LEASES

3 Months Ended

Mar. 31, 2023


10. LEASES

The Company has operating leases for some of 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. Some leases also contain renewal provisions and provide for rent abatement and escalating payments.

During the three months ended March 31, 2023 and 2022, the Company recorded approximately $4,313 and $3,314 in operating lease expense, respectively, of which $206 and $147 was included in cost of goods sold for the same periods, respectively.

Other information related to operating leases as of and for the periods ended March 31, 2023 and December 31, 2022, were as follows:


	March 31, 2023		December 31, 2022

Weighted average remaining lease term - years	8.17		8.12
Weighted average discount rate	8.14	%	8.02	%

Maturities of lease liabilities for operating leases as of March 31, 2023 were as follows:


Year Ending December 31,	Maturities of Lease Liability
Remainder 2023	$	11,989
2024	15,506
2025	14,583
2026	13,735
2027	13,055
2028 and Thereafter	57,257
Total Lease Payments	126,125
Less: Imputed Interest	(39,294)
Present Value of Lease Liability	$	86,831