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Leases

9 Months Ended

Sep. 30, 2026

Note 11 — Leases

The Company leases real estate and equipment for its dispensaries, cultivation facilities, production plants and corporate offices.

The Company's lease agreements contain various extension and termination options. Extension options range from one to 20 years, with a typical extension period of five years, while certain termination options are contingent upon the Company securing regulatory permits.

The Company does not have any material percentage-rent, sales-based, or other contingent lease payment arrangements. Lease payments are predominantly fixed and/or based on fixed escalations.

ROU assets and lease liabilities as of September 30, 2026 and December 31, 2025 consisted of the following:


	As of
	September 30, 2026				December 31, 2025
	Finance Leases		Operating Leases		Finance Leases		Operating Leases
ROU assets:
ROU assets, gross	$	203,994	$	197,740	$	186,943	$	178,904
Accumulated amortization	(99,436)		(73,815)		(89,344)		(65,630)
Total ROU assets, net	$	104,558	$	123,925	$	97,599	$	113,274

Lease liabilities:
Lease liabilities - current	$	16,235	$	21,754	$	11,684	$	19,837
Lease liabilities - net of current	149,646		111,358		144,446		102,346
Total lease liabilities	$	165,881	$	133,112	$	156,130	$	122,183

The components of the Company's lease expenses for the three and nine months ended September 30, 2026 and 2025 were as follows:


	Three months ended September 30,				Nine months ended September 30,
	2026		2025		2026		2025
Finance lease expense:
Amortization of ROU assets
Cost of goods sold	$	2,120	$	1,632	$	5,561	$	4,994
Operating expenses	1,901		1,408		4,936		4,115
Total amortization of ROU assets	4,021		3,040		10,497		9,109
Interest on finance lease liabilities	4,353		4,382		12,850		13,269
Total finance lease expense	8,374		7,422		23,347		22,378

Operating lease expense(1)	8,166		8,472		24,465		24,682

Short-term lease expense	652		525		1,809		2,155

Total lease expense	$	17,192	$	16,419	$	49,621	$	49,215

(1) Includes $0.2 million and $0.4 million of sublease income as a net reduction of rent expense for the three and nine months ended September 30, 2026, respectively and less than $0.0 million for the three and nine months ended September 30, 2025.

Cash flows associated with the Company's leasing arrangements for the nine months ended September 30, 2026 and 2025 were as follows:


	Nine months ended September 30,
	2026		2025
Cash flows from operating activities:
Operating cash flows from operating leases	$	(24,227)	$	(23,155)
Operating cash flows from finance leases	(12,850)		(13,269)

Cash flows from financing activities:
Financing cash flows from finance leases	(9,595)		(7,557)
Net cash flows from leasing arrangements	$	(46,672)	$	(43,981)

As of September 30, 2026 and December 31, 2025, the weighted average remaining lease terms and weighted average discount rates of the Company's leasing arrangements were as follows:


	As of
	September 30, 2026		December 31, 2025

Weighted average remaining lease term (in years) - finance leases	8.2		10.0
Weighted average remaining lease term (in years) - operating leases	6.3		6.3
Weighted average discount rate - finance leases	10.5	%	11.2	%
Weighted average discount rate - operating leases	10.1	%	10.9	%

As of September 30, 2026, maturities of the Company's lease liabilities under its non-cancelable leases were as follows:


Fiscal Year	Operating Leases		Finance Leases
2026 (three months remaining)	$	8,308	$	8,108
2027	33,575		32,987
2028	31,474		32,610
2029	27,781		32,552
2030	23,369		31,891
2031 and thereafter	57,174		124,505
Total undiscounted remaining minimum lease payments	181,681		262,653
Less: imputed interest	(48,569)		(96,772)
Total discounted remaining minimum lease payments	$	133,112	$	165,881

Leases