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7. Related Party Transactions

12 Months Ended

Dec. 31, 2019

7.	Related Party Transactions

For the year ended December 31, 2019

During the year ended December 31, 2019, the Company had sales from Super Farm LLC (“Super Farm”) totaling $578,655 and sales from De Best Inc. (“De Best”) totaling $191,915. The Company gives a larger discount on nutrient sales to related parties than non-related parties. During the year ended December 31, 2019, the Company had sales discounts associated with Super Farm totaling $291,823 and sales discounts associated with De Best totaling $95,957. As of December 31, 2019, the Company had an accounts receivable balance from Super Farm totaling $33,127 and an accounts receivable balance from De Best totaling $2,180. The Company’s Chief Cultivation Officer, Joshua Haupt, currently owns 20% of both Super Farm and De Best.

During the year ended December 31, 2019, the Company recorded sales from Medicine Man Denver totaling $402,839 and sales discounts totaling $143,473. As of December 31, 2019, the Company had an accounts receivable balance with Medicine Man Denver totaling $34,748. Also, during the year ended December 31, 2019, the Company incurred expenses from Medicine Man Denver totaling $125,897 for contract labor and other related administrative costs. The Company’s former Chief Executive Officer, Andy Williams, currently owns 38% of Medicine Man Denver.

During the year ended December 31, 2019, the Company recorded sales from MedPharm Holdings LLC (“MedPharm Holdings”) totaling $64,378 and sales discounts totaling $7,498. As of December 31, 2019, the Company had an accounts receivable balance with MedPharm Holdings totaling $2,604. Also, during the year ended December 31, 2019, the Company issued various notes receivable to MedPharm Holdings totaling $767,695 with original maturity dates ranging from September 21, 2019 through January 19, 2020 and all bearing interest at 8% per annum. Certain notes extended to 2020 by mutual agreement between the Company and noteholder. The Company’s former Chief Executive Officer, Andy Williams, currently owns 29% of MedPharm Holdings.

During the year ended December 31, 2019, the Company recorded sales from Baseball 18, LLC (“Baseball”) totaling $165,617. The revenue is included under product sales - related party, net, in the Company’s consolidated financial statements. As of December 31, 2019, the Company had an accounts receivable balance with Baseball totaling $169,960. During the year ended December 31, 2019, the Company recorded sales from Farm Boy, LLC (“Farm Boy”) totaling $321,307. The revenue is included under product sales - related party, net, in the Company’s consolidated financial statements. As of December 31, 2019, the Company had an accounts receivable balance with Farm Boy totaling $330,911.

For the year ended December 31, 2018

As of December 31, 2018, the Company had six related parties, Brett Roper, Medicine Man Denver, MedPharm Holdings, MedPharm Iowa, Super Farm LLC and De Best Inc. The Company’s Chief Cultivation Officer, Joshua Haupt, currently owns 20% of both Super Farm and De Best. Additionally, the Company’s former Chief Executive Officer, Andy Williams, currently owns 38% of Medicine Man Denver. Andy Williams also owns 10% of MedPharm Holdings and 3% of MedPharm Iowa. Brett Roper was the Chief Executive Officer of the Company before Andy Williams.

During the year ended December 31, 2018, the Company had net sales from Super Farm totaling $264,103 and $88,063 in net sales from De Best. The Company gives a larger discount on nutrient sales to related parties than non-related parties. As of December 31, 2018, the Company had accounts receivable balance with Super Farm totaling $61,110 and $20,503 accounts receivable from De Best. As of December 31, 2018, the company had an accounts payable balance to Brett Roper in the amount of $69,714.

As of and for the year ended December 31, 2018, the Company had sales from Medicine Man Denver totaling $158,805 and an accounts receivable balance of $28,893. As of December 31, 2018, the Company had an accounts receivable balance owed from Medicine Man Denver totaling $2,986. During the year ended December 31, 2018, the Company had sales from MedPharm Iowa totaling $10,026 and $34,438 in sales from MedPharm Holdings. As of December 31, 2018, the Company had an accounts receivable balance owed from MedPharm Iowa totaling $1,195 and $10,425 owed from MedPharm Holdings.