LEASES

9 Months Ended

Sep. 30, 2024

The Company has operating leases for some of its retail dispensaries and processing and production facilities located throughout the U.S., as well as for its corporate offices located in Chicago, 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 Company's 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 September 30, 2024 and 2023, the Company recorded approximately $5,210 and $4,691 in operating lease expense, respectively, of which $198 and $167 was included in cost of goods sold for the same periods, respectively. During the nine months ended September 30, 2024 and 2023, the Company recorded approximately $15,122 and $13,451 in operating lease expense, respectively, of which $426 and $538 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 September 30, 2024 and December 31, 2023, were as follows:


	September 30, 2024		December 31, 2023
Weighted average remaining lease term - years	7.88		8.19
Weighted average discount rate	9.99	%	9.52	%

Maturities of lease liabilities for operating leases as of September 30, 2024 were as follows:


Year Ending December 31,	Maturities of Lease Liability
2024 (Remaining)	$	5,144
2025	20,226
2026	19,297
2027	18,619
2028	17,792
Thereafter	70,533

Total Lease Payments	151,611

Less: Imputed Interest	(49,803)

Present Value of Lease Liability	$	101,808