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Business Combinations and Asset Acquisitions | 9 Months Ended
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Sep. 30, 2025
Business Combinations and Asset Acquisitions [Abstract] |
Business Combinations and Asset Acquisitions | Note 7 — Business Combinations and Asset Acquisitions The Company performs an assessment of whether an acquisition is a business combination or asset acquisition based on the conditions surrounding the event using guidance from ASC 805. Judgement is applied in determining whether a transaction is a business combination or an asset acquisition by considering the nature of the assets acquired and the processes applied to those assets, or if the integrated set of assets and activities is capable of being conducted and managed for the purpose of providing a return to investors or other owners. Business combinations and asset acquisitions have been accounted for in accordance with ASC 805. Business Combinations are accounted for by applying the acquisition method, whereby the assets acquired, and the liabilities assumed are recorded at their fair values with any excess of the aggregate consideration over the fair values of the identifiable net assets allocated to goodwill (where applicable). If an acquisition is deemed to be a business, the purchase method of accounting is applied. Identifiable assets acquired and liabilities assumed at the acquisition date are recorded at fair value. If a transaction is deemed to be an asset acquisition, the cost accumulation and allocation model is used whereby the assets and liabilities are recorded based on the purchase price and allocated to the individual assets and liabilities based on relative fair values. Goodwill is not recognized in asset acquisitions. Operating results have been included in these consolidated financial statements from the date of each respective acquisition. Supplemental pro forma financial information has not been presented as the impact for Business Combinations was not material to the Company’s consolidated financial statements. Asset Acquisition of VCP On August 27, 2025, the Company entered into a purchase agreement with VCP23, an indirect wholly-owned subsidiary of Green Thumb, a related party, pursuant to which the Company acquired all of the equity interests in VCP. The assets of VCP consist primarily of intellectual property rights to several brands including the Acquired Brands. The consideration exchanged for the equity interest was cash consideration of $50.0 million. The Acquisition of VCP did not meet the definition of a business according to ASC 805 because substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset or a group of similar identifiable assets. The Company recorded intangible assets relating to trade names of the Acquired Brands in the amount of the $50.0 million purchase consideration. In addition, no process or output exists and there is not an integrated set of activities capable of providing a return. The useful lives of the identified intangibles range from 2.4 to 4.4 years with a weighted average useful life of 3.9 years. As the transaction was determined to be an asset acquisition, the total purchase price was allocated to the fair value of the net identifiable assets acquired and goodwill was not recognized. Acquisition of MC Brands LLC On May 20, 2025, the Company entered into a purchase agreement with VCP, an indirect wholly-owned subsidiary of Green Thumb, a related party, pursuant to which the Company acquired all of the equity interests in MC Brands LLC and its wholly-owned subsidiary Core Growth LLC (together referred to as “MC Brands”). The assets of MC Brands consist primarily of intellectual property rights to the incredibles brand. The aggregate consideration exchanged for the equity interest was $5.1 million of cash. The Company prepared a purchase price allocation based on management’s estimates and assumptions which are subject to change within the purchase price allocation period (generally not more than one year from the acquisition date). As part of the purchase accounting, the Company recorded intangible assets of $4.8 million relating to the incredibles trade name intellectual property and $275 thousand of customer relationships. The estimates for useful lives of the identified intangibles are five years for trade names and seven years for customer relationships with a weighted average useful life of 5.11 years. As the total purchase price equaled the fair value of the net identifiable assets acquired, no goodwill was recorded. The following table summarizes the allocation of the purchase price:
Allocation of Purchase Price (in thousands) |  |  |
Accounts receivable |  | $ | 469 |
Inventory (non-cannabis) |  |  | 287 |
Prepaid |  |  | 22 |
Tradenames |  |  | 4,800 |
Customer relationships |  |  | 275 |
Total assets acquired at fair value |  |  | 5,853 |
Accounts payable |  |  | (778 | )
Total liabilities assumed at fair value |  |  | (778 | )
Total purchase price |  | $ | 5,075 |

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