GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]


8. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill




Goodwill, carrying amount, as of January 1, 2021	$	19,093
Additions from acquisitions	28,518
Impairment	(1,783)
Goodwill, carrying amount, as of December 31, 2021	$	45,828
Additions from acquisitions, including reclassification of $254	35,480
Impairment	(39,643)
Measurement period adjustment	(3,426)
Goodwill, carrying amount, as of December 31, 2022	$	38,239

Other Intangible Assets

The components of other intangible assets are as follows:


	As of December 31,				Estimated Useful Life
	2022		2021
Licenses	$	82,401	$	174,662	Indefinite
Intellectual Property	9,580		9,580		10 years
Tradenames	12,800		10,200		1 - 15 years
Patient/Customer database	3,195		2,795		5 - 10 years
Non-compete	155		155		3 years
Website development	61		61		3 years
Formulations	50		50		Indefinite
Total gross amount	$	108,242	$	197,503
Less: Accumulated Amortization	(8,160)		(5,037)
Other Intangible Assets, net	$	100,082	$	192,466

Amortization expense for the years ended December 31, 2022, 2021 and 2020 was $3,123, $1,977 and $2,202, respectively, and is included in operating expenses in the consolidated statements of operations and comprehensive income (loss). For the years ended December 31, 2022, and 2021, all additions to intangible assets were from acquisitions.

The estimated future annual amortization expense related to intangible assets as of December 31, 2022 are as follows:


2023	$	3,237
2024	3,214
2025	3,182
2026	2,911
2027	1,912
Thereafter	3,175
Total estimated future amortization expense	$	17,631

Impairment of Goodwill and Other intangible assets

2022 Impairments

During the year ended December 31, 2022, management determined that the Company’s goodwill and certain intangible assets in California, Massachusetts, Nevada, Ohio, and Pennsylvania were impaired due to the Company’s lower than expected operating results, driven in part by significant price compression and the overall economy in the respective state. The Company utilized a combination of the income approach (discounted cash flow method) and market approach (a combination of the guideline transactions method and guideline company method) for its impairment test for each state, resulting in goodwill and intangible impairment charges reflected below. The goodwill and intangible asset impairment is recorded within operating expenses in the consolidated statements of operations and comprehensive income (loss).


	Year Ended December 31, 2022				Key Assumptions
State	Goodwill Impairment		Intangible Asset Impairment		Perpetual Growth Rate	Discount Rate	Weighted Average Cost of Capital	Cash Flow Forecast
California	$	2,432	$	10,142	2%	22.5%	21.5%	5 years
Massachusetts	12,231		37,954		2%	21.0%	20.0%	5 years
Nevada	24,980		22,150		2%	21.0%	20.0%	5 years
Ohio	—		5,317		2%	24.5%	23.5%	5 years
Pennsylvania	—		35,952		2%	22.0%	21.0%	5 years
	$	39,643	$	111,515

2021 Impairments

Nevada

During the year ended December 31, 2021, management determined that the lower than expected operating results of the Company’s Nevada operations was an indicator of impairment. The Company utilized the discounted cash flow method for its impairment test, and as a result, recorded a goodwill impairment charge of $1,783. The key inputs and assumptions used in the fair valuation of Nevada include: (i) a five-year cash flow forecast, which is based on the Company’s actual operating results and business plans; (ii) a perpetual growth rate of 3%; and (iii) an estimated discount rate of 16.5%. The goodwill impairment is recorded within operating expenses in the consolidated statements of operations and comprehensive income (loss).