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Goodwill and Intangible Assets | 9 Months Ended
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Sep. 30, 2022
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | 10. GOODWILL AND INTANGIBLE ASSETS During the second quarter of 2022, the Company recognized macroeconomic challenges in the U.S. CBD market, including a decrease in market capitalization of CBD companies and transaction multiplies. Based on those qualitative factors, the Company concluded that its U.S. Cannabis segment more likely than not was impaired and tested that segment’s assets, including goodwill and intangible assets for impairment. The U.S. Cannabis segment’s net working capital assets are readily monetized and therefore book value is deemed to represent its fair value. Its ROU asset and associated liability are primarily based on the lease arrangement and the incremental borrowing rate and deemed to represent fair value. Brand was tested using a relief from royalty method, using a pre-tax royalty rate of 4% and brand maintenance of 2.45%. In assessing goodwill, the Company used a market-based approach using a multiple of 1.6 x revenue. The tests resulted in the Company recognizing impairment charges to goodwill of ($25,169) and its brand intangible asset of ($4,630). Goodwill The following table presents the changes in the carrying value of goodwill by reportable segment for the nine months ended September 30, 2022:
|  | Cannabis - Canada |  |  | Cannabis - United States |  |  | Total |
Balance as of December 31, 2021 |  | $ | 57,525 |  |  | $ | 60,008 |  |  | $ | 117,533 |
Purchase price adjustment |  |  | 3,175 |  |  |  | — |  |  | $ | 3,175 |
Reclass to intangible assets |  |  | (14,170 | ) |  |  | — |  |  |  | (14,170 | )
Foreign currency translation adjustment |  |  | (1,926 | ) |  |  | — |  |  |  | (1,926 | )
Impairments |  |  | — |  |  |  | (25,169 | ) |  |  | (25,169 | )
Balance as of September 30, 2022 |  | $ | 44,604 |  |  | $ | 34,839 |  |  | $ | 79,443 |
Intangible Assets Intangibles consisted of the following as of:
Classification |  | September 30, 2022 |  |  | December 31, 2021 |
Licenses |  | $ | 16,762 |  |  | $ | 12,835 |
Brand and trademarks* |  |  | 12,670 |  |  |  | 12,951 |
Customer relationships |  |  | 13,107 |  |  |  | — |
Computer software |  |  | 1,942 |  |  |  | 2,014 |
Other* |  |  | 144 |  |  |  | 144 |
Less: Accumulated amortization |  |  | (3,593 | ) |  |  | (1,550 | )
Less: Impairments |  |  | (4,630 | ) |  |  | — |
Intangibles, net |  | $ | 36,402 |  |  | $ | 26,394 |
* Indefinite-lived intangible assets The expected future amortization expense for definite-lived intangible assets as of September 30, 2022 was as follows:
Fiscal period |  |  |
Remainder of 2022 |  | $ | 603 |
2023 |  |  | 2,052 |
2024 |  |  | 1,918 |
2025 |  |  | 1,831 |
2026 |  |  | 1,740 |
Thereafter |  |  | 15,444 |
Intangibles, net |  | $ | 23,588 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI https://asc.fasb.org/topic&trid=2144416 + Details
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