Related Parties

12 Months Ended

Dec. 31, 2021

Related Party Transactions [Abstract]

Related Parties

Note 17: RELATED PARTIES

Related party transactions

Roman Tkachenko, a director and Leonid Gontmakher, the Company’s Chief Executive Officer and a director, each hold a 14.28% ownership interest in LI Lending LLC, which extended the Company a real estate improvement/development loan of $50,000 of which $48,682 includes the notes payable and accrued interest less debt discount of $416 that was outstanding as of December 31, 2021. Of the $48,682 outstanding at December 31, 2021, $7,575 represents interest accrued through December 31, 2021. See Note 11 for details on the outstanding note payable.

Leonid Gontmakher, Chief Executive Officer of the Company, holds an interest in an entity related to iWolf Management, LLC, an online marketing company serving the online CBD market which provided online marketing services during 2020 and 2019 for the Company’s Pure Ratios division. Pure Ratios paid $313 and $4,875 for the years ended December 31, 2021 and 2020 respectively, to this vendor for management fees, pass through marketing costs and customer service.

Certain subsidiaries which were acquired in the Company’s business combination with Cannex Capital Holdings Inc. have a contractual relationship with a licensed Washington cannabis producer, 7Point Holdings LLC (“7Point”). The sole owner of 7Point, Mr. Gerald Derevyanny, was an executive of the Company during 2019 and the first half of 2020. As a result of his departure on June 30, 2020 from 4Front, 7Point is no longer considered a related party.

7Point and the Company are parties to a commercial sublease expiring May 31, 2023 with one five-year renewal option. The Company recognized as interest revenue for the year ended December 31, 2020 is $1,190 on the lease receivable for this lease.