LEASES

12 Months Ended

Dec. 31, 2022


14. LEASES

The Company has operating leases for its retail dispensaries and processing and cultivation facilities located throughout the U.S., as well as for its corporate office 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.

Leases with an initial term of 12 months or less are not recorded on the balance sheet. Certain leases require payments for taxes, insurance, and maintenance, and are considered non-lease components. The Company accounts for non-lease components separately.

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.

The Company leases certain business facilities from third parties under non-cancellable operating lease agreements that contain minimum rental provisions that expire through 2037. Certain leases also contain renewal provisions and provide for rent abatement and escalating payments.

During the years ended December 31, 2022, 2021, and 2020, the Company recorded approximately $15,229, $9,140, and $2,246 in operating lease expense, respectively, of which $641, $804 and $695, respectively, was included in cost of goods sold for the years ended December 31, 2022, 2021 and 2020, respectively.

Other information related to operating leases as of and for the years ended December 31, 2022, 2021, and 2020 were as follows:


	2022		2021		2020
Weighted average remaining lease term - years	8.12		8.52		6.66
Weighted average discount rate	8.02	%	8.11	%	8.8	%

Maturities of lease liabilities for operating leases as of December 31, 2022 were as follows:


Year Ending December 31,	Maturities of Lease Liability
2023	$	15,278
2024	14,631
2025	13,818
2026	12,976
2027	12,261
Thereafter	58,117
Total Lease Payments	127,081
Less: Imputed Interest	(41,339)
Present Value of Lease Liability	$	85,742