On June 3, 2026, the Company completed the Deconsolidation Transaction pursuant to which Harvest, which holds the Company’s former mixed-use cannabis operations (other than businesses the transfer of which is subject to regulatory approval, which businesses will, automatically and without any action on the part of the Company or any other party, transfer to Harvest upon the receipt of regulatory approval), ceased to be a consolidated subsidiary.

As further described below, as a result of the implementation of the Deconsolidation Transaction, an indirect wholly-owned subsidiary of the Company (“Company Subsidiary”) holds non-voting and non-participating units (the “Non-Voting Units”) in the capital of Harvest. The Non-Voting Units do not carry voting rights or rights to receive dividends, do not provide the Company with the ability to direct the business, operations or activities of Harvest, or provide other rights upon dissolution of Harvest, and are only convertible into Class B units of Harvest (the “Common Units”) following the date that the New York Stock Exchange permits the listing of companies that consolidate the financial statements of companies that cultivate, distribute or possess marijuana (as defined in 21 U.S.C. 802) for non-medical uses in the United States (the “Stock Exchange Permissibility Date”).

1)Harvest and its members (including Company Subsidiary), entered into a limited liability company agreement, dated June 3, 2026 (the “LLC Agreement”), which provides for, among other things, three classes of units (the “Units”): the Class A units (the “Voting Units”), the Common Units and the Non-Voting Units. The Harvest Investor (as defined below) holds all of the Voting Units, which provide for standard voting and dividend rights, including rights upon dissolution of Harvest. The Common Units also provide for standard voting and dividend rights, including rights upon dissolution of Harvest. The LLC Agreement provides that upon conversion of all of the Non-Voting Units into Common Units, the Voting Units will be equal to no less than 10% of the total issued and outstanding Units following such issuance. Accordingly, in no circumstances will Company Subsidiary, at the time of such conversions, own more than 90% of the Units. In addition, pursuant to the terms of the LLC Agreement, Company Subsidiary has the right to appoint one member to the Harvest board of managers (the “Harvest Board”) and the Harvest Investor has the right to appoint two members to the Harvest Board.

2)Harvest and the Company entered into a Class A Unit Purchase Agreement (the “Class A Unit Purchase Agreement”) with an independent third party investor, Whitley Holding 05192026, LLC (the “Harvest Investor”), dated June 3, 2026, pursuant to which, among other things, the Harvest Investor made an investment in Harvest and acquired Voting Units representing a 10% economic ownership interest in Harvest for approximately $14.8 million (the “Harvest Investment”). In connection with the Harvest Investment, the Harvest Investor appointed two managers to the Harvest Board and Company Subsidiary appointed one manager to the Harvest Board.

3)The Company, Company Subsidiary and Harvest entered into a protection agreement, dated June 3, 2026, to provide for certain covenants in order to preserve the value of the Non-Voting Units held by Company Subsidiary until such time as the Non-Voting Units are converted into Common Units in accordance with their terms, provided that, such conversion shall only be permitted following the Stock Exchange Permissibility Date, but does not provide the Company or Company Subsidiary with the ability to direct the business, operations or activities of Harvest.

In connection with the Deconsolidation Transaction, the Company and Harvest entered into a management services agreement (the “MSA”), pursuant to which, among other things, a subsidiary of the Company agreed to provide certain consulting, advisory and administrative support services to Harvest. The MSA provides for reimbursement of the Company's costs incurred in providing such services plus a 5% margin, together with a fixed quarterly management fee. Each of the parties to the MSA has the ability to terminate the MSA at any time upon 90 days’ notice.

Accordingly, following the Deconsolidation Transaction, the Company concluded that it no longer possesses a controlling financial interest in Harvest under ASC 810, Consolidation, and therefore deconsolidated Harvest effective June 3, 2026. The Company determined that it retained significant influence over Harvest and accounts for its retained investment under the equity method of accounting pursuant to ASC 323, Investments - Equity Method and Joint Ventures. See Note 6. Equity Method Investment.

In accordance with ASC 810-10-40, the Company measured its retained investment at fair value as of the deconsolidation date. The Company recognized a loss on deconsolidation equal to the excess of the carrying amount of the net assets derecognized over the aggregate fair value of the retained investment. The Company recognized no loss on deconsolidation during the three months ended September 30, 2026. The Company recognized a loss on deconsolidation of approximately $403.3 million during the nine months ended September 30, 2026, which is presented within loss on Deconsolidation Transaction in the condensed consolidated statements of operations.

The Company evaluated the transaction under ASC 205-20, Presentation of Financial Statements - Discontinued Operations, and concluded that the transaction does not represent a strategic shift that has or will have a major effect on the Company’s operations or financial results. Accordingly, the historical operating results of Harvest are included within continuing operations through June 3, 2026 and have not been presented as discontinued operations.


	(in thousands)
Fair value of retained investment	$	155,792

Total consideration received	$	155,792
Assets and liabilities disposed
Cash and cash equivalents	$	58,395
Accounts receivable, net	9,795
Inventories	49,426
Income tax receivable	7,203
Prepaid and other current assets	11,350
Property and equipment, net	89,497
Right of use asset - operating, net	19,393
Right of use asset - finance, net	13,395
Intangible assets, net	465,874
Goodwill	158,281
Other assets	3,787
Total assets derecognized	$	886,396
Accounts payable and accrued liabilities	$	(22,087)
Deferred revenue	(2,336)
Operating lease liabilities	(36,061)
Finance lease liabilities	(14,228)
Construction finance liabilities	(35,198)
Deferred tax liability	(101,685)
Uncertain tax positions	(131,143)
Other liabilities	(1,512)
Non-controlling interest	16,979
Net assets derecognized	$	559,125
Loss on Deconsolidation Transaction	$	(403,333)

As discussed in Note 5. Disposition, in connection with the Deconsolidation Transaction, all of the entities comprising the Company's historical discontinued operations were transferred to Harvest. Accordingly, the results of discontinued operations are included only through the Deconsolidation Transaction date, and no discontinued operations activity was recognized subsequent to June 3, 2026.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025

	(in thousands)



Expenses:
Operating expenses	$	—	$	763	$	1,170	$	2,275


Loss (gain) on disposal of assets	—		3,503		(7)		1,786
Total expenses	—		4,266		1,163		4,061
Loss from operations	—		(4,266)		(1,163)		(4,061)
Other expense:

Total other expense, net	—		(783)		(1,211)		(2,464)
Loss before income taxes	—		(5,049)		(2,374)		(6,525)
Benefit (provision) for income taxes	—		—		597		(441)
Net loss from discontinued operations, net of tax benefit (provision) of $0, $0, $597, and $(441), respectively, attributable to common shareholders	$	—	$	(5,049)	$	(1,777)	$	(6,966)