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TRANSACTIONS
 9 Months Ended
Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
TRANSACTIONS
Business Combinations
The Company has determined that the acquisitions described below are business combinations under ASC Topic 805, Business Combinations. Acquisitions that are determined to be the acquisition of a business are accounted for by applying the acquisition method, whereby the assets acquired, and the liabilities assumed are recorded at their fair values at the date of acquisition with any excess of the aggregate consideration over the fair values of the identifiable net assets allocated to goodwill. Operating results for the companies acquired have been included in these Unaudited Interim Condensed Consolidated Financial Statements from the date of the acquisition. Any goodwill recognized is attributed based on reporting units.
The purchase price allocations for the acquisitions reflect various fair value estimates and analyses which are subject to change within the measurement period, which is the one-year period subsequent to the acquisition date. The primary areas of the purchase price allocation that are subject to change relate to the fair value of certain tangible assets, the value of intangible assets acquired, and residual goodwill. The Company expects to continue to obtain information to assist in determining the fair value of the net assets acquired at the acquisition date during the measurement period.
Measurement period adjustments that the Company determined to be material will be applied prospectively in the Company’s future consolidated financial statements, and depending on the nature of the adjustments, other periods subsequent to the period of acquisition could be affected.

2024 Business Combinations

203 Organix L.L.C. & Salubrious Wellness Clinic, Inc.

On July 29, 2024, the Company entered into two equity purchase agreements, (a) one with The Cannabist Company Holdings Inc. ("Cannabist"), CC VA Holdco LLC, Columbia Care – Arizona, Tempe, L.L.C., Thomas Allison and Salubrious Wellness Clinic, Inc. (“SWC”), pursuant to which the Company acquired all of the issued and outstanding equity interests of SWC, and (b) one with Cannabist, CC VA Holdco LLC, Columbia Care-Arizona, Prescott, L.L.C. and 203 Organix, LLC (“203” and together with SWC, “Cannabist AZ”), pursuant to which the Company acquired all of the issued and outstanding equity interests of 203. The Company added an active cultivation and production facility and increased the Company's retail footprint in Arizona. The transactions closed on August 16, 2024. Pursuant to the equity purchase agreement, the Company paid total cash consideration of $13,251, which is subject to a post-closing adjustment period of 120 days.

The Company's Consolidated Statements of Operations includes net revenue of $2,140 and net loss of $1,324 related to the acquired operations of Cannabist AZ for the three months ended September 30, 2024. Cannabist AZ is reported in both the Retail and Cultivation segments.
Columbia Care Eastern Virginia LLC

On July 29, 2024, the Company entered into an equity purchase agreement with Cannabist, Columbia Care Eastern Virginia LLC ("CC East Virginia"), and the members of CC East Virginia party thereto (the "Virginia EPA"), pursuant to which the Company acquired all of the issued and outstanding equity interests of CC East Virginia. CC East Virginia is the sole vertical cannabis operator in HSA 5 in Eastern Virginia. The transaction closed on August 21, 2024. Pursuant to the Virginia EPA, the Company paid $24,122 in cash consideration and equity consideration of 10,416,041 Subordinate Voting Shares with an estimated fair value of $34,453, all of which was distributed on the closing date of the transaction. In addition, on the closing date of the transaction, the Company issued a $26,700 promissory note (the "CC East Virginia Promissory Note") with an estimated fair value of $25,150 and which bears interest at a rate of 7% per annum and matures on the two-year anniversary of the transaction closing date. The CC East Virginia Promissory Note is subject to a post-closing adjustment period of 120 days.

The Company's Unaudited Interim Condensed Consolidated Statements of Operations includes net revenue of $5,105 and net loss of $226 related to the acquired operations of CC East Virginia for the three months ended September 30, 2024. CC East Virginia is reported in both the Retail and Cultivation segments.

For the acquisitions of CC East Virginia and Cannabist AZ, the purchase price allocation as of the date of acquisition was based on a preliminary valuation and is subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available. The primary areas that remain preliminary for the acquisitions of CC East Virginia and Cannabist AZ relate to the fair values of goodwill, intangible assets, and income taxes.

For the acquisitions of CC East Virginia and Cannabist AZ, the major classes of assets and liabilities to which we have preliminarily allocated the purchase price were as follows:
CC East VirginiaCannabist AZ
Cash and Cash Equivalents$1,150 $348 
Accounts Receivable, net535 252 
Inventory16,237 7,145 
Prepaid Expenses and Other Current Assets310 33 
Property, Plant and Equipment, net20,798 5,796 
Right of Use Assets, net3,323 2,212 
Deposits and Other Assets791 230 
Intangible Assets, net26,700 3,200 
Goodwill19,810 1,081 
Accounts Payable and Accrued Liabilities(2,461)(3,790)
Income Tax Payable— (280)
Current Portion of Lease Liabilities(470)(208)
Lease Liabilities, net of Current Portion(2,894)(1,761)
Deferred Income Taxes— (952)
Other Long-Term Liabilities(104)(55)
Purchase Price$83,725 $13,251 
Goodwill was assigned to both the Retail and Cultivation segments. The goodwill was primarily attributed to increased synergies that are expected to be achieved from the integration of CC East Virginia and Cannabist AZ. Substantially all of the goodwill is expected to be non-deductible for income tax purposes.
The following tables represent the supplemental consolidated financial results on an unaudited pro forma basis, as if the Cannabist AZ acquisition had been consummated on January 1, 2023:

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Revenues$218,851 $244,800 $672,224 $716,046 
Net Income (Loss)$(42,397)$(18,845)$(68,826)$(42,180)


The following tables represent the supplemental consolidated financial results on an unaudited pro forma basis, as if the CC East Virginia acquisition had been consummated on January 1, 2023:

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Revenues$222,939 $250,099 $687,922 $728,112 
Net Income (Loss)$(40,920)$(20,197)$(63,264)$(44,027)

These pro forma results were based on estimates and assumptions, which we believe are reasonable. They are not the results that would have been realized had we been a combined company during the periods presented and are not necessarily indicative of our consolidated results of operations in future periods. The pro forma results include adjustments related to purchase accounting, primarily amortization of intangible assets. Acquisition costs and other nonrecurring charges were immaterial and are included in the earliest period presented.

2022 Business Combinations

WSCC, Inc.
On July 6, 2021, Verano entered into a merger agreement to acquire 100% of the equity interests of WSCC, Inc (“Sierra Well”). Sierra Well held cannabis licenses that allow it to cultivate, produce and sell medical and recreational cannabis products in the state of Nevada, including sales through its retail dispensaries located in Carson City and Reno. The transaction closed on September 7, 2022.
During the quarter ended March 31, 2024, the Company paid cash consideration of $32 and issued 31,181 Subordinate Voting Shares to the former shareholders of Sierra Well, which had been held back to secure indemnification obligations of such shareholders. As of September 30, 2024, all consideration related to the acquisition has been paid.