VARIABLE INTEREST ENTITIES

12 Months Ended

Dec. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

VARIABLE INTEREST ENTITIES

NOTE 17. VARIABLE INTEREST ENTITIES

The Company has entered into certain agreements in several states with various entities related to the purchase and operation of cannabis dispensary, cultivation, and production licenses, and has determined these to be variable interest entities for which it is the primary beneficiary and/or holds a controlling voting equity position. The Company holds an ownership interest in these entities ranging from 0% to 95% either directly or through a proxy as of December 31, 2024.

The Company consolidates these entities due to the other holder’s equity investment being insufficient to finance its activities without additional subordinated financial support and the Company meeting the power and economics criteria. In particular, the Company controls the management decisions and activities most significant to certain VIEs, has provided a significant portion of the subordinated financial support provided to date, and holds membership interests exposing the Company to the risk of reward and/or loss. The Company allocates income and cash flows of the VIEs based on the outstanding ownership percentage in accordance with the underlying operating agreements, as amended. The Company has consolidated all identified variable interest entities for which the Company is the primary beneficiary in the accompanying consolidated financial statements.

The summarized assets and liabilities of the Company's consolidated VIEs in which the Company does not hold a majority interest are presented in the table below as of December 31 and include third-party assets and liabilities of the Company's VIEs only and exclude intercompany balances that were eliminated in consolidation.

	2024		2023
	(in thousands)
Current assets:
Cash	$	420	$	9,491
Accounts receivable, net	721		1,308
Inventories	901		8,341
Prepaid expenses	160		423
Other current assets	—		7
Total current assets	2,202		19,570
Property and equipment, net	1,228		28,068
Right of use asset - operating, net	—		2,744
Right of use asset - finance, net	—		259
Intangible assets, net	2,028		17,162
Other assets	355		140
Total assets	$	5,813	$	67,943
Current liabilities:
Accounts payable and accrued liabilities	$	371	$	1,939
Income tax payable	—		2,017
Deferred revenue	—		2
Operating lease liability - current portion	—		63
Finance lease liability - current portion	—		60
Total current liabilities	371		4,081
Notes payable	—		885
Operating lease liability	—		2,926
Finance lease liability	—		210
Deferred tax liabilities	—		3,638
Other long-term liabilities	—		671
Total liabilities	$	371	$	12,411

Consolidated VIE Settlement Transaction

In 2024, the Company entered into a settlement agreement with the non-controlling interest holders of consolidated VIEs in Ohio in which the Company acquired the remaining ownership interest in dispensary businesses and agreed to provide funding and operational support for a cultivation and production business with new unrelated third parties.

The Company re-evaluated the VIEs after settlement and concluded that the Company continues to be the primary beneficiary of the cultivation and production business and there are no longer variable interests in the dispensary businesses as the Company increased its ownership to 100%. As a result, the Company accounted for this settlement as an equity transaction in accordance with ASC 810-10.

Redeemed Non-Controlling Interests

In 2024, the Company fully redeemed non-controlling interests and issued 1,787,372 Subordinate Voting Shares in a series of redemptions of non-controlling interests which increased the Company's ownership in the VIE from 46% as of December 31, 2023 to 100% as of December 31, 2024. The transactions were recorded as equity transactions as the Company increased its ownership in an already consolidated VIE without loss of control. The redemptions included a $3.0 million subscription fee and a net $1.9 million impact recorded to additional paid-in-capital on the consolidated balance sheets.