2. Summary of Significant Accounting Policies

Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2 to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the United States Securities and Exchange Commission (“SEC”) on March 17, 2026, (the "Annual Financial Statements"). There have been no material changes to the Company’s significant accounting policies except as noted below.

Segment Information

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 in accordance with Accounting Standards Codification (“ASC”) 280, Segment Reporting, and determined that it has two reportable segments: (i) Cannabis, which cultivates, processes, and distributes medical and adult-use cannabis products and related accessories in the United States, and (ii) Non-Cannabis, which 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. The Company's Chief Executive Officer continues to serve as the Company's Chief Operating Decision Maker ("CODM"), and assesses segment performance and allocates resources 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. See Note 18 – Segment Information for additional disclosures required by ASC 280, including the significant expense categories reviewed by the CODM and segment net income (loss) reconciled to consolidated results.

Equity Method Investments

On June 18, 2026, the Company acquired an indirect 49% equity interest in HA-MD, LLC ("HA-MD"), the sole owner of Chesapeake Integrated Health Institute, LLC and Maryland Alternative Relief, LLC, pursuant to a membership interest purchase agreement dated November 3, 2025 (the "HA-MD Transaction"). HA-MD operates two dispensaries in Maryland. As consideration, the Company issued 37,035 shares valued at $0.4 million, issued a $0.4 million promissory note, and paid $0.4 million in cash to the sellers. In addition, the Company invested $4.9 million in HA-MD to repay all outstanding debt obligations and fund certain capital expenditures. The Company concluded it does not have control but does have the ability to exercise significant influence over the operating and financial policies of HA-MD the investee, and accordingly accounts for this investment under the equity method in accordance with ASC 323, Investments—Equity Method and Joint Ventures. Under the equity method, the investment is initially recorded at cost and subsequently adjusted for the Company's proportionate share of the investee's net income or loss, which is recognized within equity in earnings (losses) of equity method investee in the condensed consolidated statements of operations, as well as for contributions made, distributions received, and other comprehensive income items, if any. The Company evaluates its equity method

investment for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable, and records an impairment charge if a decline in value is determined to be other-than-temporary.

Basis of presentation

The accompanying interim unaudited condensed consolidated financial statements reflect the accounts of the Company. The information included in these statements should be read in conjunction with the Annual Financial Statements. The unaudited condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. In the opinion of management, the financial data presented includes all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. Results of interim periods should not be considered indicative of the results for the full year. These unaudited interim condensed consolidated financial statements include estimates and assumptions of management that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ from these estimates.

Basis of consolidation

These unaudited condensed consolidated financial statements include the accounts of the entities that were wholly owned, or effectively controlled by the Company during the period ended June 30, 2026.

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Variable Interest Entities

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The Company consolidates entities in which it holds a variable interest and is the primary beneficiary. On March 31, 2026, the Company's subsidiary transferred a 51% equity interest in Vireo Health of New York LLC ("VHNY") to a third party, retaining the remaining 49% equity interest. The Company determined that VHNY is a VIE and that it remains the primary beneficiary based on its power to direct VHNY's most significant activities and its obligation to absorb losses and right to receive benefits that could be significant to VHNY. Accordingly, the Company continues to consolidate VHNY. Total VHNY assets and liabilities consolidated as of June 30, 2026, were $28.8 million and $6.1 million, respectively.

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The entity listed above was formed or acquired to support the intended operations of the Company. All intercompany transactions and balances have been eliminated from the Company's unaudited condensed consolidated financial statements.

Recently adopted accounting pronouncements

None.

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Net loss per share

Basic net loss per share is computed by dividing reported net loss by the weighted average number of common shares outstanding for the reported period. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue subordinate voting shares were exercised or converted into subordinate voting shares of the Company during the reporting period. Diluted net loss per share is computed by dividing net loss by the sum of the weighted average number of subordinate voting shares and the number of potential dilutive subordinate voting share equivalents outstanding during the period. Potential dilutive subordinate voting share equivalents consist of stock options, warrants, convertible debt, and restricted stock units (“RSUs”).

In computing diluted earnings per share, subordinate voting share equivalents are not considered in periods in which a net loss is reported, as the inclusion of the subordinate voting share equivalents would be anti-dilutive. The Company recorded a net loss for the three and six month periods ended June 30, 2026 and 2025, as presented in these financial statements, and as such there is no difference between the Company’s basic and diluted net loss per share for these periods.

The anti-dilutive shares outstanding as of June 30, 2026 and 2025, were as follows:

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Revenue Recognition

The Company’s primary source of revenue is from the wholesale of cannabis products to dispensary locations and direct retail sales to eligible customers at Company-owned dispensaries. Substantially all of the Company’s retail revenue is from the direct sale of cannabis products to adult-use and medical customers.

The following table represents the Company’s disaggregated revenue by source:

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New accounting pronouncements not yet adopted

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures ("ASU 2024-03"), which requires disaggregated disclosures of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, amortization and depletion, within relevant income statement captions. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning with the first quarter ended March 31, 2027. Early adoption and retrospective application is permitted. The Company is currently evaluating the impact of this guidance on the Company's future consolidated financial statements.