ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2021

Business Combination and Asset Acquisition [Abstract]

Schedule of Recognized Identified Assets Acquired

The Company allocated the purchase price of the acquisitions completed during 2021 as summarized in the table below. The purchase price allocation for these acquisitions reflects various preliminary fair value estimates and analyses, including certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, and goodwill, which are subject to change within the measurement period as preliminary valuations are finalized (generally one year from the acquisition date). Measurement period adjustments are recorded in the reporting period in which the estimates are finalized and adjustment amounts are determined.

(in thousands)	Hemma		BCCO		OCC
Assets acquired (liabilities assumed):
Cash	$	44	$	2,144	$	84
Accounts receivable	41		—		—
Inventory	188		343		217
Property and equipment(1)	153		657		288
Other noncurrent assets	—		5		—
License(2)	6,928		1,797		8,342
Goodwill(3)	3,039		833		7,170
Accounts payable and accrued liabilities	(12)		(218)		(1)
Net assets acquired	$	10,381	$	5,561	$	16,100
Consideration transferred:
Cash(4)	$	7,212	$	1,995	$	12,448
Settlement of note and working capital loan(5)	3,169		3,566		—
Fair value of shares issued(6)	—		—		3,652
Total consideration	$	10,381	$	5,561	$	16,100

(1)Consists of furniture, fixtures and equipment of $162 and leasehold improvements of $936.

(2)The amortization period for acquired licenses is 10 years.

(3)Goodwill is largely attributable to the value we expect to obtain from long-term business growth and buyer-specific synergies. The Company is evaluating whether the goodwill is deductible for tax purposes under the limitations imposed under IRC Section 280E. See Note 14, “Income Taxes,” for additional information.

(4)Total cash consideration includes a $4,712 sellers’ note for Hemma, which was paid in December 2021, and a $7,471 sellers’ note for OCC. See Note 11, “Debt,” for additional information.

(5)Hemma includes settlement of $2,500 due under a note receivable and settlement of $669 due under a working capital line of credit. BCCO includes settlement of $1,750 due under a note receivable and settlement of $1,816 due under a working capital line of credit

(6)The sellers of OCC received 664 shares of Class A common stock with a fair value of $3,652 at issuance. Per the terms of the agreement with OCC, the number of shares issued was based on $3,798 divided by the volume weighted-average price per share of the Class A common stock as reported on the CSE for the ten consecutive trading days ending on the date immediately preceding the closing date.

The following table presents the final purchase price allocation for each of our 2020 acquisitions:

(in thousands)	MOCA		GCC		Midway
Assets acquired (liabilities assumed):
Cash	$	261	$	39	$	82
Inventory	1,308		660		499
Prepaids and other current assets	1,367		—		14
Property and equipment(1)	790		—		2,016
Trade names(2)	170		30		180
License(3)	9,755		11,501		14,684
Goodwill(2)	11,861		4,077		15,178
Other assets	83		—		50
Accounts payable and accrued liabilities	(308)		—		(55)
Deferred tax liability(4)	(2,975)		—		(4,479)
Net assets acquired	$	22,312	$	16,307	$	28,169
Consideration transferred:
Cash(5)	$	21,174	$	13,626	$	28,169
Fair value of AWH common units(6)	1,138		1,181		—
Settlement of note	—		1,500		—
Total consideration	$	22,312	$	16,307	$	28,169

(1)Consists of real property with a fair value of $876, furniture, fixtures and equipment of $1,399, and leasehold improvements of $531.

(2)The amortization period for the acquired intangible assets is 10 years and trade names is 6 months. During the year ended December 31, 2021, we recorded the following measurement period purchase accounting adjustments to the acquired intangible assets based on changes to certain estimates and assumptions with a related impact to goodwill: the MOCA license was revised from $10,661 to $9,755; the GCC license was revised from $11,845 to $11,501; the Midway license was revised from $15,108 to $14,684; and the Midway trade name was revised from $10 to $180. Additionally, during the year ended December 31, 2021 we recorded measurement period adjustments to goodwill for MOCA and Midway for pre-acquisition deferred tax liabilities of $2,975 and $4,479, respectively, due to the finalization of certain income-tax related items.

(3)Goodwill is largely attributable to the value we expect to obtain from long-term business growth and buyer-specific synergies. The goodwill is not deductible for tax purposes due to the limitations imposed on marijuana dispensaries under IRC Section 280E. See Note 14, “Income Taxes,” for additional information.

(4)The deferred tax liabilities related to MOCA and Midway were recorded as measurement period purchase accounting adjustments with a related impact to goodwill during the year ended December 31, 2021 due to the finalization of certain income-tax related items.

(5)MOCA includes a seller’s note of $11,174 that is included in “Current portion of debt, net” on the Consolidated Balance Sheet at December 31, 2020 and was paid in January 2021. Midway includes a total seller’s note of $25,369, which reflects a working capital adjustment of $169 that was recorded during the year ended December 31, 2021 with a related impact to goodwill. Of the total Midway seller’s note, $17,369 and $17,200 is included in “Current portion of debt, net, on the Consolidated Balance Sheet at December 31, 2021 and 2020, respectively, and was paid in January 2022. $8,000 is included in “Long-term debt, net” on the Consolidated Balance Sheets at each of December 31, 2021 and 2020. See Note 11, “Debt,” for additional information.

(6)The former owners of MOCA and GCC received 4,063 and 4,219 historical AWH common units, respectively, with a fair value of $1,138 and $1,181, respectively, at issuance.

Business Acquisition, Pro Forma Information

The following tables summarize the revenue and net income (loss) related to our acquisitions that are included in our consolidated results from the respective acquisition dates for the year ended December 31, 2021 and 2020, as applicable.

	Year Ended December 31, 2021
(in thousands)	MOCA		GCC		Midway		Hemma		BCCO		OCC
Revenue, net	$	43,193	$	10,326	$	22,895	$	236	$	1,771	$	159
Net income (loss)	5,576		(955)		(714)		(565)		323		65

	Year Ended December 31, 2020
(in thousands)	MOCA		GCC		Midway
Revenue, net	$	13,011	$	1,687	$	747
Net income	304		657		61

The tables below summarize the unaudited pro forma combined revenue and net income (loss) of AWH, MOCA, GCC, and Midway for the year ended December 31, 2020 as if the respective acquisitions had occurred on January 1, 2019. The results for MOCA, GCC, and Midway are through their respective acquisition dates, as the results for each were included in our Financial Statements after such dates. These results do not reflect the cost of integration activities or benefits from expected revenue enhancements and synergies. Accordingly, the unaudited pro forma information is not necessarily indicative of the results that would have been achieved if the acquisitions had been effective on January 1, 2019. Pro forma financial information is not presented for Hemma, BCCO, or OCC as such results are immaterial, individually and in aggregate, to both the current and prior period. Since the acquisition date for HCI was January 1, 2019, our consolidated results for 2019 reflect a full year of HCI’s operations.

	Year Ended December 31, 2020
(in thousands)	AWH (as reported)		MOCA		GCC		Midway		Pro Forma Adjustments(1)		Pro Forma Combined
Revenue, net	$	143,732	$	8,615	$	3,046	$	10,416	$	—	$	165,809
Net income (loss)	(23,841)		786		926		2,680		(10,897)		(30,346)

(1)These adjustments include estimated additional amortization expense of $2,879 on intangible assets acquired as part of the acquisitions as follows: $537 related to MOCA, $887 related to GCC, and $1,455 related to Midway. These adjustments also include additional estimated interest expense of $8,544 and an adjustment to exclude $526 of acquisition-related costs incurred during the year ended December 31, 2020, which are included in “General and administrative expenses” in the accompanying Consolidated Statements of Operations. These adjustments are not tax-effected, as the related expenses are not deductible for tax purposes due to the limitations imposed on marijuana dispensaries under IRC Section 280E.

	Year Ended December 31, 2019
(in thousands)	AWH (as reported)		MOCA		GCC		Midway		Pro Forma Adjustments(1)		Pro Forma Combined
Revenue, net	$	12,032	$	7,864	$	2,984	$	4,062	$	—	$	26,942
Net income (loss)	(33,242)		1,231		(312)		577		(15,337)		(47,083)

(1)These adjustments include estimated additional amortization expense of $3,971 on intangible assets acquired as part of the acquisitions as follows: $1,236 related to MOCA, $1,214 related to GCC, and $1,521 related to Midway. These adjustments also include additional estimated interest expense of $11,366 as if the respective loans were outstanding for twelve months.

These adjustments are not tax-effected, as the related expenses are not deductible for tax purposes due to the limitations imposed on marijuana dispensaries under IRC Section 280E.