v3.26.1
LEASES
 3 Months Ended
Mar. 31, 2026
Leases [Abstract]  
LEASES LEASES
The Company leases land, buildings, equipment, and other capital assets which it uses for corporate purposes and the production and sale of cannabis products with terms generally ranging from one to 20 years.
We determine if an arrangement is a lease at inception and begin recording lease activity at the commencement date, which is generally the date in which we take possession of or control the physical use of the asset. ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term, with lease expense recognized on a straight-line basis. Lease agreements may contain rent escalation clauses, rent holidays, or certain landlord incentives, including tenant improvement allowances. ROU assets include amounts for scheduled rent increases and are reduced by lease incentive amounts. Certain of our lease agreements include variable rent payments, consisting primarily of rental payments adjusted periodically for inflation and amounts paid to the lessor based on cost or consumption, such as maintenance and utilities. Variable rent lease components are not included in the lease liability. We typically exclude options to extend the lease in a lease term unless it is reasonably certain that we will exercise the option and when doing so is at our sole discretion. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. We may rent or sublease to third parties certain real property assets that we no longer use.
The components of lease assets and lease liabilities and their classification on the unaudited Condensed Consolidated Balance Sheets were as follows:
(in thousands)ClassificationMarch 31, 2026December 31, 2025
Lease assets
Operating leasesOperating lease right-of-use assets$47,364 $47,063 
Finance leasesProperty and equipment, net126,356 128,732 
Total lease assets$173,720 $175,795 
Lease liabilities
Current liabilities
Operating leasesOperating lease liabilities, current $3,008 $2,771 
Finance leases
Finance lease and other lease financing liabilities, current
2,951 2,924 
Non-current liabilities
Operating leases
Operating lease liabilities, non-current
60,740 60,546 
Finance leases
Finance lease and other lease financing liabilities, non-current
243,750 243,813 
Total lease liabilities$310,449 $310,054 
The components of lease costs and classification within the unaudited Condensed Consolidated Statements of Operations were as follows:
Three Months Ended
March 31,
(in thousands)20262025
Operating lease costs
Capitalized to inventory
$2,949 $9,291 
General and administrative expenses
222 1,070 
Total operating lease costs$3,171 $10,361 
Finance lease costs
Amortization of leased assets(1)
$2,566 $404 
Interest on lease liabilities8,727 100 
Total finance lease costs$11,293 $504 
(1)Included as a component of depreciation expense within “General and administrative expenses” on the accompanying unaudited Condensed Consolidated Statements of Operations.
At March 31, 2026 and December 31, 2025, $2,148 and $5,297, respectively, of lease costs remained capitalized in inventory.
The following table presents information on short-term and variable lease costs:
Three Months Ended
March 31,
(in thousands)20262025
Total short-term and variable lease costs$943 $1,069 
Sublease income generated during the three months ended March 31, 2026 and 2025 was immaterial.
The following table includes supplemental cash and non-cash information related to our leases:
Three Months Ended
March 31,
(in thousands)20262025
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases
$3,053 $10,736 
Operating cash flows for finance leases
8,727 100 
Financing cash flows for finance leases
226 341 
ROU assets obtained in exchange for new lease obligations
Operating leases$1,066 $1,479 
Finance leases190 2,215 
The following table summarizes the weighted-average remaining lease term and discount rate:
March 31, 2026December 31, 2025
Weighted-average remaining term (years)
Operating leases10.410.6
Finance leases16.716.9
Weighted-average discount rate
Operating leases16.3%16.3%
Finance leases14.6%14.6%
The amounts of future undiscounted cash flows related to the lease payments over the lease terms and the reconciliation to the present value of the lease liabilities as recorded on our unaudited Condensed Consolidated Balance Sheet as of March 31, 2026 are as follows:
(in thousands)
Operating Lease Liabilities
Finance Lease Liabilities
Remainder of 2026
$9,446 $27,007 
202712,848 36,216 
202813,125 36,847 
202913,069 37,786 
203012,461 38,754 
Thereafter78,784 548,939 
Total lease payments139,733 725,549 
Less: imputed interest75,985 478,848 
Present value of lease liabilities$63,748 $246,701 
Sale Leaseback Transactions
The following table presents cash payments due under transactions that did not qualify for sale-leaseback treatment. The cash payments are allocated between interest and liability reduction, as applicable. The “sold” assets remain within land, buildings, and leasehold improvements, as appropriate, for the duration of the lease. A lease financing liability equal to the amount of proceeds received is recorded within “Finance lease and other lease financing liabilities, non-current” on the unaudited Condensed Consolidated Balance Sheets, and totaled $18,100 as of each of March 31, 2026 and December 31, 2025.
(in thousands)Remainder of 20262027202820292030ThereafterTotal
Cash payments due under financing liabilities$1,952 $2,665 $2,741 $2,497 $1,596 $6,512 $17,963 
LEASES LEASES
The Company leases land, buildings, equipment, and other capital assets which it uses for corporate purposes and the production and sale of cannabis products with terms generally ranging from one to 20 years.
We determine if an arrangement is a lease at inception and begin recording lease activity at the commencement date, which is generally the date in which we take possession of or control the physical use of the asset. ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term, with lease expense recognized on a straight-line basis. Lease agreements may contain rent escalation clauses, rent holidays, or certain landlord incentives, including tenant improvement allowances. ROU assets include amounts for scheduled rent increases and are reduced by lease incentive amounts. Certain of our lease agreements include variable rent payments, consisting primarily of rental payments adjusted periodically for inflation and amounts paid to the lessor based on cost or consumption, such as maintenance and utilities. Variable rent lease components are not included in the lease liability. We typically exclude options to extend the lease in a lease term unless it is reasonably certain that we will exercise the option and when doing so is at our sole discretion. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. We may rent or sublease to third parties certain real property assets that we no longer use.
The components of lease assets and lease liabilities and their classification on the unaudited Condensed Consolidated Balance Sheets were as follows:
(in thousands)ClassificationMarch 31, 2026December 31, 2025
Lease assets
Operating leasesOperating lease right-of-use assets$47,364 $47,063 
Finance leasesProperty and equipment, net126,356 128,732 
Total lease assets$173,720 $175,795 
Lease liabilities
Current liabilities
Operating leasesOperating lease liabilities, current $3,008 $2,771 
Finance leases
Finance lease and other lease financing liabilities, current
2,951 2,924 
Non-current liabilities
Operating leases
Operating lease liabilities, non-current
60,740 60,546 
Finance leases
Finance lease and other lease financing liabilities, non-current
243,750 243,813 
Total lease liabilities$310,449 $310,054 
The components of lease costs and classification within the unaudited Condensed Consolidated Statements of Operations were as follows:
Three Months Ended
March 31,
(in thousands)20262025
Operating lease costs
Capitalized to inventory
$2,949 $9,291 
General and administrative expenses
222 1,070 
Total operating lease costs$3,171 $10,361 
Finance lease costs
Amortization of leased assets(1)
$2,566 $404 
Interest on lease liabilities8,727 100 
Total finance lease costs$11,293 $504 
(1)Included as a component of depreciation expense within “General and administrative expenses” on the accompanying unaudited Condensed Consolidated Statements of Operations.
At March 31, 2026 and December 31, 2025, $2,148 and $5,297, respectively, of lease costs remained capitalized in inventory.
The following table presents information on short-term and variable lease costs:
Three Months Ended
March 31,
(in thousands)20262025
Total short-term and variable lease costs$943 $1,069 
Sublease income generated during the three months ended March 31, 2026 and 2025 was immaterial.
The following table includes supplemental cash and non-cash information related to our leases:
Three Months Ended
March 31,
(in thousands)20262025
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases
$3,053 $10,736 
Operating cash flows for finance leases
8,727 100 
Financing cash flows for finance leases
226 341 
ROU assets obtained in exchange for new lease obligations
Operating leases$1,066 $1,479 
Finance leases190 2,215 
The following table summarizes the weighted-average remaining lease term and discount rate:
March 31, 2026December 31, 2025
Weighted-average remaining term (years)
Operating leases10.410.6
Finance leases16.716.9
Weighted-average discount rate
Operating leases16.3%16.3%
Finance leases14.6%14.6%
The amounts of future undiscounted cash flows related to the lease payments over the lease terms and the reconciliation to the present value of the lease liabilities as recorded on our unaudited Condensed Consolidated Balance Sheet as of March 31, 2026 are as follows:
(in thousands)
Operating Lease Liabilities
Finance Lease Liabilities
Remainder of 2026
$9,446 $27,007 
202712,848 36,216 
202813,125 36,847 
202913,069 37,786 
203012,461 38,754 
Thereafter78,784 548,939 
Total lease payments139,733 725,549 
Less: imputed interest75,985 478,848 
Present value of lease liabilities$63,748 $246,701 
Sale Leaseback Transactions
The following table presents cash payments due under transactions that did not qualify for sale-leaseback treatment. The cash payments are allocated between interest and liability reduction, as applicable. The “sold” assets remain within land, buildings, and leasehold improvements, as appropriate, for the duration of the lease. A lease financing liability equal to the amount of proceeds received is recorded within “Finance lease and other lease financing liabilities, non-current” on the unaudited Condensed Consolidated Balance Sheets, and totaled $18,100 as of each of March 31, 2026 and December 31, 2025.
(in thousands)Remainder of 20262027202820292030ThereafterTotal
Cash payments due under financing liabilities$1,952 $2,665 $2,741 $2,497 $1,596 $6,512 $17,963