Property and Equipment, Net

9 Months Ended

Sep. 30, 2022

Property and Equipment, Net

Property and Equipment, Net

8. Property and Equipment, Net

Property and equipment, net consisted of the following:

	September 30,		December 31,
	2022		2021
Land	$	56,702	$	1,366,650
Buildings and leasehold improvements		17,687,985		15,529,928
Furniture and equipment		9,166,698		7,962,363
Software		221,540		221,540
Vehicles		640,135		513,135
Construction-in-progress		2,641,160		10,510,166
Right of use asset under finance lease		69,892,379		71,078,655
		100,306,599		107,182,437
Less: accumulated depreciation		(9,060,472)		(7,693,878)
Total	$	91,246,127	$	99,488,559

For the nine months ended September 30, 2022 and 2021, total depreciation on property and equipment was $2,446,700 and $2,194,465, respectively. For the nine months ended September 30, 2022 and 2021, accumulated amortization of the right of use asset under finance lease amounted to $3,121,441 and $2,258,732, respectively. The right of use asset under

finance lease of $69,892,379 consists of leased processing and cultivation premises. The Company capitalized into inventory $1,959,536 and $1,678,558 relating to depreciation associated with manufacturing equipment and production facilities for the nine months ended September 30, 2022 and 2021, respectively. The capitalized depreciation costs associated are added to inventory and expensed through Cost of Sales Product Cost on the unaudited condensed consolidated statements of net loss and comprehensive loss.

As of September 30, 2022, in conjunction with the Company’s held for sale assessment and disposal of certain long-lived assets, the Company evaluated whether property and equipment showed any indicators of impairment, and it was determined that the recoverable amount of certain net assets were below book value. As a result, the Company recorded an impairment charge of $7,476,618 (2021 - $0) on property and equipment, net.