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| Segment Reporting | 18. Segment Reporting To identify the Company’s reportable segments the Company considered various factors including, but not limited to, the Company's products and services, production processes, customers, regulatory environment, and business geography, as well as the degree to which the CODM evaluates the Company's performance and allocates resources. As a result of the Company's acquisitions of Hawthorne in April 2026 and Bridgewell in June 2026, the Company expanded its operations beyond cannabis into the supply of horticultural and agricultural products to a broader customer base outside of the cannabis industry. Following these acquisitions, the Company reassessed its segment structure and determined that it has two reportable segments: (i) Cannabis and (ii) Non-Cannabis, based on discrete financial information regularly reviewed by the Company's CODM in evaluating performance and allocating resources. The Company determined that Cannabis and Non-Cannabis represent separate reportable segments because (a) the Cannabis segment's products and services are limited to various forms of cannabis products, while the Non-Cannabis segment's products and services consist of nutrients, lighting, and other materials used for indoor and hydroponic gardening, as well as organic and non-GMO agricultural commodities and food ingredients; (b) the Cannabis segment's customers include retail and wholesale cannabis customers, while the Non-Cannabis segment's customers include manufacturers and other commercial customers outside of the cannabis industry; (c) the Cannabis segment operates within the regulatory environment governing state-legal cannabis markets in the United States, while the Non-Cannabis segment is not subject to such cannabis-specific regulatory regimes; and (d) the Company's CODM reviews discrete financial information and allocates resources separately for each segment. The Company's Chief Executive Officer serves as the Company's CODM. The CODM assesses performance for each reportable segment and decides how to allocate resources based primarily based on segment operating income (loss), but also based on segment revenues, product costs, operating expenses and gross profit, which is reconciled to consolidated net income (loss) as reported on the statement of net loss and comprehensive loss. The CODM also reviews the significant expense categories presented in the table below in evaluating each segment's performance. A comparison of budgeted results to actual results, by segment, is also used by the CODM to assess business performance. The Company's Cannabis segment cultivates, processes, and distributes medical and adult-use cannabis products in a variety of formats, as well as related accessories, in the United States. The Company's Non-Cannabis segment provides nutrients, lighting, and other materials used for indoor and hydroponic gardening, and supplies organic and non-GMO agricultural commodities and food ingredients to manufacturers, in the United States. Revenue for both segments is derived from sales in the United States, and the operations of each segment are also located in the United States. The Company's CODM does not review total assets by segment in evaluating segment performance or allocating resources; accordingly, no such measures are disclosed by segment. The accounting policy for recording revenue, and all other accounting policies, are the same as those described in Note 2 "Summary of Significant Accounting Policies."
(1) Includes insurance expenses, occupancy expenses, and other general expenses. Does not include stock-based compensation expenses. |
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