LEASES

6 Months Ended

Jun. 30, 2025

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 June 30, 2025 and 2024, the Company recorded approximately $5,718 and $4,913 in operating lease expense, respectively, of which $317 and $114 was included in cost of goods sold for the same periods, respectively. During the six months ended June 30, 2025 and 2024, the Company recorded approximately $11,410 and $9,912 in operating lease expense, respectively, of which $635 and $228 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 June 30, 2025 and December 31, 2024, were as follows:


	June 30, 2025		December 31, 2024
Weighted average remaining lease term - years	7.87		8.08
Weighted average discount rate	10.43	%	10.28	%

Maturities of lease liabilities for operating leases as of June 30, 2025 were as follows:


Year Ending December 31,	Maturities of Lease Liability
2025 (Remaining)	$	10,855
2026	21,229
2027	20,551
2028	19,811
2029	18,763
Thereafter	69,227

Total Lease Payments	160,436

Less: Imputed Interest	(54,745)

Present Value of Lease Liability	$	105,691