentures bearing interest at the rate of 6% per annum that mature two years from issuance, with a 1% issue discount to an accredited investor, resulting in net proceeds to the Company of $9,900,000 (the “$10M Debentures”).

The holder of the $10M Debentures (the “Holder”) has the right at any time to convert all or a portion of the $10M Debenture, along with accrued and unpaid interest, into the Company’s common stock at conversion prices equal to 80% of a calculated average, as determined in the $10M Debentures, of the daily volume-weighted price during the ten consecutive trading days preceding the date of conversion. Notwithstanding this conversion right, the Holder shall limit conversions in any given month to certain agreed-upon values based on the conversion price, and the Holder shall also be limited from beneficially owning more than 4.99% of the Company’s outstanding common stock (potentially further limiting the Holder’s conversion right).

The Company shall have the right to redeem all or a portion of the $10M Debentures, along with accrued and unpaid interest, at a 10% premium, provided however that the Company first provide advance written notice to the Holder of its intention to make a redemption, with the Holder allowed to affect certain conversions of the $10M Debentures during such notice period.

Upon a change in control transaction, as defined in the $10M Debentures, the Holder may require the Company to redeem all or a portion of the $10M Debentures at a price equal to 110% of the principal amount of the $10M Debentures plus all accrued and unpaid interest thereon. So long as the $10M Debentures are outstanding, in the event the Company enters into a Variable Rate Transaction (“VRT”), as defined in the SPA, the Holder may cause the Company to revise the terms of the $10M Debentures to match the terms of the convertible security of such VRT.

As part of issuance of the $10M Debentures, the Company issued three-year warrants to the Holder to purchase 324,675 shares of its common stock at exercise prices of $3.50 and $5.50 per share (the “Initial Warrants”). The fair value of the Initial Warrants of approximately $1,057,000 was recorded as a discount to the carrying amount of the $10M Debentures.

Pursuant to the terms of a registration rights agreement with the Holder, entered into concurrently with the SPA and the $10M Debentures, the Company agreed to provide the Holder with customary registration rights with respect to any potential shares issued pursuant to the terms of the SPA, the $10M Debentures, and the Warrants.

Subsequent to the consummation of the SPA and related agreements, the Company and the Holder executed an addendum to the SPA whereby the Holder agreed to that it would not undertake a conversion of all or a portion of the $10M Debentures that would require the Company to issue more shares than the amount of available authorized shares at the time of conversion, which amount of authorized shares shall not be less than the current authorized number of 500 million shares of common stock. Such addendum eliminated the requirement to bifurcate and account for the conversion feature of the $10M Debentures as a derivative.

Based on the conversion prices of the $10M Debentures in relation to the market value of the Company’s common stock, the $10M Debentures provided the Holder with a beneficial conversion feature, as the embedded conversion option was in-the-money on the commitment date. The intrinsic value of the beneficial conversion feature of approximately $5,570,000 was recorded as a discount to the carrying amount of the $10M Debentures, with an offset to additional paid-in-capital.

In May 2019, the Company sold an additional $5,000,000 of convertible debentures bearing interest at the rate of 6% per annum that mature two years from issuance, with a 1% issue discount, resulting in net proceeds to the Company of $4,950,000, and (the “$5M Debentures”). In June 2019, the Company sold an additional $2,500,000 of convertible debentures that mature two years from issuance, with a 7% issue discount, resulting in net proceeds to the Company of $2,350,000 (the “$2.5M Debentures,” and together with the $5M Debentures, the “$7.5M Debentures”).

The $7.5M Debentures were sold to the Holder of the $10M Debentures. The terms of the $7.5M Debentures are consistent with the terms of the $10M Debentures, except that (i) no interest shall accrue on the $2.5M Debentures, (ii) the issue discount on the $2.5M Debentures is 7%, compared to 1% on the $10M Debentures and $5M Debentures, and (iii) other small variations, most notably a cap on the conversion price. The SPA, registration rights agreement, and addendum to the SPA were all amended and restated to incorporate the $7.5M Debentures.

As part of issuance of the $7.5M Debentures, the Company issued three-year warrants to the Holder to purchase 550,000 shares of common stock an exercise price of $5.00 per share (the “Additional Warrants”). The fair value of the Additional Warrants of approximately $929,000 was recorded as a discount to the carrying amount of the $7.5M Debentures.

Based on the conversion prices of the $7.5M Debentures in relation to the market value of the Company’s common stock, the $7.5M Debentures provided the Holder with a beneficial conversion feature, as the embedded conversion option was in-the-money on the commitment date. The intrinsic value of the beneficial conversion feature of approximately $3,385,000 was recorded as a discount to the carrying amount of the $7.5M Debentures, with an offset to additional paid-in-capital.

In November and December 2018, the Holder converted, in two separate transactions, an aggregate of $1,400,000 of principal and approximately $36,000 of accrued interest into 524,360 shares of common stock at conversion prices of $2.23 and $3.04 per share. In January 2019, the Holder converted, in three separate transactions, an aggregate of $600,000 of principal and approximately $97,000 of accrued interest into 233,194 shares of common stock at conversion prices ranging from $2.90 to $3.06 per share. In April and June 2019, the Holder converted, in four separate transactions, an aggregate of $1,750,000 of principal and approximately $181,000 of accrued interest into 923,185 shares of common stock at conversion prices ranging from $1.74 to $2.74 per share.

During the six months ended June 30, 2019, amortization of the beneficial conversion features, after adjustment for the conversions, approximated $2,282,000; amortization of the discounts from the Initial Warrants and Additional Warrants (together, the “Total Warrants”) approximated $320,000; and the amortization of original issue discounts approximated $29,000. This amortization was charged to interest expense. Additionally, accrued interest expense for such period approximated $280,000.

At June 30, 2019, the aggregate outstanding principal balance on the $10M Debentures and the $7.5M Debentures (together, the “$17.5M Debentures”) was $13,750,000. Also on such date, the unamortized balances of the beneficial conversion feature, the Total Warrants discount, and original issue discounts were approximately $5,152,000, $1,575,000, and $287,000, respectively. Accordingly, at June 30, 2019, the carrying value of the $17.5M Debentures was approximately $6,736,000.

At December 31, 2018, the outstanding principal balance on the $10M Debentures was $8,600,000. Also on such date, the unamortized balances of the beneficial conversion feature, Initial Warrants discount, and original issue discounts were approximately $4,048,000, $966,000, and $91,000, respectively, and accrued and unpaid interest was approximately $62,000. Accordingly, at December 31, 2018, the carrying value of the $10M Debentures was approximately $3.6 million.

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Equity

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Equity

NOTE 13 – EQUITY

Preferred Stock

In January 2018, all 500,000 shares of subscribed Series A convertible preferred stock were converted into 970,988 shares of common stock at a conversion price of $0.55 per share. The Company recorded a non-cash loss on conversion of approximately $34,000 based on the market value of the common stock on the conversion date.

The Series A convertible preferred stock accrues an annual dividend of 6% until conversion. The preferred stock is convertible, along with any accrued dividends, into common stock at a twenty-five percent discount to the selling price of the common stock in a qualified offering, as defined in the subscription agreement. In addition, the Company has the ability to force the conversion of preferred stock at such time the Company has a market capitalization in excess of $50 million for ten consecutive trading days. In such event, the conversion price shall be a 25% discount to the average closing price of the Company’s common stock over the ten trading days prior to the Company’s notice of its intent to convert.

Common Stock

During the six months ended June 30, 2019, the Company sold 799,995 shares of common stock at a price of $3.25 per share, resulting in total proceeds of $2.6 million. During the same period in 2018, the Company sold 10,111,578 shares of common stock, at prices ranging from $0.50 to $1.30 per share, resulting in total proceeds of approximately $8.5 million.

During the six months ended June 30, 2019 and 2018, the Company issued 97,136 and 1,000,000 common shares, respectively, associated with previously issued subscriptions on common stock with a value of approximately $169,000 and $370,000, respectively.

During the six months ended June 30, 2018, the Company issued 1,313,901 common shares in exchange for services rendered by third-parties or to otherwise settle outstanding obligations. Based on the market value of the common stock on the dates of issuance, the Company recorded non-cash losses on these settlements of approximately $959,000. Also during such period, the Company issued 1,679,486 common shares to retire $1,175,000 of promissory notes. Based on the market value of the stock on the retirement dates, the Company recorded non-cash losses of approximately $918,000. No common shares were issued during the same period in 2019 to settle obligations or retire promissory notes.

As previously disclosed in Note 3 – Acquisitions, the Company issued 1,000,000 shares of common stock to the owners of Harvest.

As previously disclosed in Note 4 – Investments, the Company issued 500,000 shares of common stock to purchase a minority interest in Terrace.

As previously disclosed in Note 12 – Debentures Payable, during the six months ended June 30, 2019, the holder of the $17.5M Debentures converted $2,350,000 of principal and approximately $278,000 of accrued interest into 1,156,379 shares of common stock.

As further disclosed in Note 14 – Stock Options, during the six months ended June 30, 2019 and 2018, 358,446 and 300,000 shares of common stock, respectively, were issued in connection with the exercise of stock options.

As further disclosed in Note 15 – Warrants, during the six months ended June 30, 2019 and 2018, warrants to purchase 666,104 and 1,235,768 shares of common stock were exercised.

Common Stock Issuance Obligations

At June 30, 2019, the Company was obligated to issue 752,260 shares of common stock, valued at $2,080,000, as part of the purchase price for MediTaurus, as previously disclosed in Note 3 – Acquisitions. These shares will be subsequently issued in the third quarter of 2019.

At December 31, 2018, the Company was obligated to issue: (a) 79,136 shares of common stock, valued at approximately $95,000, related to the settlement of a previously issued promissory note with a principal balance of $50,000 and accrued interest of $1,454; and (b) 18,000 shares of common stock, valued at approximately $74,000, for the payment of rent for a leased property in Massachusetts for the months of September 2018 through January 2019. Such shares were subsequently issued in the first quarter of 2019.

At June 30, 2018, the Company was obligated to issue: (a) 264,317 shares of common stock to in connection with the acquisition of iRollie LLC, as disclosed in Note 3 – Acquisitions; (b) 32,083 shares of common stock in connection with the exercise of a warrant, (c) 2,001,641 shares of common stock to settle $1,951,600 of vendor invoices; and (d) 9,281 shares of common stock, valued at approximately $20,000, for the payment of rent on a leased property in Massachusetts for the months of May and June 2018. All such shares were issued subsequent to the June 30, 2018 quarter end.

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Stock Options

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Stock Options

NOTE 14 – STOCK OPTIONS

In January 2018, the Company granted options to purchase 1.45 million shares of common stock to the Company’s board members at exercise prices ranging from $0.14 to $0.77, vesting over a six-month period, and expiring between December 2020 and December 2022. The fair value of these options on grant date of approximately $458,000 was fully amortized by June 30, 2018. No stock options were granted to board members during the six months ended June 30, 2019.

In May 2018, the Company granted five-year options to purchase 200,000 shares of common stock to an employee with an exercise price of $0.90 per share. As of June 30, 2018, the Company amortized approximately $28,000 of the total adjusted fair value of this grant of approximately $208,000. In December 2018, 150,000 of these options were forfeited prior to their vesting dates. Approximately $50,000 of the fair value had been amortized through the forfeiture date, and as a result, approximately $158,000 will not be amortized. No options were granted to employees during the six months ended June 30, 2019.

During the six months ended June 30, 2019 and 2018, options to purchase 520,000 and 700,000 shares of common stock, respectively, were exercised at exercise prices ranging from $0.08 to $0.77 per share in 2019, and $0.08 to $0.63 per share in 2018. Of the options exercised in 2019, 350,000 were exercised on a cashless basis by two board members with the exercise prices paid via the surrender of 139,985 shares of common stock. Of the options exercised in 2018, 400,000 were exercised by a board member on a cashless basis with the exercise price paid via the surrender of 98,000 shares of common stock.

During the six months ended June 30, 2018, options to purchase 300,000 were forfeited, of which 200,000 had been owned by two board members. There were no forfeitures in 2019

Stock options outstanding and exercisable as of June 30, 2019 were:

Exercise Price		Shares Under Option				Remaining
per Share		Outstanding		Exercisable		Life in Years
$	0.080		100,000		100,000		0.47
$	0.130		200,000		200,000		1.00
$	0.140		100,000		100,000		0.50
$	0.140		550,000		550,000		1.51
$	0.150		1,000,000		1,000,000		0.25
$	0.250		1,000,000		1,000,000		0.25
$	0.330		50,000		50,000		1.69
$	0.350		1,000,000		1,000,000		0.25
$	0.450		190,000		190,000		2.26
$	0.630		300,000		300,000		2.51
$	0.770		200,000		200,000		3.51
$	0.900		50,000		50,000		3.87
$	0.950		50,000		10,000		3.51
$	2.320		300,000		60,000		4.20
$	2.450		2,000,000		2,000,000		3.48
$	2.500		100,000		25,000		4.16
$	2.650		200,000		100,000		4.24
$	2.850		75,000		-		3.45
$	2.850		100,000		-		4.45
$	3.000		25,000		-		4.47
$	3.725		200,000		-		4.45
			7,790,000		6,935,000

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Warrants

6 Months Ended

Jun. 30, 2019

Warrants

Warrants

NOTE 15 – WARRANTS

During the six months ended June 30, 2019, in conjunction with the $7.5M Debentures previously disclosed in Note 12 – Debentures Payable, the Company issued three-year warrants to purchase 550,000 shares of common stock at an exercise price of $5.00 per share. The fair value of these warrants at issuance approximated $929,000, with approximately $57,000 of this amount amortized to interest expense during the period and the remainder to be amortized over the two-year term of the $7.5M Debentures. Also during this period, the Company issued three-year warrants to purchase 375,000 shares of common stock at an exercise price of $4.50 per share as part of the $10M Note transaction previously disclosed in Note 11 – Debt. The fair value of these warrants at issuance approximated $601,000, with approximately $65,000 of this amount amortized to interest expense during the period and the remainder to be amortized by the January 2020 maturity date of the $10M Note.

During the six months ended June 30, 2018, the Company issued warrants to purchase 4,239,000 shares of common stock at exercise prices ranging from $0.30 to $2.25 per share. Of these warrants, (i) 470,000 warrants were issued in exchange for services previously rendered to the Company, with expiration dates of three and five years from issuance, at a fair value of approximately $433,000 which was charged to compensation expense during the period, (ii) 237,500 warrants issued in conjunction with a promissory note, expiring in April 2021, at a fair value of approximately $198,200 which was charged to interest expense during the period, and (iii) 3,531,500 three-year warrants issued as part of the sale of common stock, at a fair value of at issuance of approximately $4.5 million that was charged to additional paid-in capital.

During the six months ended June 30, 2019 and 2018, warrants to purchase 666,104 and 1,425,379 shares of common stock, respectively, were exercised at exercise prices ranging from $0.12 to $1.75 per share in 2019 and $0.10 to $0.50 per share in 2018.

At June 30, 2019 and 2018, warrants to purchase 10,865,107 and 7,058,932 shares of common stock, respectively, were outstanding at exercise prices ranging from $0.15 to $5.50 per share in 2019 and $0.10 to $2.25 per share in 2018.

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Revenues

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenues

NOTE 16 – REVENUES

For the six months ended June 30, 2019 and 2018, the Company’s revenues were comprised of the following major categories:

	Six months ended June 30,
		2019		2018
Real estate	$	3,442,024	$	2,731,364
Management		1,194,791		754,038
Supply procurement		1,906,399		1,241,834
Licensing		568,127		281,557
Product sales		1,880		-
Product sales from related party		22,014,879		-
Other		60,392		11,482
Total revenues	$	29,188,492	$	5,020,275

For the six months ended June 30, 2019, revenue from three clients represented 95% of total revenues. One of these clients was GenCanna, a related party, with whom the Company conducted the seed sale transactions previously disclosed in Note 1 – Organization and Description of Business. The amount under Product Sales From Related Party shown in the table above represents the total revenues from these transactions with GenCanna through June 30, 2019.

For the six months ended June 30, 2018, revenue from two clients comprised 75% of total revenues.

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Related Party Transactions

6 Months Ended

Jun. 30, 2019

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 17 – RELATED PARTY TRANSACTIONS

During the quarter ended June 30, 2019, the Company entered into several hemp seed sale transactions with GenCanna, a related party, whereby the Company acquired large quantities of top-grade feminized hemp seeds with proven genetics at volume discounts that it sold to GenCanna at market rates. As previously disclosed in Note 1 – Organization and Description of Business, the Company classified the $25.2 million due from GenCanna as a receivable from a related party, with $22,0 million recognized as revenue from a related party for the six months ended June 30, 2019, and $3.2M recorded under Unearned Revenue From Related Party on the balance sheet. When GenCanna makes its payments to the Company in December 2019, the amount in Unearned Revenue From Related Party will be recognized as revenue.

As disclosed in Note 3 – Acquisitions, the current CEO and CFO of the Company were part of the ownership group from whom Sigal Consulting LLC was acquired in May 2014. The 49% ownership in the Company’s subsidiary, MariMed Advisors Inc., which this ownership group acquired as part of the purchase price, was acquired by the Company from this ownership group in June 2017 in exchange for 75 million shares of the Company’s common stock.

In October 2017, the Company acquired certain assets of the Betty’s Eddies™ brand of cannabis-infused products, as disclosed in Note 3 – Acquisitions, from a company that was minority-owned by the Company’s chief operating officer.

As disclosed in Note 11 – Debt, the Company’s two mortgages with Bank of New England are personally guaranteed by the Company’s CEO and CFO.

In January 2018, the Company granted options to purchase 1.45 million shares of common stock to the Company’s board members at exercise prices ranging from $0.14 to $0.77 and expiring between December 2020 and December 2022. Also during this month, options to purchase 200,000 were forfeited by board members. During the six months ended June 30, 2019 and 2018, options to purchase 350,000 and 400,000 shares of common stock, respectively, were exercised by board members on a cashless basis with the exercise prices paid via the surrender of 139,985 shares of common stock in 2019 and 98,000 shares of common stock in 2018. All of the option transactions referred to in this paragraph have been previously disclosed in Note 14 – Stock Options.

The Company’s current corporate offices are leased from a company owned by a related party under a 10-year lease that commenced August 2018 and contains a five-year extension option. Previous to this lease, the Company’s former corporate offices were also leased from a company owned by a related party. For the six months ended June 30, 2019 and 2018, expenses incurred under these leases approximated $34,000 and $6,000, respectively.

The outstanding Due To Related Parties balances at June 30, 2019 and December 31, 2018 of approximately $77,000 and $276,000, respectively, were comprised of amounts owed of approximately (i) zero and $81,000 in respectively to the Company’s CEO and CFO, (ii) $17,000 and $135,000, respectively, to two companies partially owned by these officers, and (iii) $60,000 in both periods to two shareholders of the Company. Such amounts owed are not subject to repayment schedules and are expected to be repaid during 2019.

The outstanding Due From Related Parties balance at December 31, 2018 of approximately $120,000 was comprised of an advance to a company partially owned by the Company’s CEO and CFO. This amount was entirely offset by advances from such related parties. At June 30, 2019, there were no amounts due from related parties.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 18 – COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company is the lessee under five operating leases and three finance leases. These leases contain rent holidays and customary escalations of lease payments for the type of facilities being leased. The Company recognizes rent expense on a straight-line basis over the expected lease term, including cancelable option periods which the Company fully expects to exercise. Certain leases require the payment of property taxes, insurance and/or maintenance costs in addition to the rent payments.

The details of the Company’s operating lease agreements are as follows:

● Delaware – 4,000 square feet of retail space in a multi-use building under a five-year lease that commenced in October 2016 and contains a five-year option to extend the term. The Company developed the space into a cannabis dispensary which is subleased to its cannabis-licensed client.

● Delaware – a 100,000 square foot warehouse leased in March 2019 that the Company intends to construct into a cultivation and processing facility to be subleased to the same Delaware client. The lease term is 10 years, with an option to extend the term for three additional five-year periods.

● Nevada – 10,000 square feet of an industrial building that the Company has built-out into a cannabis cultivation facility and plans to rent to its cannabis-licensed client under a sub-lease which will be coterminous with this lease expiring in 2024.

● Massachusetts – 10,000 square feet of office space which the Company utilizes as its corporate offices under a 10-year lease with a related party expiring in 2028 which contain a 5-year extension option.

● Maryland – a 2,700 square foot 2-unit apartment under a lease that expires in July 2020 with an option to renew for a two-year term.

The Company leases machinery and office equipment under finance leases that expire in February 2022 through June 2024 with such terms being a major part of the economic useful life of the leased property.

The components of lease expense for the six months ended June 30, 2019 were as follows:

Operating lease cost	$	339,478
Finance lease cost:
Amortization of right-of-use assets	$	6,744
Interest on lease liabilities		1,824
Total finance lease cost	$	8,568

The weighted average remaining lease term for operating leases is 9.7 years, and for the finance lease is 3.9 years. The weighted average discount rate used to determine the right-of-use assets and lease liabilities was 7.5% for all leases.

Future minimum lease payments as of June 30, 2019 under all non-cancelable operating leases having an initial or remaining term of more than one year were:

	Operating Leases			Finance Lease
2019	$	230,744		$	11,556
2020		917,444			23,112
2021		1,008,227			23,112
2022		949,535			11,823
2023		910,166			10,451
Thereafter		5,139,851			3,229
Total lease payments		9,155,967		$	83,282
Less: imputed interest		(2,845,742	)		(11,296	)
	$	6,310,224		$	71,986

Terminated Employment Agreement

An employment agreement with Thomas Kidrin, the former CEO of the Company, that provided Mr. Kidrin with salary, car allowances, stock options, life insurance, and other employee benefits, was terminated by the Company in 2017. The Company maintained an accrual of approximately $1,043,000 at June 30, 2019 and December 31, 2018 for any amounts that may be owed under this agreement, although the Company contends that such agreement is not valid.

In July 2019, Mr. Kidrin, also a former director of the Company, filed a complaint in the Massachusetts Superior Court, alleging that the Company breached the employment agreement and failed to pay all wages owed to him, and requesting compensatory damages, attorney fees, costs, and interest. To date, Mr. Kidrin has not served the complaint upon the Company. The Company believes that the allegations are without merit and will vigorously defend this matter when Mr. Kidrin makes service upon it.

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Subsequent Events

6 Months Ended

Jun. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

NOTE 19 – SUBSEQUENT EVENTS

Seed Transactions

In July 2019, the Company delivered and billed GenCanna an additional $8.0 million for hemp seeds that were purchased by the Company for approximately $5.0 million. The seeds are to be harvested in the fall of 2019, and accordingly, the Company provided GenCanna with extended payment terms, with the full payment to be made in December 2019 after the crop is harvested. The accounting treatment of these sales were consistent with that of the original seed sale transactions as previously disclosed in Note – 1 Organization and Description of Business.

Licensing Agreement

In July 2019, as previously disclosed in Note 4 – Investments, the Company entered into a licensing agreement for the exclusive manufacturing and distribution in seven eastern states of the Binske^® portfolio of products, a brand known for utilizing best-in-class proprietary strains and craft ingredients in its edibles, concentrates, vaporizers, and topicals.

Debentures Payable

In July 2019, the Holder of the $17.5M Debentures converted, in two separate transactions, an aggregate of $2,750,000 of principal and approximately $17,000 of accrued interest into 2,435,144 shares of common stock at conversion prices of $1.08 and $1.70 per share.

Note Receivable

In July 2019, the Company loaned an additional $230,000 to Atalo, pursuant a promissory note to the Company that bears interest at 6% per annum, with principal and interest payable on the earlier of April 3, 2020 or the date on which the Company acquires at least 25% of Atalo’s outstanding capital stock, in which case the principal and interest due shall be credited toward Company’s purchase price for such capital stock.

Equity

In July 2019, the Company issued three-year warrants to purchase 125,000 shares of common stock at an exercise price of $1.71 per share. Also during this month, the Company issued options to purchase 100,000 shares of common stock to an employee at an exercise price of $1.34 per share, expiring five years from issuance date.

In July and August, the Company issued an aggregate of 18,820 shares of common stock to two employees.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

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

In accordance with GAAP, these interim statements do not contain all of the disclosures normally required in annual statements. In addition, the results of operations of interim periods are not necessarily indicative of the results of operations to be expected for the full year. Accordingly, these interim financial statements should be read in conjunction with the Company’s most recent audited annual financial statements and accompanying notes for the year ended December 31, 2018.

Certain reclassifications have been made to prior periods’ data to conform to the current period presentation. These reclassifications had no effect on reported income (losses) or cash flows.

Principles of Consolidation

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of MariMed Inc. and the following majority-owned subsidiaries:

Subsidiary:	Percentage Owned
MariMed Advisors Inc.		100.0	%
Mia Development LLC		89.5	%
Mari Holdings IL LLC		60.0	%
Mari Holdings MD LLC		97.4	%
Mari Holdings NV LLC		100.0	%
Hartwell Realty Holdings LLC		100.0	%
iRollie LLC		100.0	%
ARL Healthcare Inc.		100.0	%
MariMed Hemp Inc.		100.0	%
MediTaurus LLC		70.0	%

Intercompany accounts and transactions have been eliminated.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts within the financial statements and disclosures thereof. Actual results could differ from these estimates or assumptions.

Cash Equivalents

Cash Equivalents

The Company considers all highly liquid investments with a maturity date of three months or less to be cash equivalents. The fair values of these investments approximate their carrying values.

The Company’s cash and cash equivalents are maintained with recognized financial institutions located in the United States. In the normal course of business, the Company may carry balances with certain financial institutions that exceed federally insured limits. The Company has not experienced losses on balances in excess of such limits and management believes the Company is not exposed to significant risks in that regard.

Accounts Receivable

Accounts Receivable

Accounts receivable consist of trade receivables and are carried at their estimated collectible amounts.

The Company provides credit to its clients in the form of payment terms. The Company limits its credit risk by performing credit evaluations of its clients and maintaining a reserve, if deemed necessary, for potential credit losses. Such evaluations include the review of a client’s outstanding balances with consideration towards such client’s historical collection experience, as well as prevailing economic and market conditions and other factors. Based on such evaluations, the Company recorded a reserve of $250,000 and $150,000 at June 30, 2019 and December 31, 2018, respectively.

Inventory

Inventory

Inventory is carried at the lower of cost or net realizable value, with the cost being determined on a first-in, first-out (FIFO) basis. The Company periodically reviews physical inventory and will record a reserve for excess and/or obsolete inventory if necessary. As of the date of this report, no reserve was deemed necessary.

Investments

Investments

The Company classifies its investments as available-for-sale-investments. Investments are comprised of equity holding of private companies. These investments are recorded at fair value on the Company’s consolidated balance sheet, with changes to fair value, if any, included in comprehensive income. Investments are evaluated for other-than-temporary impairment and are written down if such impairments are deemed to have occurred.

Revenue Recognition

Revenue Recognition

On January 1, 2018, the Company adopted the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 606, Revenue from Contract with Customers, as amended by subsequently issued Accounting Standards Updates. This revenue standard requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to in exchange for those goods or services. The recognition of revenue is determined by performing the following consecutive steps:

● Identify the contract(s) with a customer;

● Identify the performance obligations in the contract(s);

● Determine the transaction price;

● Allocate the transaction price to the performance obligations in the contract(s); and

● Recognize revenue as the performance obligation is satisfied.

Additionally, when another party is involved in providing goods or services to the Company’s clients, a determination is made as to who—the Company or the other party—is acting in the capacity as the principal in the sale transaction, and who is merely the agent arranging for goods or services to be provided by the other party.

The Company is typically considered the principal if it controls the specified good or service before such good or service is transferred to its client. The Company may also be deemed to be the principal even if it engages another party (an agent) to satisfy some of the performance obligations on its behalf, provided the Company (i) takes on certain responsibilities, obligations and risks, (ii) possesses certain abilities and discretion, or (iii) other relevant indicators of the sale. If deemed an agent, the Company would not recognize revenue for the performance obligations it does not satisfy.

The adoption of this standard did not have a significant impact on the Company’s consolidated operating results, and accordingly no restatement has been made to prior period reported amounts.

The Company’s main sources of revenue are comprised of the following:

● Real Estate – rental income and additional rental fees from leasing of the Company’s regulatory-compliant legal cannabis facilities to its clients, which are cannabis-licensed operating companies. Rental income is generally a fixed amount per month that escalates over the respective lease terms, while additional rental fees are based on a percentage of tenant revenues that exceed a specified amount.

● Management – fees for providing the Company’s cannabis clients with corporate services and operational oversight of their cannabis cultivation, production, and dispensary operations. These fees are based on a percentage of such clients’ revenue, and are recognized after services have been performed.

● Supply Procurement – the Company maintains volume discounts with top national vendors of cultivation and production resources, supplies, and equipment, which the Company acquires and resells to its clients or third parties within the cannabis industry. The Company recognizes this revenue after the acceptance of goods by the purchaser.

● Licensing – revenue from the sale of precision-dosed, cannabis-infused products, such as Kalm Fusion™ and Betty’s Eddies™, to legal dispensaries throughout the United States. The recognition of this revenue occurs when the products are delivered.

● Consulting – fees from third-parties parties where the Company provides assistance in securing cannabis licenses, and advisory services in the areas of facility design and development, and cultivation and dispensing best practices. These fees are recognized as the services are performed.

● Product Sales – direct sales of cannabis, hemp, and products derived from these plants. During the quarter ended June 30,2019, the Company commenced the direct sale of acquired hemp seed inventory. As the Company continues to explore opportunities to continue such sales, significant product sales are expected to be generated from (i) the distribution of the Company’s acquired and developing hemp-derived CBD product lines, and (ii) the dispensary and wholesale operations of ARL in Massachusetts and of the Company’s planned cannabis-licensee acquisitions in Illinois, Maryland, and Nevada. This revenue will be recognized when products are delivered or at retail points-of-sale.

Research and Development Costs

Research and Development Costs

Research and development costs are charged to operations as incurred.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation, with depreciation recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term, if applicable. When assets are retired or disposed, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income. Repairs and maintenance are charged to expense in the period incurred.

The estimated useful lives of property and equipment are generally as follows: buildings and building improvements, seven to thirty-nine years; tenant improvements, the remaining duration of the related lease; furniture and fixtures, seven years; machinery and equipment, five to ten years. Land is not depreciated.

The Company’s property and equipment are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undiscounted basis. An impairment loss is measured based on the excess of the asset’s carrying amount over its estimated fair value.

Impairment analyses are based on management’s current plans, intended holding periods and available market information at the time the analyses are prepared. If these criteria change, the Company’s evaluation of impairment losses may be different and could have a material impact to the consolidated financial statements.

For the six months ended June 30, 2019 and 2018, based on its impairment analyses, the Company did not have any impairment losses.

Leases

Leases

The consolidated financial statements reflect the Company’s adoption of ASC 842, Leases, as amended by subsequent accounting standards updates, utilizing the modified retrospective transition approach which calls for applying the new standard to all of the Company’s leases effective January 1, 2019, which is the effective date of adoption.

ASC 842 is intended to improve financial reporting of leasing transactions. The most prominent change from previous accounting guidance is the requirement to recognize right-of-use assets and lease liabilities for the rights and obligations created by operating leases in which the Company is the lessee that extend more than twelve months on the balance sheet. The Company elected the package of practical expedients permitted under ASC 842. Accordingly, the Company accounted for its existing operating leases that commenced before the effective date as operating leases under the new guidance without reassessing (i) whether the contracts contain a lease, (ii) the classification of the leases (iii) the accounting for indirect costs as defined in ASC 842.

The Company determines if an arrangement is a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Non-lease components within lease agreements are accounted for separately. Right-of-use assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term, utilizing the Company’s incremental borrowing rate. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company evaluates the recoverability of its fixed assets and other assets in accordance with ASC 360-10-15, Impairment or Disposal of Long-Lived Assets. Impairment of long-lived assets is recognized when the net book value of such assets exceeds their expected cash flows, in which case the assets are written down to fair value, which is determined based on discounted future cash flows or appraised values.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company follows the provisions of ASC 820, Fair Value Measurement, to measure the fair value of its financial instruments, and ASC 825, Financial Instruments, for disclosures on the fair value of its financial instruments. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by ASC 820 are:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Pricing inputs that are generally observable inputs and not corroborated by market data.

The carrying amounts of the Company’s financial assets and liabilities, such as cash and accounts payable approximate their fair values due to the short maturity of these instruments.

The fair value of option and warrant issuances are determined using the Black-Scholes pricing model and employing several inputs such as the expected life of instrument, the exercise price, the expected risk-free interest rate, the expected dividend yield, the value of the Company’s common stock on issuance date, and the expected volatility of such common stock. The following table summarizes the range of inputs used by the Company during the six months ended June 30, 2019 and 2018:

	Six Months Ended June 30,
	2019		2018
Life of instrument		3.0 years		2.8 to 5.0 years
Volatility factors		1.059 to 1.106		1.020 to 2.086
Risk-free interest rates		1.76% to 2.28%		1.92% to 2.94%
Dividend yield		0%		0%

The expected life of an instrument is calculated using the simplified method pursuant to Staff Accounting Bulletin Topic 14, Share-Based Payment, which allows for using the mid-point between the vesting date and expiration date. The volatility factors are based on the historical two-year movement of the Company’s common stock prior to an instrument’s issuance date. The risk-free interest rate is based on U.S. Treasury rates with maturity periods similar to the expected instruments life on the issuance date.

The Company amortizes the fair value of option and warrant issuances on a straight-line basis over the requisite service period of each instrument.

Extinguishment of Liabilities

Extinguishment of Liabilities

The Company accounts for extinguishment of liabilities in accordance with ASC 405-20, Extinguishments of Liabilities. When the conditions for extinguishment are met, the liabilities are written down to zero and a gain or loss is recognized.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for stock-based compensation using the fair value method as set forth in ASC 718, Compensation—Stock Compensation, which requires a public entity to measure the cost of employee services received in exchange for an equity award based on the fair value of the award on the grant date, with limited exceptions. Such value will be incurred as compensation expense over the period an employee is required to provide service in exchange for the award, usually the vesting period. No compensation cost is recognized for equity awards for which employees do not render the requisite service.

Income Taxes

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits for the six months ended June 30, 2019 and 2018.

Related Party Transactions

Related Party Transactions

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

In accordance with ASC 850, the Company’s financial statements include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business, as well as transactions that are eliminated in the preparation of financial statements.

Comprehensive Income

Comprehensive Income

The Company reports comprehensive income and its components following guidance set forth by ASC 220, Comprehensive Income, which establishes standards for the reporting and display of comprehensive income and its components in the consolidated financial statements. There were no items of comprehensive income applicable to the Company during the period covered in the financial statements.

Earnings Per Share

Earnings Per Share

Earnings per common share is computed pursuant to ASC 260, Earnings Per Share. Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income by the sum of the weighted average number of shares of common stock outstanding plus the weighted average number of potentially dilutive securities during the period.

As of June 30, 2019 and 2018, there were 18,655,107 and 12,508,932, respectively, of potentially dilutive securities in the form of options and warrants. Also as of such dates, there were $350,000 and $250,000, respectively, of convertible promissory notes, and $13.75 million and zero, respectively, of convertible debentures payable, that were potentially dilutive, whose conversion into common stock is based on a discount to the market value of common stock on or about the future conversion date. Utilizing the June 30, 2019 closing stock price of the Company’s common stock, all such dilutive securities were convertible into 19,509,815 shares of common stock. Such share amount was included in the number of weighted average common shares outstanding on a diluted basis, and in the calculation of diluted net income per share for the three and six months ended June 30, 2019, as shown in the statement of operations.

Commitments and Contingencies

Commitments and Contingencies

The Company follows ASC 450, Contingencies, which requires the Company to assess the likelihood that a loss will be incurred from the occurrence or non-occurrence of one or more future events. Such assessment inherently involves an exercise of judgment. In assessing possible loss contingencies from legal proceedings or unasserted claims, the Company evaluates the perceived merits of such proceedings or claims, and of the relief sought or expected to be sought.

If the assessment of a contingency indicates that it is probable that a material loss will be incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

While not assured, management does not believe, based upon information available at this time, that a loss contingency will have material adverse effect on the Company’s financial position, results of operations or cash flows.

Beneficial Conversion Features on Convertible Debt

Beneficial Conversion Features on Convertible Debt

Convertible instruments that are not bifurcated as a derivative pursuant to ASC 815, Derivatives and Hedging, and not accounted for as a separate equity component under the cash conversion guidance are evaluated to determine whether their conversion prices create an embedded beneficial conversion feature at inception, or may become beneficial in the future due to potential adjustments.

A beneficial conversion feature is a nondetachable conversion feature that is “in-the-money” at the commitment date. The in-the-money portion, also known as the intrinsic value of the option, is recorded in equity, with an offsetting discount to the carrying amount of convertible debt to which it is attached. The discount is amortized to interest expense over the life of the debt with adjustments to amortization upon full or partial conversions of the debt.

Risk and Uncertainties

Risk and Uncertainties

The Company is subject to risks common to companies operating within the legal and medical marijuana industries, including, but not limited to, federal laws, government regulations and jurisdictional laws.

Noncontrolling Interests

Noncontrolling Interests

Noncontrolling interests represent third-party minority ownership of the Company’s consolidated subsidiaries. Net income attributable to noncontrolling interests is shown in the consolidated statements of operations; and the value of net assets owned by noncontrolling interests are presented as a component of equity within the balance sheets.

Off Balance Sheet Arrangements

Off Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which enhances and clarifies the guidance on the classification and presentation of restricted cash in the statement of cash flows. This ASU was adopted effective January 1, 2019 with no impact to the Company’s financial statements and related disclosures.

In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvement to Nonemployee Share-Based Payment Accounting, which is part of the FASB’s simplification initiative to maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. This update, which provides consistency in the accounting for share-based payments to nonemployees with that of employees, was adopted effective January 1, 2019 with no material impact to the Company’s financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) which simplifies goodwill impairment testing by requiring that such periodic testing be performed by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures, which is effective for fiscal years, including interim periods, beginning after December 15, 2019.

In addition to the above, the Company has reviewed all other recently issued, but not yet effective, accounting pronouncements, and does not believe the future adoption of any such pronouncements will have a material impact on its financial condition or the results of its operations.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Schedule of Majority Owned Subsidiaries

The accompanying condensed consolidated financial statements include the accounts of MariMed Inc. and the following majority-owned subsidiaries:

Subsidiary:	Percentage Owned
MariMed Advisors Inc.		100.0	%
Mia Development LLC		89.5	%
Mari Holdings IL LLC		60.0	%
Mari Holdings MD LLC		97.4	%
Mari Holdings NV LLC		100.0	%
Hartwell Realty Holdings LLC		100.0	%
iRollie LLC		100.0	%
ARL Healthcare Inc.		100.0	%
MariMed Hemp Inc.		100.0	%
MediTaurus LLC		70.0	%

Schedule of Assumptions Used

The following table summarizes the range of inputs used by the Company during the six months ended June 30, 2019 and 2018:

	Six Months Ended June 30,
	2019		2018
Life of instrument		3.0 years		2.8 to 5.0 years
Volatility factors		1.059 to 1.106		1.020 to 2.086
Risk-free interest rates		1.76% to 2.28%		1.92% to 2.94%
Dividend yield		0%		0%

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2019

Betty's Eddies [Member]

Schedule of Fair Value of Assets Acquired on Acquisition

The following table summarizes the allocation of the purchase price to the fair value of the assets acquired on the acquisition date:

Inventory	$	46,544
Machinery and equipment		130,255
Goodwill		333,201
Total fair value of consideration	$	510,000

iRollie LLC [Member]

Schedule of Fair Value of Assets Acquired on Acquisition

The following table summarizes the allocation of the purchase price to the fair value of the assets acquired:

Cash and cash equivalents	$	13,494
Goodwill		266,682
Total fair value of consideration	$	280,176

ARL Healthcare Inc. [Member]

Schedule of Fair Value of Assets Acquired on Acquisition

The following table summarizes the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed on the acquisition date:

Equipment	$	21,000
Cannabis licenses		185,000
Accounts payable		(120,689	)
Due to related parties		(92,765	)
Total identifiable net assets		(7,454	)
Goodwill		731,902
Total fair value of consideration	$	724,448

Meditaurus LLC [Member]

Schedule of Fair Value of Assets Acquired on Acquisition

The following table summarizes the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed on the acquisition date:

Cash and cash equivalents	$	128,997
Accounts receivable		5,362
Inventory		519,750
Tradename and customer lists		3,346,668
Accounts payable		(777	)
Total value of MediTaurus		4,000,000
Noncontrolling interests in MediTaurus		(1,200,000	)
Total fair value of consideration	$	2,800,000

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Investments (Tables)

6 Months Ended

Jun. 30, 2019

Schedule of Investments [Abstract]

Schedule of Investments

At June 30, 2019 and December 31, 2018, the Company’s investments were comprised of the following:

	June 30, 2019		December 31, 2018
GenCanna Global Inc.	$	32,234,403	$	-
Terrace Inc.		1,590,000		-
CVP Worldwide LLC		1,080,016		1,172,163
Iconic Ventures Inc.		500,000		500,000
Chooze Corp.		257,687		-
Total investments	$	35,662,106	$	1,672,163

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Deferred Rents Receivable (Tables)

6 Months Ended

Jun. 30, 2019

Revenue Recognition and Deferred Revenue [Abstract]

Schedule of Future Minimum Rental Receipts for Non-cancelable Leases and Subleases

Future minimum rental receipts for non-cancelable leases and subleases as of June 30, 2019 were:

2019	$	2,071,161
2020		4,222,040
2021		4,368,640
2022		4,293,999
2023		3,997,651
Thereafter		48,942,935
Total	$	67,896,427

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Due from Third Parties (Tables)

6 Months Ended

Jun. 30, 2019

Due From Third Parties

Schedule of Due from Third Parties

At June 30, 2019 and December 31, 2018, the following amounts were advanced by the Company to its cannabis-licensed clients primarily for working capital purposes:

	June 30, 2019		December 31, 2018
Kind Therapeutics USA Inc. (Maryland licensee)	$	1,590,016	$	2,679,496
KPG of Anna LLC (Illinois licensee)		81,066		482,700
KPG of Harrisburg LLC (Illinois licensee)		46,516		449,385
Harvest Foundation LLC (Nevada licensee)		1,145,083		248,796
Total due from third parties	$	2,862,681	$	3,860,377

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Notes Receivable (Tables)

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Schedule of Notes Receivable

At June 30, 2019 and December 31, 2018, notes receivable were comprised of the following:

	June 30, 2019		December 31, 2018
First State Compassion Center	$	553,791	$	578,723
Healer LLC		822,015		307,429
Atalo Holdings Inc.		755,113		-
KPG of Anna LLC		447,712		-
KPG of Harrisburg LLC		402,878		-
Maryland Health & Wellness Center Inc.		310,882		-
Chooze Corp.		-		257,687
Total notes receivable		3,292,391		1,143,839
Notes receivable, current portion		821,524		51,462
Notes receivable, less current portion	$	2,470,867	$	1,092,377

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Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

At June 30, 2019 and December 31, 2018, property and equipment consisted of the following:

	June 30, 2019			December 31, 2018
Land	$	3,392,710		$	3,392,710
Buildings and building improvements		14,513,538			13,566,144
Tenant improvements		5,625,882			5,348,882
Furniture and fixtures		143,237			114,160
Machinery and equipment		2,057,059			1,632,351
Construction in progress		14,473,474			12,205,447
		40,205,900			36,259,694
Less: accumulated depreciation		(2,602,019	)		(2,159,830	)
Property and equipment, net	$	37,603,881		$	34,099,864

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Debt (Tables)

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Schedule of Mortgages Payable

At June 30, 2019 and December 31, 2018, mortgage balances, including accrued but unpaid interest, were comprised of the following:

	June 30, 2019			December 31, 2018
Bank of New England – Massachusetts property	$	4,877,624		$	4,895,000
Bank of New England – Delaware property		1,742,619			1,791,736
DuQuoin State Bank – Illinois properties		837,556			850,076
Total mortgages payable		7,457,799			7,536,812
Mortgages payable, current portion		(238,386	)		(188,231	)
Mortgages payable, less current portion	$	7,219,413		$	7,348,581

Schedule of Aggregate Maturities of Debt Outstanding

The aggregate scheduled maturities of the Company’s total debt outstanding, inclusive of the promissory notes and mortgages described within this Note 12 – Debt, and the convertible debentures described in the following Note 12 – Debentures Payable, as of June 30, 2019 were:

2019	$	10,496,536
2020		16,495,007
2021		7,762,293
2022		280,348
2023		299,689
Thereafter		6,262,463
Total		41,596,336
Less discounts		(6,557,932	)
	$	35,038,404

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Stock Options (Tables)

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Schedule of Stock Options Outstanding and Exercisable

Stock options outstanding and exercisable as of June 30, 2019 were:

Exercise Price		Shares Under Option				Remaining
per Share		Outstanding		Exercisable		Life in Years
$	0.080		100,000		100,000		0.47
$	0.130		200,000		200,000		1.00
$	0.140		100,000		100,000		0.50
$	0.140		550,000		550,000		1.51
$	0.150		1,000,000		1,000,000		0.25
$	0.250		1,000,000		1,000,000		0.25
$	0.330		50,000		50,000		1.69
$	0.350		1,000,000		1,000,000		0.25
$	0.450		190,000		190,000		2.26
$	0.630		300,000		300,000		2.51
$	0.770		200,000		200,000		3.51
$	0.900		50,000		50,000		3.87
$	0.950		50,000		10,000		3.51
$	2.320		300,000		60,000		4.20
$	2.450		2,000,000		2,000,000		3.48
$	2.500		100,000		25,000		4.16
$	2.650		200,000		100,000		4.24
$	2.850		75,000		-		3.45
$	2.850		100,000		-		4.45
$	3.000		25,000		-		4.47
$	3.725		200,000		-		4.45
			7,790,000		6,935,000

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Revenues (Tables)

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Schedule of Revenues Comprised of Major Categories

For the six months ended June 30, 2019 and 2018, the Company’s revenues were comprised of the following major categories:

	Six months ended June 30,
		2019		2018
Real estate	$	3,442,024	$	2,731,364
Management		1,194,791		754,038
Supply procurement		1,906,399		1,241,834
Licensing		568,127		281,557
Product sales		1,880		-
Product sales from related party		22,014,879		-
Other		60,392		11,482
Total revenues	$	29,188,492	$	5,020,275

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Schedule of Components of Lease Expense

The components of lease expense for the six months ended June 30, 2019 were as follows:

Operating lease cost	$	339,478
Finance lease cost:
Amortization of right-of-use assets	$	6,744
Interest on lease liabilities		1,824
Total finance lease cost	$	8,568

Schedule of Future Minimum Lease Payments Under All Non-cancelable Operating Leases

Future minimum lease payments as of June 30, 2019 under all non-cancelable operating leases having an initial or remaining term of more than one year were:

	Operating Leases			Finance Lease
2019	$	230,744		$	11,556
2020		917,444			23,112
2021		1,008,227			23,112
2022		949,535			11,823
2023		910,166			10,451
Thereafter		5,139,851			3,229
Total lease payments		9,155,967		$	83,282
Less: imputed interest		(2,845,742	)		(11,296	)
	$	6,310,224		$	71,986

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Organization and Description of Business (Details Narrative)	1 Months Ended			3 Months Ended					6 Months Ended
	Aug. 09, 2019 USD ($)	Jul. 31, 2019 USD ($)	May 31, 2019 USD ($) shares	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($) ft²	Mar. 31, 2019 USD ($) ft²	Oct. 31, 2018 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) ft² Integer	Oct. 31, 2018 USD ($)	Jun. 30, 2018 USD ($)	May 30, 2019 USD ($)	Feb. 28, 2019 USD ($)	Jan. 31, 2019	Dec. 31, 2018 USD ($)	Aug. 31, 2018	Sep. 30, 2016 ft²
Area of land | ft²					300,000				300,000
Ownership percentage																23.00%
Proceeds from notes receivable									$ 117,006		$ 22,125
Payment for purchase of inventory					$ 16,700,000	$ 3,300,000
Billed amount					25,672,676			$ 2,937,325	29,188,492		5,020,275
Accounts receivable from related party					25,177,845				25,177,845
Revenues from related party					22,014,878				22,014,878
ScenarioPlanMember
Billed amount				$ 8,000,000
Subsequent Event [Member]
Payment for purchase of inventory	$ 5,000,000
Funding to Seed Purchases [Member]
Notes payable					17,000,000				17,000,000
Terrace Inc. [Member]
Number of common stock issued during period | shares			500,000
Percentage for acquired interest rate			8.95%
Chooze Corp. [Member]
Ownership percentage														2.70%
Proceeds from notes receivable										$ 250,000
Healer LLC [Member] | Dr. Dustin Sulak [Member]
Proceeds from notes receivable							$ 300,000		500,000
Maryland Health & Wellness Center Inc [Member]
Ownership percentage														20.00%
GenCanna Global, Inc. [Member]
Ownership percentage													33.50%
Subordinated secured convertible debentures													$ 30,000,000
Atalo Holdings Inc [Member]
Loan to related party			$ 750,000									$ 750,000
Percentage for acquired interest rate												25.00%
Atalo Holdings Inc [Member] | Subsequent Event [Member]
Loan to related party		$ 230,000
Gen Canna [Member]
Accounts receivable from related party					25,200,000				25,200,000
Revenues from related party									22,000,000
Unearned revenue					$ 3,200,000				$ 3,200,000
Profit percentage of ownership portion									33.50%
Gen Canna [Member] | Subsequent Event [Member]
Payment for purchase of inventory		5,000,000
Billed amount		$ 8,000,000
Gen Canna [Member] | Billed Revenues [Member]
Billed amount									$ 25,200,000
Delaware [Member]
Area of land | ft²					100,000	100,000			100,000								45,000
Illinois [Member]
Area of land | ft²					3,400				3,400
Nevada [Member]
Area of land | ft²					10,000				10,000
Maryland [Member]
Area of land | ft²					180,000				180,000
Cannabis [Member]
Number of licenses | Integer									12
Number of states licensed | Integer									5
Cannabis [Member] | Delaware [Member]
Number of licenses | Integer									2
Cannabis [Member] | Illinois [Member]
Number of licenses | Integer									2
Cannabis [Member] | Nevada [Member]
Number of licenses | Integer									1
Cannabis [Member] | Rhode Island [Member]
Number of licenses | Integer									1
Cannabis [Member] | Maryland [Member]
Number of licenses | Integer									3
Cannabis [Member] | Massachusetts [Member]
Number of licenses | Integer									3

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Summary of Significant Accounting Policies (Details Narrative) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Impairment losses
Options issued
Warrants issued
Unrecognized tax liabilities or benefits
Common Stock [Member]
Potentially dilutive securities, shares	19,509,815
Convertible Promissory Notes [Member]
Potentially dilutive securities, amount	$ 350,000	250,000
Convertible Debentures Payable [Member]
Potentially dilutive securities, amount	$ 13,750,000	$ 0
Options and Warrants [Member]
Potentially dilutive securities, shares	18,655,107	12,508,932
Buildings and Building Improvements [Member] | Minimum [Member]
Estimated useful lives of property and equipment	7 years
Buildings and Building Improvements [Member] | Maximum [Member]
Estimated useful lives of property and equipment	39 years
Tenant Improvements [Member]
Estimated useful lives of property and equipment	The remaining duration of the related lease.
Furniture and Fixtures [Member]
Estimated useful lives of property and equipment	7 years
Machinery and Equipment [Member] | Minimum [Member]
Estimated useful lives of property and equipment	5 years
Machinery and Equipment [Member] | Maximum [Member]
Estimated useful lives of property and equipment	10 years
Accounts Receivable [Member]
Debt collectible reserve	$ 250,000		$ 150,000

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Summary of Significant Accounting Policies - Schedule of Majority Owned Subsidiaries (Details)	Jun. 30, 2019	Aug. 31, 2018
Percentage Owned		23.00%
MariMed Advisors Inc. [Member]
Percentage Owned	100.00%
Mia Development LLC [Member]
Percentage Owned	89.50%
Mari Holdings IL LLC [Member]
Percentage Owned	60.00%
Mari Holdings MD LLC [Member]
Percentage Owned	97.40%
Mari Holdings NV LLC [Member]
Percentage Owned	100.00%
Hartwell Realty Holdings LLC [Member]
Percentage Owned	100.00%
iRollie LLC [Member]
Percentage Owned	100.00%
ARL Healthcare Inc. [Member]
Percentage Owned	100.00%
MariMed Hemp Inc. [Member]
Percentage Owned	100.00%
Meditaurus LLC [Member]
Percentage Owned	70.00%

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Summary of Significant Accounting Policies - Schedule of Assumptions Used (Details)	6 Months Ended
	Jun. 30, 2019 $ / shares	Jun. 30, 2018 $ / shares
Life of Instrument [Member]
Fair value assumptions, measurement input, term	3 years
Life of Instrument [Member] | Minimum [Member]
Fair value assumptions, measurement input, term		2 years 9 months 18 days
Life of Instrument [Member] | Maximum [Member]
Fair value assumptions, measurement input, term		5 years
Volatility Factors [Member] | Minimum [Member]
Fair value assumptions, measurement input, volatility factors	$ 1.059	$ 1.020
Volatility Factors [Member] | Maximum [Member]
Fair value assumptions, measurement input, volatility factors	1.106	2.086
Risk-Free Interest Rate [Member] | Minimum [Member]
Fair value assumptions, measurement input, volatility factors	1.76	1.92
Risk-Free Interest Rate [Member] | Maximum [Member]
Fair value assumptions, measurement input, volatility factors	$ 2.28	$ 2.94
Dividend Yield [Member]
Fair value assumptions, measurement input, percentages	0.00	0.00

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Acquisitions (Details Narrative) - USD ($)		1 Months Ended										6 Months Ended		12 Months Ended
	Nov. 30, 2018	Nov. 30, 2019	Jun. 30, 2019	May 31, 2019	Dec. 31, 2018	Oct. 31, 2018	Jul. 31, 2018	Apr. 30, 2018	Oct. 31, 2017	Jun. 30, 2017	May 31, 2014	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Jun. 01, 2019	Aug. 31, 2018
Ownership percentage																23.00%
Warrants to purchase shares of common stock													4,239,000
MariMed Advisors Inc. [Member]
Percentage on minority ownership interest											49.00%
Options [Member]
Options to purchase shares of common stock												358,446	300,000
Sigal Consulting LLC [Member]
Stock issued during period, shares, acquisitions											31,954,236
Stock issued during period, value, acquisitions											$ 5,913,000
Percentage on outstanding shares											50.00%
Sigal Consulting LLC [Member] | MariMed Advisors Inc. [Member]
Percentage on minority ownership interest										49.00%
Number of common stock exchanged										75,000,000
Sigal Consulting LLC [Member] | Options [Member]
Options to purchase shares of common stock											3,000,000
Options exercisable term											5 years
Options expiry date											Sep. 30, 2019
Options to purchase shares of common stock, value											$ 570,000
Written down of goodwill											$ 0
Sigal Consulting LLC [Member] | Options [Member] | Minimum [Member]
Exercise price of options											$ 0.15
Sigal Consulting LLC [Member] | Options [Member] | Maximum [Member]
Exercise price of options											$ 0.35
Betty's Eddies [Member]
Options to purchase shares of common stock, value									$ 370,000
Stock issued during period, value, purchase of assets									$ 140,000
Stock issued during period, shares, purchase of assets									1,000,000
Written down of goodwill														$ 333,000
Description on royalties percentage									Icky shall receive royalties based on a percentage of the Company's sales of the Betty's Eddies™ product line, commencing at 25% and decreasing to 2.5% as certain sales thresholds are met.
Royalties												$ 85,000	$ 14,000
iRollie LLC [Member]
Value of common stock issued to former owners					$ 280,000
iRollie LLC [Member] | Purchase Agreement [Member]
Number of shares subscriptions on common stock equity interest								264,317
Ownership percentage								100.00%
ARL Healthcare Inc. [Member]
Written down of goodwill	$ 732,000
ARL Healthcare Inc. [Member] | Cannabis Licenses [Member]
Carrying value less amortization			$ 77,000									$ 77,000
KPG of Anna LLC and KPG of Harrisburg LLC [Member]
Stock issued during period, shares, acquisitions						1,000,000
KPG of Anna LLC and KPG of Harrisburg LLC [Member] | Purchase Agreement [Member]
Percentage of interests acquired in business acquisition						100.00%
The Harvest Foundation LLC [Member]
Percentage of interests acquired in business acquisition	100.00%
The Harvest Foundation LLC [Member] | Two Owners [Member]
Stock issued during period, shares, acquisitions			1,000,000
Number common shares issued during period		1,000,000
Sale of common stock amount		$ 1,200,000
Warrants to purchase shares of common stock		400,000
Meditaurus LLC [Member] | Purchase Agreement [Member]
Stock issued during period, shares, acquisitions												752,260
Stock issued during period, value, acquisitions												$ 2,080,000
Percentage of interests acquired in business acquisition															70.00%
Payment for business acquisition												2,800,000
Cash used for acquisition												$ 720,000
Percentage for royalty												10.00%
Percentage for royalty, description												For a period of ten years following June 1, 2020, certain former members of MediTaurus shall be paid a royalty on the Company's receipts from the licensing of MT Property, with the royalty percentage commencing at 10% and decreasing to 2% over time.
Meditaurus LLC [Member] | Purchase Agreement [Member] | June 1, 2020 [Member]
Percentage of interests acquired in business acquisition			30.00%									30.00%
AgriMed Industries of PA LLC [Member] | Purchase Agreement [Member]
Stock issued during period, value, acquisitions							$ 8,000,000
Percentage of interests acquired in business acquisition							100.00%
Terrace Inc. [Member]
Percentage of interests acquired in business acquisition				8.95%
Payment for business acquisition				$ 2,949,000
Cash used for acquisition				$ 3,100,000

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Acquisitions - Schedule of Fair Value of Assets Acquired on Acquisition (Details)	Jun. 30, 2019 USD ($)
Betty's Eddies [Member]
Inventory	$ 46,544
Machinery and equipment	130,255
Goodwill	333,201
Total fair value of consideration	510,000
iRollie LLC [Member]
Cash and cash equivalents	13,494
Goodwill	266,682
Total fair value of consideration	280,176
ARL Healthcare Inc. [Member]
Machinery and equipment	21,000
Cannabis licenses	185,000
Accounts payable	(120,689)
Due to related parties	(92,765)
Total identifiable net assets	(7,454)
Goodwill	731,902
Total fair value of consideration	724,448
Meditaurus LLC [Member]
Inventory	519,750
Cash and cash equivalents	128,997
Accounts receivable	5,362
Tradename and customer lists	3,346,668
Accounts payable	(777)
Total fair value of consideration	4,000,000
Noncontrolling interests	(1,200,000)
Total fair value consideration, net of noncontrolling interests	$ 2,800,000

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Investments (Details Narrative) - USD ($)	1 Months Ended						3 Months Ended		6 Months Ended
	Jul. 31, 2019	Jun. 30, 2019	May 31, 2019	Feb. 28, 2019	Dec. 31, 2018	Aug. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Jan. 31, 2019
Ownership percentage						23.00%
Earnings in equity method investments on net income							$ (45,465)		$ 1,912,942
Shares of common stock exchanged, value									2,627,754
Investments		$ 35,662,106			$ 1,672,163		35,662,106		35,662,106
Number of common stock shares issued, values									2,600,000	8,461,003
Billed amount							25,672,676	$ 2,937,325	29,188,492	$ 5,020,275
Binske [Member] | Licensing Agreement [Member] | Subsequent Event [Member]
Billed amount
Vitiprints [Member] | Licensing Agreement [Member]
Non-refundable payment						$ 250,000
Percentage of royalty on net revenue						10.00%
Payments for royalties						$ 250,000
Maximum [Member] | Binske [Member] | Licensing Agreement [Member] | Subsequent Event [Member]
Percentage for royalty	12.50%
Minimum [Member] | Binske [Member] | Licensing Agreement [Member] | Subsequent Event [Member]
Percentage for royalty	10.00%
CVP Worldwide LLC [Member]
Investments		1,080,016			$ 1,172,163	300,000	1,080,016		1,080,016
Contracted cash investment						$ 500,000
Number of common stock issued during period						378,259
Number of common stock shares issued, values						$ 915,000
Percentage on minority ownership interest						23.00%
Number of revenue shares earned
Equity method investments		92,000			$ 43,000		92,000		92,000
Equity method investment market value		1,080,000			$ 1,172,000		1,080,000		1,080,000
Iconic Ventures Inc. [Member] | Maximum [Member]
Percentage on minority ownership interest					10.00%
Chooze Corp. [Member]
Ownership percentage											2.70%
Investments		258,000					258,000		258,000
Note receivable											$ 258,000
Impairment charges on investments
Terrace Inc. [Member]
Shares of common stock exchanged, value			$ 1,590,000
Percentage for acquired interest rate			8.95%
Investment carried cost			$ 1,590,000
Number of common stock issued during period			500,000
Iconic Ventures Inc. [Member]
Investments		500,000			$ 500,000		500,000		500,000
Number of shares purchased during the period					2,500,000
Value of shares purchased during period					$ 500,000
GenCanna Global, Inc. [Member]
Subordinated secured convertible debentures					30,000,000
Debt conversion amount				$ 229,000
Earnings in equity method investments on net income		200,000
Employee pool bonus fund		10,000,000
Investments		$ 32,234,403					$ 32,234,403		$ 32,234,403

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Investments - Schedule of Investments (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018	Aug. 31, 2018	Jun. 30, 2018
Total investments	$ 35,662,106	$ 1,672,163
Iconic Ventures Inc. [Member]
Total investments	500,000	500,000
CVP Worldwide LLC [Member]
Total investments	1,080,016	1,172,163	$ 300,000
GenCanna Global, Inc. [Member]
Total investments	32,234,403
Terrace Inc. [Member]
Total investments	1,590,000
Chooze Corp. [Member]
Total investments	$ 257,687

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Deferred Rents Receivable (Details Narrative)		6 Months Ended	12 Months Ended
	Mar. 31, 2019 ft²	Jun. 30, 2019 USD ($) ft²	Dec. 31, 2018 USD ($)	Sep. 30, 2016 ft²
Area of land		300,000
Cumulative fixed rental receipts | $		$ 7,500,000	$ 5,400,000
Revenue recognized | $		9,500,000	7,500,000
Deferred rents receivable | $		$ 2,000,000	$ 2,100,000
Delaware [Member]
Area of land	100,000	100,000		45,000
Percentage of space occupied		100.00%
Non-cancelable lease agreement, term		20 years
Lease expiration description	The lease term is 10 years, with an option to extend the term for three additional five-year periods.	Lease expiring in 2035.
Delaware [Member] | Retails Space [Member]
Area of land		4,000
Illinois [Member]
Area of land		3,400
Non-cancelable lease agreement, term		20 years
Lease expiration description		Lease expiring in 2036.
Maryland [Member ]
Area of land		180,000
Non-cancelable lease agreement, term		20 years
Massachusetts [Member] | Non-Cannabis [Member]
Area of land		138,000
Lease expiration description		Approximately half of the available square footage is leased to a non-cannabis manufacturing company under a five-year lease.

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Deferred Rents Receivable - Schedule of Future Minimum Rental Receipts for Non-cancelable Leases and Subleases (Details)	Jun. 30, 2019 USD ($)
Revenue Recognition and Deferred Revenue [Abstract]
2019	$ 2,071,161
2020	4,222,040
2021	4,368,640
2022	4,293,999
2023	3,997,651
Thereafter	48,942,935
Total	$ 67,896,427

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Due from Third Parties - Schedule of Due from Third Parties (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Due from third parties	$ 2,862,681	$ 3,860,377
Kind Therapeutics USA Inc. [Member]
Due from third parties	590,016	2,679,496
KPG of Anna LLC [Member]
Due from third parties	81,066	482,700
KPG of Harrisburg LLC [Member]
Due from third parties	46,516	449,385
Harvest Foundation LLC [Member]
Due from third parties	$ 1,145,083	$ 248,796

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Notes Receivable (Details Narrative) - USD ($)	1 Months Ended			3 Months Ended	6 Months Ended			7 Months Ended
	May 30, 2019	Jan. 31, 2019	May 31, 2016	Oct. 31, 2018	Jun. 30, 2019	Oct. 31, 2018	Jun. 30, 2018	Apr. 30, 2016	Jul. 31, 2019	May 31, 2019	Feb. 28, 2019	Dec. 31, 2018	Aug. 31, 2018
Proceeds from notes receivable					$ 117,006		$ 22,125
Notes receivable, current					821,524							$ 51,462
Ownership percentage													23.00%
Chooze Corp. [Member]
Proceeds from notes receivable						$ 250,000
Debt interest rate				8.00%		8.00%
Debt maturity description						Maturing in 2021
Ownership percentage		2.70%
Note receivable		$ 258,000
Delaware Cannabis-licensee [Member]
Proceeds from notes receivable								$ 700,000
Promissory note term			10 years
Debt interest rate			12.50%
Monthly payments								$ 10,100
Notes receivable, current					55,000							$ 51,000
Atalo Holdings Inc [Member]
Debt interest rate	6.00%
Loan to related party	$ 750,000									$ 750,000
Percentage for acquired interest rate	25.00%
Debt maturity description	Principal and interest payable in April 3, 2020.
Atalo Holdings Inc [Member] | Subsequent Event [Member]
Loan to related party									$ 230,000
Healer LLC [Member] | Dr. Dustin Sulak [Member]
Proceeds from notes receivable				$ 300,000	$ 500,000
Debt interest rate											6.00%
Debt maturity description					Principal and interest payable on the maturity date which is three years from issuance.
KPG of Anna LLC [Member]
Proceeds from notes receivable		451,000
KPG of Harrisburg LLC [Member]
Proceeds from notes receivable		$ 405,000
KPG of Anna LLC & KPG of Harrisburg LLC [Member]
Debt interest rate		12.00%
Notes receivable, current					$ 12,000
Debt maturity description		Monthly principal and interest payments due through December 2038.
Maryland Health & Wellness Center Inc [Member] | Construction Loan [Member]
Debt interest rate		8.00%
Debt maturity description		Principal and interest payable in January 2020, provided however, upon the two-year anniversary of final state approval of MHWC's dispensing license.
Ownership percentage		20.00%

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Notes Receivable - Schedule of Notes Receivable (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Total notes receivable	$ 3,292,391	$ 1,143,839
Notes receivable, current portion	821,524	51,462
Notes receivable, less current portion	2,470,867	1,092,377
First State Compassion Center [Member]
Total notes receivable	553,791	578,723
Healer LLC [Member]
Total notes receivable	822,015	307,429
Atalo Holdings Inc [Member]
Total notes receivable	755,113
KPG of Anna LLC [Member]
Total notes receivable	447,712
KPG of Harrisburg LLC [Member]
Total notes receivable	398,803
Maryland Health & Wellness Center Inc [Member]
Total notes receivable	310,882
Chooze Corp. [Member]
Total notes receivable		$ 257,687

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Inventory/Unearned Revenue From Related Party (Details Narrative) - USD ($)	3 Months Ended			6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Payment for purchase of inventory	$ 16,700,000	$ 3,300,000
Proceeds from sale of inventory				$ 28,000,000
Billed amount	25,672,676		$ 2,937,325	29,188,492	$ 5,020,275
Accounts receivable from related party	25,177,845			25,177,845
Revenues from related party	22,014,878			22,014,878
Gross profit	8,927,123		$ 2,023,968	11,188,149	$ 3,218,049
Gen Canna [Member]
Proceeds from sale of inventory				$ 18,000,000
Billed amount, description				The seeds are to be harvested by October 2019, and accordingly the Company provided GenCanna with extended payment terms, allowing full payments to be made by December 2019.
Costs associated with unearned revenue	15,700,000			$ 15,700,000
Unearned revenue	3,200,000			3,200,000
Accounts receivable from related party	$ 25,200,000			25,200,000
Revenues from related party				22,000,000
Gen Canna [Member] | Billed Revenues [Member]
Proceeds from sale of inventory				15,700,000
Billed amount				25,200,000
MariMed Hemp Inc. [Member]
Payment for purchase of inventory				20,000,000
MediTaurus [Member] | Hemp Seeds [Member]
Payment for purchase of inventory				4,300,000
MediTaurus [Member] | Hemp Oil [Member]
Payment for purchase of inventory				$ 520,000

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Debentures Receivable (Details Narrative) - GenCanna Global, Inc. [Member] - USD ($)	12 Months Ended
	Dec. 31, 2018	Feb. 28, 2019
Ownership percentage of investment		33.50%
Debt interest rate		9.00%
Maturity date, description	Original maturity of three years from issuance.
Earned and received interest income	$ 502,000

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Property and Equipment (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Additions to property and equipment	$ 3,900,000	$ 5,700,000
Construction in progress			$ 12,200,000
Depreciation and amortization	471,000	$ 254,000
New Bedford, MA [Member]
Construction in progress			9,800,000
Middleborough, MA [Member]
Construction in progress			$ 2,400,000
New Bedford, MA and Middleborough, MA [Member]
Construction in progress	$ 2,300,000

XML

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Property plant and equipment, gross	$ 40,205,900	$ 36,259,694
Less: accumulated depreciation	(2,602,019)	(2,159,830)
Property and equipment, net	37,603,881	34,099,864
Land [Member]
Property plant and equipment, gross	3,392,710	3,392,710
Buildings and Building Improvements [Member]
Property plant and equipment, gross	14,513,538	13,566,144
Tenant Improvements [Member]
Property plant and equipment, gross	625,882	5,348,882
Furniture and Fixtures [Member]
Property plant and equipment, gross	143,237	114,160
Machinery and Equipment [Member]
Property plant and equipment, gross	2,057,059	1,632,351
Construction in Progress [Member]
Property plant and equipment, gross	$ 14,473,474	$ 12,205,447

XML

Debt (Details Narrative)	1 Months Ended							4 Months Ended	6 Months Ended		12 Months Ended
	Jun. 30, 2019 USD ($) ft² $ / shares shares	Apr. 30, 2019 USD ($)	Mar. 31, 2019 USD ($) ft²	Dec. 31, 2018 USD ($) $ / shares shares	Sep. 30, 2018 USD ($) $ / shares shares	Jun. 30, 2018 USD ($) $ / shares shares	Nov. 30, 2017 ft²	Dec. 31, 2018 USD ($) $ / shares shares	Jun. 30, 2019 USD ($) ft² $ / shares shares	Jun. 30, 2018 USD ($) $ / shares shares	Dec. 31, 2018 USD ($) $ / shares shares	Dec. 31, 2016 ft²	Sep. 30, 2016 ft²
Area of land | ft²	300,000								300,000
Repayment of notes										$ 700,000
Number of warrants issued to purchase common stock | shares						4,239,000				4,239,000
Common stock, subscriptions | shares	752,260			97,136				97,136	752,260		97,136
Minimum [Member]
Warrant term						3 years				3 years
Warrant exercise price | $ / shares						$ 0.30				$ 0.30
Maximum [Member]
Warrant term						5 years				5 years
Warrant exercise price | $ / shares						$ 2.25				$ 2.25
Secured Promissory Notes [Member]
Debt maturity description			December 2019		September 2019
Interest rate			13.00%		10.00%
Debt instrument, extended maturity description			The Company may extend the maturity date by up to three months upon thirty days' notice prior to the maturity date with an extension fee payment to the note holder of $300,000.
Promissory notes issued			$ 6,000,000		$ 3,000,000				$ 6,000,000
Debt instrument, extension fee			$ 300,000
Secured Promissory Notes [Member] | MariMed Hemp Inc. [Member]
Debt instrument, extended maturity description	On the maturity date in January 2020, or earlier at Mari-Hemp's discretion, the principal balance shall be repaid plus a payment of $1.5 million.
Promissory notes issued	$ 10,000,000
Repayment of additional debt	1,500,000
Repayment of notes	162,000
Interest expenses	162,000
Secured Promissory Notes [Member] | MariMed Hemp Inc. [Member] | Note Holder [Member]
Repayment of additional debt		$ 180,000
Secured Promissory Notes [Member] | MariMed Hemp Inc. [Member] | Gen Canna [Member]
Debt maturity description		December 2019
Debt instrument, extended maturity description		The principal balance plus a payment of $180,000 shall be due in full on the earlier of the maturity date or three business days after Mari-Hemp's receipt of payment by GenCanna of the Secured Receivables.
Promissory notes issued		$ 1,000,000
Repayment of additional debt		180,000
Repayment of notes		180,000
Interest expenses		52,000
Secured Promissory Notes [Member] | MariMed Hemp Inc. [Member] | Gen Canna [Member] | Note Holder [Member]
Debt instrument, extension fee		$ 30,000
Promissory Notes [Member]
Debt principal amount				$ 7,495,000				$ 7,495,000			$ 7,495,000
Repayment of notes											700,000
Warrant term					3 years
Number of warrants issued to purchase common stock | shares					750,000
Warrant exercise price | $ / shares					$ 1.80
Note discount recorded				629,000	$ 1,511,000			629,000			629,000
Note carrying value	$ 3,000,000			$ 2,370,000				2,370,000	3,000,000		2,370,000
Value of warrant discount amortized								882,000	629,000
Debt conversion of convertible shares | shares				1,568,375
Debt conversion principal amount				$ 1,075,000				$ 1,075,000			1,075,000
Debt conversion of convertible debt				$ 829,000							$ 2,500,000
Stock issued during period | shares											2,596,313
Common stock, subscriptions | shares				79,136				79,136			79,136
Accrued interest				$ 95,000				$ 95,000			$ 95,000
Promissory Note [Member] | Minimum [Member]
Debt conversion price | $ / shares				$ 0.65				$ 0.65			$ 0.65
Promissory Note [Member] | Maximum [Member]
Debt conversion price | $ / shares				$ 0.90				$ 0.90			$ 0.90
Delaware [Member]
Area of land | ft²	100,000		100,000						100,000				45,000
Mortgage Agreement [Member]
Agreement term							10 years
Debt payment, description							From the start of the mortgage through May 2019, the Company is required to make monthly payments of interest-only at a rate equal to the monthly prime rate plus 2%, with a floor of 6.25%. From May 2019 to May 2024, the Company shall make principal and interest payments at a rate equal to the prime rate on May 2, 2019 plus 2%, with a floor of 6.25%. Principal and interest payments shall continue from May 2024 through the end of the lease at a rate equal to the prime rate on May 2, 2024 plus 2%, with a floor of 6.25%.
Debt principal amount	$ 4,877,000			$ 4,895,000				$ 4,895,000	$ 4,877,000		$ 4,895,000
Debt principal amount, current	110,000			63,000				63,000	110,000		63,000
Mortgage Agreement [Member] | DuQuoin State Bank [Member ]
Area of land | ft²												3,400
Debt principal amount	838,000			850,000				850,000	838,000		850,000
Debt principal amount, current	$ 23,000			23,000				23,000	$ 23,000		23,000
Interest rate												8.50%
Debt instrument, extended maturity description												The mortgage was renewed in May 2019 at a rate of 8.5% per annum.
Mortgage Agreement [Member] | Prime Rate [Member]
Variable rate							2.00%
Mortgage Agreement [Member] | Prime Rate [Member] | May 2, 2019 [Member]
Variable rate							2.00%
Mortgage Agreement [Member] | Prime Rate [Member] | May 2, 2024 [Member]
Variable rate							2.00%
Mortgage Agreement [Member] | Floor Rate [Member]
Variable rate							6.25%
Mortgage Agreement [Member] | Floor Rate [Member] | May 2, 2019 [Member]
Variable rate							6.25%
Mortgage Agreement [Member] | Floor Rate [Member] | May 2, 2024 [Member]
Variable rate							6.25%
Mortgage Agreement [Member] | New Bedford, Massachusetts [Member]
Area of land | ft²							138,000
Cultivating and processing facility | ft²							70,000
Mortgage Agreement [Member] | Delaware [Member]
Area of land | ft²	45,070								45,070
Debt principal amount	$ 1,743,000			1,792,000				1,792,000	$ 1,743,000		1,792,000
Debt principal amount, current	$ 105,000			$ 102,000				$ 102,000	$ 105,000		$ 102,000
Debt maturity description									The mortgage matures in 2031
Mortgage Agreement [Member] | Delaware [Member] | Prime Rate [Member]
Interest rate									1.50%
Mortgage Agreement [Member] | Delaware [Member] | Floor Rate [Member]
Interest rate									5.25%
Mortgage Agreement [Member] | Delaware [Member] | September 2021 [Member]
Interest rate									5.25%
10M Note [Member] | Secured Promissory Notes [Member] | MariMed Hemp Inc. [Member]
Warrant term	3 years								3 years
Number of warrants issued to purchase common stock | shares	375,000								375,000
Warrant exercise price | $ / shares	$ 4.50								$ 4.50
Note discount recorded	$ 601,000								$ 601,000
Interest expenses						$ 65,000
Note carrying value	$ 9,460,000								$ 9,460,000

XML

Debt - Schedule of Mortgages Payable (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Total mortgages payable	$ 35,038,404
Mortgage [Member]
Total mortgages payable	7,457,799	$ 7,536,812
Mortgages payable, current portion	(238,386)	(188,231)
Mortgages payable, less current portion	7,219,413	7,348,581
Mortgage [Member] | Bank of New England - Massachusetts property [Member]
Total mortgages payable	4,877,624	4,895,000
Mortgage [Member] | Bank of New England - Delaware Property [Member]
Total mortgages payable	1,742,619	1,791,736
Mortgage [Member] | DuQuoin State Bank - Illinois Properties [Member]
Total mortgages payable	$ 837,556	$ 850,076

XML

Debt - Schedule of Aggregate Maturities of Debt Outstanding (Details)	Jun. 30, 2019 USD ($)
Debt Disclosure [Abstract]
2019	$ 10,496,536
2020	16,495,007
2021	7,762,293
2022	280,348
2023	299,689
Thereafter	6,262,463
Total	41,596,336
Less discounts	(6,557,932)
Long-term debt, net	$ 35,038,404

XML

Debentures Payable (Details Narrative) - USD ($)	1 Months Ended					2 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2019	May 31, 2019	Jan. 31, 2019	Dec. 31, 2018	Nov. 30, 2018	Nov. 30, 2018	Jun. 30, 2019	Jun. 30, 2019	Jun. 30, 2018	Aug. 31, 2018
Proceeds from issuance of convertible debt									$ 1,998,360
Ownership percentage										23.00%
Fair value of warrants									$ 198,200
Warrants to purchase common stock									4,239,000
Amortization of original issue discount								28,920
Minimum [Member]
Warrant term									3 years
Warrant exercise price per share									$ 0.30
Maximum [Member]
Warrant term									5 years
Warrant exercise price per share									$ 2.25
17.5M Debentures Holder [Member]
Debt principal amount	$ 13,750,000						$ 13,750,000	13,750,000
Unamortized balances of the beneficial conversion feature	5,152,000						5,152,000	5,152,000
Unamortized balance of warrants discount	1,575,000						1,575,000	1,575,000
Unamortized balance of original issue discount	287,000						287,000	287,000
Debentures carrying value	6,736,000						6,736,000	6,736,000
Convertible Debentures [Member]
Debt principal amount	1,750,000		$ 600,000	$ 1,400,000	$ 1,400,000	$ 1,400,000	$ 1,750,000	1,750,000
Debt conversion of convertible shares			233,194	524,360	524,360		923,185
Debt conversion price per share				$ 3.04	$ 2.23	$ 2.23
Accrued interest	181,000		$ 97,000	$ 36,000	$ 36,000	$ 36,000	$ 181,000	181,000
Amortization of the beneficial conversion feature								2,282,000
Amortization of the warrants discount								320,000
Amortization of original issue discount								29,000
Accrued interest	$ 280,000						$ 280,000	$ 280,000
Convertible Debentures [Member] | Minimum [Member]
Debt conversion price per share	$ 1.74		$ 2.90				$ 1.74	$ 1.74
Convertible Debentures [Member] | Maximum [Member]
Debt conversion price per share	$ 1.74		$ 3.06				$ 1.74	$ 1.74
Convertible Debentures [Member] | 10M Debentures Holder [Member]
Debt principal amount					$ 10,000,000	$ 10,000,000
Interest bearing, rate					6.00%	6.00%
Debt mature						2 years
Debt instrument discount rate					1.00%	1.00%
Proceeds from issuance of convertible debt						$ 9,900,000
Debt interest rate						80.00%
Ownership percentage					4.99%	4.99%
Accrued unpaid interest						10.00%
Debt redemption percentage						110.00%
Warrant term					3 years	3 years
Debt conversion of convertible shares						324,675
Fair value of warrants						$ 1,057,000
Intrinsic value of the beneficial conversion feature						5,570,000
Beneficial conversion feature, additional discount					$ 1,057,000	$ 1,057,000
Convertible Debentures [Member] | 10M Debentures Holder [Member] | Securities Purchase Agreement [Member]
Debt conversion of convertible shares						500,000,000
Convertible Debentures [Member] | 10M Debentures Holder [Member] | Minimum [Member]
Debt conversion price per share					$ 3.50	$ 3.50
Convertible Debentures [Member] | 10M Debentures Holder [Member] | Maximum [Member]
Debt conversion price per share					$ 5.50	$ 5.50
Convertible Debentures [Member] | 5M Debentures Holder [Member]
Debt mature		2 years
Debt instrument discount rate		1.00%
Proceeds from issuance of convertible debt		$ 4,950,000
Convertible debentures		$ 5,000,000
Convertible Debentures [Member] | 2.5M Debentures Holder [Member]
Debt mature	2 years
Debt instrument discount rate	7.00%						7.00%	7.00%
Proceeds from issuance of convertible debt	$ 2,350,000
Convertible debentures	$ 2,500,000						$ 2,500,000	$ 2,500,000
Debt instrument, description	The "$2.5M Debentures," and together with the $5M Debentures, the :"$7.5M Debentures".
Convertible Debentures [Member] | 7.5M Debentures Holder [Member]
Warrant term	3 years						3 years	3 years
Fair value of warrants								$ 929,000
Intrinsic value of the beneficial conversion feature								$ 3,385,000
Debt instrument, description								The $7.5M Debentures were sold to the Holder of the $10M Debentures. The terms of the $7.5M Debentures are consistent with the terms of the $10M Debentures, except that (i) no interest shall accrue on the $2.5M Debentures, (ii) the issue discount on the $2.5M Debentures is 7%, compared to 1% on the $10M Debentures and $5M Debentures, and (iii) other small variations, most notably a cap on the conversion price. The SPA, registration rights agreement, and addendum to the SPA were all amended and restated to incorporate the $7.5M Debentures.
Warrants to purchase common stock	550,000						550,000	550,000
Warrant exercise price per share	$ 5.00						$ 5.00	$ 5.00
17.5M Debentures Holder [Member]
Debt principal amount	$ 2,350,000			8,600,000			$ 2,350,000	$ 2,350,000
Debt conversion of convertible shares								1,156,379
Accrued interest	$ 278,000			62,000			$ 278,000	$ 278,000
Unamortized balances of the beneficial conversion feature				4,048,000
Unamortized balance of warrants discount				966,000
Unamortized balance of original issue discount				91,000
Debentures carrying value				$ 3,600,000

XML

Equity (Details Narrative) - USD ($)	1 Months Ended		3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jan. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Preferred stock, shares authorized	50,000,000		50,000,000		50,000,000		50,000,000
Loss on conversion				$ (563,119)		$ (1,776,960)
Share issued price	$ 3.25		$ 3.25		$ 3.25
Number of shares issued during period, value					$ 2,600,000	$ 8,461,003
Number of warrants issued to purchase common stock				4,239,000		4,239,000
17.5M Debentures Holder [Member]
Debt converted into common shares					1,156,379
Promissory notes	$ 2,350,000		$ 2,350,000		$ 2,350,000		$ 8,600,000
Accrued interest	$ 278,000		$ 278,000		$ 278,000		62,000
Harvest Foundation LLC [Member]
Number of common stock issued during period					1,000,000
Terrace Inc [Member]
Number of common stock issued during period					500,000
iRollie LLC [Member]
Number of shares issued for acquisition						264,317
Third Parties [Member]
Loss on conversion						$ 959,000
Shares in exchange for services						1,313,901
Number of shares issued to retire promissory note, shares						1,679,486
Number of shares issued to retire promissory note						$ 1,175,000
Non cash loss on conversions						$ 918,000
Previously Issued Subscription [Member]
Number of common stock issued during period					97,136	1,000,000
Number of shares issued during period, value					$ 169,000	$ 370,000
Minimum [Member]
Share issued price				$ 0.50		$ 0.50
Maximum [Member]
Share issued price				$ 1.30		$ 1.30
Common Stock [Member]
Number of common stock issued during period					799,995	10,111,578
Number of shares issued during period, value					$ 800	$ 10,112
Number of shares issued for acquisition						1,000,000
Options [Member]
Options to purchase shares of common stock					358,446	300,000
Warrant [Member]
Number of warrants issued to purchase common stock	666,104		666,104	1,425,379	666,104	1,425,379
Series A convertible Preferred [Member]
Preferred stock, shares authorized		500,000
Debt converted into common shares		970,989
Debt instrument conversion price		$ 0.55
Loss on conversion		$ 34,000
Preferred stock dividend, rate		6.00%
Market capitalization		$ 50,000,000
Discount to selling price, percentage		25.00%
Common Stock Issuance Obligations [Member]
Promissory notes							$ 50,000
Subscription outstanding, shares							79,136
Accrued interest							$ 1,454
Subscription outstanding, value							$ 95,000
Number of shares subscribed for exercise of warrants						32,083
Number of shares issued to settlement of debt, shares						2,001,641
Number of shares issued to settlement of debt						$ 1,951,600
Common stock shares subscription				9,281		9,281
Payment of rent						$ 20,000
Common Stock Issuance Obligations [Member] | September 2018 through January 2019 [Member]
Subscription outstanding, shares							18,000
Subscription outstanding, value							$ 74,000
Common Stock Issuance Obligations [Member] | Meditaurus LLC [Member]
Number of common stock issued during period	752,260
Number of shares issued during period, value	$ 2,080,000

XML

Stock Options (Details Narrative) - USD ($)	1 Months Ended			6 Months Ended
	Dec. 31, 2018	May 31, 2018	Jan. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Number of stock options forfeited					300,000
Two Board Members [Member]
Number of stock options forfeited					200,000
Options One [Member]
Options to purchase shares of common stock			1,450,000	520,000
Exercise price of common stock		$ 0.90
Stock options expiration period, description			Expiring between December 2020 and December 2022.
Option term		5 years
Number of stock options granted		200,000
Amortized fair value of options granted		$ 28,000
Adjusted fair value of options granted		$ 208,000
Number of stock options forfeited	150,000
Amortized fair value of options for forfeiture	$ 50,000
Unamortized fair value of options for forfeiture	$ 158,000
Purchase exercised options				350,000
Number of shares surrendered by board members				139,985
Options One [Member] | December 2020 and December 2022 [Member]
Non-cash equity compensation					$ 458,000
Options One [Member] | Minimum [Member]
Exercise price of common stock			$ 0.14	$ 0.08
Options One [Member] | Maximum [Member]
Exercise price of common stock			$ 0.77	0.77
Options Two [Member]
Options to purchase shares of common stock					700,000
Purchase exercised options					400,000
Number of shares surrendered by board members					98,000
Options Two [Member] | Minimum [Member]
Exercise price of common stock				0.08
Options Two [Member] | Maximum [Member]
Exercise price of common stock				$ 0.63

XML

Stock Options - Schedule of Stock Options Outstanding and Exercisable (Details)	6 Months Ended
	Jun. 30, 2019 $ / shares shares
Outstanding shares under option	7,790,000
Exercisable shares under option	6,935,000
Range One [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 0.080
Outstanding shares under option	100,000
Exercisable shares under option	100,000
Outstanding remaining life in years	5 months 20 days
Range Two [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 0.130
Outstanding shares under option	200,000
Exercisable shares under option	200,000
Outstanding remaining life in years	1 year
Range Three [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 0.140
Outstanding shares under option	100,000
Exercisable shares under option	100,000
Outstanding remaining life in years	6 months
Range Four [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 0.140
Outstanding shares under option	550,000
Exercisable shares under option	550,000
Outstanding remaining life in years	1 year 6 months 3 days
Range Five [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 0.150
Outstanding shares under option	1,000,000
Exercisable shares under option	1,000,000
Outstanding remaining life in years	2 months 30 days
Range Six [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 0.250
Outstanding shares under option	1,000,000
Exercisable shares under option	1,000,000
Outstanding remaining life in years	2 months 30 days
Range Seven [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 0.330
Outstanding shares under option	50,000
Exercisable shares under option	50,000
Outstanding remaining life in years	1 year 8 months 9 days
Range Eight [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 0.350
Outstanding shares under option	1,000,000
Exercisable shares under option	1,000,000
Outstanding remaining life in years	2 months 30 days
Range Nine [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 0.450
Outstanding shares under option	190,000
Exercisable shares under option	190,000
Outstanding remaining life in years	2 years 3 months 4 days
Range Ten [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 0.630
Outstanding shares under option	300,000
Exercisable shares under option	300,000
Outstanding remaining life in years	2 years 6 months 3 days
Range Eleven [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 0.770
Outstanding shares under option	200,000
Exercisable shares under option	200,000
Outstanding remaining life in years	3 years 6 months 3 days
Range Twelve [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 0.900
Outstanding shares under option	50,000
Exercisable shares under option	50,000
Outstanding remaining life in years	3 years 10 months 14 days
Range Thirteen [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 0.950
Outstanding shares under option	50,000
Exercisable shares under option	10,000
Outstanding remaining life in years	3 years 6 months 3 days
Range Fourteen [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 2.320
Outstanding shares under option	300,000
Exercisable shares under option	60,000
Outstanding remaining life in years	4 years 2 months 12 days
Range Fifteen [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 2.450
Outstanding shares under option	2,000,000
Exercisable shares under option	2,000,000
Outstanding remaining life in years	3 years 5 months 23 days
Range Sixteen [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 2.500
Outstanding shares under option	100,000
Exercisable shares under option	25,000
Outstanding remaining life in years	4 years 1 month 27 days
Range Seventeen [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 2.650
Outstanding shares under option	200,000
Exercisable shares under option	100,000
Outstanding remaining life in years	4 years 2 months 27 days
Range Eighteen [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 2.850
Outstanding shares under option	75,000
Exercisable shares under option
Outstanding remaining life in years	3 years 5 months 12 days
Range Nineteen [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 2.850
Outstanding shares under option	100,000
Exercisable shares under option
Outstanding remaining life in years	4 years 5 months 12 days
Range Twenty [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 3.000
Outstanding shares under option	25,000
Exercisable shares under option
Outstanding remaining life in years	4 years 5 months 20 days
Range Twenty One [Member]
Outstanding and exercisable exercise price per share | $ / shares	$ 3.725
Outstanding shares under option	200,000
Exercisable shares under option
Outstanding remaining life in years	4 years 5 months 12 days

XML

Warrants (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Number of warrants issued to purchase common stock		4,239,000
Fair value of warrants		$ 198,200
Number of warrants issued in exchange for services rendered		470,000
Compensation expense		$ 433,000
Number of warrants issued in relation to promissory note		237,500
Warrants expiration date		Apr. 30, 2021
Number of warrants issued in relation to sale of common stock		3,531,500
Fair value of warrants at issuance		$ 4,500,000
Warrant [Member]
Number of warrants issued to purchase common stock	666,104	1,425,379
Warrant One [Member]
Number of warrants issued to purchase common stock	10,865,107	7,058,932
Minimum [Member]
Warrants term		3 years
Warrants exercise price		$ 0.30
Minimum [Member] | Warrant [Member]
Warrants exercise price	$ 0.12	0.10
Minimum [Member] | Warrant One [Member]
Warrants exercise price	0.15	$ 0.10
Maximum [Member]
Warrants term		5 years
Warrants exercise price		$ 2.25
Maximum [Member] | Warrant [Member]
Warrants exercise price	1.75	0.50
Maximum [Member] | Warrant One [Member]
Warrants exercise price	$ 5.50	$ 2.25
Three Year Warrants One [Member]
Debt instrument face amount	$ 7,500,000
Warrants term	3 years
Number of warrants issued to purchase common stock	550,000
Warrants exercise price	$ 5.00
Fair value of warrants	$ 929,000
Amortization of debt discount	57,000
Three Year Warrants Two [Member]
Debt instrument face amount	$ 10,000,000
Warrants term	3 years
Number of warrants issued to purchase common stock	375,000
Warrants exercise price	$ 4.50
Fair value of warrants	$ 601,000
Amortization of debt discount	$ 65,000
Debt instrument maturity date	Jan. 31, 2020

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Revenues (Details Narrative) - Revenues [Member]	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Three Clients [Member]
Concentration risk, percentage	95.00%
Two Clients [Member]
Concentration risk, percentage		75.00%

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Revenues - Schedule of Revenues Comprised of Major Categories (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Total revenues	$ 25,672,676	$ 2,937,325	$ 29,188,492	$ 5,020,275
Real Estate [Member]
Total revenues			3,442,024	2,731,364
Management [Member]
Total revenues			1,194,791	754,038
Supply Procurement [Member]
Total revenues			1,906,399	1,241,835
Licensing [Member]
Total revenues			568,127	281,557
Product Sales [Member]
Total revenues			1,880
Other [Member]
Total revenues			60,392	11,482
Product Sales from Related Party [Member]
Total revenues			$ 22,014,879

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Related Party Transactions (Details Narrative) - USD ($)	1 Months Ended				3 Months Ended		6 Months Ended
	Dec. 31, 2018	Aug. 31, 2018	Jan. 31, 2018	Jun. 30, 2017	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues from related party					$ 22,014,878		$ 22,014,878
Ownership percentage		23.00%
Number of stock options forfeited								300,000
Common stock exercise price					$ 3.25		$ 3.25
Lease term		10 years
Expenses incurred under the leases							$ 34,000	$ 6,000
Due to related parties	$ 276,000				$ 77,000		$ 77,000
Minimum [Member]
Common stock exercise price						$ 0.50		$ 0.50
Maximum [Member]
Common stock exercise price						$ 1.30		$ 1.30
Options One [Member]
Purchase exercised options							350,000
Number of stock options forfeited	150,000
Number of shares surrendered by board members							139,985
Stock options expiration period, description			Expiring between December 2020 and December 2022.
Options Two [Member]
Purchase exercised options								400,000
Number of shares surrendered by board members								98,000
CEO [Member]
Purchase exercised options			1,450,000
Stock options expiration period, description			Expiring between December 2020 and December 2022.
CEO [Member] | Minimum [Member]
Common stock exercise price			$ 0.14
CEO [Member] | Maximum [Member]
Common stock exercise price			$ 0.77
Two Board Members [Member]
Number of stock options forfeited								200,000
CEO and CFO [Member]
Due to related parties	$ 81,000				81,000		$ 81,000
Two Shareholders [Member]
Due to related parties	60,000				60,000		60,000
MariMed Advisors Inc. [Member]
Ownership percentage				49.00%
Common stock shares acquired				75,000,000
Two Companies [Member] | CEO and CFO [Member]
Due to related parties	$ 135,000				17,000		17,000
Due from related parties					120,000		120,000
Repayment to related party							120,000
Gen Canna [Member]
Due from related party					25,200,000		25,200,000
Revenues from related party							22,000,000
Unearned revenue					3,200,000		3,200,000
Costs associated with unearned revenue					$ 15,700,000		$ 15,700,000

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Commitments and Contingencies (Details Narrative)		1 Months Ended		6 Months Ended
	Mar. 31, 2019 ft²	Aug. 31, 2018	Oct. 31, 2016 ft²	Jun. 30, 2019 USD ($) ft² Integer	Dec. 31, 2018 USD ($)	Sep. 30, 2016 ft²
Number of operating leases | Integer				5
Number of finance leases | Integer				3
Area of land				300,000
Lease term		10 years
Agreement term description				An employment agreement with the former CEO of the Company that provided this individual with salary, car allowances, stock options, life insurance, and other employee benefits, was terminated in 2017.
Accrued expenses | $				$ 3,920,742	$ 1,588,368
Employment Agreement [Member]
Weighted average operating lease remaining term				9 years 10 months 25 days
Weighted average finance lease remaining term				3 years 3 months 19 days
Weighted average discount rate for right-of-use assets				7.50%
Weighted average discount rate for lease liabilities				7.50%
Accrued expenses | $				$ 1,043,000	$ 1,043,000
Finance Lease Commitments [Member] | Machinery [Member]
Lease expiration, description				Expire in February 2022 through June 2024
Delaware [Member]
Area of land	100,000			100,000		45,000
Lease term	10 years
Lease expiration, description	The lease term is 10 years, with an option to extend the term for three additional five-year periods.			Lease expiring in 2035.
Delaware [Member] | Operating Lease Commitments [Member ]
Area of land			4,000
Lease term			5 years
Nevada [Member]
Area of land				10,000
Lease expiration, description				Expiring in 2024.
Maryland [Member ]
Area of land				180,000
Maryland [Member ] | Operating Lease Commitments [Member ]
Area of land				2,700
Lease expiration, description				Expires in July 2020 with an option to renew for a two-year term.

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Commitments and Contingencies - Schedule of Components of Lease Expense (Details)	6 Months Ended
	Jun. 30, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Operating lease cost	$ 339,478
Finance lease cost, Amortization of right-of-use assets	6,744
Finance lease cost, Interest on lease liabilities	1,824
Total finance lease cost	$ 8,568

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Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under All Non-cancelable Operating Leases (Details)	Jun. 30, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Operating Leases, 2019	$ 230,744
Operating Leases, 2020	917,444
Operating Leases, 2021	1,008,227
Operating Leases, 2022	949,535
Operating Leases, 2023	910,166
Operating Leases, Thereafter	5,139,851
Operating Leases, Total lease payments	9,155,967
Less: Operating Leases, Imputed Interest	2,845,742
Operating Leases	6,310,224
Finance Lease, 2019	11,556
Finance Lease, 2020	23,112
Finance Lease, 2021	23,112
Finance Lease, 2022	11,823
Finance Lease, 2023	10,451
Finance Lease, Thereafter	3,229
Finance Lease, Total lease payments	83,282
Less: Finance Lease, imputed interest	(11,296)
Finance Lease	$ 71,986

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Subsequent Events (Details Narrative) - USD ($)	1 Months Ended					3 Months Ended			6 Months Ended		7 Months Ended
	Aug. 09, 2019	Jul. 31, 2019	Jan. 31, 2019	Dec. 31, 2018	Nov. 30, 2018	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Aug. 09, 2019	Jul. 31, 2019	May 30, 2019
Billed amount						$ 25,672,676		$ 2,937,325	$ 29,188,492	$ 5,020,275
Payment for purchase of inventory						16,700,000	$ 3,300,000
Minimum [Member]
Warrants term								3 years		3 years
Warrants exercise price								$ 0.30		$ 0.30
Maximum [Member]
Warrants term								5 years		5 years
Warrants exercise price								$ 2.25		$ 2.25
Convertible Debentures [Member]
Accrued interest			$ 97,000	$ 36,000	$ 36,000	$ 181,000			$ 181,000
Debt conversion of convertible shares			233,194	524,360	524,360	923,185
Debt conversion price per share				$ 3.04	$ 2.23
Convertible Debentures [Member] | Minimum [Member]
Debt conversion price per share			$ 2.90			$ 1.74			$ 1.74
Convertible Debentures [Member] | Maximum [Member]
Debt conversion price per share			$ 3.06			$ 1.74			$ 1.74
Promissory Note [Member] | Minimum [Member]
Debt conversion price per share				0.65
Promissory Note [Member] | Maximum [Member]
Debt conversion price per share				$ 0.90
Gen Canna [Member]
Billed amount, description									The seeds are to be harvested by October 2019, and accordingly the Company provided GenCanna with extended payment terms, allowing full payments to be made by December 2019.
Atalo Holdings Inc [Member]
Interest rate													6.00%
Percentage for acquired interest rate													25.00%
Subsequent Event [Member]
Payment for purchase of inventory	$ 5,000,000
Subsequent Event [Member] | Three-Year Warrants [Member]
Warrants term		3 years										3 years
Warrants to purchase common stock		125,000										125,000
Warrants exercise price		$ 1.71										$ 1.71
Subsequent Event [Member] | Employee [Member]
Options to purchase common stock												100,000
Options exercise price		$ 1.34										$ 1.34
Options term												5 years
Subsequent Event [Member] | Two Employees [Member]
Number of common stock issued during period											18,820
Subsequent Event [Member] | Convertible Debentures [Member] | 17.5M Debentures Holder [Member]
Debt converted into common shares, value		$ 2,750,000
Accrued interest		$ 17,000										$ 17,000
Debt conversion of convertible shares		2,435,144
Subsequent Event [Member] | Convertible Debentures [Member] | 17.5M Debentures Holder [Member] | Minimum [Member]
Debt conversion price per share		$ 1.08										$ 1.08
Subsequent Event [Member] | Convertible Debentures [Member] | 17.5M Debentures Holder [Member] | Maximum [Member]
Debt conversion price per share		$ 1.70										$ 1.70
Subsequent Event [Member] | Gen Canna [Member]
Billed amount		$ 8,000,000
Payment for purchase of inventory		$ 5,000,000
Billed amount, description		The seeds are to be harvested in the fall of 2019, and accordingly, the Company provided GenCanna with extended payment terms, with the full payment to be made in December 2019 after the crop is harvested.
Subsequent Event [Member] | Atalo Holdings Inc [Member] | Promissory Note [Member]
Convertible debentures		$ 230,000										$ 230,000
Interest rate		6.00%										6.00%
Percentage for acquired interest rate		25.00%										25.00%
Subsequent Event [Member] | Atalo Holdings Inc [Member] | Promissory Note [Member]
Debt instrument maturity date		Apr. 03, 2020