DISCONTINUED OPERATIONS

3 Months Ended

Mar. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

ASSETS HELD FOR SALE

On November 8, 2023, the Company ceased operations at its retail dispensary located in Ann Arbor, Michigan operating under Om of Medicine, LLC ("Om of Medicine"). The assets were classified as held for sale as of March 31, 2024 and December 31, 2023 and did not meet the criteria for discontinued operations under ASC Subtopic 205-20. As of March 31, 2024, assets and liabilities related to Om of Medicine was $0.8 million and $1.0 million, respectively, which are presented separately on the consolidated balance sheet as of March 31, 2024.

In May 2023, the Company entered into an Asset Purchase Agreement to sell the assets related to Om of Medicine, which was amended in January 2024. The transaction has received regulatory approval, however closing is subject to standard final adjustments, which is expected within one year. In January 2024, the Company received confirmation of the legal dissolution of Om of Medicine, LLC.

DISCONTINUED OPERATIONS

During the fiscal quarter ended September 30, 2023, the Company ceased its cultivation and production operations in the state of California (together, the "California operations") as reported under the THC Cannabis segment. The Company concluded that the abandonment of its California operations represented a strategic shift and thus all assets and liabilities to the operations within the state of California were classified as discontinued operations. Long-lived assets related to the California operations ceased to be used as of September 30, 2023 and thus considered disposed of other than by sale as of September 30, 2023. The assets associated with the California operations were measured at the lower of their carrying amount or fair value less costs to sell. The Company does not have significant continuing involvement with the California operations outside of the contract liabilities of $2.3 million and the litigation matters disclosed in Note 15.

Revenue and expenses, gains or losses relating to the discontinuation of California operations were eliminated from profit or loss from the Company’s continuing operations and are shown as a single line item in the consolidated statements of operations for all periods presented.

The operating results of the discontinued operations are summarized as follows:

	Three Months Ended March 31,
	2024		2023
REVENUE
Revenue from sale of goods	$	3	$	4,031
Real estate income	—		66
Total revenues	3		4,097
Cost of goods sold	(7)		(6,675)
Gross profit	(4)		(2,578)
OPERATING EXPENSES
Selling, general and administrative expenses	101		1,704
Depreciation and amortization	—		73
Total operating expenses	101		1,777
Loss from operations	(105)		(4,355)
Other income (expense)
Interest expense	—		(32)
Other	—		805
Total other income (expense), net	—		773
Net loss from discontinued operations before income taxes	(105)		(3,582)
Income tax expense	—		—
Net loss on discontinued operations	$	(105)	$	(3,582)

The carrying amounts of assets and liabilities in the disposal group are summarized as follows:

	March 31, 2024		December 31, 2023
Carrying amount of the assets included in discontinued operations:
Current assets:
Cash	$	54	$	63
Accounts receivable, net	(110)		(49)
Other receivables	16		16
Inventory	30		33
Total current assets (1)	(10)		63
Intangible assets, net	738		738
Deposits	14		14
Total non-current assets (1)	752		752
TOTAL ASSETS OF THE DISPOSAL GROUP	$	742	$	815
Carrying amount of the liabilities included in discontinued operations:
Current liabilities:
Accounts payable	3,544		3,552
Accrued expenses and other current liabilities	4,744		4,752
Taxes payable	72		72
Current portion of contract liabilities	333		48
Total current liabilities (1)	8,693		8,424
Long term notes payable	(1)		5
Long term accounts payable	330		330
Contract liabilities	1,995		2,280
Total non-current liabilities (1)	2,324		2,615
TOTAL LIABILITIES OF THE DISPOSAL GROUP	$	11,017	$	11,039

(1)    The assets and liabilities of the disposal group are classified as current on the consolidated balance sheets as of March 31, 2024 because it is probable that the sale or disposal other than by sale will occur within one year.