Note 8 - Leases |
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| Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lessee, Finance and Operating Leases [Text Block] |
The Company’s lease agreements are for cultivation, manufacturing, retail, and office premises and for vehicles. The property lease terms range between 5 years and 24 years depending on the facility and are subject to an average of 2 renewal periods of equal length as the original lease. Certain leases include escalation clauses or payment of executory costs such as property taxes, utilities, or insurance and maintenance. Rent expense for leases with escalation clauses is accounted for on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The following table provides the components of lease cost recognized in the consolidated statement of operations and comprehensive loss for 2025 and 2024:
Other information related to operating and finance leases as of and for the year end December 31, 2025 and 2024 are as follows:
The maturity of the contractual undiscounted lease liabilities as of December 31, 2025 and 2024 is:
All leases relate to real estate.
For the year ended December 31, 2025 the Company incurred $9,116,064 of operating lease costs (2024 - $7,773,169), of which $3,991,265 (2024 - $3,275,515) was allocated to cost of goods sold and inventory.
During the year ended December 31, 2025 the Company recorded a full impairment charge of $5,813,212 associated with ROU assets related to its Las Vegas, Nevada cultivation facility as the fair value of these assets based on management's expected future cash flows equal $0.
During the year ended December 31, 2025 the Company recorded a full impairment charge of $590,491 associated with ROU assets related to a warehouse space in Coalinga, California as the fair value of these assets based on management's expected future cash flows equal $0.
During the year ended December 31, 2024 the Company recorded a full impairment charge of $3,214,740 associated with ROU assets related to its Orange County, California dispensary as the fair value of these assets based on management's expected future cash flows equal $0.
During the year ended December 31, 2024 the Company recorded a full impairment charge of $24,796 associated with ROU assets related to its cultivation facility in Beatty Nevada. Due the expected closure of this facility, management's expected future cash flows equal $0.
See Note 16 for additional supplemental cash flow information related to leases.
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