Property, plant and equipment

12 Months Ended

Dec. 31, 2021

Property, plant and equipment

Property, plant and equipment

Note 9 – Property, plant and equipment

Property, plant and equipment and related accumulated depreciation consist of the following:

	December 31,
	2021		2020
Land	$	7,494	$	6,871
Building and improvements		247,772		139,044
Furniture and fixtures		106,083		70,486
Information technology		4,406		3,025
Construction in progress		89,059		73,728
Transferred to assets held for sale		(12,501)		(6,326)
Total property, plant and equipment		442,313		286,828
Less: Accumulated depreciation		(62,593)		(43,973)
Property, plant and equipment, net	$	379,720	$	242,855

Assets included in construction in progress represent projects related to both cultivation and dispensary facilities not yet completed or otherwise not ready for use.

In August 2020, the Company completed a sale and lease back transaction to sell its Mt. Dora, Florida cultivation and processing facility to GA NA 3 LLC. Under a long-term agreement, the Company will lease back the facility and continue to operate and manage it for a term of 15 years. As a result of the sale, the Company disposed of $26,700 of buildings and improvements and $14,800 of construction in progress. The Company recognized a loss on the sale related to the transaction of $557 which was recorded within other income (expense) on the consolidated statements of profits and losses.

In April 2021, the Company completed a sale and lease back transaction to sell its Bordentown, New Jersey cultivation and processing facility to 500 Columbia LLC. Under a long-term agreement, the Company will lease back the facility and continue to operate and manage it for a term of 12 years. As a result of the sale, the Company disposed of $476 of buildings and improvements and $2,187 of construction in progress. The Company recognized a gain on the sale related to the transaction of $3,196, which was recorded within other income (expense) on the consolidated statements of profits and losses.

In July 2021, the Company completed a sale and lease back transaction to sell its Holbrook, Arizona cultivation and processing facility to TAC Vega AZ Owner, LLC. Under a long-term agreement, the Company will lease back the facility and continue to operate and manage it for a term of 10 years. As a result of the sale, the Company disposed of $3,362 of buildings and improvements and $10,638 of construction in progress. The Company did not recognize a material gain or loss on the sale related to the transaction.

A reconciliation of the beginning and ending balances of property, plant and equipment and accumulated depreciation is as follows:

									Construction
			Building and		Furniture and		Information		in
	Land		Improvements		Fixtures		Technology		Progress		Total
Cost
As of December 31, 2019	$	487	$	76,997	$	29,649	$	1,348	$	21,331	$	129,812
Additions		10		49,088		18,701		646		104,741		173,186
Business acquisitions		6,384		25,828		12,225		823		16,447		61,707
Disposals, net		—		(31,667)		(1,423)		(268)		(61,682)		(95,040)
Transfers, net		(10)		5,528		1,663		(71)		(7,110)		—
Depreciation		—		(8,624)		(10,854)		(1,006)		—		(20,484)
Transferred to Assets Held for Sale, net		(44)		(4,453)		(1,275)		(3)		(551)		(6,326)
As of December 31, 2020	$	6,827	$	112,697	$	48,686	$	1,469	$	73,176	$	242,855
Additions		2,871		79,721		31,414		1,120		107,635		222,761
Business acquisitions		2,056		24,817		8,885		—		214		35,972
Disposals, net		(4,260)		(16,705)		(5,408)		603		(46,607)		(72,377)
Transfers, net		—		28,376		9,420		(6)		(37,790)		—
Depreciation		—		(12,833)		(16,045)		(882)		—		(29,760)
Impairments		—		—		(23)		—		(7,567)		(7,590)
Difference in Exchange		—		(104)		(196)		—		(3)		(303)
Transferred to Assets Held for Sale, net		(838)		(9,267)		(1,216)		—		(517)		(11,838)
Balance as of December 31, 2021	$	6,656	$	206,702	$	75,517	$	2,304	$	88,541	$	379,720

Depreciation expense totaled $29,760 and $20,484 for the years ended December 31, 2021 and 2020, respectively, which includes $19,641 and $13,135 recognized as cost of goods sold and $10,119 and $7,349 recognized as a part of operating expenses in the consolidated statements of profits or losses for the years ended December 31, 2021 and 2020, respectively.