v3.26.1
Acquisitions
 6 Months Ended
Jun. 30, 2026
Business Combination [Abstract]  
Acquisitions

6. ACQUISITIONS

 

 

 

(a) Business Combinations:

 

During the six months ended June 30, 2026, the Company obtained control of several retail cannabis operations for the purposes of expanding its retail presence. In each case, the Company obtained a controlling financial interest as the primary beneficiary of a VIE through management services agreements and related asset purchase agreements with the license-holding entities, rather than through the acquisition of equity or legal title. Each transaction was accounted for in accordance with ASC 805, Business Combinations, as a business combination, with results included from the date control was obtained.

The most significant transaction was the acquisition of control over eight retail dispensary licenses (the “Eight Retail Stores”), for consideration consisting of cash and an acquisition payable due upon regulatory approval of the transfer of the underlying licenses. The remaining transactions were individually immaterial and have been aggregated below. The purchase price allocations are preliminary and subject to change during the measurement period, principally with respect to the valuation of intangible assets and residual goodwill. The following table summarizes the preliminary acquisition-date fair values recognized:

 

 

 

 

 

 

 

Eight Retail Stores

 

Other Retail Stores

 

Total

 

 

 

(in thousands)

Cash

$

83

$

4

$

87

Inventory

 

1,469

 

149

 

1,618

Prepaid expenses

 

538

 

60

 

598

Property and equipment, net

 

9,990

 

2,134

 

12,124

Operating lease right-of-use asset

 

9,874

 

497

 

10,371

Deposits and other assets

 

268

 

11

 

279

Intangible assets, net:

 

 

 

 

 

 

      Licenses and permits

 

21,120

 

1,100

 

22,220

Liabilities assumed

 

(310)

 

(854)

 

(1,164)

Operating lease liabilities

 

(9,874)

 

(497)

 

(10,371)

Total identifiable net assets

 

33,158

 

2,604

 

35,762

Goodwill

 

9,052

 

276

 

9,328

Net assets

 

$

42,210

$

2,880

$

45,090

 

Consideration Transferred:

 

 

 

 

 

 

 

 

 

 

 

Eight Retail Stores

 

Other Retail Stores

 

Total

 

 

 

(in thousands)

Cash

$

11,960

$

2,830

$

14,790

Contingent consideration payable

 

—

 

50

 

50

Acquisition payable

 

30,250

 

—

 

30,250

Total consideration transferred

$

42,210

$

2,880

$

45,090

 

The acquired license intangible assets have a weighted-average amortization period of approximately 15 years. Goodwill reflects expected synergies from integrating the acquired operations into the Company’s existing retail network and is deductible for income tax purposes. Acquisition-related costs and the effect on pro forma results were not material.