The Company has operating leases for its Retail stores and processing and cultivation facilities located throughout the U.S, as well as for corporate office space located in Illinois. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date.

All real estate leases are recorded on the balance sheet. Equipment and other non-real estate leases with an initial term of twelve months or less are not recorded on the balance sheet. Lease agreements for some locations provide for rent escalations and renewal options. Certain real estate leases require payment for fixed and variable non-lease components, such as taxes, insurance and maintenance. The Company accounts for each real estate lease and the related non-lease components together as a single component.

The Company determines if an arrangement is a lease at inception. The Company must consider whether the contract conveys the right to control the use of an identified asset. Certain arrangements require significant judgment to determine if an asset is specified in the contract and if the Company directs how and for what purpose the asset is used during the term of the contract. For the three and six months ended June 30, 2022, the Company recorded operating lease expense of $10,201 thousand and $20,022 thousand, respectively compared to operating lease expense of $8,276 thousand and $16,028 thousand for the three and six months ended June 30, 2021, respectively.

Other information related to operating leases as of June 30, 2022 and December 31, 2021 were as follows:


	June 30, 2022	December 31, 2021
Weighted average remaining lease term (years)	12.30	11.82
Weighted average discount rate	12.47%	13.60%

Maturities of lease liabilities for operating leases as of June 30, 2022 were as follows:


		Maturities of Lease Liability
Year Ending December 31,		Third Party		Related Party		Total
		(in thousands)
Remainder of 2022	$	20,307	$	564	$	20,871
2023		40,976		1,144		42,120
2024		40,472		1,027		41,499
2025		38,138		948		39,086
2026		36,406		970		37,376
2027 and Thereafter		375,416		7,066		382,482
Total Lease Payments		551,715		11,719		563,434
Less: Interest		(298,970)		(5,304)		(304,274)
Present Value of Lease Liability	$	252,745	$	6,415	$	259,160

The Company entered into related party transactions with respect to its leasing arrangements for certain facilities in Florida, Maryland, Massachusetts and Nevada. Wendy Berger, a director of the Company, is a principal of WBS Equities, LLC, which is the Manager of Mosaic Real Estate, LLC, and owns the facilities leased by the Company. Additionally, Mosaic Real Estate, LLC is indirectly owned in part by Ms. Berger (through the Wendy Berger 1998 Revocable Trust), Benjamin Kovler, the Chief Executive Officer and a director of the Company (through KP Capital, LLC), and Anthony Georgiadis, the Chief Financial Officer and a director of the Company (through Three One Four Holdings, LLC). The terms of these leases range from 7 years to 15 years. For the three and six months ended June 30, 2022, the Company recorded lease expense of $296 thousand and $589 thousand, respectively, compared to lease expense of $301 thousand and $595 thousand for the three and six months ended June 30, 2021, respectively, associated with these leasing arrangements.

On June 29, 2022 the Company entered into the third amendment ("the Amendment") to its existing lease agreement with Innovative Industrial Properties, Inc. ("IIP") associated with its Danville, Pennsylvania cultivation and processing facility. The Amendment provided an additional tenant improvement allowance of $55,000 thousand to be used on enhancements to the facility. In addition to the tenant improvement allowance of $19,300 thousand received in prior years, the total tenant improvement allowance provided by IIP will be $74,300 thousand, and brings IIP's total investment in the property to $94,600 thousand. The Amendment to the lease was treated as a modification and resulted in a gain of $3,061 thousand as well as an increase in the right of use asset and related lease liability of $81,720 thousand.