Leases

6 Months Ended

Jun. 30, 2026

Note 11 — Leases

The Company leases real estate and equipment for its 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 June 30, 2026 and December 31, 2025 consisted of the following:


	As of
	June 30, 2026				December 31, 2025
	Finance Leases		Operating Leases		Finance Leases		Operating Leases
ROU assets:
ROU assets, gross	$	203,468	$	190,651	$	186,943	$	178,904
Accumulated amortization	(95,554)		(69,135)		(89,344)		(65,630)
Total ROU assets, net	$	107,914	$	121,516	$	97,599	$	113,274

Lease liabilities:
Lease liabilities - current	$	15,228	$	20,366	$	11,684	$	19,837
Lease liabilities - net of current	152,453		109,622		144,446		102,346
Total lease liabilities	$	167,681	$	129,988	$	156,130	$	122,183

The components of the Company's lease expenses for the three and six months ended June 30, 2026 and 2025 were as follows:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Finance lease expense:
Amortization of ROU assets
Cost of goods sold	$	1,756	$	1,662	$	3,440	$	3,362
Operating expenses	1,600		1,400		3,035		2,707
Total amortization of ROU assets	3,356		3,062		6,475		6,069
Interest on finance lease liabilities	4,249		4,438		8,497		8,887
Total finance lease expense	7,605		7,500		14,972		14,956

Operating lease expense(1)	8,299		8,834		16,298		16,210

Short-term lease expense	374		686		1,156		1,630

Total lease expense	$	16,278	$	17,020	$	32,426	$	32,796

(1) Includes $0.1 million and $0.2 million of sublease income as a net reduction of rent expense for the three and six months ended June 30, 2026, respectively and less than $0.1 million for the three and six months ended June 30, 2025.

Cash flows associated with the Company's leasing arrangements for the six months ended June 30, 2026 and 2025 were as follows:


	Six months ended June 30,
	2026		2025
Cash flows from operating activities:
Operating cash flows from operating leases	$	(16,259)	$	(15,374)
Operating cash flows from finance leases	(8,497)		(8,887)

Cash flows from financing activities:
Financing cash flows from finance leases	(6,031)		(4,952)
Net cash flows from leasing arrangements	$	(30,787)	$	(29,213)

As of June 30, 2026 and December 31, 2025, the weighted average remaining lease terms and weighted average discount rates of the Company's leasing arrangements were as follows:


	As of
	June 30, 2026		December 31, 2025

Weighted average remaining lease term (in years) - finance leases	8.4		10.0
Weighted average remaining lease term (in years) - operating leases	6.4		6.3
Weighted average discount rate - finance leases	10.6	%	11.2	%
Weighted average discount rate - operating leases	10.3	%	10.9	%

As of June 30, 2026, maturities of the Company's lease liabilities under its non-cancelable leases were as follows:


Fiscal Year	Operating Leases		Finance Leases
2026 (six months remaining)	$	15,897	$	15,870
2027	32,131		32,533
2028	30,067		32,150
2029	26,410		32,201
2030	21,976		31,694
2031 and thereafter	53,018		124,038
Total undiscounted remaining minimum lease payments	179,499		268,486
Less: imputed interest	(49,511)		(100,805)
Total discounted remaining minimum lease payments	$	129,988	$	167,681

Leases