v3.26.1
10-Q Leases
 3 Months Ended
Mar. 31, 2026
Leases [Abstract]  
Leases Leases
The Company leases real estate used for dispensaries, cultivation facilities, production plants and corporate offices.
The Company's lease agreements contain various extension and termination options. Extension options range from one to 20 years, with a typical extension period of five years, while certain termination options are contingent upon the Company securing regulatory permits.
The Company does not have any material percentage-rent, sales-based, or other contingent lease payment arrangements. Lease payments are predominantly fixed and/or based on fixed escalations.
ROU assets and lease liabilities as of December 31, 2025 and 2024 consisted of the following:
As of
2025
2024
Operating leases
Finance leases
Operating leases
Finance leases
ROU assets:
ROU assets, gross
$
178,904 
$
186,943 
$
166,004 
$
183,968 
Accumulated amortization
(65,630)
(89,344)
(50,175)
(78,800)
Total ROU assets, net
$
113,274 
$
97,599 
$
115,829 
$
105,168 
Lease liabilities:
Lease liabilities - current
$
19,837 
$
11,684 
$
17,333 
$
10,995 
Lease liabilities - net of current
102,346 
144,446 
106,192 
150,683 
Total lease liabilities
$
122,183 
$
156,130 
$
123,525 
$
161,678 
The components of the Company’s lease expenses for the years ended December 31, 2025, 2024 and 2023 were as follows:
Years Ended December 31,
Finance lease expense:
2025
2024
2023
Amortization of ROU assets:
Cost of goods sold
$
6,686 
$
10,257 
$
10,589 
Operating expenses
5,599 
28,787 
4,817 
Total amortization of ROU assets
12,285 
39,044 
15,406 
Interest on finance lease liabilities
17,626 
17,537 
18,265 
Total finance lease expense
29,911 
56,581 
33,671 
Operating lease expense(1)
32,092 
30,446 
28,812 
Short-term lease expense
2,467 
2,589 
2,282 
Total lease expense
$
64,470 
$
89,616 
$
64,765 
(1) Includes $0.1 million, $0.1 million and $0.2 million of sublease income as a net reduction of rent expense for the years ended December 31, 2025, 2024 and 2023, respectively.
During 2025 and 2024, as part of strategic cost-optimization initiatives, the Company elected to abandon, in whole or in part, certain leases in its Northeast and West regions, and the estimated economic lives of the associated ROU assets were shortened. Consequently, the Company recognized accelerated amortization of $1.7 million and $23.5 million during the years ended December 31, 2025 and 2024, respectively, to fully amortize the ROU assets over their revised remaining economic lives. There were no similar lease abandonments or accelerated amortization in 2023.
Cash flows associated with the Company’s leasing arrangements for the years ended December 31, 2025, 2024 and 2023 were as follows:
Years Ended December 31,
2025
2024
2023
Cash flows from operating activities:
Operating cash flows from operating leases
$
(31,083)
$
(29,920)
$
(29,352)
Operating cash flows from finance leases
(17,626)
(17,537)
(18,265)
Cash flows from financing activities:
Financing cash flows from finance leases
(10,230)
(9,445)
(8,474)
Net cash flows from leasing arrangements
$
(58,939)
$
(56,902)
$
(56,091)
As of December 31, 2025 and 2024, the weighted average remaining lease terms and weighted average discount rates of the Company’s leasing arrangements were as follows:
As of December 31,
2025
2024
Weighted average remaining lease term (in years) - finance leases
10.0
9.2
Weighted average remaining lease term (in years) - operating leases
6.3
6.2
Weighted average discount rate - finance leases
11.2 
%
11.2 
%
Weighted average discount rate - operating leases
10.9 
%
11.0 
%
As of December 31, 2025, maturities of the Company’s lease liabilities, under its non-cancelable leases were as follows:
Fiscal Year
Operating Leases
Finance Leases
2026
$
31,834 
$
28,446 
2027
30,269 
28,967 
2028
26,839 
28,309 
2029
22,768 
28,181 
2030
18,574 
27,819 
2031 and thereafter
40,445 
145,127 
Total undiscounted remaining minimum lease payments
170,729 
286,849 
Less: imputed interest
(48,546)
(130,719)
Total discounted remaining minimum lease payments
$
122,183 
$
156,130 
Leases Leases
The Company leases real estate used for dispensaries, cultivation facilities, production plants and corporate offices.
The Company's lease agreements contain various extension and termination options. Extension options range from one to 20 years, with a typical extension period of five years, while certain termination options are contingent upon the Company securing regulatory permits.
The Company does not have any material percentage-rent, sales-based, or other contingent lease payment arrangements. Lease payments are predominantly fixed and/or based on fixed escalations.
ROU assets and lease liabilities as of December 31, 2025 and 2024 consisted of the following:
As of
2025
2024
Operating leases
Finance leases
Operating leases
Finance leases
ROU assets:
ROU assets, gross
$
178,904 
$
186,943 
$
166,004 
$
183,968 
Accumulated amortization
(65,630)
(89,344)
(50,175)
(78,800)
Total ROU assets, net
$
113,274 
$
97,599 
$
115,829 
$
105,168 
Lease liabilities:
Lease liabilities - current
$
19,837 
$
11,684 
$
17,333 
$
10,995 
Lease liabilities - net of current
102,346 
144,446 
106,192 
150,683 
Total lease liabilities
$
122,183 
$
156,130 
$
123,525 
$
161,678 
The components of the Company’s lease expenses for the years ended December 31, 2025, 2024 and 2023 were as follows:
Years Ended December 31,
Finance lease expense:
2025
2024
2023
Amortization of ROU assets:
Cost of goods sold
$
6,686 
$
10,257 
$
10,589 
Operating expenses
5,599 
28,787 
4,817 
Total amortization of ROU assets
12,285 
39,044 
15,406 
Interest on finance lease liabilities
17,626 
17,537 
18,265 
Total finance lease expense
29,911 
56,581 
33,671 
Operating lease expense(1)
32,092 
30,446 
28,812 
Short-term lease expense
2,467 
2,589 
2,282 
Total lease expense
$
64,470 
$
89,616 
$
64,765 
(1) Includes $0.1 million, $0.1 million and $0.2 million of sublease income as a net reduction of rent expense for the years ended December 31, 2025, 2024 and 2023, respectively.
During 2025 and 2024, as part of strategic cost-optimization initiatives, the Company elected to abandon, in whole or in part, certain leases in its Northeast and West regions, and the estimated economic lives of the associated ROU assets were shortened. Consequently, the Company recognized accelerated amortization of $1.7 million and $23.5 million during the years ended December 31, 2025 and 2024, respectively, to fully amortize the ROU assets over their revised remaining economic lives. There were no similar lease abandonments or accelerated amortization in 2023.
Cash flows associated with the Company’s leasing arrangements for the years ended December 31, 2025, 2024 and 2023 were as follows:
Years Ended December 31,
2025
2024
2023
Cash flows from operating activities:
Operating cash flows from operating leases
$
(31,083)
$
(29,920)
$
(29,352)
Operating cash flows from finance leases
(17,626)
(17,537)
(18,265)
Cash flows from financing activities:
Financing cash flows from finance leases
(10,230)
(9,445)
(8,474)
Net cash flows from leasing arrangements
$
(58,939)
$
(56,902)
$
(56,091)
As of December 31, 2025 and 2024, the weighted average remaining lease terms and weighted average discount rates of the Company’s leasing arrangements were as follows:
As of December 31,
2025
2024
Weighted average remaining lease term (in years) - finance leases
10.0
9.2
Weighted average remaining lease term (in years) - operating leases
6.3
6.2
Weighted average discount rate - finance leases
11.2 
%
11.2 
%
Weighted average discount rate - operating leases
10.9 
%
11.0 
%
As of December 31, 2025, maturities of the Company’s lease liabilities, under its non-cancelable leases were as follows:
Fiscal Year
Operating Leases
Finance Leases
2026
$
31,834 
$
28,446 
2027
30,269 
28,967 
2028
26,839 
28,309 
2029
22,768 
28,181 
2030
18,574 
27,819 
2031 and thereafter
40,445 
145,127 
Total undiscounted remaining minimum lease payments
170,729 
286,849 
Less: imputed interest
(48,546)
(130,719)
Total discounted remaining minimum lease payments
$
122,183 
$
156,130