7. Property and Equipment, Net

As of March 31, 2026 and December 31, 2025, the Company’s property and equipment, net consisted of the following:

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For the three months ended March 31, 2026 and 2025, total depreciation on property and equipment was $4.0 million and $0.6 million, respectively. For the three months ended March 31, 2026 and 2025, accumulated amortization of the right of use asset (the “ROU”) under finance lease amounted to $9.4 million and $2.6 million, respectively. The right of use asset under finance lease of $84.8 million consists of leased processing and cultivation premises. The Company capitalized $2.9 million and $0.5 million into inventory relating to depreciation associated with manufacturing equipment and production facilities for the three months ended March 31, 2026 and 2025, respectively. The associated capitalized depreciation costs are added to inventory and expensed as cost of sales when the product is sold.

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As of each of March 31, 2026 and 2025, in conjunction with the Company’s held for sale assessment and disposal of certain long-lived assets, the Company evaluated whether property and equipment showed any indicators of impairment, and it was determined that the recoverable amount of certain net assets was above book value. As a result, the Company recorded no impairment charge on property and equipment, net.