EQUITY-BASED COMPENSATION EXPENSE

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Amended Arrangement with Canopy Growth

On September 23, 2020, the Company announced the implementation of the Amended Arrangement (as defined in Note 13). Pursuant to the Amended Arrangement, the Company’s articles have been amended to create new Fixed Shares, Floating Shares and Fixed Multiple Shares. Consequently, the Company’s equity-based compensation was modified into new equity awards of the Company. Refer to Note 13 for further discussion.

Equity-based compensation - Plan (Acreage Holdings, Inc. Omnibus Incentive Plan)

In connection with the RTO transaction, the Company’s Board of Directors adopted an Omnibus Incentive Plan, as amended September 23, 2020 (the “Plan”), which permits the issuance of stock options, stock appreciation rights, stock awards, share units, performance shares, performance units and other stock-based awards up to an amount equal to 15% of the issued and outstanding Subordinate Voting Shares of the Company.

Pursuant to the Amended Arrangement, the Company retained the Plan described above, the upper limit of issuances being up to an amount equal to 15% of the issued and outstanding Fixed Shares and Floating Shares of the Company. As of March 31, 2023, the Company had 4,212 shares authorized and available for grant under the Plan.

Restricted Share Units (“RSUs”)


	Fixed Shares			Floating Shares
Restricted Share Units (Fair value information expressed in whole dollars)	RSUs	Weighted Average Grant Date Fair Value		RSUs	Weighted Average Grant Date Fair Value
Unvested, January 1, 2023	6,324	$	1.80	464	$	6.68
Granted	—	$	—	—	$	—
Forfeited	(109)	$	0.98	(1)	$	2.15
Vested	(458)	$	2.17	(161)	$	2.24
Unvested, March 31, 2023	5,757	$	1.79	302	$	9.06
Vested and unreleased(1)	449	$	2.50	147	$	3.16
Outstanding, March 31, 2023	6,206	$	1.84	449	$	7.13

(1) RSUs that are vested and unreleased represent RSUs that are pending delivery.

RSUs of the Company generally vest over a period of three years and RSUs granted to certain executives vest based on achievement of specific performance conditions. In certain situations for specified individuals, RSUs vest on an accelerated basis on separation. The fair value for RSUs is based on the Company’s share price on the date of the grant. The Company recorded $758 and $3,877 as Equity-based compensation expense relating to RSUs on the Unaudited Condensed Consolidated Statements of Operations during the three months ended March 31, 2023 and 2022, respectively. The fair value of RSUs vested during the three months ended March 31, 2023 and 2022 was $442 and $1,882, respectively.

The total weighted average remaining contractual life and aggregate intrinsic value of unvested RSUs as of March 31, 2023 was approximately 2.0 years and $3,214, respectively. Unrecognized compensation expense related to these awards at March 31, 2023 was $11,054 and is expected to be recognized over a weighted average period of approximately 1.7 years.

Stock options


	Fixed Shares			Floating Shares
Stock Options (Exercise price expressed in whole dollars)	Options	Weighted Average Exercise Price		Options	Weighted Average Exercise Price
Options outstanding, January 1, 2023	7,337	$	2.75	2,267	$	3.10
Granted	—	$	—	—	$	—
Forfeited	—	$	—	—	$	—
Expired	—	$	—	(31)	$	2.55


Options outstanding, March 31, 2023	7,337	$	2.75	2,236	$	3.10

Options exercisable, March 31, 2023	1,834	$	9.14	2,106	$	3.10

Stock options of the Company generally vest over a period of three years and options granted to certain executives vest based on achievement of specific performance conditions. Stock options of the Company have an expiration period of 5 or 10 years from the date of grant. The weighted average contractual life remaining for Fixed Share options outstanding and exercisable as of March 31, 2023 was approximately 5 and 6 years, respectively. The weighted average contractual life remaining for Floating Share options outstanding and exercisable as of March 31, 2023 was approximately 6 and 7 years, respectively. The Company recorded $226 and $282 as Equity-based compensation expense on Unaudited Condensed Consolidated Statements of Operations during the three months ended March 31, 2023 and 2022, respectively.

As of March 31, 2023, unamortized expense related to stock options totaled $1,670 and is expected to be recognized over a weighted-average period of approximately 2 years. As of March 31, 2023, the aggregate intrinsic value for unvested options and for vested and exercisable options was nil, respectively.