Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from______ to______

Commission File Number: 333-254800

ASCEND WELLNESS HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Delaware						83-0602006
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

__________________________

44 Whippany Rd.

Suite 101

Morristown, NJ 07960

(Address of principal executive offices)

(646) 661-7600

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

__________________________

Securities registered pursuant to Section 12(b) of the Act: None

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 8, 2024, there were 214,365,317 shares of the registrant’s Class A common stock, par value $0.001, and 65,000 shares of the registrant’s Class B common stock, par value $0.001, outstanding.

ASCEND WELLNESS HOLDINGS, INC

TABLE OF CONTENTS


FORWARD-LOOKING STATEMENTS			1
PART I. FINANCIAL INFORMATION			3
Item 1. Condensed Consolidated Financial Statements (Unaudited)			3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			38
Item 3. Quantitative and Qualitative Disclosures About Market Risk			61
Item 4. Controls and Procedures			62
PART II. OTHER INFORMATION			63
Item 1. Legal Proceedings			63
Item 1A. Risk Factors			63
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			64
Item 3. Defaults Upon Senior Securities			64
Item 4. Mine Safety Information			64
Item 5. Other Information			64
Item 6. Exhibits			65
SIGNATURES			67

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q for Ascend Wellness Holdings, Inc. and its subsidiaries (collectively referred to as “AWH,” “Ascend,” “we,” “us,” “our,” or the “Company”) contains both historical and forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, and forward-looking information, within the meaning of applicable Canadian securities laws (collectively, “forward-looking statements”), that involve risks and uncertainties. We make forward-looking statements related to future expectations, estimates, and projections that are uncertain and often contain words such as, but not limited to, “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “outlook,” “plan,” “predict,” “should,” “target,” or other similar words or phrases. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and assumptions that are difficult to predict. Particular risks and uncertainties that could cause our actual results to be materially different from those expressed in our forward-looking statements include those listed below:

•the effect of the volatility of the market price and liquidity risks on shares of our Class A common stock;

•the effect of the voting control exercised by holders of Class B common stock;

•our ability to attract and maintain key personnel;

•our ability to continue to open new dispensaries and cultivation facilities as anticipated;

•the illegality of cannabis under federal law;

•our ability to comply with state and federal regulations;

•the uncertainty regarding enforcement of cannabis laws;

•the effect of restricted access to banking and other financial services;

•the effect of constraints on marketing and risks related to our products;

•the effect of unfavorable tax treatment for cannabis businesses;

•the effect of proposed legislation on our tax liabilities and financial performance;

•the effect of risks related to U.S. tax provisions related to controlled substances;

•the effect of security risks;

•the effect of infringement or misappropriation claims by third parties;

•our ability to comply with potential future U.S. Food and Drug Administration (“FDA”) regulations;

•our ability to enforce our contracts;

•the effect of unfavorable publicity or consumer perception;

•the effect of risks related to material acquisitions, dispositions and other strategic transactions;

•the effect of agricultural and environmental risks;

•the effect of climate change;

•the effect of risks related to information technology systems;

•the effect of unknown health impacts associated with the use of cannabis and cannabis derivative products;

•the effect of product liability claims and other litigation to which we may be subjected;

•the effect of risks related to the results of future clinical research;

•the effect of intense competition in the industry;

•the effect of the maturation of the cannabis market;

•the effect of adverse changes in wholesale and retail prices;

•the effect of sustained inflation;

•the effect of political and economic instability;

•the effect of outbreaks of pandemic diseases, fear of such outbreaks or economic disturbances due to such outbreaks; and

•the effect of general economic risks, such as the unemployment level, interest rates, and inflation, and challenging global economic conditions.

The list of factors above is illustrative and by no means exhaustive. Additional information regarding these risks and other risks and uncertainties we face is contained in our Annual Report on Form 10-K for the year ended December 31, 2023 and in other reports we may file from time to time with the United States Securities and Exchange Commission and the applicable Canadian securities regulatory authorities (including all amendments to those reports). Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated, or intended.

We urge readers to consider these risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. The forward-looking statements contained in this Form 10-Q are expressly qualified in their entirety by this cautionary statement.

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

ASCEND WELLNESS HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


(in thousands, except per share amounts)	September 30, 2024		December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	65,279	$	72,508

Accounts receivable, net	38,775		28,298
Inventory	97,387		95,294
Notes receivable	1,764		13,116
Other current assets	10,373		19,644
Total current assets	213,578		228,860
Property and equipment, net	263,491		268,082
Operating lease right-of-use assets	138,776		130,556
Intangible assets, net	212,191		221,452
Goodwill	49,599		47,538

Other noncurrent assets	18,238		23,062
TOTAL ASSETS	$	895,873	$	919,550

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities	$	58,894	$	71,112
Current portion of debt, net	73,739		11,148
Operating lease liabilities, current	5,125		3,660
Income taxes payable	753		—
Other current liabilities	6,618		6,766
Total current liabilities	145,129		92,686
Long-term debt, net	232,162		297,565
Operating lease liabilities, noncurrent	267,414		261,087
Deferred tax liabilities, net	25,568		35,745
Other non-current liabilities	136,691		89,595
Total liabilities	806,964		776,678
Commitments and contingencies (Note 15)
Stockholders' Equity
Preferred stock, $0.001 par value per share; 10,000 shares authorized, none issued and outstanding as of September 30, 2024 and December 31, 2023	—		—
Class A common stock, $0.001 par value per share; 750,000 shares authorized; 214,346 and 206,810 shares issued and outstanding at September 30, 2024 and December 31, 2023	215		207
Class B common stock, $0.001 par value per share, 100 shares authorized; 65 issued and outstanding at September 30, 2024 and December 31, 2023	—		—
Additional paid-in capital	471,436		458,027
Accumulated deficit	(383,565)		(315,362)
Equity of Ascend Wellness Holdings, Inc. common stockholders	88,086		142,872
Non-controlling interests	823		—
Total stockholders' equity	88,909		142,872
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	895,873	$	919,550

The accompanying notes are an integral part of the condensed consolidated financial statements.

ASCEND WELLNESS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2024		2023		2024		2023
Revenue, net	$	141,647	$	141,268	$	425,593	$	378,432
Cost of goods sold	(97,918)		(97,712)		(288,254)		(270,853)
Gross profit	43,729		43,556		137,339		107,579
Operating expenses
General and administrative expenses	46,146		40,009		138,703		111,762


Operating (loss) profit	(2,417)		3,547		(1,364)		(4,183)

Other (expense) income
Interest expense	(16,481)		(8,963)		(33,554)		(28,419)
Other, net	409		902		1,098		25,211
Total other expense	(16,072)		(8,061)		(32,456)		(3,208)
Loss before income taxes	(18,489)		(4,514)		(33,820)		(7,391)
Income tax expense	(9,767)		(6,726)		(34,383)		(21,480)
Net loss	$	(28,256)	$	(11,240)	$	(68,203)	$	(28,871)



Net loss per share attributable to Class A and Class B common stockholders — basic and diluted	$	(0.13)	$	(0.05)	$	(0.32)	$	(0.15)

Weighted-average common shares outstanding — basic and diluted	214,290		205,710		212,134		196,616

The accompanying notes are an integral part of the condensed consolidated financial statements.

ASCEND WELLNESS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)


	Nine Months Ended September 30, 2024
	Class A and Class B Common Stock			Attributable to Ascend Wellness Holdings, Inc. Common Stockholders
(in thousands)	Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Stockholders’ Equity		Non- Controlling Interests		Total
December 31, 2023	206,875	$	207	$	458,027	$	(315,362)	$	142,872	$	—	$	142,872
Vesting of equity-based payment awards	7,053	7		(7)		—		—		—		—
Equity-based compensation expense	—	—		13,554		—		13,554		—		13,554
Taxes withheld under equity-based compensation plans, net	(2,433)	(2)		(3,481)		—		(3,483)		—		(3,483)
Recognition of non-controlling interests	—	—		—		—		—		1,050		1,050
Net loss	—	—		—		(18,163)		(18,163)		—		(18,163)
March 31, 2024	211,495	$	212	$	468,093	$	(333,525)	$	134,780	$	1,050	$	135,830


Vesting of equity-based payment awards	3,712	4		(4)		—		—		—		—
Equity-based compensation expense	—	—		5,284		—		5,284		—		5,284
Taxes withheld under equity-based compensation plans, net	(1,387)	(1)		(1,786)		—		(1,787)		—		(1,787)


Net loss	—	—		—		(21,784)		(21,784)		—		(21,784)
June 30, 2024	213,820	$	215	$	471,587	$	(355,309)	$	116,493	$	1,050	$	117,543

Vesting of equity-based payment awards	529	—		—		—		—		—		—
Equity-based compensation expense	—	—		(195)		—		(195)		—		(195)
Taxes withheld under equity-based compensation plans, net	(144)	—		(131)		—		(131)		—		(131)

Exercise of stock options	206	—		175		—		175		—		175
Distributions to non-controlling interests	—	—		—		—		—		(227)		(227)
Net loss	—	—		—		(28,256)		(28,256)		—		(28,256)
September 30, 2024	214,411	$	215	$	471,436	$	(383,565)	$	88,086	$	823	$	88,909

The accompanying notes are an integral part of the condensed consolidated financial statements.

ASCEND WELLNESS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)


	Nine Months Ended September 30, 2023
	Class A and Class B Common Stock
(in thousands)	Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Total
December 31, 2022	188,064	$	188	$	430,375	$	(267,148)	$	163,415
Vesting of equity-based payment rewards	2,023	2		(2)		—		—
Equity-based compensation expense	—	—		4,555		—		4,555
Taxes withheld under equity-based compensation plans, net	(521)	(1)		(536)		—		(537)
Net loss	—	—		—		(18,472)		(18,472)
March 31, 2023	189,566	$	189	$	434,392	$	(285,620)	$	148,961
Shares issued in private placement, net of offering expenses	9,859	10		6,990		—		7,000
Shares issued in acquisitions or asset purchases	5,185	5		4,765		—		4,770
Vesting of equity-based payment awards	382	1		(1)		—		—
Equity-based compensation expense	—	—		4,457		—		4,457
Taxes withheld under equity-based compensation plans, net	(102)	—		(74)		—		(74)


Net income	—	—		—		841		841
June 30, 2023	204,890	$	205	$	450,529	$	(284,779)	$	165,955

Vesting of equity-based payment awards	1,384	1		(1)		—		—
Equity-based compensation expense	—	—		4,964		—		4,964
Taxes withheld under equity-based compensation plans, net	(339)	—		(214)		—		(214)
Net loss	—	—		—		(11,240)		(11,240)
September 30, 2023	205,935	$	206	$	455,278	$	(296,019)	$	159,465

The accompanying notes are an integral part of the condensed consolidated financial statements.

ASCEND WELLNESS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Nine Months Ended September 30,
(in thousands)	2024		2023
Cash flows from operating activities


Net loss	$	(68,203)	$	(28,871)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	48,689		44,192
Amortization of operating lease assets	1,451		827
Non-cash interest expense	6,380		7,082
Equity-based compensation expense	15,805		13,976


Deferred income taxes	(10,177)		(10,875)
Gain on sale of assets	(11)		(226)
Other	11,765		17,837
Changes in operating assets and liabilities, net of effects of acquisitions
Accounts receivable	(10,477)		(11,278)

Inventory	(4,760)		(5,693)
Other current assets	1,186		(5,726)

Other noncurrent assets	(759)		(484)
Accounts payable and accrued liabilities	(5,079)		12,601

Other current liabilities	(148)		615
Lease liabilities	(1,767)		(569)
Income taxes payable	54,231		25,258

Net cash provided by operating activities	38,126		58,666
Cash flows from investing activities
Additions to capital assets	(17,510)		(16,012)
Investments in notes receivable	(600)		(15,169)
Collection of notes receivable	8,345		245
Proceeds from sale of assets	11		15,000
Acquisition of businesses, net of cash acquired	(9,800)		(19,857)
Purchase of intangible assets	(10,450)		(15,943)


Net cash used in investing activities	(30,004)		(51,736)
Cash flows from financing activities

Proceeds from issuance of common stock in private placement	—		7,000
Proceeds from issuance of debt	217,413		—
Repayments of debt	(215,786)		(23,188)


Debt issuance costs	(6,658)		—
Repayments under finance leases	(366)		(256)
Taxes withheld under equity-based compensation plans, net	(5,060)		(711)

Proceeds from the exercise of stock options	175		—
Payment of contingent consideration	(4,842)		—
Distributions to non-controlling interests	(227)		—
Net cash used in financing activities	(15,351)		(17,155)
Net decrease in cash, cash equivalents, and restricted cash	(7,229)		(10,225)
Cash, cash equivalents, and restricted cash at beginning of period	72,508		74,146
Cash, cash equivalents, and restricted cash at end of period	$	65,279	$	63,921

The accompanying notes are an integral part of the condensed consolidated financial statements.

ASCEND WELLNESS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(CONTINUED, UNAUDITED)


	Nine Months Ended September 30,
(in thousands)	2024		2023
Supplemental Cash Flow Information
Interest paid	$	15,460	$	20,579
Income tax (refunds) payments, net	(9,671)		7,057

Non-cash investing and financing activities
Capital expenditures incurred but not yet paid	$	2,981	$	6,102
Taxes withheld under equity-based compensation plans, net	953		214


Financing costs incurred but not yet paid	535		—
Non-controlling interest recognized upon initial consolidation of variable interest entities	1,050		—

Issuance of shares in business acquisitions	—		4,770

The accompanying notes are an integral part of the condensed consolidated financial statements.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

1. THE COMPANY AND NATURE OF OPERATIONS

Ascend Wellness Holdings, Inc., which operates through its subsidiaries (collectively referred to as “AWH,” “Ascend,” “we,” “us,” “our,” or the “Company”), is a vertically integrated multi-state operator in the United States cannabis industry. AWH owns, manages, and operates cannabis cultivation facilities and dispensaries in several states across the United States, including Illinois, Maryland, Massachusetts, Michigan, New Jersey, Ohio, and Pennsylvania. Our core business is the cultivation, manufacturing, and distribution of cannabis consumer packaged goods, which are sold through company-owned retail stores and to third-party licensed retail cannabis stores. AWH is headquartered in Morristown, New Jersey.

Shares of the Company’s Class A common stock are listed on the Canadian Securities Exchange (the “CSE”) under the ticker symbol “AAWH.U” and are quoted on the OTCQX® Best Market (the “OTCQX”) under the symbol “AAWH.”

2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with (i) United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information, and (ii) the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of our management, our unaudited condensed consolidated financial statements and accompanying notes (the “Financial Statements”) include all normal recurring adjustments that are necessary for the fair statement of the interim periods presented. Interim results of operations are not necessarily indicative of results for the full year, or any other period. The Financial Statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “Annual Report”), as filed with the United States Securities and Exchange Commission (“SEC”) and with the relevant Canadian securities regulatory authorities under its profile on the System for Electronic Document Analysis and Retrieval Plus (“SEDAR+”). Except as noted below, there have been no material changes to the Company’s significant accounting policies and estimates during the nine months ended September 30, 2024.

The Financial Statements include the accounts of Ascend Wellness Holdings, Inc. and its subsidiaries. Refer to Note 8, “Variable Interest Entities,” for additional information regarding certain entities that are not wholly-owned by the Company. We include the results of acquired businesses in the consolidated statements of operations from their respective acquisition dates. All intercompany accounts and transactions have been eliminated in consolidation.

We round amounts in the Financial Statements to thousands, except per unit or per share amounts or as otherwise stated. We calculate all percentages, per-unit, and per-share data from the underlying whole-dollar amounts. Thus, certain amounts may not foot, crossfoot, or recalculate based on reported numbers due to rounding. The Financial Statements are expressed in U.S. dollars, which is the Company’s functional currency. Unless otherwise indicated, all references to years are to our fiscal year, which ends on December 31.

We are an emerging growth company under federal securities laws and as such we are able to elect to follow scaled disclosure requirements for this filing and can delay adopting new or revised accounting standards until such time as those standards apply to private companies.

Use of Estimates

The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts. We base our estimates on historical experience, known or expected trends, independent valuations, and various other measurements that we believe to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

Liquidity

As reflected in the Financial Statements, the Company had an accumulated deficit as of September 30, 2024 and December 31, 2023, as well as a net loss for the nine months ended September 30, 2024 and 2023, which are indicators that raise substantial doubt of our ability to continue as a going concern. Management believes that substantial doubt of our ability to continue as a going concern for at least one year from the issuance of these Financial Statements has been alleviated due to: (i) cash on hand and (ii) continued growth of sales from our consolidated operations. Management plans to continue to access capital markets for additional funding through debt and/or equity financings to supplement future cash needs, as may be required. However, management cannot provide any assurances that the Company will be successful in accomplishing its business plans. If the Company is unable to raise additional capital whenever necessary, it may be forced to decelerate or curtail certain of its operations until such time as additional capital becomes available.

Cash and Cash Equivalents and Restricted Cash

As of September 30, 2024 and December 31, 2023, we did not hold significant restricted cash or cash equivalents.

Fair Value of Financial Instruments

During the nine months ended September 30, 2024 and 2023, we had no transfers of assets or liabilities between any of the hierarchy levels.

In addition to assets and liabilities that are measured at fair value on a recurring basis, we are also required to measure certain assets at fair value on a non-recurring basis that are subject to fair value adjustments in specific circumstances. These assets can include: goodwill; intangible assets; property and equipment; and lease-related right-of-use (“ROU”) assets. We estimate the fair value of these assets using primarily unobservable Level 3 inputs.

Basic and Diluted Earnings (Loss) per Share

The Company computes earnings (loss) per share (“EPS”) using the two-class method required for multiple classes of common stock. The rights, including the liquidation and dividend rights, of the Class A common stock and Class B common stock are substantially identical, except for voting and conversion rights. As the liquidation and dividend rights are identical, undistributed earnings are allocated on a proportionate basis to each class of common stock and the resulting basic and diluted net loss per share attributable to common stockholders are, therefore, the same for both Class A and Class B common stock on both an individual and combined basis.

Basic EPS is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects potential dilution and is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period increased by the number of additional common shares that would have been outstanding if all potential common shares had been issued and were dilutive. However, potentially dilutive securities are excluded from the computation of diluted EPS to the extent that their effect is anti-dilutive. Potential dilutive securities include incremental shares of common stock issuable upon the exercise of warrants, unvested restricted stock awards, unvested restricted stock units, and outstanding stock options, as applicable. At September 30, 2024 and 2023, 15,273 and 26,840 shares of common stock equivalents, respectively, were excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive.

Shares of restricted stock granted by us are considered to be legally issued and outstanding as of the date of grant, notwithstanding that the shares remain subject to the risk of forfeiture if the vesting conditions for such shares are not met, and are included in the number of shares of Class A common stock outstanding, as applicable. Weighted-average common shares outstanding excludes time-based and performance-based unvested shares of restricted Class A common stock, as restricted shares are treated as issued and outstanding for financial statement presentation purposes only after such shares have vested and, therefore, have ceased to be subject to a risk of forfeiture.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

Recently Issued Accounting Pronouncements

The following standards have been recently issued by the Financial Accounting Standards Board (“FASB”). Pronouncements that are not applicable to the Company or where it has been determined do not have a significant impact on us have been excluded herein.

Reference Rate Reform

In March 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This guidance was effective upon issuance as of March 12, 2020 and could be adopted as reference rate reform activities occurred through December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, to extend the sunset date of the transition guidance included in ASU 2020-04 to December 31, 2024. This guidance can be adopted prospectively as reference rate reform activities occur, with early adoption permitted, and is not expected to have a material impact on our consolidated financial statements.

Segment Reporting

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands and enhances the disclosures required for reportable segments in annual and interim consolidated financial statements, including reportable segment expenses, interim segment profit or loss, and how an entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The guidance in this update is effective for the Company for the fiscal year ending December 31, 2024 and interim periods beginning with the fiscal period commencing January 1, 2025 and should be adopted retrospectively unless it is impractical to do so. Early adoption is permitted. We are currently evaluating the impact of this update on our disclosures in the consolidated financial statements.

Income Taxes

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures, including disaggregation in the rate reconciliation table and disaggregation information related to income taxes paid. The amendments in this update are effective for the Company for the fiscal year ending December 31, 2026 on a prospective or retrospective basis, with early adoption permitted. We are currently evaluating the impact of this update on our disclosures in the consolidated financial statements.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

3. REPORTABLE SEGMENTS AND REVENUE

The Company operates under one operating segment, which is its only reportable segment: the production and sale of cannabis products. The Company prepares its segment reporting on the same basis that its chief operating decision maker manages the business and makes operating decisions. The Company’s measure of segment performance is net income and derives its revenue primarily from the sale of cannabis products. All of the Company’s operations are located in the United States.

Disaggregation of Revenue

The Company disaggregates its revenue from the direct sale of cannabis to customers as retail revenue and wholesale revenue. We have determined that disaggregating revenue into these categories best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Retail revenue	$	93,599	$	101,263	$	281,882	$	273,862
Wholesale revenue	77,894		68,671		236,436		188,263
	171,493		169,934		518,318		462,125
Elimination of inter-company revenue	(29,846)		(28,666)		(92,725)		(83,693)
Total revenue, net	$	141,647	$	141,268	$	425,593	$	378,432

The liability related to the loyalty program we offer dispensary customers at certain locations was $1,566 and $1,317 at September 30, 2024 and December 31, 2023, respectively, and is included within “Other current liabilities” on the unaudited Condensed Consolidated Balance Sheets. The Company recorded $2,047 and $1,939 in allowance for doubtful accounts as of September 30, 2024 and December 31, 2023, respectively. Write-offs were not significant during the three and nine months ended September 30, 2024 and 2023.

4. ACQUISITIONS

Business Combinations

The Company has determined that the acquisitions discussed below are considered business combinations under ASC Topic 805, Business Combinations, and are accounted for by applying the acquisition method, whereby the assets acquired and the liabilities assumed are recorded at their fair values with any excess of the aggregate consideration over the fair values of the identifiable net assets allocated to goodwill. Operating results are included in these Financial Statements from the date of the acquisition.

The purchase price allocation for each acquisition reflects various preliminary fair value estimates and analyses, including certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, and goodwill, which are subject to change within the measurement period as preliminary valuations are finalized (generally one year from the acquisition date). Measurement period adjustments are recorded in the reporting period in which the estimates are finalized and adjustment amounts are determined.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

2024 Acquisition

Effective in April 2024, a consolidated variable interest entity (“VIE”) of the Company acquired two dispensaries in the greater Chicago, Illinois area (the “Chicago Partner Dispensaries”). The parties entered into interim management services agreements (“MSAs”) pursuant to which the consolidated entity will advise on certain business, operational, and financial matters for a monthly fee while the parties finalize asset purchase agreements to acquire the underlying dispensaries (the “Illinois MSAs”). The total purchase price of approximately $10,000 of cash consideration is subject to certain closing adjustments. An initial deposit of $1,500 was remitted during the three months ended March 31, 2024. The remainder of $8,500 was remitted to escrow during the three months ended June 30, 2024 and remained in escrow as of September 30, 2024. The asset purchase agreements in respect of the Chicago Partner Dispensaries are subject to regulatory review and approval. Based on the provisions of the Illinois MSAs, the third party obtained operational and financial influence over the dispensaries and therefore recognized the transaction as a business combination as of the April 2024 regulatory approval date of the Illinois MSAs. Refer to Note 8, “Variable Interest Entities,” for additional information regarding the Company’s VIEs.

The following table summarizes the preliminary purchase price allocation, which remains preliminary as management refines certain estimates during the measurement period:


(in thousands)
Assets acquired (liabilities assumed):


Property and equipment(1)	$	1,525
Other assets	76
Licenses(2)	6,210
Goodwill(3)	2,261
Accounts payable and accrued liabilities	(72)
Net assets acquired	$	10,000

(1)Consists of leasehold improvements of $1,398 and furniture, fixtures, and equipment of $127. During the three months ended September 30, 2024, certain estimates related to the fair value of the acquired leasehold improvements were refined, resulting in a measurement period purchase accounting adjustment that decreased the estimated fair value of the leasehold improvements by $1,307, with a related impact to goodwill.

(2)The amortization period for acquired licenses is 10 years. During the three months ended September 30, 2024, certain estimates related to the fair value of the acquired licenses were refined, resulting in a measurement period purchase accounting adjustment that increased the value by $1,740, with a related impact to goodwill.

(3)Goodwill is largely attributable to the value expected to be obtained from long-term business growth and buyer-specific synergies. Goodwill is largely not deductible for tax purposes under the limitations under IRC Section 280E; see Note 14, “Income Taxes,” for additional information.

The consolidated entity has also agreed to assume the lease for the associated locations and recognized a total lease liability and ROU asset of $3,065 as of the effective date; refer to Note 10, “Leases,” for additional information regarding the Company’s leases. Direct transaction costs were not material.

Our consolidated results of operations for the three and nine months ended September 30, 2024 include $1,323 and $1,435, respectively, of net revenue and $160 and $493, respectively, of net loss related to the Chicago Partner Dispensaries. Pro forma financial information is not presented, as such results are immaterial to both the current and prior periods.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

2023 Acquisition

Effective April 27, 2023, the Company acquired 100% of the membership interests of certain entities related to Devi Holdings, Inc. (“Devi”), pursuant to a definitive agreement that was entered into on January 25, 2023 (the “Maryland Agreement”). Through the Maryland Agreement, the Company acquired the four licensed medical cannabis dispensaries that Devi owned and operated in Maryland (“Devi Maryland”). Total consideration at closing consisted of cash consideration of $12,000, which was subject to customary closing conditions and working capital adjustments, and 5,185 shares of Class A common stock with an estimated fair value of $4,770 at issuance. In April 2024 the Company finalized the working capital settlement and reduced consideration and goodwill by $200. Our results of operations for the three and nine months ended September 30, 2024 include $9,719 and $28,860 of net revenue, respectively, and $1,080 and $3,006 of net income, respectively, related to Devi Maryland. Our results of operations for the three and nine months ended September 30, 2023 include $9,541 and $11,270, respectively, of net revenue and $688 and $15, respectively, of net loss related to Devi Maryland. Pro forma financial information is not presented, as such results are immaterial to both the current and prior periods.

Asset Acquisitions

The Company determined the acquisitions below did not meet the definition of a business and are therefore accounted for as asset acquisitions. When the Company acquires assets and liabilities that do not constitute a business or VIE of which the Company is the primary beneficiary, the cost of each acquisition, including certain transaction costs, is allocated to the assets acquired and liabilities assumed on a relative fair value basis. Contingent consideration associated with the acquisition is generally recognized only when the contingency is resolved.

When the Company acquires assets and liabilities that do not constitute a business but meet the definition of a VIE of which the Company is the primary beneficiary, the purchase is accounted for using the acquisition method described above for business combinations, except that no goodwill is recognized. To the extent there is a difference between the purchase consideration, including the estimated fair value of contingent consideration, plus the estimated fair value of any non-controlling interest and the VIE’s identifiable assets and liabilities recorded and measured at fair value, the difference is recognized as a gain or loss. A non-controlling interest represents the non-affiliated equity interest in the underlying entity. Transaction costs are expensed.

2024 Asset Acquisitions

Massachusetts Purchase Agreement

In January 2024, the Company entered into a definitive agreement (the “Massachusetts Purchase Agreement”) to purchase a cultivation license and a manufacturer license from a third party in Massachusetts for a cash purchase price of $2,750, which total may be adjusted at closing, as provided in the Massachusetts Purchase Agreement and of which $1,500 was paid at signing and $1,250 was paid on October 1, 2024. The transfer of each license is subject to regulatory review and approval, which the Company expects may occur within twelve months following the signing date. The licenses were not associated with active operations at signing, but operations have since commenced. In conjunction with the Massachusetts Purchase Agreement, the parties also entered into a bridge loan which provides for the financing of certain covered expenses, at the sole discretion of the Company. This bridge loan bears interest based on the federal funds rate and, if not otherwise satisfied, is due on the fifth anniversary of the signing date. The parties also entered into an interim consulting services agreement, effective as of the signing date. The Company accounted for this transaction as an asset acquisition as of the signing date based on the provisions of the underlying agreements and allocated the cash consideration as the cost of the license acquired. The Company has also agreed to assume the lease for the associated location and to reimburse the seller for the security deposit at final closing. The Company recognized a lease liability and ROU asset of $761 as of the signing date; refer to Note 10, “Leases,” for additional information regarding the Company’s leases. Direct transaction costs were not material.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

Detroit License

In September 2024, the Company acquired 49% of the member interests of an entity (the “Detroit License Holder”) that received conditional approval for an adult-use license in Detroit, Michigan (the “Detroit License”). The Detroit License was not associated with active operations as of the closing date and the Detroit License Holder had no other active operations as of that date. The Company anticipates transferring the Detroit License to its existing dispensary in Detroit, Michigan, subject to regulatory approvals. The Company paid $850 of cash consideration at closing and the sellers may receive up to an additional $2,250 based upon the achievement of certain levels of sales during a specified twelve month period following the commencement of adult-use sales at the dispensary. The underlying agreement provides the Company with an option to acquire the remaining ownership interests in the Detroit License Holder, after such is permissible by applicable regulations, for no additional consideration. The parties also entered into a management services agreement, pursuant to which the Company is providing management and advisory services for a set monthly fee, which is expected to expire upon the Company’s exercise of the option.

The Company determined that the Detroit License Holder is a VIE and the Company became the primary beneficiary as of the closing date; therefore, the Detroit License Holder is consolidated as a VIE. Management applied the acquisition method discussed above and allocated the total estimated fair value of the transaction consideration of $1,140 as the estimated fair value of the license. This total consisted of the fair value of the cash consideration of $850 plus the initial estimated fair value of the contingent consideration of $290, which was determined utilizing an income approach based on a probability-weighted estimate of the future payment discounted using the Company’s estimated incremental borrowing rate, is classified within Level 3 of the fair value hierarchy, and is included within “Other non-current liabilities” on the unaudited Condensed Consolidated Balance Sheet as of September 30, 2024. The Company determined the fair value of any noncontrolling interest is de minimis. Refer to Note 8, “Variable Interest Entities,” for additional information regarding the Company’s VIEs.

Previous Asset Acquisitions

Ohio Patient Access

On August 12, 2022, the Company entered into a definitive agreement (the “Ohio Agreement”) that provides the Company the option to acquire 100% of the equity of Ohio Patient Access LLC (“OPA”), the holder of a license that grants it the right to operate three medical dispensaries in Ohio. The Ohio Agreement is subject to regulatory review and approval. Once regulatory approval is received, the Company may exercise the option, and the exercise is solely within the Company’s control. As initially provided by the Ohio Agreement, the Company had the right to exercise the option until the fifth anniversary of the agreement date, but was subsequently amended in June 2024 so that such option will expire on March 22, 2026. The Company anticipates exercising the option prior to the amended expiration date.

In conjunction with the Ohio Agreement, the parties also entered into a support services agreement under which the Company is providing management and advisory services to OPA for a set monthly fee. The parties also entered into a working capital loan agreement under which the Company may, at its full discretion, loan OPA up to $10,000 for general working capital needs. Under the Ohio Agreement, the Company will also acquire the real property of the three dispensary locations. OPA had not yet commenced operations as of the signing date, but subsequently opened two dispensaries in December 2023 and a third in January 2024. The Company determined OPA is a VIE and the Company became the primary beneficiary as of the signing date; therefore, OPA is consolidated as a VIE. To account for the initial consolidation of OPA, management applied the acquisition method discussed above.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

The purchase price per the Ohio Agreement consisted of total cash consideration of $22,300. The Ohio Agreement also includes an earn-out provision of $7,300 that is dependent upon the commencement of adult-use cannabis sales in Ohio and which the sellers could elect to receive as either cash or shares of the Company’s Class A common stock, or a combination thereof. The sellers elected to receive the payment in cash and such payment was made in July 2024. The parties amended the Ohio Agreement in June 2024 to incorporate certain provisions regarding evolving regulations in Ohio, including that the Company will, upon final closing of the Ohio Agreement, receive two additional adult-use licenses that are expected to be awarded to OPA.

The total estimated fair value of the transaction consideration was determined to be $24,132 and consisted of the fair value of the cash consideration of $19,290 plus the initial estimated fair value of the contingent consideration of $4,842. Of the total cash consideration, $11,300 was funded at signing pursuant to note agreements and $11,000 is due at final closing (the “OPA Sellers’ Note”); refer to Note 11, “Debt,” for additional information. The license intangible asset acquired was determined to have an estimated fair value of $21,684 and the three properties had an estimated fair value of $2,448, which was determined using a market approach based on the total transaction consideration. The license is being amortized in accordance with the Company’s policy following the commencement of operations. During the third quarter of 2023, the Company recorded an acquisition-related deferred tax liability of $9,516, which was allocated to the estimated fair value of the license.

The estimated fair value of the contingent consideration was determined utilizing an income approach based on a probability-weighted estimate of the future payment discounted using the Company’s estimated incremental borrowing rate and is classified within Level 3 of the fair value hierarchy. As of December 31, 2023, the estimated fair value of this contingent consideration was $6,670 and is included within “Other non-current liabilities on the unaudited Condensed Consolidated Balance Sheet at that date. The $630 change in fair value through the payment date was recognized during the nine months ended September 30, 2024 and is included within “General and administrative expenses” on the unaudited Condensed Consolidated Statement of Operations. The Company determined the fair value of any noncontrolling interest is de minimis. Refer to Note 8, “Variable Interest Entities,” for additional information regarding the Company’s VIEs.

Illinois Licenses

In August 2022, the Company entered into definitive agreements to acquire two additional licenses in Illinois. Neither of these licenses were associated with active operations at signing. These acquired licenses are being amortized in accordance with the Company’s policy as of the commencement of operations for each respective location, described below.

One transaction was entered on August 11, 2022 for total cash consideration of $5,500. The Company accounted for this transaction as an asset acquisition and allocated the cash consideration plus an acquisition-related deferred tax liability of $2,414 as the total cost of the license. Of the total cash consideration, $3,000 was paid at signing and $2,500 was due at final closing, which occurred in April 2024. The closing payment is included as a sellers’ note within “Current portion of debt, net” on the unaudited Condensed Consolidated Balance Sheet at December 31, 2023; refer to Note 11, “Debt,” for additional information. Operations at the associated location commenced during the second quarter of 2023.

The second transaction was entered on August 12, 2022 for total cash consideration of $5,600. The Company accounted for this transaction as an asset acquisition and allocated the cash consideration plus an acquisition-related deferred tax liability of $2,458 as the total cost of the license. The cash consideration was paid at final closing in July 2024 and was included as a sellers’ note within “Current portion of debt, net” on the unaudited Condensed Consolidated Balance Sheets at December 31, 2023; refer to Note 11, “Debt,” for additional information. Operations at the associated location commenced in December 2023.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

5. INVENTORY

The components of inventory are as follows:


(in thousands)	September 30, 2024		December 31, 2023
Materials and supplies	$	10,983	$	16,824
Work in process	40,114		36,612
Finished goods	46,290		41,858
Total	$	97,387	$	95,294

Total compensation expense capitalized to inventory was $19,566 and $18,552 during the three months ended September 30, 2024 and 2023, respectively, and $58,539 and $52,847 during the nine months ended September 30, 2024 and 2023, respectively. At September 30, 2024 and December 31, 2023, $16,030 and $13,730, respectively, of compensation expense remained capitalized as part of inventory. The Company recognized, as a component of cost of goods sold, total write-downs related to net realizable value adjustments, expired products, and obsolete packaging totaling $1,749 and $2,223 during the three and nine months ended September 30, 2024, respectively, and $2,938 and $13,052 during the three and nine months ended September 30, 2023, respectively. These amounts are included within “Other” on the unaudited Condensed Consolidated Statements of Cash Flows.

6. NOTES RECEIVABLE


(in thousands)	September 30, 2024		December 31, 2023
Massachusetts Note(1)	$	1,764	$	147
MMNY - working capital loan(2)	—		2,422
Maryland Loan Receivable(3)	—		10,547
Total	$	1,764	$	13,116

(1)In May 2022 the Company issued a secured promissory note to a retail dispensary license holder in Massachusetts providing up to $3,500 of funding, which note was amended in December 2023 (the “Massachusetts Note”). As amended, the Massachusetts Note bears interest at a rate of 12.5% per annum, which is to be paid monthly beginning in January 2024, and principal is to be repaid monthly commencing in December 2024 based on a period of twenty-four months, with the remainder due at the December 1, 2025 revised maturity date. In April 2024, the Massachusetts Note was further amended to increase the principal to $4,100 and the additional payment was funded at that time. A total of $4,100 is outstanding under the Massachusetts Note as of September 30, 2024, of which $1,764 is included in “Notes receivable” and $2,336 is included in “Other noncurrent assets,” respectively, on the unaudited Condensed Consolidated Balance Sheet as of that date. A total of $3,500 was outstanding as of December 31, 2023, of which $147 was included in “Notes receivable” and $3,353 was included in “Other noncurrent assets.” The borrower may prepay the outstanding principal amount, plus accrued interest thereon. Borrowings under the Massachusetts Note are secured by the assets of the borrower. The borrower is partially owned by an entity that is managed, in part, by one of the founders of the Company. Additionally, the Company transacts with the retail dispensary in the ordinary course of business.

(2)On February 25, 2021, the Company entered into a working capital advance agreement with MedMen NY, Inc. (“MMNY”), an unrelated third party, in conjunction with an Investment Agreement (as defined in Note 15, “Commitments and Contingencies”). The working capital advance agreement allows for initial maximum borrowings of up to $10,000, which may be increased to $17,500, and was issued to provide MMNY with additional funding for operations in conjunction with the Investment Agreement. Borrowings do not bear interest, but may be subject to a financing fee. The outstanding balance is due and payable at the earlier of the initial closing of the Investment Agreement or, if the Investment Agreement is terminated for certain specified reasons, three business days following such termination. During the nine months ended September 30, 2024, the Company increased its estimated reserve on the amounts outstanding from MMNY to include the remaining balances, including this working capital loan. The Company is pursuing collection of these amounts through its legal proceedings against MMNY, refer to Note 15, “Commitments and Contingencies,” for additional information.

(3)In June 2023 the Company purchased, at par, $12,027 of the principal of a loan (the “Maryland Loan Receivable”), outstanding pursuant to a loan agreement with a cannabis license holder in Maryland (the “Maryland Loan Agreement”), plus the associated interest receivable. The Maryland Loan Agreement had an original maturity date of August 1, 2026, required monthly repayments equal to 10.0% of the outstanding balance (including paid-in-kind interest), and could be

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

prepaid subject to a customary make-whole payment or prepayment penalty, as applicable. Mandatory prepayments were required from the proceeds of certain events. The Maryland Loan Agreement provided for a base interest rate of 12.0% plus LIBOR (LIBOR floor of 1.0%) and a paid-in-kind interest rate of 4.5%. Following the replacement of LIBOR, effective July 1, 2023, the LIBOR component of the interest rate transitioned to the secured overnight financing rate (“SOFR”) plus an alternative reference rate committee (“ARRC”) standard adjustment.

The Company recorded the Maryland Loan Receivable at an amortized cost basis of $12,622. A total of $595 of transaction-related expenses were capitalized as part of the amortized cost basis and were being amortized to interest income over the term. The Company identified certain events of default and covenant violations, including non-payment, and provided an acceleration notice during the second quarter of 2023 that declared all amounts due and payable. As such, during 2023 the Company established a reserve of $1,804 for potential collectability.

In March 2024 the borrower refinanced the borrowings underlying the Maryland Loan Agreement with a third-party lender (the “Maryland Refinancing”). In conjunction with the Maryland Refinancing, the borrower’s obligations to the Company under the Maryland Loan Agreement were settled. As part of this settlement, the Company received a cash payment of $8,100. Additionally, the parties entered into a supply agreement that provides for the Company to receive $6,000 of inventory products from the borrower, based on market prices, over the course of three years, with a maximum of $500 per quarter. The Company recorded this receivable net of an initial discount of $984 that is included within “General and administrative expenses” on the unaudited Condensed Consolidated Statements of Operations for the nine months ended September 30, 2024 and within “Other” on the unaudited Condensed Consolidated Statements of Cash Flows. This discount was calculated utilizing the Company’s estimated incremental borrowing rate as of the agreement date and will be accreted to interest income over the agreement term. The total settlement value, excluding the discount, approximated the obligations outstanding under the Maryland Loan Receivable, including $2,859 of past due interest that was outstanding as of December 31, 2023 and was included within “Other current assets” on the unaudited Condensed Consolidated Balance Sheet as of that date.

A total of $500 of inventory was supplied under this agreement during the nine months ended September 30, 2024. During the three months ended September 30, 2024, the Company established a reserve of $2,083 on the remaining receivable due to collection risk. This reserve was recognized within “General and administrative expenses” on the unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and within “Other” on the unaudited Condensed Consolidated Statements of Cash Flows. As of September 30, 2024, $1,000 of the remaining receivable is included within “Other current assets” and $1,543 is included within “Other noncurrent assets” on the unaudited Condensed Consolidated Balance Sheet, which amounts are net of $1,000 and $1,083 respectively, associated with this reserve.

Additionally, a total of $3,891 was outstanding at September 30, 2024 related to a promissory note issued to the owner of a property that the Company is leasing, of which $175 and $3,716 is included in “Other current assets” and “Other noncurrent assets,” respectively, on the unaudited Condensed Consolidated Balance Sheets. At December 31, 2023, $4,018 was outstanding, of which $170 and $3,848 is included in “Other current assets” and “Other noncurrent assets,” respectively, on the unaudited Condensed Consolidated Balance Sheets.

No impairment losses on notes receivable were recognized during the nine months ended September 30, 2024 or 2023, other than as described above.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

7. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:


(in thousands)	September 30, 2024		December 31, 2023
Leasehold improvements	$	202,341	$	192,807
Buildings	83,703		72,204
Furniture, fixtures, and equipment	75,833		71,474
Construction in progress	3,329		6,511
Land	5,782		5,242
Property and equipment, gross	370,988		348,238
Less: accumulated depreciation	107,497		80,156
Property and equipment, net	$	263,491	$	268,082

Total depreciation expense was $9,057 and $8,531 during the three months ended September 30, 2024 and 2023, respectively, and $27,341 and $24,958 during the nine months ended September 30, 2024 and 2023, respectively. Total depreciation expense capitalized to inventory was $6,380 and $6,227 during the three months ended September 30, 2024 and 2023, respectively, and $19,431 and $18,628 during the nine months ended September 30, 2024 and 2023, respectively. At September 30, 2024 and December 31, 2023, $4,211 and $5,510, respectively, of depreciation expense remained capitalized as part of inventory.

The table above includes equipment with a gross value of $2,321 as of each of September 30, 2024 and December 31, 2023 and accumulated amortization of $966 and $549, respectively, that the Company is renting under finance leases pursuant to a master lease agreement that was entered into in June 2022 and, as amended, allows for an aggregate of up to $3,000 of such leases to be entered during the current annual renewal period. Refer to Note 10, “Leases,” for additional information regarding our lease arrangements.

8. VARIABLE INTEREST ENTITIES

A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured that such equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains or losses of the entity. The primary beneficiary has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

We assess all variable interests in the entity and use our judgment when determining if we are the primary beneficiary. Other qualitative factors that are considered include decision-making responsibilities, the VIE capital structure, risk and rewards sharing, contractual agreements with the VIE, voting rights, and level of involvement of other parties. We assess the primary beneficiary determination for a VIE on an ongoing basis if there are any changes in the facts and circumstances related to a VIE.

Where we determine we are the primary beneficiary of a VIE, we consolidate the accounts of that VIE. The equity owned by other stockholders is shown as non-controlling interests in the accompanying unaudited Condensed Consolidated Balance Sheets, Statements of Operations, and Statements of Changes in Stockholders’ Equity. The assets of the VIE can only be used to settle obligations of that entity, and any creditors of that entity generally have no recourse to the assets of other entities or the Company unless the Company separately agrees to be subject to such claims.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

Recent Transactions

January 2024 Loan Agreement

In January 2024, the Company entered into a loan agreement pursuant to which the Company may provide, at its sole discretion, up to $2,500 of financing to a third party (the “January 2024 Loan Agreement”). The January 2024 Loan Agreement contains certain provisions and restrictive covenants that provide the Company with operational and financial influence over the underlying entity and also provides the Company with financial distributions based on the underlying associated results of operations. Additionally, the January 2024 Loan Agreement provides the Company with conversion options to obtain 35% of the equity interests of the borrower upon the initial funding (which occurred in January 2024) and up to an additional 65% of the remaining equity interest of the borrower at any time through October 2033, subject to certain provisions and regulatory approvals. The Company determined that the terms and provisions of the January 2024 Loan Agreement create a variable interest in the third-party entity and met the criteria for consolidation as of such date. The third-party entity received a conditional license approval for one dispensary in New Jersey that was determined to have a fair value of $1,050, which approximated the fair value of the non-controlling interest held by the third-party member as of the effective date. The non-controlling interest received a distribution during the three months ended September 30, 2024 in accordance with the provisions of the January 2024 Loan Agreement. The net loss attributable to the non-controlling interest was not significant during the three and nine months ended September 30, 2024.

Borrowings under the January 2024 Loan Agreement bear interest at a rate of 20.0% per annum and are secured by substantially all of the assets and equity interests of the third party. The January 2024 Loan Agreement provides for customary events of default, contains certain covenants and other restrictions, and provides for a default penalty of an additional 6.0% interest. Borrowings are due on the sixth anniversary of the January 2024 Loan Agreement, which may be extended by two additional two-year periods, and prepayment is permitted with prior written notice. Since the entity is consolidated as a VIE, the intercompany activity related to the January 2024 Loan Agreement is eliminated in consolidation.

February 2024 Loan Agreement

In February 2024, the Company entered into a loan agreement pursuant to which the Company may provide financing to a third party, at its sole discretion (the “February 2024 Loan Agreement”). The February 2024 Loan Agreement initially provided for up to $3,750 of financing, but was amended in July 2024 to increase the funding amount based on the Company’s sole discretion at such a time that the borrower requests additional funding. The parties also entered into a support services agreement under which the Company will provide management and advisory services for a set monthly fee. The terms of the February 2024 Loan Agreement contain certain provisions and restrictive covenants that provide the Company with operational and financial influence over the underlying entity. The February 2024 Loan Agreement provides the Company with the option to convert the outstanding balance into equity interests of the borrower, up to 100%, as may be permissible by applicable regulations at such time. The Company determined that the terms and provisions of the February 2024 Loan Agreement and support services agreement create a variable interest in the third-party entity and met the criteria for consolidation as of such date. The entity held no assets at the time the agreements were entered into and the non-controlling interest was determined to have a de minimis fair value as of that date. The net loss attributable to the non-controlling interest was not significant during the three and nine months ended September 30, 2024.

Borrowings under the February 2024 Loan Agreement bear interest at a rate of 20.0% per annum and are secured by substantially all of the assets of the borrower. The February 2024 Loan Agreement provides for customary events of default, contains certain covenants and other restrictions, and provides for a default penalty of an additional 5.0% interest. The February 2024 Loan Agreement matures ten years from issuance, but may be extended if not otherwise converted prior to maturity, with borrowings and interest not due until such time. Since the entity is consolidated as a VIE, the intercompany activity related to the February 2024 Loan Agreement and the related support services agreement is eliminated in consolidation.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

Financial Information

The following tables present the summarized financial information about the Company’s consolidated VIEs which are included in the unaudited Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 and in the unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023, as applicable. The underlying entities were determined to be VIEs since the Company possesses the power to direct the significant activities of the VIEs and has the obligation to absorb losses or the right to receive benefits from the VIEs. The information below excludes intercompany balances and activity that eliminate in consolidation and includes the related acquisition details disclosed in Note 4, “Acquisitions.”



(in thousands)	September 30, 2024		December 31, 2023
Current assets	$	4,414	$	585
Other noncurrent assets	61,754		44,722
Current liabilities	6,144		25,460
Noncurrent liabilities	13,418		9,516

Deficit	(8,838)		(3,476)



	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Revenue, net	$	5,980	$	—	$	7,752	$	—


Net loss	(891)		(672)		(5,362)		(1,869)

9. INTANGIBLE ASSETS AND GOODWILL


(in thousands)	September 30, 2024		December 31, 2023
Intangible Assets
Licenses and permits	$	262,017	$	250,867
In-place leases	19,963		19,963
Trade names	380		380
	282,360		271,210
Accumulated amortization:
Licenses and permits	(53,708)		(34,427)
In-place leases	(16,081)		(14,951)
Trade names	(380)		(380)
	(70,169)		(49,758)

Total intangible assets, net	$	212,191	$	221,452

Amortization expense related to intangible assets was $6,842 and $5,876 during the three months ended September 30, 2024 and 2023, respectively, and $20,411 and $17,703 during the nine months ended September 30, 2024 and 2023, respectively. Total amortization expense capitalized to inventory was $755 and $685 during the three months ended September 30, 2024 and 2023, respectively, and $2,263 and $2,106 during the nine months ended September 30, 2024 and 2023, respectively. At September 30, 2024 and December 31, 2023, $1,278 and $916, respectively, of amortization expense remained capitalized as part of inventory.

No impairment indicators were noted during the nine months ended September 30, 2024 or 2023 and, as such, we did not record any impairment charges during either period.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

Goodwill


(in thousands)
Balance, December 31, 2023	$	47,538
Acquisitions(1)	2,261
Adjustments to purchase price allocation(1)	(200)
Balance, September 30, 2024	$	49,599

(1)Refer to Note 4, “Acquisitions,” for additional information.

10. LEASES

The Company leases land, buildings, equipment, and other capital assets which it uses for corporate purposes and the production and sale of cannabis products with terms generally ranging from 1 to 20 years.

We determine if an arrangement is a lease at inception and begin recording lease activity at the commencement date, which is generally the date in which we take possession of or control the physical use of the asset. ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term, with lease expense recognized on a straight-line basis. Lease agreements may contain rent escalation clauses, rent holidays, or certain landlord incentives, including tenant improvement allowances. ROU assets include amounts for scheduled rent increases and are reduced by lease incentive amounts. Certain of our lease agreements include variable rent payments, consisting primarily of rental payments adjusted periodically for inflation and amounts paid to the lessor based on cost or consumption, such as maintenance and utilities. Variable rent lease components are not included in the lease liability. We typically exclude options to extend the lease in a lease term unless it is reasonably certain that we will exercise the option and when doing so is at our sole discretion. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. We may rent or sublease to third parties certain real property assets that we no longer use.

The components of lease assets and lease liabilities and their classification on the unaudited Condensed Consolidated Balance Sheets were as follows:


(in thousands)	Classification	September 30, 2024		December 31, 2023
Lease assets
Operating leases	Operating lease right-of-use assets	$	138,776	$	130,556
Finance leases	Property and equipment, net	1,355		1,772
Total lease assets		$	140,131	$	132,328

Lease liabilities
Current liabilities
Operating leases	Operating lease liabilities, current	$	5,125	$	3,660
Finance leases	Current portion of debt, net	549		496
Noncurrent liabilities
Operating leases	Operating lease liabilities, noncurrent	267,414		261,087
Finance leases	Long-term debt, net	777		1,196
Total lease liabilities		$	273,865	$	266,439

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

The components of lease costs and classification within the unaudited Condensed Consolidated Statements of Operations were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Operating lease costs
Capitalized to inventory	$	9,349	$	9,262	$	27,459	$	25,960
General and administrative expenses	980		651		3,117		1,914
Total operating lease costs	$	10,329	$	9,913	$	30,576	$	27,874

Finance lease costs
Amortization of leased assets(1)	$	139	$	138	$	417	$	320
Interest on lease liabilities	48		68		154		138
Total finance lease costs	$	187	$	206	$	571	$	458

(1)Included as a component of depreciation expense within “General and administrative expenses” on the accompanying unaudited Condensed Consolidated Statements of Operations.

At September 30, 2024 and December 31, 2023, $7,312 and $6,028, respectively, of lease costs remained capitalized in inventory.

The following table presents information on short-term and variable lease costs:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023


Total short-term and variable lease costs	$	1,195	$	1,176	$	3,162	$	3,353

Sublease income generated during the three and nine months ended September 30, 2024 and 2023 was immaterial.

The following table includes supplemental cash and non-cash information related to our leases:


	Nine Months Ended September 30,
(in thousands)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	30,898	$	27,581
Operating cash flows from finance leases	154		138
Financing cash flows from finance leases	366		256
ROU assets obtained in exchange for new lease obligations
Operating leases	$	9,560	$	34,583
Finance leases	—		1,159

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

The following table summarizes the weighted-average remaining lease term and discount rate:


	September 30, 2024		December 31, 2023
Weighted-average remaining term (years)
Operating leases	13.5		14.3
Finance leases	2.3		3.0
Weighted-average discount rate
Operating leases	15.1	%	15.1	%
Finance leases	13.7	%	13.7	%

The amounts of future undiscounted cash flows related to the lease payments over the lease terms and the reconciliation to the present value of the lease liabilities as recorded on our unaudited Condensed Consolidated Balance Sheet as of September 30, 2024 are as follows:


(in thousands)	Operating Lease Liabilities		Finance Lease Liabilities
Remainder of 2024	$	10,586	$	173
2025	43,257		693
2026	43,595		572
2027	44,759		103
2028	45,967		—
Thereafter	488,667		—
Total lease payments	676,831		1,541
Less: imputed interest	404,292		215
Present value of lease liabilities	$	272,539	$	1,326

Sale Leaseback Transactions

The following table presents cash payments due under transactions that did not qualify for sale leaseback treatment. The cash payments are allocated between interest and liability reduction, as applicable. The “sold” assets remain within land, buildings, and leasehold improvements, as appropriate, for the duration of the lease and a financing liability equal to the amount of proceeds received is recorded within “Long-term debt, net” on the accompanying unaudited Condensed Consolidated Balance Sheets.


(in thousands)	Remainder of 2024		2025		2026		2027		2028		Thereafter		Total
Cash payments due under financing liabilities	$	623	$	2,525	$	2,599	$	2,676	$	2,755	$	6,722	$	17,900

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

11. DEBT


(in thousands)	September 30, 2024		December 31, 2023
2024 Term Notes(1)	$	235,000	$	—
2021 Credit Facility(2)	60,000		275,000
Finance liabilities(3)	18,100		18,100
Sellers’ notes(4)	11,996		18,591
Financing Agreement(5)	1,964		1,766
Finance leases(6)	1,326		1,692
Total debt	$	328,386	$	315,149

Current portion of debt	74,509		11,148
Less: unamortized deferred financing costs	770		—
Current portion of debt, net	$	73,739	$	11,148

Long-term debt	253,877		304,001
Less: unamortized deferred financing costs	21,715		6,436
Long-term debt, net	$	232,162	$	297,565

(1)On July 16, 2024, the Company issued $235,000 in aggregate principal of senior secured notes due July 16, 2029 (the “2024 Term Notes”) through a private placement (the “2024 Notes Offering”) pursuant to an indenture agreement (the “July 2024 Loan Agreement”). The 2024 Term Notes were issued at 94.75% of face value and do not require scheduled principal amortization payments. The 2024 Term Notes bear interest at a rate of 12.75% per annum, payable semi-annually in arrears on January 15 and July 15 of each year until the maturity date, commencing on January 15, 2025, unless earlier prepaid in accordance with the terms of the July 2024 Loan Agreement. The total of the original issue discount and other capitalized direct financing fees was approximately $21,200 and will be amortized over the associated term using the straight-line method, which approximates the interest method. The Company utilized the proceeds from the 2024 Notes Offering, along with cash on hand, to prepay $215,000 of borrowings outstanding under the 2021 Credit Facility, as further described below. The 2024 Term Notes were funded by a combination of new and existing lenders. Borrowings from these existing lenders were accounted for as a modification of existing debt. The Company incurred approximately $3,600 of other expenses associated with this transaction that are included within “General and administrative expenses” on the unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024.

The 2024 Term Notes are irrevocably and unconditionally guaranteed, jointly and severally, on a senior secured basis by certain of the Company’s subsidiaries (the “Guarantees”). The 2024 Term Notes and the Guarantees are (i) secured, on a first lien basis, by substantially all assets of the Company and the guarantors of the 2024 Term Notes, subject to certain carveouts, and (ii) issued and governed by the July 2024 Loan Agreement. In addition, subject to certain limitations, the July 2024 Loan Agreement permits the Company to issue additional notes thereunder, including up to an additional $60,000 in aggregate principal in the future, with the proceeds therefrom to be used to prepay the remaining outstanding balance under, and to terminate, the 2021 Credit Facility.

The Company may, at any time and from time to time upon not less than 15 nor more than 60 days’ prior notice, prepay the 2024 Term Notes, along with accrued and unpaid interest, subject to a prepayment premium equal to: zero through July 15, 2026, 4.5% if paid between July 16, 2026 through July 15, 2027, 3.0% if paid between July 16, 2027 through July 15, 2028, and zero if paid July 16, 2028 and thereafter. The July 2024 Loan Agreement requires mandatory prepayments from proceeds of certain events. In the event of a change of control, as provided in the July 2024 Loan Agreement, the Company will be required to make an offer to each holder of the 2024 Term Notes to repay all or any part of such holders’ 2024 Term Notes at a price in cash equal to not less than 101% of the aggregate principal amount of such 2024 Term Notes repaid, plus accrued and unpaid interest thereon.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

2024 Loan Agreement provides for customary events of default which, if certain of them occur, would permit certain parties, including holders of not less than 25% in aggregate principal of the then-outstanding 2024 Term Notes to declare the principal of, and interest or premium, if any, and any other monetary obligations on, all the then-outstanding 2024 Term Notes to be due and payable immediately. The July 2024 Loan Agreement also requires the Company, on a consolidated basis, to maintain liquidity, consisting of cash and/or cash equivalents plus any future revolving credit availability, at all times in an aggregate amount of at least $20,000, with which the Company was in compliance as of September 30, 2024. The Company is required to comply with certain other financial covenants in contemplation of certain transactions or events, such as acquisitions and other financing activities, as defined within and provided for under the July 2024 Loan Agreement.

(2)On August 27, 2021, the Company entered into a credit agreement with a group of lenders (the “2021 Credit Agreement”) that provided for an initial term loan of $210,000 (the “2021 Credit Facility”), which was borrowed in full. The 2021 Credit Agreement provided for an expansion feature that allowed the Company to request an increase in the 2021 Credit Facility up to $275,000 if the then-existing lenders (or other lenders) agreed to provide such additional term loans. During the second quarter of 2022, the Company borrowed an additional $65,000 pursuant to this expansion feature (the “2022 Loans”).

The 2021 Credit Facility matures on August 27, 2025 and does not require scheduled principal amortization payments. Borrowings under the 2021 Credit Facility bear interest at a rate of 9.5% per annum, payable quarterly and, as to any portion of the term loan that is prepaid, on the date of prepayment. The 2021 Credit Agreement permits the Company to request an extension of the maturity date for 364 days, subject to the lenders’ discretion.

We incurred initial financing costs of $8,806 and additional financing costs of $7,606 related to the 2022 Loans, which includes warrants issued to certain lenders to acquire 3,130 shares of Class A common stock that had a fair value of $2,639 at issuance. The financing costs are being amortized to interest expense over the term of 2021 Credit Facility using the straight-line method which approximates the interest rate method.

The 2021 Credit Agreement requires mandatory prepayments from proceeds of certain events, including the proceeds of indebtedness that is not permitted under the agreement and asset sales and casualty events, subject to customary reinvestment rights. The Company may prepay the 2021 Credit Facility at any time, subject to a customary make-whole payment or prepayment penalty, as applicable. Once repaid, amounts borrowed under the 2021 Credit Facility may not be re-borrowed.

In April 2024, the 2021 Credit Agreement was amended to permit the Company to initiate, from time to time and at its discretion, a “Dutch Auction” pursuant to which it may issue a tender offer to existing lenders to re-purchase and retire their loans at a specified discount to par. No such re-purchase has occurred as of the date of filing of this Form 10-Q.

In June 2024, the 2021 Credit Agreement was amended to, among other things, permit the Company to issue new senior secured notes. In July 2024, the Company prepaid $215,000 of borrowings outstanding under the 2021 Credit Facility, primarily utilizing the proceeds from the issuance of the 2024 Term Notes, as discussed above. The remaining $60,000 of borrowings outstanding under the 2021 Credit Facility will remain outstanding based on the original terms of the 2021 Credit Agreement. The Company recognized, as a component of interest expense, a loss on extinguishment of $5,475, which includes $3,527 of prepayment fees and the write-off of $1,948 of unamortized deferred financing costs that were attributable to those lenders who did not provide funding under the 2024 Term Notes. A total of $1,579 of prepayment fees and $1,428 of previously unamortized deferred financing costs that were associated with existing lenders will remain capitalized and will be deferred over the term of the 2024 Term Notes in accordance with modification treatment. The total prepayment fee of $5,106 is included within “Debt issuance costs” on the unaudited Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2024. A total of $943 of unamortized deferred financing costs were associated with the portion of the 2021 Credit Facility that was not prepaid and will be amortized through the remaining term of those loans.

The Company is required to comply with two financial covenants under the 2021 Credit Agreement. The Company may not permit its liquidity (defined as unrestricted cash and cash equivalents pledged under the 2021 Credit Facility plus any future revolving credit availability) to be below $20,000 as of the last day of any fiscal quarter. Additionally, the Company may not permit the ratio of Consolidated EBITDA (as defined in the 2021 Credit Agreement) to consolidated cash interest expense for any period of four consecutive fiscal quarters to be less than 2.50:1.00. The Company has a customary equity cure right for each of these financial covenants. The Company was in compliance with these covenants as of September 30, 2024.

The 2021 Credit Agreement requires the Company to make certain representations and warranties and to comply with customary covenants, including restrictions on the payment of dividends, repurchase of stock, incurrence of indebtedness, dispositions, and acquisitions. The 2021 Credit Agreement also contains customary events of default including: non-payment of principal or interest; violations of covenants; bankruptcy; change of control; cross defaults to other debt; and material judgments. The 2021 Credit Facility is guaranteed by all of the Company’s subsidiaries and is secured by substantially all of the assets of the Company and its subsidiaries.

(3)Finance liabilities related to failed sale leaseback transactions. See Note 10, “Leases,” for additional information.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

(4)Sellers’ notes consist of amounts owed for acquisitions or other purchases. As of September 30, 2024 and December 31, 2023, sellers’ notes includes the OPA Sellers’ Note which had balance of $10,686 included in “Current portion of debt, net” at September 30, 2024 and $9,705 that was included within “Long-term debt, net” at December 31, 2023. The $11,000 OPA Sellers’ Note was recorded net of a discount of $3,010 that was calculated utilizing the Company’s estimated incremental borrowing rate based on the anticipated close date that is being accreted to interest expense over the expected term. Additionally, sellers’ notes includes $1,310 related to the Massachusetts Purchase Agreement entered into during 2024, which is included within “Current portion of debt, net” at September 30, 2024, and of which $1,250 was paid on October 1, 2024. Refer to Note 4, “Acquisitions,” for additional information regarding these transactions.

Sellers’ notes outstanding as of December 31, 2023 includes a total of $8,100 related to the acquisition of two licenses in Illinois, which total was included in “Current portion of debt, net” at December 31, 2023, and of which $2,500 was paid in April 2024 and $5,600 was paid in July 2024.

Additionally, during the nine months ended September 30, 2024, we repaid $786 of sellers’ notes related to the former owners of a previous non-controlling interest, which was included in “Current portion of debt, net” at December 31, 2023.

(5)In December 2022, the Company received $19,364 pursuant to a financing agreement with a third-party lender (the “Financing Agreement”). The Company assigned to the lender its interests in an employee retention tax credit claim (the “ERTC Claim”) that it submitted in November 2022 totaling approximately $22,794. If the Company does not receive the ERTC Claim, in whole or in part, the Company is required to repay the related portion of the funds received plus interest of 10% accrued from the date of the Financing Agreement through the repayment date. The Financing Agreement does not have a stated maturity date and the discount is being accreted to interest expense over an expected term. The Company’s obligations under the Financing Agreement will be satisfied upon receipt of the ERTC Claim, in full, or other full repayment. The total claim amount of $22,794 was recognized during the second quarter of 2023. A total of $1,964 of the ERTC Claim remains outstanding as of September 30, 2024 and December 31, 2023, which receivable is included in “Other current assets” on the unaudited Condensed Consolidated Balance Sheets, and the balance outstanding under the Financing Agreement is included in “Current portion of debt, net.”

(6)Liabilities related to finance leases. See Note 10, “Leases,” for additional information.

Debt Maturities

As of September 30, 2024, the following cash payments are payable under our debt arrangements:


(in thousands)	Remainder of 2024		2025		2029		Total
Sellers’ notes(1)	$	1,250	$	11,060	$	—	$	12,310
Term note maturities	—		60,000		235,000		295,000

(1)Certain cash payments include an interest accretion component. The timing of certain payments may vary based on regulatory approval of the underlying transactions.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

Interest Expense

Interest expense during the three and nine months ended September 30, 2024 and 2023 consisted of the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Cash interest	$	8,707	$	6,515	$	21,699	$	19,479
Loss on extinguishment of debt(1)	5,475		—		5,475		—
Accretion	1,636		1,802		4,432		7,082
Interest on financing liabilities(2)	615		578		1,794		1,720
Interest on finance leases	48		68		154		138
Total	$	16,481	$	8,963	$	33,554	$	28,419

(1)Includes $3,527 of pre-payment fees associated with the partial extinguishment treatment of the pre-payment made under the 2021 Credit Facility and the write-off of $1,948 of unamortized deferred financing costs.

(2)Interest on financing liability related to failed sale leaseback transactions. See Note 10, “Leases,” for additional details.

12. STOCKHOLDERS’ EQUITY

The Company has authorized 750,000 shares of Class A common stock with a par value of $0.001 per share, 100 shares of Class B common stock with a par value of $0.001 per share, and 10,000 shares of preferred stock with a par value of $0.001 per share. Holders of each share of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to 1,000 votes per share. Holders of Class A common stock and Class B common stock will vote together as a single class on all matters (including the election of directors) submitted to a vote of stockholders, unless otherwise required by law or our certificate of incorporation. Each share of Class B common stock is convertible at any time into one share of Class A common stock at the option of the holder. In addition, each share of Class B common stock will automatically convert into one share of Class A common stock on May 4, 2026, the final conversion date. Each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, whether or not for value, except for certain transfers described in our certificate of incorporation, including, without limitation, transfers for tax and estate planning purposes, so long as the transferring holder of Class B common stock continues to hold exclusive voting and dispositive power with respect to any such transferred shares. Once converted into a share of Class A common stock, a converted share of Class B common stock will not be reissued, and following the conversion of all outstanding shares of Class B common stock, no further shares of Class B common stock will be issued.

The following table summarizes the total shares of Class A common stock and Class B common stock outstanding as of September 30, 2024 and December 31, 2023:


(in thousands)	September 30, 2024	December 31, 2023
Shares of Class A common stock	214,346	206,810
Shares of Class B common stock	65	65
Total	214,411	206,875

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

Warrants

The following table summarizes the warrants activity during the nine months ended September 30, 2024:


	Number of Warrants (in thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Exercise Period (years)	Aggregate Intrinsic Value (in thousands)(1)
Outstanding, December 31, 2023	4,568	$	3.33	2.3	$	—


Outstanding, September 30, 2024(2)	4,568	$	3.33	1.5	$	—

(1)Based on the amount by which the closing market price of our Class A common stock exceeds the exercise price on each date indicated.

(2)The warrants outstanding as of September 30, 2024 are equity-classified instruments, are subject to customary anti-dilution adjustments, and are stand-alone instruments. The fair value per warrant was calculated at issuance using a Black-Scholes model and ranged from $0.06 to $0.84. Significant assumptions used in the calculations included volatility ranging from 70.0% to 87.5% and risk-free rates ranging from 0.3% to 4.2%. No warrants were exercised during the nine months ended September 30, 2024.

13. EQUITY-BASED COMPENSATION EXPENSE

Equity Incentive Plans

The Company adopted an incentive plan in November 2020 (the “2020 Plan”) which authorized the issuance of incentive common unit options and restricted common units (collectively, “Awards”). The maximum number of Awards to be issued under the 2020 Plan is 10,031 and any Awards that expire or are forfeited may be re-issued. As of September 30, 2024, a total of 9,994 Awards had been granted under the 2020 Plan and, as of September 30, 2024, there are no remaining unvested Awards and no remaining unrecognized compensation cost associated with these Awards. The Awards issued generally vested over two or three years and the estimated fair value of the Awards at issuance was recognized as compensation expense over the related vesting period.

In July 2021, the Company adopted a new stock incentive plan (the “2021 Plan”), pursuant to which 17,000 shares of Class A common stock are reserved for issuance thereunder, subject to certain adjustments and other terms. Following the adoption of the 2021 Plan, no additional awards are expected to be issued under the 2020 Plan. The 2021 Plan authorized the issuance of stock options, stock appreciation rights (“SAR Awards”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), and other stock-based awards (collectively the “2021 Plan Awards”). Any 2021 Plan Awards that expire or are forfeited may be re-issued. The estimated fair value of the 2021 Plan Awards at issuance is recognized as compensation expense over the related vesting, exercise, or service periods, as applicable.

On March 9, 2023, the Company’s board of directors unanimously approved, subject to stockholder approval, an amendment to the 2021 Plan (the “Amendment” and together with the 2021 Plan, the “Amended 2021 Plan”) to increase the maximum number of shares of Class A common stock available for issuance under the Amended 2021 Plan to an amount not to exceed 10% of the total number of issued and outstanding shares of Class A common stock, on a non-diluted basis, as constituted on the grant date of an award pursuant to the Amended 2021 Plan. On May 5, 2023, the stockholders of the Company voted to approve the Amendment. As of September 30, 2024, there were 10,729 shares of Class A common stock available for grant for future equity-based compensation awards under the Amended 2021 Plan. Activity related to awards issued under the Amended 2021 Plan is further described below. As of September 30, 2024, no SAR Awards and no RSAs had been granted under the Amended 2021 Plan.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

Stock Options

The following table summarizes stock option activity during the nine months ended September 30, 2024:


	Options Outstanding
(in thousands, except per share amounts)	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (years)	Aggregate Intrinsic Value(1)
Outstanding, December 31, 2023	4,010	$	1.80	3.9	$	353


Exercised	(206)	0.85			8
Forfeited	(112)	1.15
Expired	(346)	2.91
Outstanding, September 30, 2024	3,346	$	1.77	3.2	$	—
Exercisable at September 30, 2024	2,212	$	1.91	3.1	$	—

(1)Based on the amount by which the closing market price of our Class A common stock exceeds the exercise price on each date indicated.

Total unrecognized stock-based compensation expense related to unvested options was $742 as of September 30, 2024, which is expected to be recognized over a weighted-average remaining period of 2.0 years.

Restricted Stock Units

The following table summarizes the RSU activity during the nine months ended September 30, 2024:


	Number of Shares (in thousands)	Weighted-Average Grant Date Fair Value per Share



Unvested, December 31, 2023	12,021	$	2.15
Granted(1)	12,110	1.29
Vested(1)(2)	(11,294)	2.29
Forfeited	(5,478)	1.10
Unvested, September 30, 2024	7,359	$	1.31

(1)Includes RSUs issued for the 2023 annual performance bonus that vested at issuance with a value of $3,304, of which $2,838 is included in “Accounts payable and accrued liabilities” on the unaudited Condensed Consolidated Balance Sheet at December 31, 2023, with the remainder reflected as a change in estimate that is included within “General and administrative expenses” on the unaudited Condensed Consolidated Statements of Operations for the nine months ended September 30, 2024.

(2)Includes 3,964 vested shares that were withheld to cover tax obligations and were subsequently cancelled.

As of September 30, 2024, total unrecognized compensation cost related to the RSUs was $8,154, which is expected to be recognized over a weighted-average remaining period of 2.8 years.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

Performance Based Awards

In August 2023, the Company’s board of directors approved the grant of 4,000 RSUs outside of the Company’s Amended 2021 Plan (the “August 2023 Grant”). The August 2023 Grant was issued pursuant to an employment agreement and vests upon the later of the second anniversary of employment and the achievement of certain stock price targets. Continued service to the Company is required as of the date the vesting conditions are satisfied. The August 2023 Grant was forfeited in August 2024 following the cessation of the associated service to the Company and $638 of associated equity-based compensation was reversed during the three months ended September 30, 2024.

Compensation Expense by Type of Award

The following table details the equity-based compensation expense by type of award for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
RSUs(1)	$	(287)	$	4,656	$	14,575	$	13,133
Stock Options	92		308		1,230		728
Restricted Common Shares	—		—		—		115
Total equity-based compensation expense	$	(195)	$	4,964	$	15,805	$	13,976

(1)The three months ended September 30, 2024 reflects the reversal of equity-based compensation associated with RSUs and performance based awards that were forfeited during the period.

During the three months ended September 30, 2024 the Company recognized a net benefit of $359 from the forfeiture of certain unvested awards within “General and administrative expenses” on the unaudited Condensed Consolidated Statements of Operations and recognized $230 of expense within “Cost of goods sold.” During the nine months ended September 30, 2024, the Company recognized $9,289 of expense within “General and administrative expenses” and $6,777 within “Cost of goods sold.” During the three and nine months ended September 30, 2023, the Company recognized $3,134 and $8,287, respectively, of expense within “General and administrative expenses” and recognized $2,476 and $4,457, respectively, within “Cost of goods sold.”

During the three months ended September 30, 2024 and 2023 the Company capitalized $164 and $1,830, respectively, of equity-based compensation expense to inventory, and $6,516 and $5,689 was capitalized during the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and December 31, 2023, $1,707 and $1,968, respectively, remained capitalized in inventory.

Employee Stock Purchase Plan

In July 2021, the Company also adopted an employee stock purchase plan (the “2021 ESPP”), pursuant to which 4,000 shares of Class A common stock are reserved for issuance thereunder, subject to certain adjustments and other terms. No shares have been issued under the 2021 ESPP as of September 30, 2024.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

14. INCOME TAXES


	Three Months Ended September 30,						Nine Months Ended September 30,
($ in thousands)	2024			2023			2024			2023
Loss before income taxes	$	(18,489)		$	(4,514)		$	(33,820)		$	(7,391)
Income tax expense	9,767			6,726			34,383			21,480
Effective tax rate	(52.8)		%	(149.0)		%	(101.7)		%	(290.6)		%

Gross profit	$	43,729		$	43,556		$	137,339		$	107,579
Effective tax rate on gross profit	22.3		%	15.4		%	25.0		%	20.0		%

The internal revenue service has taken the position that cannabis companies are subject to the limitations of IRC Section 280E, under which such companies are only allowed to deduct expenses directly related to the sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E and those allowed for financial statement reporting purposes (“book-to-tax” differences). Cannabis companies operating in states that align their tax codes with IRC Section 280E are also unable to deduct ordinary and necessary business expenses for state tax purposes. Ordinary and necessary business expenses deemed non-deductible under IRC Section 280E are treated as permanent book-to-tax differences. Therefore, the effective tax rate on income realized by cannabis companies can be highly variable and may not necessarily correlate with pre-tax income or loss.

The Company’s quarterly tax provision is calculated under the discrete method which treats the interim period as if it were the annual period and determines the income tax expense or benefit on that basis. The discrete method is applied when application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The Company believes, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method due to the high degree of uncertainty in estimating annual pre-tax income due to the early growth stage of the business.

The Company has recorded an uncertain tax liability for uncertain tax positions primarily related to the treatment of certain transactions and deductions under IRC Section 280E based on legal interpretations that challenge the Company’s tax liability under IRC Section 280E. These uncertain tax positions are included within “Other non-current liabilities” on the unaudited Condensed Consolidated Balance Sheets. The following table shows a reconciliation of the beginning and ending amount of unrecognized tax benefits:


	Nine Months Ended September 30, 2024
Balance, December 31, 2023	$	72,955
Additions for tax positions related to the current year	26,315
Additions for tax positions related to prior years(1)	27,131
Balance, September 30, 2024	$	126,401

(1)Includes approximately $17,000 of IRC Section 280E refunds received during the nine months ended September 30, 2024.

A total of $15,809 of interest and penalties is accrued for the uncertain tax positions as of September 30, 2024, which includes $10,385 related to the current year and $5,424 for prior years. The Company has been selected for examination of its amended tax returns filed with these unrecognized tax benefits but does not currently anticipate its unrecognized tax benefits to be resolved in the next twelve months and anticipates that the total amount of unrecognized tax benefits may change within the next twelve months for additional uncertain tax positions taken on a go-forward basis. If favorably resolved, the unrecognized tax benefits would decrease the Company’s effective tax rate.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

15. COMMITMENTS AND CONTINGENCIES

Commitments

The Company does not have significant future annual commitments, other than related to leases and debt, which are disclosed in Notes 10 and 11, respectively, and certain payments related to acquisitions, as disclosed in Note 4. The Company has commercial relationships with license holders across the markets in which it operates with mutually beneficial purchasing and supply arrangements entered into in the ordinary course of business.

Through the acquisition of Story of PA CR, LLC (“Story of PA”) in April 2022, the Company is party to a research collaboration agreement with the Geisinger Commonwealth School of Medicine (“Geisinger”), a Pennsylvania Department of Health-Certified Medical Marijuana Academic Clinical Research Center, through which to which the Company will help fund clinical research to benefit the patients of Pennsylvania. A total of up to $10,000 of additional funding may be provided pursuant to the research collaboration agreement and is expected to be funded over the course of the ten years following the transaction date based on a percentage of annual revenues associated with the underlying operations, of which none has been funded to date. This additional $10,000 is included within “Other non-current liabilities” on the unaudited Condensed Consolidated Balance Sheets at September 30, 2024 and December 31, 2023.

Legal and Other Matters

The Company’s operations are subject to a variety of local and state regulations. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, or losses of permits that could result in the Company ceasing operations. While management believes that the Company is in compliance with applicable local and state regulations as of September 30, 2024 in all material respects, cannabis regulations continue to evolve and are subject to differing interpretations, and accordingly, the Company may be subject to regulatory fines, penalties, or restrictions in the future.

State laws that permit and regulate the production, distribution, and use of cannabis for adult-use or medical purposes are in direct conflict with the Controlled Substances Act (21 U.S.C. § 811) (the “CSA”), which makes cannabis use and possession federally illegal. Although certain states and territories of the United States authorize medical and/or adult-use cannabis production and distribution by licensed or registered entities, under United States federal law, the possession, use, cultivation, and transfer of cannabis and any related drug paraphernalia is illegal and any such acts are criminal acts under federal law under the CSA. Although the Company’s activities are believed to be compliant with applicable state and local laws, strict compliance with state and local laws with respect to cannabis may neither absolve the Company of liability under United States federal law, nor may it provide a defense to any federal proceeding which may be brought against the Company.

The Company may be, from time to time, subject to various administrative, regulatory, and other legal proceedings arising in the ordinary course of business. Contingent liabilities associated with legal proceedings are recorded when a liability is probable and the contingent liability can be estimated. We do not accrue for contingent losses that, in our judgment, are considered to be reasonably possible but not probable. At September 30, 2024 there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on our consolidated results of operations, other than as disclosed below.

MedMen NY Litigation

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

amounts owed to MMNY’s senior secured lender. Following its investment, AWH would hold a controlling interest in MMNY equal to approximately 86.7% of the equity in MMNY, and be provided with an option to acquire MedMen’s remaining interest in MMNY in the future for a nominal additional payment, which option the Company intended to exercise. The Investment Agreement also required AWH to make an additional investment of $10,000 in MMNY, which investment would also be used to repay MMNY’s senior secured lender, if adult-use cannabis sales commenced in MMNY’s dispensaries.

The Company contends that, in December 2021, the parties to the Investment Agreement received the required approvals from the State of New York to close the transactions contemplated by the Investment Agreement, but MedMen has disputed the adequacy of the approvals provided by the State of New York. The Company delivered notice to MedMen in December 2021 that it wished to close the transactions as required by the Investment Agreement. Nevertheless, MedMen, on January 2, 2022, gave notice to the Company that MedMen purported to terminate the Investment Agreement.

Following receipt of such notice, on January 13, 2022, the Company filed a complaint against MedMen and others in the Commercial Division of the Supreme Court of the State of New York (the “Court”), requesting specific performance that the transactions contemplated by the Investment Agreement must move forward, and such other relief as the Court may deem appropriate. The Company simultaneously moved for a temporary restraining order and preliminary injunction (the “Motion”) requiring MedMen to operate its New York business in the ordinary course of business and to refrain from any activities or transactions that might impair, encumber, or dissipate MedMen’s New York assets. The parties resolved the Motion via a “Stipulation and Order” entered by the Court on January 21, 2022 that required that MMNY operate only in compliance with the law and in a manner consistent with its ordinary course of business that preserved all assets of MMNY. It further required MMNY to not take certain actions, including any actions that would have a material adverse effect on MedMen’s New York business. On March 27, 2023, the parties entered a further stipulation that modified the January 21, 2022 Stipulation and Order by lifting the Court’s prohibition against a sale or transfer of MMNY or its assets, without waiver of any claims that the Company might have in the event of such a transaction. That further stipulation modifying the January 21, 2022 Stipulation and Order was entered by the Court on August 1, 2023.

On January 24, 2022, MedMen filed counterclaims against the Company, alleging that Ascend had breached the Investment Agreement, and seeking declaratory relief that MedMen had properly terminated the Investment Agreement. On February 14, 2022, the Company moved to dismiss MedMen’s counterclaims and filed an amended complaint (the “First Amended Complaint”) that included additional claims against MedMen for breach of contract. The First Amended Complaint contained several causes of action, including for breach of contract and breach of the covenant of good faith and fair dealing. The First Amended Complaint sought damages in addition to continuing to seek injunctive and declaratory relief. On March 7, 2022, MedMen filed amended counterclaims, an answer, and affirmative defenses to the First Amended Complaint. On March 28, 2022, the Company moved to dismiss MedMen’s amended counterclaims. On April 20, 2022, the parties entered into a stipulation extending the time for MedMen to oppose the Company’s motion to dismiss until May 5, 2022. In addition, the parties agreed to stay all discovery, including both party and non-party discovery. On May 5, 2022, the parties filed another stipulation order with the Court adjourning until further notice from the Court MedMen’s time to oppose the Company’s motion to dismiss MedMen’s amended counterclaims. The parties again stipulated that all discovery remains stayed pending further order from the Court.

On May 10, 2022, the Company and MedMen signed a term sheet (the “Term Sheet”), pursuant to which the parties agreed to use best efforts to enter into a settlement agreement and enter into new or amended transactional documents. Specifically, if consummated, the agreements contemplated by the Term Sheet would have entailed, among other things, the Company paying MedMen $15,000 in additional transaction consideration, and MedMen withdrawing its counterclaims against the Company. Per the amended transaction terms contemplated in the Term Sheet, upon closing, the Company would have received a 99.99% controlling interest in MMNY and the Company would have paid MedMen $74,000, which reflected the original transaction consideration plus an additional $11,000 per the parties’ Term Sheet, less a $4,000 deposit that the Company already paid.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

The amended transaction terms contemplated in the Term Sheet also would have required MedMen to provide a representation and warranty that the status of the MMNY assets had not materially changed since December 31, 2021 and an acknowledgement that the representations and warranties from the Investment Agreement would survive for three months after the closing of the contemplated transactions. However, after the Company determined that MedMen could not make or provide the representations and warranties that MedMen would have been required to make as part of the contemplated transactions, the Company determined that it no longer intended to consummate the contemplated transactions.

On September 30, 2022, the Company sought leave from the Court to file a second amended complaint (the “Second Amended Complaint”). The Second Amended Complaint contains breach of contract claims against MedMen, as well as a claim for the breach of the implied covenant of good faith and fair dealing, and a claim for anticipatory breach of contract. In connection with those claims, the Company is no longer seeking injunctive or declaratory relief; however, the Company continues to seek damages from MedMen, including, but not limited to, the return of the $4,000 deposit, approximately $2,400 of advances pursuant to a working capital loan agreement (as described in Note 6, “Notes Receivable”) and other capital expenditure advances paid to MMNY by the Company.

On November 21, 2022, the parties entered into a stipulation whereby MedMen agreed to the filing of the Second Amended Complaint, which is now the Company’s operative pleading in the litigation. In addition, in the stipulation, the Company agreed that it would not contest MedMen’s filing of second amended counterclaims against the Company while reserving all rights with respect to any such counterclaims. Because the parties agreed to the filing of each side’s amended pleadings, on November 28, 2022, the Court determined that Ascend’s March 2022 motion to dismiss was moot.

On December 21, 2022, MedMen filed its second amended counterclaims, an answer, and affirmative defenses to the Company’s Second Amended Complaint. In addition to the allegations in MedMen’s earlier pleadings, MedMen now also alleged that the Company breached the Term Sheet. On January 20, 2023, the Company moved to dismiss MedMen’s second amended counterclaims.

On August 18, 2023, the Court issued a Decision and Order on the Company’s motion to dismiss, dismissing seven of MedMen’s ten counterclaims, including each of the counterclaims brought by MedMen relating to the Term Sheet. On September 26, 2023, MedMen filed a motion seeking leave to file its third amended counterclaims, in which MedMen seeks to revive its previously dismissed counterclaims relating to the Term Sheet. On October 24, 2023, the Company filed an opposition to that motion for leave. As further discussed below, the Court denied that motion on February 2, 2024. In addition, on October 18, 2023, MedMen filed a Notice of Appeal of the Court’s August 18, 2023 Decision and Order with respect to the dismissal of MedMen’s three counterclaims relating to the Term Sheet. On November 1, 2023 the Company filed a Notice of Cross-Appeal with respect to the Court’s determination that the Company’s motion to dismiss was not subject to New York’s anti-SLAPP statute. Both parties have yet to perfect the appeals.

On February 2, 2024, the Court issued a Decision and Order denying MedMen’s motion for leave to file its third amended counterclaims.

On February 21, 2024, the current counsel-of-record for MedMen filed an order to show cause with the Court seeking leave to withdraw as counsel and stay proceedings for thirty days to permit MedMen time to obtain new counsel. On March 20, 2024, the Court granted such withdrawal motion and appointed April 25, 2024 as the deadline for MedMen to obtain new counsel, which, as of the date of filing of this Form 10-Q, had not occurred.

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

confirming the appointment a receiver for MM CAN USA, Inc. The receiver has submitted monthly reports to the Los Angeles Superior Court estimating that the liabilities of MedMen’s subsidiaries likely significantly exceed the estimated liquidated value of MedMen's subsidiaries and their respective assets, and such reports indicate that efforts to dissolve, liquidate, or abandon such assets are ongoing.

During the year ended December 31, 2022, following the Company’s decision to no longer consummate the contemplated transactions, the Company established an estimated reserve of $3,700 related to the amounts that it has been actively pursuing collecting, which reserve is included within “Other current assets” on the unaudited Condensed Consolidated Balance Sheet as of December 31, 2023. During the nine months ended September 30, 2024, the Company increased the estimated reserve by $5,447, which is included within “General and administrative expenses” on the unaudited Condensed Consolidated Statements of Operations and within “Other” on the unaudited Condensed Consolidated Statements of Cash Flows. The total reserve as of September 30, 2024 is reflective of all outstanding balances and of which $2,422 is included within “Notes receivable” on the unaudited Condensed Consolidated Balance Sheet, $6,695 is included within “Other current assets,” and the remainder is included within “Other noncurrent assets.”

Other Matter

In April 2021, the Company, through a subsidiary, entered into a settlement agreement with TVP, LLC, TVP Grand Rapids, LLC and, TVP Alma, LLC (collectively, the “TVP Parties”) regarding a dispute related to a purchase agreement for the Company’s potential acquisition of certain real estate properties in Michigan. As part of that settlement, the Company issued historical equity units to the TVP Parties to be held in the name of an escrow agent (the “Escrow Units”). The Escrow Units were fully issued and outstanding as of the settlement date and were to remain in the escrow account until such time as the TVP Parties exercised an option to hold the Escrow Units directly (the “Put Option”), which could be exercised for three years. In February 2024, the TVP Parties notified the Company that they were exercising the Put Option and the transfer was completed in May 2024, at which time the Escrow Units were released to the TVP Parties and the TVP Parties transferred to the Company the equity interests of the entities that hold three real estate properties. The underlying properties were determined to have a total fair value of $5,400 as of the settlement date, which was included within “Other noncurrent assets” on the unaudited Condensed Consolidated Balance Sheet as of December 31, 2023 and was reclassified to “Property and equipment, net” as of the transfer date. Prior to the completion of the transfer, the Company operated dispensaries at these locations pursuant to lease agreements, which operations will continue at the now-owned properties.

16. RELATED PARTY TRANSACTIONS

There were no significant related party transactions during the nine months ended September 30, 2024, other than as disclosed in Note 6, “Notes Receivable.”

Ascend Wellness Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per unit or per share data)

17. SUPPLEMENTAL INFORMATION

The following table presents supplemental information regarding our other current assets:


(in thousands)	September 30, 2024		December 31, 2023
Prepaid expenses	$	5,928	$	7,270
Deposits and other receivables	3,972		9,302
Construction deposits	210		569
Tenant improvement allowance	—		1,010
Other	263		1,493
Total	$	10,373	$	19,644

The following table presents supplemental information regarding our accounts payable and accrued liabilities:


(in thousands)	September 30, 2024		December 31, 2023
Accounts payable	$	29,346	$	34,687
Accrued payroll and related expenses	9,799		21,306
Accrued interest	6,239		—

Fixed asset purchases	2,981		5,738
Other	10,529		9,381


Total	$	58,894	$	71,112

The following table presents supplemental information regarding our general and administrative expenses:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Compensation	$	16,441	$	17,855	$	57,267	$	49,043
Depreciation and amortization	8,764		7,495		26,058		21,927
Rent and utilities	5,943		5,859		16,782		15,059
Professional services	7,763		3,217		16,037		9,864
Insurance	1,420		1,165		4,365		3,908
Marketing	1,887		1,034		4,031		3,303
Gain on sale of assets	—		—		(11)		(226)
Other	3,928		3,384		14,174		8,884
Total	$	46,146	$	40,009	$	138,703	$	111,762

18. SUBSEQUENT EVENTS

Management has evaluated subsequent events to determine if events or transactions occurring through the filing date of this Quarterly Report on Form 10-Q require adjustment to or disclosure in the Company’s Financial Statements. There were no events that require adjustment to or disclosure in the Financial Statements, except as disclosed.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following management discussion and analysis, which we refer to as the “MD&A,” of the financial condition and results of operations of Ascend Wellness Holdings, Inc. (the “Company,” “AWH,” or “Ascend”) is for the three and nine months ended September 30, 2024 and 2023. It is supplemental to, and should be read in conjunction with, the unaudited condensed consolidated financial statements, and the accompanying notes thereto, (the “Financial Statements”) appearing elsewhere in this Quarterly Report on Form 10-Q (the “Quarterly Report” or “Form 10-Q”) and our Annual Report on Form 10-K for the year ended December 31, 2023 (the “Annual Report”), which has been filed with the United States Securities and Exchange Commission (“SEC”) and with the relevant Canadian securities regulatory authorities under its profile on the System for Electronic Document Analysis and Retrieval Plus (“SEDAR+”). The Financial Statements and Annual Report were prepared in accordance with accounting principles generally accepted in the United States of America, which we refer to as “U.S. GAAP.”

The following discussion should be read in conjunction with, and is qualified in its entirety by, the Financial Statements. The discussion in this section contains both historical information and forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, and forward-looking information, within the meaning of applicable Canadian securities laws, (collectively, “forward-looking statements”) that involve risks and uncertainties. Generally, forward-looking statements may be identified by the use of forward-looking terminology such as “plans,” “expects,” “does not expect,” “proposed,” “is expected,” “budgets,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates,” “does not anticipate,” “believes,” or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events, or results may, could, would, or might occur or be achieved. There can be no assurance that such forward-looking statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such forward-looking statements. Forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause the actual results, level of activity, performance, or achievements of the Company to be materially different from those or implied by such forward-looking statements. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions, or expectations upon which they are placed will occur. Forward-looking statements in this MD&A are expressly qualified by this cautionary statement. See “Forward-Looking Statements” for more information.

Financial information and unit or share figures, except per-unit or per-share amounts, presented in this MD&A are presented in thousands of United States dollars (“$”), unless otherwise indicated. We round amounts in this MD&A to the thousands and calculate all percentages, per-unit, and per-share data from the underlying whole-dollar amounts. Thus, certain amounts may not foot, crossfoot, or recalculate based on reported numbers due to rounding. Unless otherwise indicated, all references to years are to our fiscal year, which ends on December 31.

The Company’s shares of Class A common stock are listed on the Canadian Securities Exchange (the “CSE”) under the ticker symbol “AAWH.U” and are quoted on the OTCQX® Best Market under the symbol “AAWH.” We are an emerging growth company under federal securities laws and as such we are able to elect to follow scaled disclosure requirements for this filing.

BUSINESS OVERVIEW

Established in 2018 and headquartered in Morristown, New Jersey, AWH is a vertically integrated multi-state operator focused on adult-use or near-term adult-use cannabis states in limited license markets. Our core business is the cultivation, manufacturing, and distribution of cannabis consumer packaged goods, which we sell through our company-owned retail stores and to third-party licensed retail cannabis stores. We believe in bettering lives through cannabis. Our mission is to improve the lives of our employees, patients, customers, and the communities we serve through the use of the cannabis plant. We are committed to providing safe, reliable, and high-quality products and providing consumers options and education to ensure they are able to identify and obtain the products that fit their personal needs.

Since our formation, we have expanded our operational footprint, primarily through acquisitions, and, as of September 30, 2024, had direct or indirect operations or financial interests in seven United States geographic markets: Illinois, Maryland, Massachusetts, Michigan, New Jersey, Ohio, and Pennsylvania. While we have been successful in opening facilities and dispensaries, we expect continued growth to be driven by opening new operational facilities and dispensaries under our current licenses, expansion of our current facilities, and increased consumer demand. We currently employ approximately 2,300 people.

Our consumer products portfolio is generated primarily from plant material that we grow and process ourselves. As of September 30, 2024, we produce our consumer packaged goods in seven manufacturing facilities with 255,000 square feet of total canopy. During the three and nine months ended September 30, 2024, we sold approximately 48,000 and 141,000 pounds of wholesale product, on a gross basis, respectively, compared to 40,000 and 101,000 pounds during the three and nine months ended September 30, 2023, respectively. In January 2024, we entered into a definitive agreement to acquire a cultivation license and a manufacturer license that we intend to use at a second cultivation site in Massachusetts to further expand our production capacity in that market. We added approximately 15,000 square feet of total additional canopy with this additional site, which build out was largely completed during the second quarter of 2024, and anticipate the transaction will close in early 2025. Our product portfolio consists of a range of cannabis product categories including flower, pre-rolls, concentrates, vapes, edibles, and other cannabis-related products. As of September 30, 2024, we have 39 open and operating retail locations, which includes 2 partner locations, and by the end of 2024 we expect to have 40 total retail locations, including 2 partner locations. Our new store opening plans are flexible and will ultimately depend on market conditions, local licensing, construction, and other regulatory permissions. We are also pursuing opportunities to partner with social equity license holders to expand our presence in various states. All of our expansion plans are subject to capital allocations decisions, the evolving regulatory environment, and the general economic environment.

Recent Developments

Business Developments

The Company is continuously reviewing its footprint in order to optimize its operations, including expansion opportunities across the markets in which it operates. Some of the highlights achieved during the quarter include:

•commencing non-medical sales at five dispensaries in Ohio;

•opening a fifth dispensary in Pennsylvania; and

•generating positive net cash from operating activities and refinancing a portion of our previously outstanding debt obligations, as further described in “Liquidity and Capital Resources.”

Recent and Pending Transactions

Massachusetts Cultivation

In January 2024, the Company entered into a definitive agreement (the “Massachusetts Purchase Agreement”) to purchase a cultivation and manufacturer license from a third party in Massachusetts for a cash purchase price of $2,750, which total may be adjusted at final closing as provided in the Massachusetts Purchase Agreement and of which $1,500 was paid at signing and $1,250 was paid on October 1, 2024. The transfer of each license is subject to regulatory review and approval, which the Company expects may occur within twelve months following the signing date. The licenses were not associated with active operations at signing, but operations have since commenced. In conjunction with the Massachusetts Purchase Agreement, the parties also entered into a bridge loan which provides for the financing of certain covered expenses, at the sole discretion of the Company. This bridge loan bears interest based on the federal funds rate and, if not otherwise satisfied, is due on the fifth anniversary of the signing date. The parties also entered into an interim consulting services agreement, effective as of the signing date. The Company accounted for this transaction as an asset acquisition as of the signing date based on the provisions of the underlying agreements and allocated the cash consideration as the cost of the license acquired. The Company has agreed to assume the lease for the associated location and to reimburse the seller for the security deposit at final closing. The Company recognized a lease liability and right-of-use (“ROU”) asset of $761 as of the signing date. Refer to Note 4, “Acquisitions,” in the Financial Statements for additional information related to this transaction and to Note 10, “Leases,” for additional information regarding the Company’s leases.

Detroit License

In September 2024, the Company acquired 49% of the member interests of an entity (the “Detroit License Holder”) that received a conditional approval for an adult-use license in Detroit, Michigan (the “Detroit License”). The Detroit License was not associated with active operations as of the closing date and the Detroit License Holder had no other active operations as of that date. The Company anticipates transferring the Detroit License to its existing dispensary in Detroit, Michigan, subject to regulatory approvals. The Company paid $850 of cash consideration at closing and the sellers may receive up to an additional $2,250 based upon the achievement of certain levels of sales during a specified twelve month period following the commencement of adult-use sales at the dispensary. The underlying agreement also provides the Company with an option to acquire the remaining ownership interests in the Detroit License Holder, after such is permissible by applicable regulations, for no additional consideration. The parties also entered into a management services agreement, pursuant to which the Company is providing management and advisory services for a set monthly fee, which is expected to expire upon the Company’s exercise of the option.

The Company determined that the Detroit License Holder is a variable interest entity (“VIE”) and the Company became the primary beneficiary as of the closing date; therefore, the Detroit License Holder is consolidated as a VIE. The total transaction consideration of $1,140 was allocated to the license acquired and consisted of the $850 of cash consideration plus the initial estimated fair value of the contingent consideration of $290. The Company determined the fair value of any noncontrolling interest is de minimis. Refer to Note 4, “Acquisitions,” in the Financial Statements for additional information related to this transaction and to Note 8, “Variable Interest Entities,” for additional information regarding the Company’s VIEs.

Ohio Patient Access

On August 12, 2022, the Company entered into a definitive agreement (the “Ohio Agreement”) that provides the Company the option to acquire 100% of the equity of Ohio Patient Access LLC (“OPA”), the holder of a license that grants it the right to operate three medical dispensaries in Ohio. The Ohio Agreement remains subject to regulatory review and approval. Once regulatory approval is received, the Company may exercise the option, and the exercise is solely within the Company’s control. The Company anticipates exercising the option prior to the March 22, 2026 amended expiration date. Under the Ohio Agreement, the Company will also acquire the real property of the three dispensary locations. OPA had not yet commenced operations as of the signing date, but subsequently opened two dispensaries in December 2023 and a third in January 2024. The Company determined OPA is a VIE and the Company became the primary beneficiary as of the signing date; therefore, OPA is consolidated as a VIE.

The Ohio Agreement also includes an earn-out provision of $7,300 that is dependent upon the commencement of adult-use cannabis sales in Ohio and which the sellers could elect to receive as either cash or shares of the Company’s Class A common stock, or a combination thereof. The sellers elected to receive the payment in cash and such payment was made in July 2024. The parties amended the Ohio Agreement in June 2024 to incorporate certain provisions regarding evolving regulations in Ohio, including that the Company will, upon final closing of the Ohio Agreement, receive two additional adult-use licenses that are expected to be awarded to OPA. Refer to Note 4, “Acquisitions,” in the Financial Statements for additional information related to this transaction and to Note 8, “Variable Interest Entities,” for additional information regarding the Company’s VIEs.

Illinois Licenses

In August 2022, the Company entered into definitive agreements to acquire two additional licenses in Illinois for combined total cash consideration of $11,100. Operations at one of the locations commenced during the second quarter of 2023 and the final closing occurred in April 2024. Operations at the second location commenced during the fourth quarter of 2023 and final closing occurred in July 2024. Refer to Note 4, “Acquisitions,” in the Financial Statements for additional information related to these transactions.

Variable Interest Entities

January 2024 Loan Agreement

In January 2024, the Company entered into a loan agreement pursuant to which the Company may provide, at its sole discretion, up to $2,500 of financing to a third party (the “January 2024 Loan Agreement”). The January 2024 Loan Agreement contains certain provisions and restrictive covenants that provide the Company with operational and financial influence over the underlying entity and also provides the Company with financial distributions based on the underlying associated results of operations. Additionally, the January 2024 Loan Agreement provides the Company with conversion options to obtain 35% of the equity interests of the borrower upon the initial funding (which occurred in January 2024) and up to an additional 65% of the remaining equity interest of the borrower at any time through October 2033, subject to certain provisions and regulatory approvals. The Company determined that the terms and provisions of the January 2024 Loan Agreement create a variable interest in the third-party entity and met the criteria for consolidation as a VIE as of such date. The third-party entity received a conditional license approval for one dispensary in New Jersey that was determined to have a fair value of $1,050, which approximated the fair value of the non-controlling interest held by the third-party as of the effective date. The net loss attributable to the non-controlling interest was not significant during the three and nine months ended September 30, 2024. Since the entity is consolidated as a VIE, the intercompany activity related to the January 2024 Loan Agreement is eliminated in consolidation. Refer to Note 8, “Variable Interest Entities,” in the Financial Statements for additional information regarding this transaction and the Company’s VIEs.

February 2024 Loan Agreement

In February 2024, the Company entered into a loan agreement pursuant to which the Company may provide financing to a third party at its sole discretion (the “February 2024 Loan Agreement”). The February 2024 Loan Agreement initially provided for up to $3,750 of financing, but was amended in July 2024 to increase the funding amount based on the Company’s sole discretion at such a time that the borrower requests additional funding. The parties also entered into a support services agreement under which the Company will provide management and advisory services for a set monthly fee. The terms of the February 2024 Loan Agreement contain certain provisions and restrictive covenants that provide the Company with operational and financial influence over the underlying entity. The February 2024 Loan Agreement provides the Company with the option to convert the outstanding balance into equity interests of the borrower, up to 100%, as may be permissible by applicable regulations at such time. The Company determined that the terms and provisions of the February 2024 Loan Agreement and support services agreement create a variable interest in the third-party entity and met the criteria for consolidation as a VIE as of such date. The entity held no assets at the time the agreements were entered into and the non-controlling interest was determined to have a de minimis fair value as of that date. Since the entity is consolidated as a VIE, the intercompany activity related to the February 2024 Loan Agreement and the related support services agreement is eliminated in consolidation.

Effective in April 2024, this third party acquired two dispensaries in the greater Chicago, Illinois area (the “Chicago Partner Dispensaries”). The parties entered into interim management services agreements (“MSAs”) pursuant to which the consolidated VIE will advise on certain business, operational, and financial matters for a monthly fee while the parties finalize asset purchase agreements to acquire the underlying dispensaries (the “Illinois MSAs”). The total purchase price of approximately $10,000 of cash consideration is subject to certain closing adjustments. An initial deposit of $1,500 was remitted during the three months ended March 31, 2024. The remainder of $8,500 was remitted to escrow during the three months ended June 30, 2024 and remained in escrow as of September 30, 2024. The asset purchase agreements in respect of the Chicago Partner Dispensaries are subject to regulatory review and approval. Based on the provisions of the Illinois MSAs, the third party obtained operational and financial influence over the dispensaries and therefore recognized the transaction as a business combination as of the April 2024 regulatory approval date of the Illinois MSAs. Refer to Note 4, “Acquisitions,” in the Financial Statements for additional information related to this transaction and Note 8, “Variable Interest Entities,” for additional information regarding the Company’s VIEs.

Operational and Regulation Overview

We believe our operations are in material compliance with all applicable state and local laws, regulations, and licensing requirements in the states in which we operate. However, cannabis is illegal under United States federal law. Substantially all of our revenue is derived from United States cannabis operations. For information about risks related to United States cannabis operations, refer to Item 1A., “Risk Factors,” of the Annual Report.

Key Financial Highlights

•Revenue increased by $379 during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily driven by incremental revenue from acquisitions and expansion of our cultivation activities, largely offset by declines in certain legacy markets.

•Operating loss of $2,417 during the three months ended September 30, 2024, as compared to operating income of $3,547 during the three months ended September 30, 2023, primarily driven by higher general and administrative expenses largely attributable to certain one time costs, including expenses associated with our debt refinancing and other strategic initiatives.

•Net decrease in cash and cash equivalents of $7,229 during the nine months ended September 30, 2024, primarily driven by payments associated with acquisitions, investments in capital assets, and debt issuance costs, all partially offset by a benefit from the timing and amount of tax payments, including certain tax refunds received, as well as the timing of timing of payments related to working capital activities and the collection of a note receivable.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2024 Compared with the Three Months Ended September 30, 2023


	Three Months Ended September 30,
($ in thousands)	2024			2023			Increase / (Decrease)
Revenue, net	$	141,647		$	141,268		$	379	NM*
Cost of goods sold	(97,918)			(97,712)			206		NM*
Gross profit	43,729			43,556			173		NM*
Gross profit %	30.9		%	30.8		%
Operating expenses
General and administrative expenses	46,146			40,009			6,137		15%




Operating (loss) profit	(2,417)			3,547			(5,964)		(168)%

Other (expense) income
Interest expense	(16,481)			(8,963)			7,518		84%
Other, net	409			902			(493)		(55)%
Total other expense	(16,072)			(8,061)			8,011		99%
Loss before income taxes	(18,489)			(4,514)			13,975		310%
Income tax expense	(9,767)			(6,726)			3,041		45%
Net loss	$	(28,256)		$	(11,240)		$	17,016	151%

*Not meaningful

Revenue

Revenue increased by $379 during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The modest increase was primarily driven by $8,043 of incremental net revenue from our wholesale operations, in large part as a result of expansion across certain markets, particularly in New Jersey and Massachusetts. During the three months ended September 30, 2024, we sold approximately 48,000 pounds of wholesale product, on a gross basis, compared to 40,000 pounds during the three months ended September 30, 2023. Additionally, we recognized $8,708 of incremental revenue from acquisitions, which includes a benefit from store openings in 2024 and late 2023 associated with previously acquired licenses and a benefit from the commencement of non-medical sales in Ohio, as well as a contribution of $1,323 of incremental revenue from partner stores. These increases were partially offset by a decrease of $17,695 across our legacy locations, primarily in Illinois, New Jersey, and Massachusetts due to increased competition in those markets.

Cost of Goods Sold and Gross Profit

Cost of goods sold increased by $206 during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. Cost of goods sold represents direct and indirect expenses attributable to the production of wholesale products as well as direct expenses incurred in purchasing products from other wholesalers. Gross profit for the three months ended September 30, 2024 was $43,729, representing a gross margin of 30.9%, compared to gross profit of $43,556 and gross margin of 30.8% for the three months ended September 30, 2023. Gross margin for the current quarter was impacted by increased competition in certain markets, partially offset by improved utilization at our Massachusetts and New Jersey cultivation facilities and expansion of wholesale sales in those markets, as well as a benefit from the commencement of non-medical sales in Ohio. The current period also benefited from $1,189 of lower write-downs of certain inventory items that were largely driven by pricing pressure in the prior year.

General and Administrative Expenses

General and administrative expenses increased by $6,137, or 15%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase was primarily driven by:

•$4,546 of higher professional services fees, including expenses associated with our debt refinancing and other projects and strategic initiatives;

•a $2,083 reserve recognized on a long-term receivable;

•a $2,079 increase in compensation expense due to higher average senior leadership headcount associated with the expansion of operations and severance costs associated with strategic streamlining in certain departments;

•a $1,269 increase in depreciation and amortization expense due to $896 of incremental amortization of licenses from prior year acquisitions and $373 of incremental depreciation expense associated with a larger average balance of fixed assets in service; and

•$853 of higher marketing expenses.

These increases were partially offset by $3,493 of lower equity-based compensation expense driven by a reversal of expense associated with the forfeiture of certain awards during the current period as well as the absence of a $1,259 expense related to the write-off of certain previously capitalized construction projects recognized during the prior year period.

Interest Expense

Interest expense increased by $7,518, or 84%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily driven by a $5,475 net loss on extinguishment associated with the prepayment of $215,000 of principal previously outstanding under a credit facility and higher cash interest associated with new term notes (refer to “Liquidity and Capital Resources” for further information). These increases were partially offset by lower non-cash interest accretion due to a lower average balance outstanding under a financing agreement. During the three months ended September 30, 2024, the Company had a weighted-average outstanding debt balance of $325,477 with a weighted-average interest rate of 10.9%, excluding finance leases, compared to a weighted-average debt balance of $316,732 during the three months ended September 30, 2023 with a weighted-average interest rate of 9.6%.

Other, net

Other, net decreased by $493, or 55%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily driven by lower interest income due to the absence of a loan receivable in the current year period.

Income Tax Expense

The internal revenue service has taken the position that cannabis companies are subject to the limitations of Internal Revenue Code (“IRC”) Section 280E, under which such companies are only allowed to deduct expenses directly related to the sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E and those allowed for financial statement reporting purposes (“book-to-tax” differences). Cannabis companies operating in states that align their tax codes with IRC Section 280E are also unable to deduct ordinary and necessary business expenses for state tax purposes. Ordinary and necessary business expenses deemed non-deductible under IRC Section 280E are treated as permanent book-to-tax differences. Therefore, the effective tax rate on income realized by cannabis companies can be highly variable and may not necessarily correlate with pre-tax income or loss. As of September 30, 2024, the Company recorded an uncertain tax liability totaling $126,401 for uncertain tax positions related to the treatment of certain transactions and deductions under IRC Section 280E based on legal interpretations that challenge the Company’s tax liability under IRC Section 280E. The Company has been selected for examination of its amended tax returns filed with these unrecognized tax benefits but does not currently anticipate its unrecognized tax benefits to be resolved in the next twelve months and anticipates that the total amount of unrecognized tax benefits may change within the next twelve months for additional uncertain tax positions taken on a go-forward basis. If favorably resolved, the unrecognized tax benefits would decrease the Company’s effective tax rate.

The statutory federal tax rate was 21% during both periods. During the three months ended September 30, 2024 the Company had operations in seven U.S. geographic markets: Illinois, Maryland, Massachusetts, Michigan, New Jersey, Ohio, and Pennsylvania, which have state tax rates ranging from 6% to 11.5%. Certain states, including Illinois, Maryland, Michigan, and New Jersey, do not align with IRC Section 280E for state tax purposes and permit the deduction of ordinary and necessary business expenses from gross profit in the calculation of state taxable income. There have been no material changes to income tax matters in connection with the normal course of our operations during the current year.

Income tax expense was $9,767, or 22.3%, of gross profit, during the three months ended September 30, 2024, as compared to $6,726, or 15.4%, of gross profit, during the three months ended September 30, 2023. The effective tax rate on gross profit for the three months ended September 30, 2024 was impacted by higher penalties and interest due on tax payments and uncertain tax positions and the tax treatment of certain accounting reserves, partially offset by a benefit from an incremental impact attributable to the tax treatment of certain acquired intangible assets. Refer to Note 14, “Income Taxes,” in the Financial Statements for additional information regarding the Company’s income taxes.

RESULTS OF OPERATIONS

Nine Months Ended September 30, 2024 Compared with the Nine Months Ended September 30, 2023


	Nine Months Ended September 30,
($ in thousands)	2024			2023			Increase / (Decrease)
Revenue, net	$	425,593		$	378,432		$	47,161	12%
Cost of goods sold	(288,254)			(270,853)			17,401		6%
Gross profit	137,339			107,579			29,760		28%
Gross profit %	32.3		%	28.4		%
Operating expenses
General and administrative expenses	138,703			111,762			26,941		24%


Operating loss	(1,364)			(4,183)			(2,819)		(67)%

Other (expense) income
Interest expense	(33,554)			(28,419)			5,135		18%
Other, net	1,098			25,211			(24,113)		(96)%
Total other expense	(32,456)			(3,208)			29,248		912%
Loss before income taxes	(33,820)			(7,391)			26,429		358%
Income tax expense	(34,383)			(21,480)			12,903		60%
Net loss	$	(68,203)		$	(28,871)		$	39,332	136%

Revenue

Revenue increased by $47,161, or 12%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. Our revenue growth was primarily driven by $39,141 of incremental net revenue from our wholesale operations, in large part as a result of expansion across the markets in which we operate, particularly in New Jersey and Massachusetts. During the nine months ended September 30, 2024, we sold approximately 141,000 pounds of wholesale product, on a gross basis, compared to 101,000 pounds during the nine months ended September 30, 2023. Additionally, we recognized $39,194 of incremental revenue from acquisitions, including $17,590 from the Devi Maryland acquisition that occurred during the second quarter of 2023. This incremental increase was also driven by new store openings in 2024 and late 2023 associated with previously acquired licenses, including a benefit from the commencement of non-medical sales in Ohio, as well as a contribution of $1,435 of incremental revenue from partner stores. These increases were partially offset by a decrease of $32,609 across our legacy locations, primarily in Illinois and New Jersey due to increased competition in those markets.

Cost of Goods Sold and Gross Profit

Cost of goods sold increased by $17,401, or 6%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. Cost of goods sold represents direct and indirect expenses attributable to the production of wholesale products as well as direct expenses incurred in purchasing products from other wholesalers. Gross profit for the nine months ended September 30, 2024 was $137,339, representing a gross margin of 32.3%, compared to gross profit of $107,579 and gross margin of 28.4% for the nine months ended September 30, 2023. Gross margin for the current period benefited from improved utilization at our Massachusetts and New Jersey cultivation facilities and expansion of wholesale sales in those markets, as well as a benefit from the commencement of non-medical sales in Ohio, partially offset by increased competition in certain markets. The current period also benefited from $10,829 of lower write-downs of certain inventory items that were largely driven by pricing pressure in the prior year.

General and Administrative Expenses

General and administrative expenses increased by $26,941, or 24%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase was primarily related to:

•a $8,224 increase in total compensation expense due to higher average senior leadership headcount associated with the expansion of operations and severance costs associated with strategic streamlining in certain departments, which was partly offset by a reduction of equity-based compensation expense due to the forfeiture of certain awards in the current period;

•$6,173 of higher professional services fees, including expenses associated with our debt refinancing and other projects and strategic initiatives;

•a $5,447 increase in an estimated reserve related to certain amounts associated with a previous transaction (refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Legal Matters–MedMen NY Litigation” for additional information);

•a $4,131 increase in depreciation and amortization expense due to $2,551 of incremental amortization of licenses driven by prior year acquisitions and $1,580 of incremental depreciation expense due to a larger average balance of fixed assets in service;

•a $2,083 reserve and $984 discount recognized on a long-term receivable;

•a $1,723 increase in overhead expenses due to expansion of operations; and

•$728 of higher marketing expenses.

These increases were partially offset by the absence of a $1,804 estimated reserve for a note receivable and the absence of a $1,259 expense related to the write-off of certain previously capitalized construction projects that were recognized during the prior year period.

Interest Expense

Interest expense increased by $5,135, or 18%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily driven by a $5,475 net loss on extinguishment associated with the prepayment of $215,000 of principal previously outstanding under a credit facility and higher cash interest associated with new term notes (refer to “Liquidity and Capital Resources” for further information). These increases were partially offset by lower non-cash interest accretion due to a lower average balance outstanding under a financing agreement. During the nine months ended September 30, 2024, the Company had a weighted-average outstanding debt balance of $319,014 with a weighted-average interest rate of 10.9%, excluding finance leases, compared to a weighted-average debt balance of $328,327 during the nine months ended September 30, 2023 with a weighted-average interest rate of 9.8%.

Other, net

Other, net decreased by $24,113 during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily driven by the absence of a $22,794 employee retention tax credit claim (the “ERTC Claim”) recognized during the prior year period and lower interest income due to the absence of a loan receivable in the current year period.

Income Tax Expense

Income tax expense was $34,383, or 25.0%, of gross profit, during the nine months ended September 30, 2024, as compared to $21,480, or 20.0%, of gross profit, during the nine months ended September 30, 2023. The effective tax rate on gross profit for the nine months ended September 30, 2024 was impacted by higher penalties and interest due on tax payments and uncertain tax positions and the tax treatment of certain accounting reserves, which was partially offset by a benefit from an incremental impact attributable to the tax treatment of certain acquired intangible assets. Refer to Note 14, “Income Taxes,” in the Financial Statements for additional information regarding the Company’s income taxes.

NON-GAAP FINANCIAL MEASURES

We define “Adjusted Gross Profit” as gross profit excluding non-cash inventory costs, which include depreciation and amortization included in cost of goods sold, equity-based compensation included in cost of goods sold, start-up costs included in cost of goods sold, and other non-cash inventory adjustments. We define “Adjusted Gross Margin” as Adjusted Gross Profit as a percentage of net revenue. Our “Adjusted EBITDA” is a non-GAAP measure used by management that is not defined by U.S. GAAP and may not be comparable to similar measures presented by other companies. We define “Adjusted EBITDA Margin” as Adjusted EBITDA as a percentage of net revenue. Management calculates Adjusted EBITDA as the reported net income or loss, adjusted to exclude: income tax expense, other (income) expense, interest expense, depreciation and amortization, depreciation and amortization included in cost of goods sold, non-cash inventory adjustments, equity-based compensation, equity-based compensation included in cost of goods sold, start-up costs, start-up costs included in cost of goods sold, transaction-related and other non-recurring expenses, and gain or loss on sale of assets. Accordingly, management believes that Adjusted EBITDA provides meaningful and useful financial information, as this measure demonstrates the operating performance of the business. Non-GAAP financial measures may be considered in addition to the results prepared in accordance with U.S. GAAP, but they should not be considered a substitute for, or superior to, U.S. GAAP results.

The following table presents Adjusted Gross Profit for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30,						Nine Months Ended September 30,
($ in thousands)	2024			2023			2024			2023
Gross Profit	$	43,729		$	43,556		$	137,339		$	107,579
Depreciation and amortization included in cost of goods sold	7,864			7,435			22,631			22,265
Equity-based compensation included in cost of goods sold	230			2,476			6,777			4,457
Start-up costs included in cost of goods sold(1)	—			—			—			1,570
Non-cash inventory adjustments(2)	1,749			2,938			2,223			13,052
Adjusted Gross Profit	$	53,572		$	56,405		$	168,970		$	148,923
Adjusted Gross Margin	37.8		%	39.9		%	39.7		%	39.4		%

(1)Incremental expenses associated with the expansion of activities at our cultivation facilities that are not yet operating at scale, including excess overhead expenses resulting from delays in regulatory approvals at certain cultivation facilities.

(2)Consists of write-offs of expired products, obsolete packaging, and net realizable value adjustments related to certain inventory items.

The following table presents Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30,						Nine Months Ended September 30,
($ in thousands)	2024			2023			2024			2023
Net loss	$	(28,256)		$	(11,240)		$	(68,203)		$	(28,871)
Income tax expense	9,767			6,726			34,383			21,480
Other, net	(409)			(902)			(1,098)			(25,211)
Interest expense	16,481			8,963			33,554			28,419
Depreciation and amortization	16,628			14,930			48,689			44,192
Non-cash inventory adjustments(1)	1,749			2,938			2,223			13,052
Equity-based compensation	(129)			5,610			16,066			12,744
Start-up costs(2)	884			504			2,329			3,309
Transaction-related and other non-recurring expenses(3)	8,402			1,996			18,006			5,269
Gain on sale of assets	—			—			(11)			(226)

Adjusted EBITDA	$	25,117		$	29,525		$	85,938		$	74,157
Adjusted EBITDA Margin	17.7		%	20.9		%	20.2		%	19.6		%

(1)Consists of write-offs of expired products, obsolete packaging, and net realizable value adjustments related to certain inventory items.

(2)One-time costs associated with acquiring real estate, obtaining licenses and permits, and other costs incurred before commencement of operations at certain locations, as well as incremental expenses associated with the expansion of activities at our cultivation facilities that are not yet operating at scale, including excess overhead expenses resulting from delays in regulatory approvals at certain cultivation facilities. Also includes other one-time or non-recurring expenses, as applicable.

(3)Legal and professional fees associated with litigation matters, potential acquisitions, other regulatory matters, and other non-recurring expenses. The three and nine months ended September 30, 2024 each include a reserve of $2,083 associated with a noncurrent receivable and approximately $3,600 of expenses associated with our debt refinancing. The nine months ended September 30, 2024 includes: a reserve of $5,447 related to certain amounts associated with a previous transaction, $984 recognized as a discount on a noncurrent receivable, and a fair value adjustment related to an acquisition earn-out of $630. The three and nine months ended September 30, 2023 include a fair value adjustment related to an acquisition earn-out of $606 and $1,594, respectively, and the nine months ended September 30, 2023 includes a $1,804 reserve on a note receivable.

LIQUIDITY AND CAPITAL RESOURCES

We are an emerging growth company and our primary sources of liquidity are operating cash flows, borrowings through the issuance of debt, and funds raised through the issuance of equity securities. We are generating cash from sales and deploying our capital reserves to acquire and develop assets capable of producing additional revenue and earnings over both the immediate and long term. Capital reserves are being utilized for acquisitions in the medical and adult-use cannabis markets, for capital expenditures and improvements in existing facilities, product development and marketing, as well as customer, supplier, and investor and industry relations.

Financing History and Future Capital Requirements

Historically, we have used private financing as a source of liquidity for short-term working capital needs and general corporate purposes. In May 2021, we completed an initial public offering of shares of our Class A common stock through which we raised aggregate net proceeds of approximately $86,065, after deducting underwriting discounts and commissions and certain direct offering expenses paid by us, and in August 2021 we entered into a credit facility under which we initially borrowed a $210,000 term loan. During the second quarter of 2022, we borrowed an additional $65,000 of term loans from certain lenders under the expansion feature of the credit facility, as further described below. Additionally, during the second quarter of 2023, we raised an aggregate of $7,000 in gross proceeds through a non-brokered private placement offering of an aggregate of 9,859 shares of the Company’s Class A common stock to a single investor. Most recently, in July 2024 we issued term notes in aggregate principal of $235,000, which proceeds were used, together with cash on hand, to prepay a portion of our other term loans then-outstanding, as discussed further below.

Our future ability to fund operations, to make planned capital expenditures, to acquire other entities or investments, to make scheduled debt payments, and to repay or refinance indebtedness depends on our future operating performance, cash flows, and ability to obtain equity or debt financing, which are subject to prevailing economic conditions, as well as financial, business, and other factors, some of which are beyond our control.

As of September 30, 2024 and December 31, 2023, we had total current liabilities of $145,129 and $92,686, respectively, and total current assets of $213,578 and $228,860, respectively, which includes cash and cash equivalents of $65,279 and $72,508, respectively, to meet our current obligations. As of September 30, 2024, we had working capital of $68,449, compared to $136,174 as of December 31, 2023.

Approximately 90% of our cash and cash equivalents balance as of each of September 30, 2024 and December 31, 2023 is on deposit with banks, credit unions, or other financial institutions. We have not experienced any material impacts related to banking restrictions applicable to cannabis businesses. Our cash and cash equivalents balance is not restricted for use by VIEs.

As reflected in the Financial Statements, we had an accumulated deficit as of September 30, 2024 and December 31, 2023, as well as a net loss for the nine months ended September 30, 2024 and 2023, which are indicators that raise substantial doubt of our ability to continue as a going concern. Management believes that substantial doubt of our ability to continue as a going concern for at least one year from the issuance of our Financial Statements has been alleviated due to: (i) cash on hand and (ii) continued growth of sales from our consolidated operations. Management plans to continue to access capital markets for additional funding through debt and/or equity financings to supplement future cash needs, as may be required. However, management cannot provide any assurances that the Company will be successful in accomplishing its business plans. If we are unable to raise additional capital on favorable terms, if at all, whenever necessary, we may be forced to decelerate or curtail certain of our operations until such time as additional capital becomes available.

2024 Notes Offering

On July 16, 2024, the Company issued $235,000 in aggregate principal of senior secured notes due July 16, 2029 (the “2024 Term Notes”) through a private placement (the “2024 Notes Offering”) pursuant to an indenture agreement (the “July 2024 Loan Agreement”). The 2024 Term Notes were issued at 94.75% of face value and do not require scheduled principal amortization payments. The 2024 Term Notes bear interest at a rate of 12.75% per annum, payable semi-annually in arrears on January 15 and July 15 of each year until the maturity date, commencing on January 15, 2025, unless earlier prepaid in accordance with the terms of the July 2024 Loan Agreement. The total of the original issue discount and other capitalized direct financing fees was approximately $21,200 and will be amortized over the associated term using the straight-line method, which approximates the interest method. The Company utilized the proceeds from the 2024 Notes Offering, along with cash on hand, to prepay $215,000 of borrowings outstanding under the 2021 Credit Facility, as further described below. The 2024 Term Notes were funded by a combination of new and existing lenders. Borrowings from these existing lenders were accounted for as a modification of existing debt. The Company incurred approximately $3,600 of other expenses associated with this transaction that are included within “General and administrative expenses” on the unaudited Condensed Consolidated Statements of Operations in the Financial Statements for the three and nine months ended September 30, 2024.

Pursuant to the July 2024 Loan Agreement, the Company has agreed to comply with certain customary covenants, including, but not limited to, restrictions on the Company’s ability to: declare or pay dividends or make certain other payments; purchase, redeem, or otherwise purchase or retire for value any equity interests or any subordinated indebtedness or otherwise make any restricted investment or restricted payment; incur certain indebtedness; create certain liens; consolidate, amalgamate, merge, or transfer all or substantially all of the assets of the Company and certain restricted subsidiaries taken as a whole; enter into certain transactions with affiliates; and engage in certain types of businesses. Additionally, the July 2024 Loan Agreement provides for customary events of default which, if certain of them occur, would permit certain parties, including holders of not less than 25% in aggregate principal of the then-outstanding 2024 Term Notes to declare the principal of, and interest or premium, if any, and any other monetary obligations on, all the then-outstanding 2024 Term Notes to be due and payable immediately. The July 2024 Loan Agreement also requires the Company, on a consolidated basis, to maintain liquidity, consisting of cash and/or cash equivalents plus any future revolving credit availability, at all times in an aggregate amount of at least $20,000, with which the Company was in compliance as of September 30, 2024. The Company is required to comply with certain other financial covenants in contemplation of certain transactions or events, such as acquisitions and other financing activities, as defined within and provided for under the July 2024 Loan Agreement.

Refer to Note 11, “Debt,” in the Financial Statements for additional information regarding the Company’s debt transactions.

Credit Facility

In August 2021, we entered into a credit agreement with a group of lenders (the “2021 Credit Agreement”) that provided for an initial term loan of $210,000, which was borrowed in full. The 2021 Credit Agreement provided for an expansion feature that allowed us to request an increase in the term loan outstanding up to $275,000 if the existing lenders (or other lenders) agreed to provide such additional term loans. During the second quarter of 2022, we borrowed an additional $65,000 of incremental term loans through this expansion feature (the “2022 Loans” and, together with the initial term loan, the “2021 Credit Facility”) for total borrowings of $275,000. The 2021 Credit Facility matures on August 27, 2025 and does not require scheduled principal amortization payments. Borrowings under the 2021 Credit Facility bear interest at a rate of 9.5% per annum, payable quarterly. The proceeds from the initial term loan under the 2021 Credit Facility were used, in part, to prepay certain then-outstanding debt obligations and, together with the 2022 Loans, fund working capital and general corporate matters, including, but not limited to, growth investments, acquisitions, capital expenditures, and other strategic initiatives.

Mandatory prepayments are required following certain events, including the proceeds of indebtedness that is not permitted under the agreement, asset sales, and casualty events, subject to customary reinvestment rights. We may prepay the 2021 Credit Facility at any time, subject to a customary make-whole payment or prepayment penalty, as applicable. Once repaid, amounts borrowed under the 2021 Credit Facility may not be re-borrowed. We may request an extension of the maturity date for 364 days, which the lenders may grant at their discretion.

In June 2024, the 2021 Credit Agreement was amended to, among other things, permit the Company to issue new senior secured notes. In July 2024, the Company prepaid $215,000 of borrowings outstanding under the 2021 Credit Facility, primarily utilizing the proceeds from the issuance of the 2024 Term Notes, discussed above. The remaining $60,000 of borrowings outstanding under the 2021 Credit Facility will remain outstanding based on the original terms of the 2021 Credit Agreement. The Company recognized, as a component of interest expense, a loss on extinguishment of $5,475, which includes $3,527 of prepayment fees and the write-off of $1,948 of unamortized deferred financing costs that were attributable to those lenders who did not provide funding under the new notes. A total of $1,579 of prepayment fees and $1,428 of previously unamortized deferred financing costs that were associated with existing lenders who participated in the new notes will remain capitalized and will be deferred over the term of the new notes in accordance with modification treatment. The total prepayment fee is included within “Debt issuance costs” on the unaudited Condensed Consolidated Statement of Cash Flows in the Financial Statements for the nine months ended September 30, 2024. A total of $943 of unamortized deferred financing costs were associated with the portion of the 2021 Credit Facility that was not prepaid and will be amortized through the remaining term of those loans.

We are required to comply with two financial covenants under the 2021 Credit Agreement. Liquidity (defined as unrestricted cash and cash equivalents pledged under the 2021 Credit Facility plus any future revolving credit availability) may not be below $20,000 as of the last day of any fiscal quarter, and we may not permit the ratio of Consolidated EBITDA (as defined in the 2021 Credit Agreement) to consolidated cash interest expense for any period of four consecutive fiscal quarters to be less than 2.50:1.00. The Company has a customary equity cure right for each of these financial covenants. The Company was in compliance with these covenants as of September 30, 2024. Refer to Note 11, “Debt,” in the Financial Statements for additional information regarding the Company’s debt transactions.

Financing Agreement

In December 2022, we received $19,364 pursuant to a financing agreement with a third-party lender (the “Financing Agreement”). The Company assigned to the lender its interests in the ERTC Claim that it submitted in November 2022 totaling approximately $22,794. If the Company does not receive the ERTC Claim, in whole or in part, the Company is required to repay the related portion of the funds received plus interest of 10% accrued from the date of the Financing Agreement through the repayment date. The Financing Agreement does not have a stated maturity date and the discount is being accreted to interest expense over an expected term. The Company’s obligations under the Financing Agreement will be satisfied upon receipt of the ERTC Claim, in full, or other full repayment. The total claim amount of $22,794 was recognized as a component of “Other, net” on the unaudited Condensed Consolidated Statements of Operations in the Financial Statements during the nine months ended September 30, 2023. A total of $1,964 of the ERTC Claim remains outstanding as of September 30, 2024 and December 31, 2023, which receivable is included in “Other current assets” on the unaudited Condensed Consolidated Balance Sheets in the Financial Statements, and the balance outstanding under the Financing Agreement is included in “Current portion of debt, net.” Refer to Note 11, “Debt,” in the Financial Statements for additional information.

Cash Flows


	Nine Months Ended September 30,
(in thousands)	2024		2023
Net cash provided by operating activities	$	38,126	$	58,666
Net cash used in investing activities	(30,004)		(51,736)
Net cash used in financing activities	(15,351)		(17,155)

Operating Activities

Net cash provided by operating activities decreased by $20,540 during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily driven by an impact from the timing of payments to suppliers and vendors and other working capital payments, including the payment of approximately $2,800 of expenses associated with our debt refinancing that are not capitalizable and $2,458 of fair value accretion associated with the payment of contingent consideration related to a prior acquisition. The nine months ended September 30, 2024 includes income tax refunds totaling approximately $17,800. Comparatively, the nine months ended September 30, 2023 includes the recognition of the $22,794 ERTC Claim, of which $20,830 was received during that period.

Investing Activities

Net cash used in investing activities decreased by $21,732 during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to lower payments associated with acquisitions and lower net investments in notes receivable, partially offset by the absence of proceeds from the sale of assets and higher capital expenditures.

Financing Activities

Net cash used in financing activities decreased by $1,804 during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The current period reflects the utilization of proceeds from the issuance of the 2024 Term Notes to partially prepay amounts outstanding under the 2021 Credit Facility and related financing costs. Additionally, the current period was impacted by the payment of contingent consideration associated with a prior acquisition and higher cash remittances of taxes withheld under equity-based compensation plans, as well as the absence of proceeds received from the issuance of common stock in the prior year period.

Contractual Obligations and Other Commitments and Contingencies

Material contractual obligations arising in the normal course of business primarily consist of long-term fixed rate debt and related interest payments, leases, finance arrangements, and amounts due for acquisitions. We believe that cash flows from operations will be sufficient to satisfy our capital expenditures, debt services, working capital needs, and other contractual obligations for the next twelve months.

The following table summarizes the Company’s material future contractual obligations as of September 30, 2024:


(in thousands)	Commitments Due by Period
Contractual Obligations	Total		Remainder of 2024		2025 - 2026		2027 - 2028		Thereafter
Term notes(1)	$	295,000	$	—	$	60,000	$	—	$	235,000
Fixed interest related to term notes(2)	155,066		1,437		63,576		60,008		30,045
Sellers’ notes(3)	12,310		1,250		11,060		—		—
Finance arrangements(4)	17,900		623		5,124		5,431		6,722
Operating leases(5)	676,831		10,586		86,852		90,726		488,667


Finance leases(5)	1,541		173		1,265		103		—


Total	$	1,158,648	$	14,069	$	227,877	$	156,268	$	760,434

(1)Principal payments due under our term notes payable. Refer to Note 11, “Debt,” in the Financial Statements for additional information.

(2)Represents fixed interest rate payments on borrowings under our term notes payable based on the principal outstanding as of September 30, 2024. Interest payments could fluctuate based on prepayments or additional amounts borrowed.

(3)Consists of amounts owed for acquisitions or other purchases. Certain cash payments include an interest accretion component, and the timing of certain payments may vary based on regulatory approval. Refer to Note 11, “Debt,” in the Financial Statements for additional information.

(4)Reflects our contractual obligations to make future payments under non-cancelable operating leases that did not meet the criteria to qualify for sale leaseback treatment. Refer to Note 10, “Leases,” in the Financial Statements for additional information.

(5)Reflects our contractual obligations to make future payments under non-cancelable leases. Refer to Note 10, “Leases,” in the Financial Statements for additional information.

The table above excludes up to a total of $10,000 that we expect to fund under a research collaboration agreement associated with a prior acquisition. This funding will be based on a percentage of annual revenue through April 2031, unless satisfied earlier, and no related funding has occurred to date.

As of the date of this filing, we do not have any off-balance sheet arrangements, as defined by applicable regulations of the SEC, that have, or are reasonably likely to have, a material current or future effect on the results of our operations or financial condition, including, and without limitation, such considerations as liquidity and capital resources.

Capital Expenditures

We anticipate capital expenditures, net of tenant improvement allowances, of approximately $10,000 to $15,000 during the remainder of 2024 related to certain expansion projects across our retail operations and at our cultivation facilities, in addition to other enhancements and general maintenance activities across our portfolio. Changes to this estimate could result from the timing of various project start dates, which are subject to local and regulatory approvals, as well as capital allocation considerations. Spending at our cultivation and processing facilities includes: construction; purchase of capital equipment such as extraction equipment, heating, ventilation, and air conditioning equipment, and other manufacturing equipment; general maintenance; and information technology capital expenditures. Dispensary-related capital expenditures includes construction costs for the initial build-out of each location, general maintenance costs, and upgrades to existing locations. Management expects to fund capital expenditures primarily by utilizing cash flows from operations.

As of September 30, 2024, our construction in progress (“CIP”) balance was $3,329 and relates to capital spending on projects that were not yet complete. This balance includes amounts related to certain expansion projects at our Massachusetts, Illinois, and New Jersey cultivation facilities and other projects across our dispensaries and cultivation facilities.

Other Matters

Equity Incentive Plans

The Company’s current stock incentive plan, as amended, (the “Amended 2021 Plan”), authorizes the issuance of options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), and other stock-based awards (collectively the “2021 Plan Awards”). The Amended 2021 Plan provides for a maximum number of shares of Class A common stock available for issuance to not exceed 10% of the total number of issued and outstanding shares of Class A common stock, on a non-diluted basis, as constituted on the grant date of a plan award. As of September 30, 2024, there were 10,729 shares of Class A common stock available for grant for future awards under the Amended 2021 Plan.

During the nine months ended September 30, 2024, the Company granted a total of 12,110 RSUs under the Amended 2021 Plan and a total of 7,359 granted are unvested as of September 30, 2024. Total unrecognized compensation cost related to the RSUs was $8,154 as of September 30, 2024, which is expected to be recognized over a weighted-average remaining period of 2.8 years.

As of September 30, 2024, a total of 3,346 stock option awards are outstanding under the Amended 2021 Plan, of which 2,212 are exercisable. No options were granted during the nine months ended September 30, 2024 and a total of 206 were exercised. As of September 30, 2024, the outstanding options have a remaining weighted-average contractual life of 3.2 years and total unrecognized compensation cost related to unvested options was $742, which is expected to be recognized over a weighted-average remaining period of 2.0 years.

During the three months ended September 30, 2024 the Company recognized a net benefit of $359 from the forfeiture of certain unvested awards within “General and administrative expenses” on the unaudited Condensed Consolidated Statements of Operations in the Financial Statements and recognized $230 of expense within “Cost of goods sold.” During the nine months ended September 30, 2024, the Company recognized $9,289 of expense within “General and administrative expenses” and $6,777 within “Cost of goods sold.” During the three and nine months ended September 30, 2023, the Company recognized $3,134 and $8,287, respectively, of expense within “General and administrative expenses” and recognized $2,476 and $4,457, respectively, within “Cost of goods sold.”

In July 2021, the Company adopted an employee stock purchase plan (the “2021 ESPP”), pursuant to which 4,000 shares of Class A common stock are reserved for issuance thereunder, subject to certain adjustments and other terms. As of September 30, 2024, no shares have been issued under the 2021 ESPP.

Refer to Note 13, “Equity-Based Compensation Expense,” in the Financial Statements for additional information regarding the Company’s equity awards and equity-based compensation expense.

Lease-Related Transactions

Refer to Note 10, “Leases,” in the Financial Statements for information regarding the Company’s leases and lease-related transactions.

Loan Receivable

In June 2023, the Company purchased, at par, $12,027 of the principal of a loan (the “Maryland Loan Receivable”), outstanding pursuant to a loan agreement with a cannabis license holder in Maryland (the “Maryland Loan Agreement”), plus the associated interest receivable. The Maryland Loan Agreement had an original maturity date of August 1, 2026, required monthly repayments equal to 10.0% of the outstanding balance (including paid-in-kind interest), and could be prepaid subject to a customary make-whole payment or prepayment penalty, as applicable. Mandatory prepayments were required from the proceeds of certain events. The Maryland Loan Agreement provided for a base interest rate of 12.0% plus LIBOR (LIBOR floor of 1.0%) and a paid-in-kind interest rate of 4.5%. Following the replacement of LIBOR, effective July 1, 2023, the LIBOR component of the interest rate transitioned to the secured overnight financing rate (“SOFR”) plus an alternative reference rate committee (“ARRC”) standard adjustment.

The Company recorded the Maryland Loan Receivable at an amortized cost basis of $12,622. A total of $595 of transaction-related expenses were capitalized as part of the amortized cost basis and were being amortized to interest income over the term. The Company identified certain events of default and covenant violations, including non-payment, and provided an acceleration notice during the second quarter of 2023 that declared all amounts due and payable. As such, during the year ended December 31, 2023 the Company established a reserve of $1,804 for potential collectability.

In March 2024, the borrower refinanced the borrowings underlying the Maryland Loan Agreement with a third-party lender (the “Maryland Refinancing”). In conjunction with the Maryland Refinancing, the borrower’s obligations to the Company under the Maryland Loan Agreement were settled. As part of this settlement, the Company received a cash payment of $8,100. Additionally, the parties entered into a supply agreement that provides for the Company to receive $6,000 of inventory products from the borrower, based on market prices, over the course of three years, with a maximum of $500 per quarter. The Company recorded this receivable net of an initial discount of $984 that is included within “General and administrative expenses” on the unaudited Condensed Consolidated Statements of Operations in the Financial Statements for the nine months ended September 30, 2024 and within “Other” on the unaudited Condensed Consolidated Statements of Cash Flows. This discount was calculated utilizing the Company’s estimated incremental borrowing rate as of the agreement date and will be accreted to interest income over the agreement term. The total settlement value, excluding the discount, approximated the obligations outstanding under the Maryland Loan Receivable, including $2,859 of past due interest that was outstanding as of December 31, 2023 and was included within “Other current assets” on the unaudited Condensed Consolidated Balance Sheet as of that date.

A total of $500 of inventory was supplied under this agreement during the nine months ended September 30, 2024. During the three months ended September 30, 2024, the Company established a reserve of $2,083 on the remaining receivable due to collection risk. This reserve was recognized within “General and administrative expenses” on the unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and within “Other” on the unaudited Condensed Consolidated Statements of Cash Flows. As of September 30, 2024, $1,000 of the remaining receivable is included within “Other current assets” and $1,543 is included within “Other noncurrent assets” on the unaudited Condensed Consolidated Balance Sheet, which balances are net of $1,000 and $1,083, respectively, associated with this reserve.

Refer to Note 6, “Notes Receivable,” in the Financial Statements for additional information regarding the Maryland Loan Receivable and the Company’s other notes receivable.

Legal Matters

MedMen NY Litigation

On February 25, 2021, the Company entered into a definitive investment agreement (the “Investment Agreement”) with subsidiaries of MedMen Enterprises Inc. (“MedMen”), under which we would have, subject to regulatory approval, completed an investment (the “Investment”) of approximately $73,000 in MedMen NY, Inc. (“MMNY”), a licensed medical cannabis operator in the state of New York. Following the completion of the transactions contemplated by the Investment Agreement, we were expected to hold all the outstanding equity of MMNY. Specifically, the Investment Agreement provided that at closing, the Company was going to pay to MedMen’s senior lenders $35,000, less certain transaction costs and a prepaid deposit of $4,000, and AWH New York, LLC was going to issue a senior secured promissory note in favor of MMNY’s senior secured lender in the principal amount of $28,000, guaranteed by AWH, which cash investment and note would be used to reduce the amounts owed to MMNY’s senior secured lender. Following its investment, AWH would hold a controlling interest in MMNY equal to approximately 86.7% of the equity in MMNY, and be provided with an option to acquire MedMen’s remaining interest in MMNY in the future for a nominal additional payment, which option the Company intended to exercise. The Investment Agreement also required AWH to make an additional investment of $10,000 in MMNY, which investment would also be used to repay MMNY’s senior secured lender, if adult-use cannabis sales commenced in MMNY’s dispensaries.

time for MedMen to oppose the Company’s motion to dismiss until May 5, 2022. In addition, the parties agreed to stay all discovery, including both party and non-party discovery. On May 5, 2022, the parties filed another stipulation order with the Court adjourning until further notice from the Court MedMen’s time to oppose the Company’s motion to dismiss MedMen’s amended counterclaims. The parties again stipulated that all discovery remains stayed pending further order from the Court.

On February 2, 2024, the Court issued a Decision and Order denying MedMen’s motion for leave to file its third amended counterclaims.

On April 26, 2024, MedMen announced that it made an assignment into bankruptcy pursuant to Canada’s Bankruptcy and Insolvency Act on April 24, 2024 and B. Riley Farber Inc. was appointed as its bankruptcy trustee. In addition, MedMen announced that MedMen’s wholly owned subsidiary, MM CAN USA, Inc., a California corporation, was placed into receivership in the Los Angeles Superior Court, Santa Monica Division on April 23, 2024 to effectuate an orderly dissolution and liquidation of its California-based assets. MedMen further announced that it intends to initiate additional receivership proceedings in those U.S. states where MM CAN USA, Inc. controls or owns assets, through which the operations and assets of MedMen’s subsidiaries will be dissolved or liquidated pursuant to applicable laws in the United States. On May 21, 2024, the Los Angeles Superior Court issued an order confirming the appointment a receiver for MM CAN USA, Inc. The receiver has submitted monthly reports to the Los Angeles Superior Court estimating that the liabilities of MedMen’s subsidiaries likely significantly exceed the estimated liquidated value of MedMen's subsidiaries and their respective assets, and such reports indicate that efforts to dissolve, liquidate, or abandon such assets are ongoing.

During the year ended December 31, 2022, following the Company’s decision to no longer consummate the contemplated transactions, the Company established an estimated reserve of $3,700 related to the amounts that it has been actively pursuing collecting. The estimated reserve as of December 31, 2023 is included within “Other current assets” on the unaudited Condensed Consolidated Balance Sheet in the Financial Statements. During the nine months ended September 30, 2024, the Company increased the estimated reserve by $5,447, which is included within “General and administrative expenses” on the unaudited Condensed Consolidated Statements of Operations and within “Other” on the unaudited Condensed Consolidated Statements of Cash Flows. The total reserve as of September 30, 2024 is reflective of all outstanding balances and of which $2,422 is included within “Notes receivable” on the unaudited Condensed Consolidated Balance Sheet, $6,695 is included within “Other current assets,” and the remainder is included within “Other noncurrent assets.”

Other Matter

In April 2021, the Company, through a subsidiary, entered into a settlement agreement with TVP, LLC, TVP Grand Rapids, LLC and, TVP Alma, LLC (collectively, the “TVP Parties”) regarding a dispute related to a purchase agreement for the Company’s potential acquisition of certain real estate properties in Michigan. As part of that settlement, the Company issued historical equity units to the TVP Parties to be held in the name of an escrow agent (the “Escrow Units”). The Escrow Units were fully issued and outstanding as of the settlement date and were to remain in the escrow account until such time as the TVP Parties exercised an option to hold the Escrow Units directly (the “Put Option”), which could be exercised for three years. In February 2024, the TVP Parties notified the Company that they were exercising the Put Option and the transfer was completed in May 2024, at which time the Escrow Units were released to the TVP Parties and the TVP Parties transferred to the Company the equity interests of the entities that hold three real estate properties. The underlying properties were determined to have a total fair value of $5,400 as of the settlement date, which was included within “Other noncurrent assets” on the unaudited Condensed Consolidated Balance Sheet in the Financial Statements as of December 31, 2023 and was reclassified to “Property and equipment, net” as of the transfer date. Prior to the completion of the transfer, the Company operated dispensaries at these locations pursuant to lease agreements, which operations will continue at the now-owned properties.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our accompanying Financial Statements are prepared in accordance with U.S. GAAP, which requires us to make certain estimates in the application of our accounting policies based on the best assumptions, judgments, and opinions of our management. The Company’s significant accounting policies are described in Note 2, “Basis of Presentation and Significant Accounting Policies,” in the Financial Statements. For a description of our critical accounting policies, see Item 7., “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report. There have been no significant changes to our critical accounting policies and estimates, except as disclosed in Note 2, “Basis of Presentation and Significant Accounting Policies,” in the Financial Statements.

Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements

For information about recently issued accounting standards that have not yet been adopted, see Note 2, “Basis of Presentation and Significant Accounting Policies,” to the Financial Statements.

The Company is an emerging growth company under federal securities laws and as such we are able to elect to follow scaled disclosure requirements for this filing, including an extended transition period for complying with new or revised accounting standards applicable to public companies.

REGULATORY ENVIRONMENT: ISSUERS WITH UNITED STATES CANNABIS-RELATED ASSETS

In accordance with the Canadian Securities Administration Staff Notice 51-352, information regarding the current federal and state-level United States regulatory regimes in those jurisdictions where we are currently directly and indirectly involved in the cannabis industry, through our subsidiaries and investments, is incorporated by reference from subsections “Overview of Government Regulation,” “Compliance with Applicable State Laws in the United States,” and “State Regulation of Cannabis,” under Item 1., “Business,” of the Company’s Annual Report, as filed with the SEC and with the relevant Canadian securities regulatory authorities under its profile on SEDAR+.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are exposed in varying degrees to various market risks, including changes in interest rates, prices of raw materials, and other financial instrument related risks. There have been no material changes in our market risks from those disclosed in Item 7A., “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the year ended December 31, 2023.

Liquidity Risk

Liquidity risk is the risk that we will not be able to meet our financial obligations associated with financial liabilities. We manage liquidity risk through the effective management of our capital structure. Our approach to managing liquidity is to ensure that we will have sufficient liquidity at all times to settle obligations and liabilities when due.

As reflected in the Financial Statements, the Company had an accumulated deficit as of September 30, 2024 and December 31, 2023, as well as a net loss for the nine months ended September 30, 2024 and 2023, which are indicators that raise substantial doubt of our ability to continue as a going concern. Management believes that substantial doubt of our ability to continue as a going concern for at least one year from the issuance of our Financial Statements has been alleviated due to: (i) cash on hand and (ii) continued growth of sales from our consolidated operations. Management plans to continue to access capital markets for additional funding through debt and/or equity financings to supplement future cash needs, as may be required. However, management cannot provide any assurances that we will be successful in accomplishing our business plans. If we are unable to raise additional capital on favorable terms, if at all, whenever necessary, we may be forced to decelerate or curtail certain of our operations until such time as additional capital becomes available.

ITEM 4. CONTROLS AND PROCEDURES.

a.Disclosure Controls and Procedures.

As of the end of the period covered by this report, our Principal Executive Officer and Principal Financial Officer evaluated our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and (2) accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure.

b.Changes in Internal Control Over Financial Reporting.

There have been no changes in our internal control over financial reporting identified in connection with the evaluation described above that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

A discussion of our litigation matters occurring in the period covered by this report is found in Note 15, “Commitments and Contingencies,” to the Financial Statements in this Form 10-Q.

ITEM 1A. RISK FACTORS.

Other than as set forth below, as of the date of this filing, there have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, in response to Item 1A., “Risk Factors,” of Part I of the Annual Report.

We face risks related to U.S. tax provisions related to controlled substances.

Limits on U.S. deductibility of certain expenses may have a material adverse effect on our financial condition, results of operations and cash flows. Section 280E (“Section 280E”) of the Internal Revenue Code of 1986, as amended, prohibits businesses from deducting certain expenses associated with the trafficking of controlled substances (within the meaning of Schedule I and II of the Controlled Substances Act (21 U.S.C. § 811) (the “CSA”)). The Internal Revenue Service (“IRS”) has applied Section 280E broadly in tax audits against various cannabis businesses in the U.S. that are permitted under applicable state laws, seeking substantial sums in tax liabilities, interest, and penalties resulting from the underpayment of taxes due to the lack of deductibility of otherwise ordinary business expenses the deduction of which is prohibited by Section 280E. Although the IRS issued a clarification allowing the deduction of certain expenses that can be categorized as cost of goods sold, the scope of such items is interpreted very narrowly, and the bulk of operating costs and general administrative costs are not permitted to be deducted. While there are currently several pending cases before various administrative and federal courts challenging these restrictions, there is no guarantee that these courts will issue an interpretation of Section 280E that is favorable to cannabis businesses.

The Company has filed amended tax returns with the IRS on behalf of itself and its subsidiaries claiming refunds of tax for 2020 and 2021 and a refund and/or reduction of tax for 2022 which had been incurred as a result of the application of Section 280E based on a legal interpretation that Section 280E does not apply to solely intrastate cannabis-related business activities. The Company intends to continue to take this position for the 2023 filing year. There is no guarantee that the IRS will not challenge our refund request and prevail in such challenge.

If our tax filing positions were to be challenged by federal, state and local or foreign tax jurisdictions, we may not be wholly successful in defending our tax filing positions. We record reserves for unrecognized tax benefits based on our assessment of the probability of successfully sustaining tax filing positions. We, therefore, analyze and consider the appropriateness of recording reserves for unrecognized tax benefits each quarter. Management exercises significant judgment when assessing the probability of successfully sustaining tax filing positions, and in determining whether a contingent tax liability should be recorded and, if so, estimating the amount. If our tax filing positions are successfully challenged, payments could be required that are in excess of reserved amounts or we may be required to reduce the carrying amount of our net deferred tax asset, either of which result could be significant to our financial condition or results of operations.

On May 21, 2024, the United States Department of Justice published a notice of proposed rulemaking with the Federal Register to initiate a formal rulemaking process to consider rescheduling cannabis under the CSA. In June 2024, the IRS issued a press release stating that, until a final rule is published, cannabis remains a Schedule I controlled substance and is subject to the limitations of Section 280E. In this press release, the IRS also announced that taxpayers seeking a refund of taxes paid related to Section 280E by filing amended returns are not entitled to a refund or payment and that it is taking steps to address these claims. From time to time, the Company receives notices from various local, state, and federal tax agencies in the normal course of business. The Company is currently engaged with certain state and federal departments of revenue in respect to certain of the Company’s income tax returns that have been selected for examination.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

There have been no sales of unregistered securities during the quarter ended September 30, 2024, and from the period from October 1, 2024 to the filing date of this report, which have not been previously disclosed in a prior Quarterly Report on Form 10-Q or Current Report on Form 8-K.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

Securities Trading Plans of Directors and Executive Officers

During the three months ended September 30, 2024, none of our executive officers or directors adopted or terminated any contract, instruction, or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K.

Other Information

On November 7, 2024, the board of directors (the “Board”) of the Company, upon recommendation of the compensation and corporate governance committee of the Board, approved the acceleration of all of the unvested and outstanding equity held by Roman Nemchenko, Chief Financial Officer of the Company, as of August 26, 2024, granted pursuant to the Company’s stock incentive plan.

ITEM 6. EXHIBITS.

(a) EXHIBIT INDEX

Incorporated by Reference

Exhibit No.

Exhibit Description

Form

File No.

Exhibit

Filing Date

3.1

Certificate of Incorporation

S-1

333-254800

3.4

April 23, 2021

3.2

Bylaws

S-1

333-254800

3.5

April 23, 2021

4.1

Specimen Stock Certificate evidencing the shares of common stock

S-1

333-254800

4.1

April 15, 2021

4.2

Form of Registration Rights Agreement

S-1

333-254800

4.2

April 23, 2021

4.3

Form of Warrant Agreement between Ascend Wellness Holdings, Inc. and each of the several lenders, dated June 30, 2022

10-Q

333-254800

4.5

August 15, 2022

4.4

Indenture dated July 16, 2024 by and between Ascend Wellness Holdings, Inc. and Odyssey Trust Company

8-K

333-254800

4.1

July 22, 2024

4.5#

Guaranty dated July 16, 2024 by and between Chicago Alternative Health Center, LLC, HealthCentral, LLC, MOCA LLC, Revolution Cannabis-Barry, LLC, The Homecoming Group, LLC, Ascend Maryland, LLC, Ascend Mass, LLC, MassGrow, LLC, FPAW Michigan LLC, Ascend New Jersey, LLC, BCCO, LLC, Ohio Cannabis Clinic LLC, and Story of PA CR, LLC (collectively, the “Guarantors”)

8-K

333-254800

4.2

July 22, 2024

4.6#

Pledge and Security Agreement dated July 16, 2024 by and between Ascend Wellness Holdings, Inc., and Revolution Cannabis-Barry, LLC, Chicago Alternative Health Center, LLC, MOCA LLC, Healthcentral, LLC, The Homecoming Group, LLC, Ascend Mass, LLC, Massgrow, LLC, FPAW Michigan, LLC, BCCO, LLC, Ohio Cannabis Clinic LLC, Ascend New Jersey, LLC, Story Of PA CR, LLC, Ascend Maryland, LLC, Ascend Mass, Inc., Ascend Illinois Holdings, LLC, Ascend Illinois, LLC, Massgrow, Inc., AWH Pennsylvania, LLC, FPAW Michigan 2, Inc., as the initial grantors (collectively, the “Initial Grantors”), and Odyssey Trust Company

8-K

333-254800

4.3

July 22, 2024

10.1*†#

Employment Agreement between Ascend Wellness Holdings, Inc. and Samuel Brill , dated as of Au gust 26, 2024

10.2*†#

Employment Agreement between Ascend Wellness Holdings, Inc. and Francis Perullo, dated as of August 26, 2024

10.3*†#

Employment Agreement between Ascend Wellness Holdings, Inc. and Roman Nemchenko, dated as of August 26, 2024

31.1*

Certification of Periodic Report by Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002

31.2*

Certification of Periodic Report by Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002

32‡

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH*

Inline XBRL Taxonomy Extension Schema Document

101.CAL*

Inline XBRL Taxonomy Calculation Linkbase Document

101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*

Inline XBRL Taxonomy Label Linkbase Document

101.PRE*

Inline XBRL Presentation Linkbase Document

104*

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

† Indicates management contract or compensatory plan, contract, or arrangement.

‡ Document has been furnished, is not deemed filed and is not to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, irrespective of any general incorporation language contained in any such filing.

# Certain schedules and exhibits have been omitted in compliance with Regulation S-K Item 601(a)(5) or certain personal information has been redacted from this exhibit pursuant to Item 601(a)(6) of Regulation S-K. The Company agrees to furnish a copy of any omitted schedule or exhibit to the SEC upon its request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


						Ascend Wellness Holdings, Inc.

November 12, 2024						/s/ Samuel Brill
						Samuel Brill Chief Executive Officer (Principal Executive Officer)


November 12, 2024						/s/ Roman Nemchenko
						Roman Nemchenko Chief Financial Officer (Principal Financial Officer)

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) dated as of August 26, 2024 (the “Effective Date”) is made and entered into by and between Ascend Wellness Holdings, Inc., a Delaware corporation with a principal place of business at 44 Whippany Road, Suite 101, Morristown, NJ 07960 (the “Company”), and Samuel Brill, an individual whose principal business address is in care of the Company at 44 Whippany Road, Suite 101, Morristown, NJ 07960 (the “Executive”).

RECITALS

WHEREAS, the parties desire to memorialize the terms of the Executive’s employment as Chief Executive Officer, on the terms and conditions hereinafter set forth.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, terms, provisions, and conditions set forth in this Agreement, the parties hereby agree:

1.Employment. Subject to the terms and conditions set forth in this Agreement, the Company hereby offers, and the Executive hereby accepts, employment as Chief Executive Officer of the Company, commencing August 26, 2024 (the “Commencement Date”).

2.Term, Then At Will. The Executive’s initial term of employment under this Agreement (the “Initial Term”) will commence on the date hereof and continue for a period of eighteen (18) months thereafter, unless earlier terminated as provided herein. Upon expiration of the Initial Term, the employment term shall automatically continue on an at will basis (such continuation period referred to as the “At Will Period”). During the At Will Period, the Executive shall be an employee at will and nothing in this Agreement is intended to change that status in any way. As a result, during the At Will Period, the Executive and/or the Company can terminate the employment relationship at any time. The parties agree, however, that if the Company terminates the employment relationship without Cause or the employee resigns for Good Reason (as each term is defined herein), during either the Initial Term or during the At Will Period, then the Executive shall be eligible to receive the Severance Benefits as defined in Section 5.

3.Capacity and Performance.

a.During the Initial Term and At Will Period hereof, the Executive shall serve the Company as Chief Executive Officer, reporting directly to the Executive Chair and/or Chairman of the Board of Directors of the Company (the “Board”).

b.During the Initial Term and At Will Period hereof, the Executive shall be employed by the Company on a full-time and diligent basis and shall perform such duties and responsibilities on behalf of the Company as are customarily performed by a Chief Executive Officer of a company of comparable size and as may be reasonably designated from time to time by the Board.

c.At or as soon as reasonably practicable after the Commencement Date, the Company will appoint the Executive to the Board. For so long as the Executive is employed as the Company’s Chief Executive Officer, the Company will nominate the Executive for re-election to the Board.

d.During the Initial Term and At Will Period hereof, the Executive shall not, directly or indirectly, render any material services of a business, commercial or professional nature to any person or entity other than the Company (or any affiliate thereof), whether for compensation or otherwise, without the prior written consent of the Board, which shall not be unreasonably withheld. For the avoidance of doubt, notwithstanding the foregoing, the Executive may (i) engage in the activities set forth on Exhibit A hereto and (ii) engage in educational, charitable and civic activities so long as such activities (A) do not, individually or in the aggregate, interfere with the performance of the Executive’s duties under this Agreement and (B) are not contrary

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to the interests of the Company or any of its affiliates or competitive with the Company or any of its affiliates. Executive may engage in personal investments without disclosure to or written approval from the Board provided Executive is not required or expected to serve as a board member, advisor or consultant in connection with such personal investment, Executive shall, at any time, own beneficially less than 5% of the outstanding securities of any issuer in such personal investment, and such personal investment shall not otherwise interfere with Executive’s performance of his duties hereunder.

4.Compensation and Benefits. As compensation for all services performed by the Executive under this Agreement and during the Initial Term and At Will Period hereof and subject to performance of the Executive’s duties and obligations to the Company pursuant to this Agreement:

a.Base Salary. The Company shall pay the Executive a base salary at the rate of $550,000 per annum (the “Base Salary”). The Executive’s base salary shall be payable in accordance with the payroll practices of the Company for its executives and subject to increase from time to time by the Board, in its sole discretion. The base salary set forth in this Section 4(a), as from time to time increased, is hereafter referred to as the “Base Salary.”

b.Annual Incentive Plan. For each complete fiscal year, the Executive shall be eligible to earn an annual performance-based bonus (the “Annual Bonus”). The Executive’s annual target bonus opportunity for each such fiscal year shall be based on the achievement of financial, operational, and strategic/individual objectives established by the Board, in its sole discretion. The terms of the Annual Bonus, including Executive’s financial, operational, and strategic/individual objectives, are subject to approval by the Board and/or its designees, and may be modified from time to time. All payouts are based on achieving such financial, operational, and strategic/individual objectives, are discretionary, and if such threshold performance objectives are not achieved for any fiscal year, then the Executive shall not receive an Annual Bonus for such fiscal year. For the 2024 fiscal year, if earned and subject to approval by the Board, Executive shall only be eligible for a prorated portion of any Annual Bonus earned (calculated as the Annual Bonus that would have been paid for a full fiscal year, multiplied by a fraction, the numerator of which is equal to the number of days the Executive worked for the Company in such fiscal year, and the denominator of which is equal to the total number of days in such fiscal year), with any such prorated Annual Bonus to be paid at the same time as others members of the Company receive payment of their Annual Bonus (the “Prorated Bonus”). Executive must be employed at the time of Annual Bonus grant and payout may be made via any method of payment determined by the Board to include equity and/or cash.

c.Equity Incentives. Subject to the approval of the Board, on or as soon as reasonably practicable after the Commencement Date, the Executive will be granted 5,000,000 Restricted Stock Units pursuant to and as defined in the Ascend Wellness Holdings, Inc. 2021 Stock Incentive Plan (the “Plan”) and subject to the terms and conditions of the applicable award agreement (“Initial RSU Grant). RSUs (the “Initial RSUs”) subject to the Initial RSU Grant will vest on the schedule set forth in this Section 4(c), or to the extent otherwise provided in either Section 4(d) or Section 5(d). 2,000,000 Initial RSUs will vest solely based on the passage of time and the Executive’s continued employment through the applicable vesting date (the “Time-Vesting Initial RSUs”), with 1,000,000 of such Time-Vesting Initial RSUs vesting immediately on December 31, 2024 and the remaining 1,000,000 of such Time-Vesting Initial RSUs vesting on December 31, 2025. Subject to the Executive’s continued employment through the applicable vesting date, the remaining 3,000,000 of the Initial RSUs (the “Performance-Based Initial RSUs”) will vest upon the achievement of the stock price performance condition (the “Stock Price Condition”) applicable to the following tranches of the Performance-Based Initial RSUs: (i) 1,000,000 Performance-Based Initial RSUs will vest at the end of any 60-day period after the Company’s stock price has reached $2.00 per share provided that it remains

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at or above $2.00 per share for at least 30 days during this 60 day period; (ii) 1,000,000 Performance-Based Initial RSUs will vest at the end of any 60-day period after the Company’s stock price has reached $2.50 per share provided that it remains at or above $2.50 per share for at least 30 days during this 60 day period; and (iii) 1,000,000 Performance-Based Initial RSUs will vest at the end of any 60-day period after the Company’s stock price has reached $3.00 per share provided that it remains at or above $3.00 per share for at least 30 days during this 60 day period. Executive shall be eligible to participate in the Company’s Long Term Incentive Program, starting in the 2025 fiscal year, the terms of which are subject to the Board or its designee’s discretion from year to year. The Initial RSU Grant shall be subject to the terms and conditions of the Plan. In the event of a conflict between the terms of this Agreement and the Plan, the Plan shall govern.

d.Upon the consummation of a Change of Control Event (as defined below), provided Executive is employed with the Company as of the Change of Control Event, and concurrent with the payment of any consideration to any other holders of capital stock of the Company in connection with such change of control, all Performance-Based Initial RSUs that are “in the money” with respect to such Change of Control Event (i.e., whereby the consideration per share of stock being paid to holders of capital stock of the Company under such Change of Control Event is equal to or greater than the Stock Price Condition applicable to such Performance-Based Initial RSUs) shall vest, notwithstanding the terms of any other agreement, the Plan, instrument or document to the contrary (including without limitation any vesting terms, performance criteria or other conditions, and regardless of whether entered into before or after the date of this Agreement). For purposes of this Agreement, “Change of Control Event” shall mean the consummation, after the Commencement Date, of (i) the sale of all or substantially all of the Company’s assets or at least a majority of voting power of the capital stock of the Company, (ii) any liquidation, dissolution or winding up of the Company, or (iii) the merger or consolidation of the Company with or into another entity, except a merger or consolidation in which the holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of the capital stock of the Company or the surviving or acquiring entity, as applicable; provided, however, that no event described in the foregoing clauses (i), (ii) and (iii) shall constitute a Change of Control Event for purposes of this Agreement unless it satisfies the requirements of Treasury Regulation Section 1.409A-3(i)(5)(v) or (vii).

e.Vacations. During the Initial Term and At Will Period hereof, the Executive shall be entitled to vacation, personal days, sick time and similar paid time off benefits in accordance with the applicable policies of the Company, as in effect from time to time.

f.Insurance Benefits. During the Initial Term hereof and subject to any contribution therefor generally required of employees of the Company, the Executive shall be eligible to participate in any medical, dental and disability insurance plans maintained by the Company from time to time (collectively, the “Insurance Benefits”). The Executive’s participation in such Insurance Benefits shall be subject to applicable law, the terms of the applicable plan documents and generally applicable Company policies. Notwithstanding anything herein to the contrary, the Company may amend, modify or terminate any Insurance Benefits at any time in its discretion.

g.Business Expenses. During the Initial Term and At Will Period hereof, the Company shall promptly pay or reimburse the Executive for all reasonable, customary and necessary business expenses incurred or paid by the Executive in the performance of his duties and responsibilities hereunder, subject to any reasonable maximum annual limit and other restrictions on such expenses set by the Board and otherwise in accordance with the Company’s then-prevailing policies and procedures for expense reimbursement (including such reasonable substantiation and documentation as may be specified by the Company from time to time).

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5.Termination of Employment, Resignation for Good Reason, and Severance Benefits. Notwithstanding the provisions of Section 2 hereof, the Executive’s employment hereunder shall end under the following circumstances:

a.Death. In the event of the Executive’s death during the Initial Term, the Executive’s employment hereunder shall immediately and automatically terminate. In such event, the Company shall pay to the Executive’s designated beneficiary or, if no beneficiary, has been designate by the Executive, to his estate, (i) the Base Salary for the remainder of the Initial Term earned but not paid through the date of termination (to be paid in accordance with the Company’s normal payroll policies or at such earlier time as required by applicable law), (ii) the Time-Vesting Initial RSUs that would have vested during the Initial Term shall vest immediately, (iii) the value of any vacation time earned but not used through the date of termination (to be paid in accordance with the Company’s policies and applicable law), (iv) any Annual Bonus earned under Section 4(b) with respect to the fiscal year immediately preceding the fiscal year in which such termination occurs, but only to the extent unpaid as of the date of termination (with any such earned Annual Bonus to be paid at the same time as if no such termination had occurred), (v) a pro-rated Annual Bonus for service completed during the then current fiscal year through and including the date of termination, calculated on the same basis as though the Executive remained employed until such Annual Bonus was paid and paid at the same time as annual bonuses are payable generally to the senior officers of the Company; (vi) any other benefits payable to the Executive, his estate or his beneficiaries, as the case may be, under the terms of any employee benefit plan, program or arrangement sponsored or maintained by the Company and (vii) any business expenses incurred by the Executive but unreimbursed as of the date of termination, provided that such expenses are reimbursable under Company policy (with such expenses to be reimbursed in accordance with the Company’s expense reimbursement policies as in effect from time to time) (all of the foregoing, “Final Compensation”). In addition to Final Compensation, if the Executive’s employment terminates due to his death during the term hereof, the Executive’s estate will be entitled to (x) the Benefit Continuation he would have been entitled to receive under clause (iii) of Section 5(d) below had the Executive been terminated by the Company other than for Cause in accordance with such Section 5(d). The Company shall have no further obligation to the Executive or his estate hereunder.

In the event of the Executive’s death during the At Will Period hereof, the Executive’s employment hereunder shall immediately and automatically terminate. In such event, the Company shall pay to the Executive’s designated beneficiary or, if no beneficiary has been designated by the Executive, to his estate, (i) the Base Salary earned but not paid through the date of termination (to be paid in accordance with the Company’s normal payroll policies or at such earlier time as required by applicable law), (ii) the value of any vacation time earned but not used through the date of termination (to be paid in accordance with the Company’s policies and applicable law), and (iii) any business expenses incurred by the Executive but unreimbursed as of the date of termination, provided that such expenses are reimbursable under Company policy (with such expenses to be reimbursed in accordance with the Company’s expense reimbursement policies as in effect from time to time) (all of the foregoing, “Final Compensation”). In addition to Final Compensation, if the Executive’s employment terminates due to his death during the term hereof, the Executive’s estate will be entitled to (x) the Benefit Continuation he would have been entitled to receive under clause (iii) of Section 5(d) below had the Executive been terminated by the Company other than for Cause in accordance with such Section 5(d). The Company shall have no further obligation to the Executive or his estate hereunder.

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b.Disability.

i.The Company may terminate the Executive’s employment hereunder, upon notice to the Executive, in the event that the Executive becomes disabled during his employment hereunder through any illness, injury, accident or condition of either a physical or psychological nature and, as a result, is unable to perform substantially all of his duties and responsibilities hereunder, with or without reasonable accommodation, for any period of ninety (90) consecutive days or more, or one hundred eighty (180) days (whether or not consecutive) during any period of three hundred and sixty-five (365) consecutive calendar days. In the event of such termination, the Company shall pay to the Executive the Final Compensation and shall otherwise comply with the provisions of this Section 5(b). In addition to such Final Compensation, the Executive will be entitled to the Benefit Continuation he would have been entitled to receive under clause (iii) of Section 5(d) below had the Executive been terminated by the Company other than for Cause in accordance with such Section 5(d). The Company shall have no further obligation to the Executive hereunder.

ii.In lieu of terminating the Executive’s employment hereunder, the Board may designate another employee to act in the Executive’s place during any period of the Executive’s disability. Notwithstanding any such designation, the Executive shall continue to receive the Base Salary in accordance with Section 4(a) and Insurance Benefits in accordance with Section 4(e), to the extent permitted by the then-current terms of the applicable benefit plans, until the Executive becomes eligible for long- term disability income benefits under the Company’s disability income plan (or any disability insurance policy of the Company).

iii.If the Executive becomes eligible to receive disability income payments under the Company’s disability income plan (or any disability insurance policy of the Company), the Executive shall be entitled to receive Base Salary under Section 4(a) hereof less the amount of such disability income payments being made to the Executive, and shall continue to participate in Company benefit plans in accordance with Section 4(e) and as permitted by the terms of such plans, in each case, until the termination of his employment.

iv.Any determination as to whether during any period the Executive is disabled through any illness, injury, accident or condition of either a physical or psychological nature so as to be unable to perform substantially all of his duties and responsibilities hereunder shall be made by a physician satisfactory to both the Executive (or his duly appointed guardian) and the Company, provided that if the Executive and the Company do not agree on a physician, the Executive and the Company shall each select a physician and these two together shall select a third physician, whose determination as to disability shall be binding on all parties. The Company shall bear all expenses of the disability determination. If the Executive fails to submit to such medical examination, the Company’s determination of the issue shall be binding on the Executive.

v.If the Company temporarily replaces Executive or transfers the Executive’s duties or responsibilities to another individual on account of the Executive’s inability to perform such duties due to an incapacity which is, or is reasonably expected to become, a Disability, then the Executive’s employment shall not be deemed terminated by the Company and Executive shall not be able to resign with Good Reason (as defined below) as a result thereof (for the avoidance of doubt, the Employee shall resume his employment under this Agreement upon his return from any such temporary inability to perform such duties or physical incapacity that does not become a Disability).

c.By the Company for Cause. The Company may terminate the Executive’s employment hereunder for Cause at any time upon notice to the Executive setting

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forth in reasonable detail the nature of such Cause. The following shall constitute “Cause” for termination:

i.Failure or neglect by the Executive to perform the material duties of his employment or to follow the lawful directions of the Board (other than by reason of the Executive’s physical or mental illness or impairment) after written notice of such failure;

ii.After eighteen (18) months from the Commencement Date, material non-performance by the Executive of such duties and responsibilities on behalf of the Company as are customarily performed by a Chief Executive Officer of a company of comparable size (it being acknowledged that the Executive’s performance of the activities described on Exhibit A cannot be the basis for any such claim of material non-performance) if Executive has not cured such failure to perform, if curable, within thirty (30) days after Executive’s receipt of written notice thereof from the Board that specifies the conduct constituting Cause under this clause (ii));

iii.The Executive’s committing any act of fraud, embezzlement, misappropriation, or theft;

iv.The Executive’s material violation of the Company’s policies that have been disclosed to the Executive;

v.The Executive’s behavior or engagement in any acts that may interfere with the ability of the Company or any of its affiliates to maintain a license to harvest, cultivate, process, or sell cannabis or otherwise continue to operate its business;

vi.The Executive’s breach of any non-disclosure, non-disparagement, non- competition, non- solicitation, assignment of inventions agreement or other restrictive covenants set forth herein, other than the Executive’s inadvertent and immaterial breach of any non- competition or non-disclosure obligation that is not otherwise detrimental to the Company or any of its affiliates;

vii.The Executive’s conviction of a felony (including pleading guilty or nolo contendere to a felony) or commitment of other acts causing a material detriment to the reputation, the business or a business relationship of the Company or any of its affiliates; provided, however, that for the avoidance of doubt, no conviction or plea of nolo contendere of a felony or crime that occurs solely as a result of a violation of U.S. federal law concerning cannabis or the cannabis industry shall be deemed to constitute “Cause”, so long as (A) the acts, omissions, conduct or activity related to cannabis or the cannabis industry giving rise to any such conviction or plea of nolo contendere of a felony or crime could be reasonably believed to be in compliance with applicable state and local laws and (B) such conviction or plea of nolo contendere is not likely to interfere with the ability of the Company or any of its affiliates to maintain a license to harvest, cultivate, process, or sell cannabis or otherwise continue to operate its business;

viii.The Executive’s engagement in dishonesty, unlawful conduct (other than solely as a result of a violation of U.S. federal law concerning cannabis or the cannabis industry, so long as (A) the acts, omissions, conduct or activity related to cannabis or the cannabis industry giving rise to such illegal conduct could be reasonably believed to be in compliance with applicable state and local laws and (B) such unlawful conduct is not likely to interfere with the ability of the Company or any of its affiliates to maintain a license to harvest, cultivate, process, or sell cannabis or otherwise continue to operate its business), or misconduct, which in each case is injurious (monetarily or otherwise) to the Company or its affiliates; or

ix.The Executive’s material breach of the terms of this Agreement.

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Upon the termination of the Executive’s employment hereunder for Cause, the Company shall have no further obligation hereunder to the Executive, other than for Final Compensation.

In the event of such termination by the Company other than for Cause during the Initial Term, then the Company shall pay to the Executive (i) the Final Compensation, (ii) the Base Salary for the remainder of the Initial Term earned but not paid through the date of termination (to be paid in accordance with the Company’s normal payroll policies or at such earlier time as required by applicable law) over the remainder of the remainder of the Initial Term following the termination date (with the first payment to be made on the first payroll date following the effective date of the Employee Release (as defined below) (the “Initial Term Termination Compensation”), (iii) the Time-Vesting Initial RSUs that would have vested during the Initial Term shall vest immediately, (iv) subject to any employee contribution applicable to the Executive as of immediately prior to the date of termination, the Company shall continue to pay the cost of the Executive’s participation in the Company’s medical and dental insurance plans for a period of the remainder of the Initial Term, provided that if the Executive’s continued participation in such plans would result in a violation of any non-discrimination rules or result in any fines, penalties or excise taxes to the Company or any of its affiliates or if the Executive is otherwise not eligible to continue participation in such plans under applicable law or plan terms, then, to the extent possible without resulting in such violation, fines, penalties or excise taxes, the Company shall instead make monthly cash payments to the Executive in an amount equal to the employer portion of the monthly insurance premiums that would have been applicable had the Executive been eligible to continue such participation (the benefit described in this clause (iv), collectively, the “Benefit Continuation”) (items (i) – (iv) collectively shall be defined as the “Initial Term Severance Benefits”).

In the event of such termination during the At Will Period then (i) the Company shall pay to the Executive the Final Compensation, (ii) the Company shall pay the Executive an amount equal to the sum of fifty-percent (50%) of the Base Salary earned by the Executive for the full fiscal year immediately preceding the fiscal year in which such termination occurs (the “At Will Period Termination Compensation”), payable in substantially equal installments in accordance with the Company’s normal payroll practices as in effect from time to time, over the six (6) month period immediately following the termination date (with the first payment to be made on the first payroll date following the effective date of the Employee Release (as defined below) and to include a catch-up to cover any payment that would have been made prior to such date had the Employee Release been effective on the termination date); provided that, if the period from the termination date through the last day that the payments could begin spans two calendar years, such payments shall commence in the second calendar year; provided further that if such termination date occurs prior to the conclusion of one full fiscal year of employment from the original hire date, it shall be assumed, for purposes of determining the Termination Compensation, that Executive earned one full fiscal year of his current Base Salary; provided, further, that, if (and only if) such termination date occurs within eighteen (18) months after a Change of Control Event (as defined above, then the Termination Compensation shall be increased to one-hundred percent (100%) of Executive’s Base Salary and shall be payable to the Executive in a lump sum payment on the first payroll date following the effective date of the Employee Release (rather than in installments, as provided above in this clause (ii)) and any unvested Time-Vesting Initial RSUs shall vest , (iii) subject to any employee contribution applicable to the Executive as of immediately prior to the date of termination, the Company shall continue to pay the cost of the Executive’s participation in the Company’s medical and dental insurance plans for a period of twelve (12) months , provided that if the Executive’s continued

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participation in such plans would result in a violation of any non-discrimination rules or result in any fines, penalties or excise taxes to the Company or any of its affiliates or if the Executive is otherwise not eligible to continue participation in such plans under applicable law or plan terms, then, to the extent possible without resulting in such violation, fines, penalties or excise taxes, the Company shall instead make monthly cash payments to the Executive in an amount equal to the employer portion of the monthly insurance premiums that would have been applicable had the Executive been eligible to continue such participation (the benefit described in this clause (iii), collectively, the “Benefit Continuation”) (items (i) – (iii) collectively shall be defined as the “At Will Severance Benefits”).

e.Resignation for Good Reason. Executive may terminate this Agreement at any time for Good Reason, provided that the Company shall have thirty (30) days from such notice of termination in which to cure (if curable) any act or omission constituting Good Reason pursuant to subsections (i) to (iv) below prior to the effective termination date. If the Company fails to cure the act or omission constituting Good Reason, or such act or omission is incurable, Executive shall be entitled to, if such termination is during the Initial Term, the Initial Term Severance Benefits, or if such termination is during the At Will Period, the At Will Severance Benefits. For purposes of this Agreement, “Good Reason” means: (i) any material reduction in the Executive’s Base Salary; (ii) any material reduction in the Executive’s target Annual Bonus; (iii) any material diminution in the Executive’s responsibilities or authority within the Company so as to fundamentally change the nature and extent of the job other than that which occurs as a result of a Change of Control Event; (iv); any failure by the Company to comply with any material provision of this Agreement that remains uncured after thirty (30) days; and (v) any requirement that the Executive relocate the principal place of his work for the Company such that his existing commute is increased by more than 50 miles.

f.Any obligation of the Company to make the payments and provide the benefits to the Executive under Section 5 (other than Final Compensation) is conditioned, however, upon the Executive (or his estate or legal representative, as applicable) signing a general release of claims and covenant not to sue (the “Employee Release”) within twenty-one (21) days (or such greater period as the Company may specify) (the “Release Period”) following the date of termination of employment and upon the Executive (or his estate or legal representative, as applicable) not revoking the Employee Release during the seven (7) day revocation period following the execution of the Employee Release (the “Revocation Period”). Notwithstanding the foregoing, if payment of Termination Compensation and the Benefit Continuation could commence in more than one taxable year based on when the Employee Release could become effective, then to the extent required by Section 409A of the Code, any such payments that would have been made during the calendar year in which the Executive’s employment terminates shall instead be withheld and paid on the first payroll date in the calendar year immediately after the calendar year in which the Executive’s employment terminates, with all remaining payments to be made as if no such delay had occurred.

6.Effect of Termination. The provisions of this Section 6 shall apply to a termination of the Executive’s employment with the Company hereunder, whether due to the expiration of the term hereof, pursuant to Section 5 or otherwise.

a.Payment by the Company of any applicable Final Compensation, Termination Compensation, Benefit Continuation, and/or any other amounts or benefits that may be due the Executive in each case under the applicable termination provision of Section 5 shall constitute the entire obligation of the Company to the Executive, and the Executive shall not be entitled to additional payments or benefits under any other severance agreement or executive severance plan of the Company. Upon request of the Company, the Executive shall promptly give the Company notice of all facts

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necessary for the Company to determine the amount and duration of its obligations in connection with any termination pursuant to Section 5 hereof.

b.Except for any amounts included in Final Compensation or the Benefit Continuation, all benefits shall terminate pursuant to the terms of the applicable benefit plans based on the date of termination of the Executive’s employment without regard to any continuation of any applicable Termination Compensation or other payment to the Executive following such date of termination.

c.Provisions of this Agreement shall survive any termination of Executive’s employment hereunder if so provided herein or if necessary or desirable to accomplish the purposes of other surviving provisions, including without limitation the Restrictive Covenants (as defined below). The obligation of the Company to make payments and provide benefits to or on behalf of the Executive under 5(b), 5(d), 5(e) or 5(f) hereof (other than the Final Compensation) is expressly conditioned upon the Executive’s continued compliance with the Restrictive Covenants; provided that (i) the Company may not discontinue any such payments and benefits (or require repayment of any such payments or benefits already provided to the Executive) unless the Company has provided written notice to the Executive setting forth in reasonable detail the nature of such non-compliance and, if the nature of such non-compliance is such that it is capable of being remedied by the Executive without any damage to the Company, as determined by the Board, the Executive shall have failed to remedy such non-compliance within ten (10) days following receipt of such notice (it being understood that if the nature of such non-compliance is such that it is not capable of being remedied by the Executive without any damage to the Company, as determined by the Board, the Company may discontinue such payments and benefits at such time as it provides such written notice to the Executive) and (ii) to the extent curable, the Company may suspend or discontinue such payments or benefits thereafter only during such period as such non-compliance continues. The Executive recognizes that, except as expressly provided in Section 5, no compensation is earned after termination of employment.

7.Restrictive Covenants. As an inducement and as essential consideration for the Company to enter into this Agreement, and in exchange for other good and valuable consideration, the Executive hereby agrees to the restrictive covenants contained in this Section 7 (the “Restrictive Covenants”). The Company and the Executive agree that the Restrictive Covenants are essential and narrowly tailored to preserve the goodwill of the business of the Company and its affiliates, to maintain the confidential and trade secret information of the Company and its affiliates, and to protect other legitimate business interests of the Company and its affiliates in light of their niche businesses and the executive position held by the Executive. The Company and the Executive further agree that the Company would not have entered into this Agreement without the Executive’s agreement to the Restrictive Covenants. For purposes of the Restrictive Covenants, each reference to “Company” and “affiliate” shall also refer to the predecessors and successors of the Company and any of its affiliates (as the case may be).

a.Customer Non-Solicitation. During the period commencing on the Commencement Date and ending on the date that is twelve (12) months after the Termination Date, regardless of the reason for the Executive’s termination of employment and regardless of who initiates such termination, the Executive shall not (except on the Company’s behalf during the term hereof), for purposes of providing products or services that are competitive with those provided by the Company or any of its affiliates, directly or indirectly, on the Executive’s own behalf or on behalf of any other person or entity, contact, solicit, divert, induce, call on, take away, or do business with (or attempt to do any of the foregoing) any customer or client of the Company or any of its affiliates (or any person or entity who, during the twelve (12) months prior to the Termination Date, was engaged in mutual contact, discussion or correspondence with the Company in respect of becoming a customer or client of the Company or any of its affiliates) with whom the Executive had contact within the twelve (12) months immediately prior to the Termination Date.

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b.Service Provider Non-Solicitation. During the period commencing on the Commencement Date and ending on the date that is twelve (12) months after the Termination Date, regardless of the reason for the Executive’s termination of employment and regardless of who initiates such termination, the Executive shall not (except on the Company’s behalf during the term hereof), directly or indirectly, on the Executive’s own behalf or on behalf of any other person or entity, solicit for employment or engagement, employ or engage, or interfere with the employment or engagement of (or attempt to do any of the foregoing) any individual who (A) is employed by, or an independent contractor of, the Company or any of its affiliates at the time of such solicitation, interference or attempt thereof or (B) was employed by, or an independent contractor of, the Company or any of its affiliates within twelve (12) months prior to such solicitation, employment, engagement, interference or attempt thereof.

c.Non-Competition. During the period commencing on the Commencement Date and ending on the date that is six (6) months after the Termination Date, regardless of the reason for the Executive’s termination of employment and regardless of who initiates such termination (such period, the “Non-Competition Period”), the Executive shall not, anywhere in the United States or in any other country or jurisdiction in which the Company or any of its affiliates conducts or conducted business during the Non-Competition Period, either directly or indirectly, as a proprietor, partner, stockholder, director, executive, employee, consultant, joint venturer, member, investor, lender or otherwise, engage or assist others to engage in, or own, manage, operate or control, or participate in the ownership, management, operation or control of, or become employed or engaged by any person or entity that (i) is engaged in the business of the cultivation, manufacture and/or sale of cannabis or (ii) is, or has taken steps to become, competitive with the current business, activities, products or services of the type conducted, authorized, offered, or provided by the Company or any of its affiliates, or with respect to prospective business, activities, products or services which the Company or any of its affiliates (with the Executive’s knowledge or involvement) has spent significant time or resources analyzing for the purposes of assessing expansion opportunities by the Company or any of its affiliates during the twelve (12) month period immediately prior to the Termination Date, in each case except as otherwise approved by the Board at any time prior to the Termination Date (the “Competitive Business”). Notwithstanding the immediately preceding sentence, the Executive shall not be deemed to be engaged in a Competitive Business solely by reason of (i) less than a 1% equity ownership interest in the stock of any publicly traded company or (ii) a passive ownership interest in any registered investment company.

d.Non-Disparagement. During the term hereof and at all times thereafter, (I) the Executive shall not, directly or through any other person or entity, make any public or private statements (whether orally, in writing, via electronic transmission, or otherwise) that disparage, denigrate or malign (i) the Company or any of its affiliates, (ii) any of the businesses, activities, operations, affairs, reputations or prospects of the Company or any of its affiliates, or (iii) any of the officers, employees, directors, managers, partners (general and limited), agents, members or shareholders of any of the persons or entities described in any of clauses (i) or (ii) and (II) none of the members of the Board shall, and the Company shall not instruct any of its employees or employees of any of its affiliates to, directly or through any other person or entity, make any public or private statements (whether orally, in writing, via electronic transmission, or otherwise) that disparage, denigrate or malign the Executive. For purposes of clarification, and not limitation, a statement shall be deemed to disparage, denigrate or malign a person or entity if such statement could be reasonably construed to adversely affect the opinion any other person or entity may have or form of such first person or entity. No obligation under this Section 7(d) shall be violated by truthful statements (x) made to any governmental authority, (y) which are in connection with legal process, legal proceedings relating to enforcement of rights hereunder, required governmental testimony or filings, or administrative or

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arbitral proceedings (including, without limitation, depositions in connection with such proceedings) or (z) made in performance reviews.

e.Confidentiality; Return of Property. During the term hereof and at all times thereafter, the Executive shall not, without the prior express written consent of the Company, directly or indirectly, use on the Executive’s behalf or on behalf of any other person or entity, or divulge, disclose or make available or accessible to any person or entity, any Confidential Information (as defined below), other than when required to do so in good faith to perform the Executive’s duties and responsibilities hereunder while employed by the Company, or when required to do so by a lawful order of a court of competent jurisdiction, any governmental authority or agency, or any recognized subpoena power. Nothing in this Section 7(e) or in this Agreement prohibits the Executive from reporting possible violations of federal law or regulation to any governmental agency or entity, or making other disclosures that are protected under the whistleblower provisions of applicable law or regulation. Further, in accordance with the Defend Trade Secrets Act of 2016, (I) the Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal, and (II) if the Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Executive may disclose a trade secret to his attorney and use the trade secret information in the court proceeding, if the Executive files any document containing the trade secret under seal and does not disclose the trade secret except pursuant to court order. In the event that the Executive becomes legally compelled (by oral questions, interrogatories, request for information or documents, subpoena, criminal or civil investigative demand or similar process) to disclose any Confidential Information, then prior to such disclosure, the Executive will provide the Board with prompt written notice so that the Company may seek (with the Executive’s cooperation) a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement. In the event that such protective order or other remedy is not obtained, then the Executive will furnish only that portion of the Confidential Information which is legally required (as may be advised by Executive’s legal counsel), and will cooperate with the Company in the Company’s efforts to obtain reliable assurance that confidential treatment will be accorded to the Confidential Information. In addition, the Executive shall not create any derivative work or other product based on or resulting from any Confidential Information (except in the good faith performance of the Executive’s duties under this Agreement while employed by the Company). The Executive shall also proffer to the Board’s designee, no later than the Termination Date (or upon the earlier request of the Company), and without retaining any copies, notes or excerpts thereof, all property of the Company and its affiliates in whatever form, including, without limitation, memoranda, computer disks or other media, computer programs, diaries, notes, records, data, customer or client lists, marketing plans and strategies, and any other documents consisting of or containing Confidential Information, that are in the Executive’s actual or constructive possession or which are subject to the Executive’s control at such time. To the extent the Executive has retained any such property or Confidential Information on any electronic or computer equipment belonging to the Executive or under the Executive’s control, the Executive agrees to so advise Company and to follow Company’s instructions in permanently deleting all such property or Confidential Information and all copies. For purposes of this Agreement, “Confidential Information” shall mean all information of a sensitive, confidential or proprietary nature respecting the business and activities of the Company or any of its affiliates, including, without limitation, the terms and provisions of this Agreement (except for the terms and provisions of Section 7), and the clients, customers, suppliers, computer or other files, projects, products, computer disks or other media, computer hardware or computer software programs, marketing plans, financial information,

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methodologies, Inventions (as defined below), know-how, research, developments, processes, practices, approaches, projections, forecasts, formats, systems, data gathering methods and/or strategies of the Company or any of its affiliates. Confidential Information also includes all information received by the Company or any of its affiliates under an obligation of confidentiality to a third party of which the Executive has knowledge. Notwithstanding the foregoing, Confidential Information shall not include any information that is (i) generally available, or is made generally available, to the public other than as a result of a direct or indirect unauthorized disclosure by the Executive or any other person or entity subject to a confidentiality obligation, or that is (ii) required to be disclosed to any governmental agency or self-regulatory body or is otherwise required to be disclosed by law.

f.Ownership of Inventions. The Executive acknowledges and agrees that all Company Inventions (as defined below) (including all intellectual property rights arising therein or thereto, all rights of priority relating to patents, and all claims for past, present and future infringement, misappropriation relating thereto), and all Confidential Information, hereby are and shall be the sole and exclusive property of the Company (collectively, the “Company IP”). For consideration acknowledged and received, the Executive hereby irrevocably assigns, conveys and sets over to the Company all of the Executive’s right, title and interest in and to all Company IP. The Executive acknowledges and agrees that the compensation received by the Executive for employment or services provided to the Company is adequate consideration for the foregoing assignment. The Executive further agrees to disclose in writing to the Board any Company Inventions promptly following their conception or reduction to practice. Such disclosure shall be sufficiently complete in technical detail and appropriately illustrated by sketch or diagram to convey to one skilled in the art of which the Company Invention pertains, a clear understanding of the nature, purpose, operations, and other characteristics of the Company Invention. The Executive agrees to execute and deliver such deeds of assignment or other documents of conveyance and transfer as the Company may request to confirm in the Company or its designee the ownership of the Company Inventions, without compensation beyond that provided in this Agreement. The Executive further agrees, upon the request of the Company and at its expense, that the Executive will execute any other instrument and document necessary or desirable in applying for and obtaining patents in the United States and in any foreign country with respect to any Company Invention. The Executive further agrees, whether or not the Executive is then an employee or other service provider of the Company or any of its affiliates, upon request of the Company, to provide reasonable assistance with respect to the perfection, recordation or other documentation of the assignment of Company IP hereunder, and the enforcement of the Company’s rights in any Company IP, and to cooperate to the extent and in the manner reasonably requested by the Company in any litigation or other claim or proceeding (including, without limitation, the prosecution or defense of any claim involving a patent) involving any Company IP covered by this Agreement, without further compensation, but all reasonable out-of-pocket expenses incurred by the Executive in satisfying the requirements of this Section 7(f) shall be paid by the Company or its designee. The Executive shall not, on or after the Commencement Date, directly or indirectly challenge the validity or enforceability of the Company’s ownership of, or rights with respect to, any Company IP, including, without limitation, any patent issued on, or patent application filed in respect of, any Company Invention. For purposes of this Agreement, “Company Invention” shall mean any Invention that is made, conceived, invented, authored, or first actually reduced to practice, by the Executive (alone or jointly with others) (i) in the course of, in connection with, or as a result of the Executive’s employment or other service with the Company or any of its affiliates (whether before, on, or after the Commencement Date, but not before the commencement of Executive’s employment with the Company or its predecessor), (ii) at the direction or request of the Company or any of its affiliates (whether before, on, or after the Commencement Date), or (iii) through the use of, or that is related to, facilities, equipment, Confidential Information, other Company Inventions, intellectual property or other resources of

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the Company or any of its affiliates, whether or not during the Executive’s work hours (and whether before, on, or after the Commencement Date, but not before the commencement of Executive’s employment with the Company or its predecessor). For purposes of this Agreement, “Invention” shall mean any invention, formula, therapy, diagnostic technique, discovery, improvement, idea, technique, design, method, art, process, methodology, algorithm, machine, development, product, service, technology, strategy, software, work of authorship or other Works (as defined below), trade secret, innovation, trademark, data, database, or the like, whether or not patentable, together with all intellectual property rights therein.

g.Works for Hire. The Executive also acknowledges and agrees that all works of authorship, in any format or medium, and whether published or unpublished, created wholly or in part by the Executive, whether alone or jointly with others, (i) in the course of, in connection with, or as a result of the Executive’s employment or other service with the Company or any of its affiliates (whether before, on, or after the Commencement Date), (ii) at the direction or request of the Company or any of its affiliates (whether before, on, or after the Commencement Date), or (iii) through the use of, or that is related to, facilities, equipment, Confidential Information, other Company Inventions, intellectual property or other resources of the Company or any of its affiliates, whether or not during the Executive’s work hours (and whether before, on, or after the Effective Date) (“Works”), are works made for hire as defined under United States copyright law, and that the Works (and all copyrights arising in the Works) are owned exclusively by the Company and all rights therein will automatically vest in the Company without the need for any further action by any party. To the extent any such Works are not deemed to be works made for hire, for consideration acknowledged and received, the Executive hereby waives any “moral rights” in such Works and the Executive hereby irrevocably assigns, transfers, conveys and sets over to the Company or its designee, without compensation beyond that provided in this Agreement, all right, title and interest in and to such Works, including without limitation all rights of copyright arising therein or thereto, and further agrees to execute such assignments or other deeds of conveyance and transfer as the Company may request to vest in the Company or its designee all right, title and interest in and to such Works, including all rights of copyright arising in or related to the Works.

h.Cooperation. During and after the term hereof, the Executive agrees to cooperate with the Company and its affiliates in any internal investigation, any administrative, regulatory, or judicial proceeding or any dispute with a third-party concerning issues about which the Executive has knowledge or that may relate to the Executive or the Executive’s employment or service with the Company or any of its affiliates (or the termination thereof). The Executive’s obligation to cooperate hereunder includes, without limitation, being available to the Company and its affiliates upon reasonable notice for interviews and factual investigations, appearing in any forum at the Company’s or any of its affiliates’ reasonable request to give testimony (without requiring service of a subpoena or other legal process), volunteering to the Company and its affiliates pertinent information, and turning over to the Company and its affiliates all relevant documents which are or may come into the Executive’s possession. The Company shall promptly reimburse the Executive for the reasonable pre-approved out-of-pocket expenses incurred by the Executive in connection with such cooperation. For the avoidance of doubt, the immediately preceding sentence shall not require the Company to reimburse the Executive for any attorneys’ fees or related costs the Executive may incur absent advance written approval by the Company, which shall not be unreasonably withheld.

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organization, other than the Company or any of its affiliates (any such individual or entity being hereinafter referred to as a “Person”) for whom such activity is undertaken and the nature of the Executive’s business relationship(s) and position(s) with such Person. The Executive shall provide the Company with such other pertinent information concerning such business activity as the Company may reasonably request in order to determine the Executive’s continued compliance with the Restrictive Covenants.

j.Enforcement of Covenants. The Executive acknowledges that he has carefully read and considered all the terms and conditions of this Agreement, including the Restrictive Covenants. The Executive agrees that the Restrictive Covenants are necessary for the reasonable and proper protection of the Company and its affiliates and that each and every one of the Restrictive Covenants is reasonable in respect to subject matter, length of time and geographic area, and otherwise. The Executive agrees that the Company and its affiliates, in addition to any other legal or equitable remedies available to them, shall be entitled to seek preliminary and permanent injunctive relief against any breach or threatened breach by the Executive of any of the Restrictive Covenants, without having to post bond, and to seek specific performance of each of the terms thereof. The Restrictive Covenants are intended for the benefit of the Company and each of its affiliates. Each affiliate of the Company is an intended third-party beneficiary of the Restrictive Covenants, and each affiliate of the Company, as well as any successor or assign of the Company or such affiliate, may enforce the Restrictive Covenants. The parties further agree that, in the event that any provision of the Restrictive Covenants shall be determined by any court of competent jurisdiction to be unenforceable by reason of its being extended over too great a time, too large a geographic area or too great a range of activities or otherwise, such provision shall be deemed to be modified by the court to permit its enforcement to the maximum extent permitted by law.

k.Notification of New Employer. In the event that the Executive is employed or otherwise engaged by any other person or entity following the Termination Date, the Executive agrees to notify, and consents to the notification by Company and its affiliates of, such person or entity of the Restrictive Covenants.

8.Excise Tax.

a.Notwithstanding anything to the contrary contained in this Agreement or otherwise, to the extent that any payment, distribution or acceleration of vesting to or for the benefit of Executive by the Company (within the meaning of Section 280G of the Code and the regulations thereunder), whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”), is or will be subject to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), then the Total Payments shall be reduced (but not below zero) to the Safe Harbor Amount (as defined below) if and to the extent that a reduction in the Total Payments would result in Executive retaining a larger amount, on an after-tax basis (taking into account federal, state and local income and employment taxes and the Excise Tax), than if Executive received the entire amount of such Total Payments in accordance with their existing terms (taking into account federal, state, and local income and employment taxes and the Excise Tax). For purposes of this Agreement, the term “Safe Harbor Amount” means the largest portion of the Total Payments that would result in no portion of the Total Payments being subject to the Excise Tax. To effectuate the foregoing, the Company shall reduce or eliminate the Total Payments by first reducing or eliminating the portion of the Total Payments which are payable in cash and then by reducing or eliminating non-cash payments, in each case, starting with the payments to be made farthest in time from the Determination (as defined below).

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shall have the opportunity to reject the selection, within two business days of being notified of the selection, on the basis of that Determining Party’s having a conflict of interest or other reasonable basis, in which case the Company shall select an alternative firm among the 10 largest accounting firms in the United States or alternative independent qualified tax counsel, which shall become the Determining Party. Such Determining Party shall provide its determination (the “Determination”), together with detailed supporting calculations and documentation to the Company and Executive, within 10 business days of the termination of Executive’s employment or at such other time mutually agreed by the Company and Executive. If the Determining Party determines that no Excise Tax is payable by Executive with respect to the Total Payments, it shall furnish Executive with an opinion reasonably acceptable to Executive that no Excise Tax will be imposed with respect to any such payments and, absent manifest error, such Determination shall be binding, final and conclusive upon the Company and Executive. If the Determining Party determines that an Excise Tax would be payable, the Company shall have the right to accept the Determination as to the extent of the reduction, if any, pursuant to Section 8(a), or to have such Determination reviewed by another accounting firm selected by the Company, at the Company’s expense. If the two accounting firms do not agree, a third accounting firm shall be jointly chosen by Executive and the Company, in which case the determination of such third accounting firm shall be binding, final and conclusive upon the Company and Executive.

c.If, notwithstanding any reduction described in this Section 8, the Internal Revenue Service (“IRS”) determines that Executive is liable for the Excise Tax as a result of the receipt of any of the Total Payments or otherwise, then Executive shall be obligated to pay back to the Company, within 30 calendar days after a final IRS determination or in the event that Executive challenges the final IRS determination, a final judicial determination, a portion of the Total Payments equal to the “Repayment Amount”. The “Repayment Amount” with respect to the payment of benefits shall be the smallest such amount, if any, as shall be required to be paid to the Company so that Executive’s net after- tax proceeds with respect to the Total Payments (after taking into account the payment of the Excise Tax and all other applicable taxes imposed on the Total Payments) shall be maximized. The Repayment Amount shall be zero if a Repayment Amount of more than zero would not result in Executive’s net after-tax proceeds with respect to the Total Payments being maximized. If the Excise Tax is not eliminated pursuant to this Section 8, Executive shall pay the Excise Tax.

d.Notwithstanding any other provision of this Section 8, if (i) there is a reduction in the Total Payments as described in this Section 8, (ii) the IRS later determines that Executive is liable for the Excise Tax, the payment of which would result in the maximization of Executive’s net after-tax proceeds (calculated as if Executive’s benefits had not previously been reduced), and (iii) Executive pays the Excise Tax, then the Company shall pay to Executive those payments or benefits which were reduced pursuant to this Section 8 as soon as administratively possible after Executive pays the Excise Tax (but not later than March 15 following the calendar year of the IRS determination) so that Executive’s net after-tax proceeds with respect to the Total Payments are maximized.

e.If, following a reduction of the Total Payments pursuant to Section 8(a), the Determining Party or a court of competent jurisdiction determines that the Total Payments were reduced to a greater extent than required under Section 8, then the Company shall as soon as administratively possible (but not later than by March 15 following the calendar year of such determination) pay the amount of such excess reduction to or for the benefit of Executive, together with interest at the applicable federal rate (as defined in Section 7872(f)(2)(A) of the Code), from the date the amount would have otherwise been paid to Executive until the payment date.

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f.To the extent requested by Executive, the Company shall cooperate with Executive in good faith in valuing, and the Determining Party shall take into account the value of, services provided or to be provided by Executive (including, without limitation, Executive’s agreeing to refrain from performing services pursuant to a covenant not to compete or similar covenant, before, on or after the date of a change in ownership or control of the Company (within the meaning of Q&A-2(b) of the final regulations under Section 280G of the Code), such that payments in respect of such services may be considered reasonable compensation within the meaning of Q&A-9 and Q&A-40 to Q&A- 44 of the final regulations under Section 280G of the Code and/or exempt from the definition of the term “parachute payment” within the meaning of Q&A-2(a) of the final regulations under Section 280G of the Code in accordance with Q&A- 5(a) of the final regulations under Section 280G of the Code.

9.Conflicting Agreements. The Executive hereby represents and warrants that the execution of this Agreement and the performance of his obligations hereunder will not breach or be in conflict with any other agreement to which the Executive is a party or is bound and that the Executive is not now subject to any covenants against competition or similar covenants or any court order or other legal obligation that would affect the performance of his obligations hereunder, any and all of which are superseded by this Agreement. The Executive will not disclose to or use on behalf of the Company any proprietary information of a third party without such party’s consent.

10.Indemnification. The Company shall indemnify the Executive to the maximum extent permitted by the General Corporation Law of the State of Delaware. At the request of the Executive, and subject to the approval of the Board, the Company shall enter into an indemnification agreement with the Executive on terms at least as favorable in each respect to the Executive as the terms of any other indemnification agreement between the Company and any other director or officer of the Company. The Executive agrees to promptly notify the Company of any actual or threatened claim arising out of or as a result of his employment or other service with the Company or any of its affiliates (or the termination thereof).

11.Withholding. All payments made by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law.

12.Assignment. Neither the Company nor the Executive may make any assignment of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company may assign its rights and obligations under this Agreement without the consent of the Executive in the event that the Company shall hereafter effect a reorganization, consolidate with, or merge into, any person or entity, transfer a substantial majority of its properties or assets to any person or entity, or engage in a similar transaction with any person or entity. This Agreement shall inure to the benefit of and be binding upon the Company and the Executive, and their respective successors, executors, administrators, heirs and permitted assigns.

13.Severability. If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

14.Amendment and Waiver. This Agreement may be amended or modified only by a written instrument signed by the Executive and the Company. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of either party to require the performance of any term or obligation of this Agreement, or the waiver by either party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach. No waiver by either of the parties of any breach by the other party hereto of any condition or provision of this Agreement to be performed by the other party hereto shall be deemed a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time.

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15.Notices. Any and all notices, requests, demands and other communications provided for by this Agreement shall be in writing and shall be effective when delivered in person or deposited in the United States mail, postage prepaid, registered or certified, and addressed:

a.if to the Executive, at his last known address on the books of the Company, with a copy to ; and

b.if to the Company, at its principal place of business, attention, Secretary, with a copy to legal@awholdings.com; or

c.to such other address as either party may specify by notice to the other actually received.

16.Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior communications, agreements and understandings, written or oral, with respect to the terms and conditions of the Executive’s employment and the subject matter hereof.

17.Headings. The headings and captions in this Agreement are for convenience only and in no way define or describe the scope or content of any provision of this Agreement.

18.Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement, by electronic mail in portable document format (.pdf) or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, has the same effect as delivery of an executed original of this Agreement.

19.Governing Law; Venue; WAIVER OF JURY TRIAL. This Agreement, the rights of the parties and all claims, actions, causes of action, suits, litigation, controversies, hearings, charges, complaints or proceedings arising in whole or in part under or in connection herewith, will be governed by and construed in accordance with the domestic substantive laws of the State of New York, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction. Both the Executive and the Company agree to appear before and submit exclusively to the jurisdiction of the United States District Court for the Southern District of New York with respect to any controversy, dispute, or claim arising out of or relating to this Agreement or the Executive’s employment or service with the Company or any of its affiliates (or the termination thereof), or if such controversy, dispute or claim may not be brought in federal court, to the state courts located in New York, New York and, in each case, the applicable courts of appeals of such court. Both the Executive and the Company also agree to waive, to the fullest possible extent, the defense of an inconvenient forum or lack of jurisdiction. The Executive further consents to service of process in the State of New York. THE COMPANY AND THE EXECUTIVE HEREBY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR THE EXECUTIVE’S EMPLOYMENT OR SERVICE WITH THE COMPANY OR ANY OF ITS AFFILIATES (OR THE TERMINATION THEREOF), OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT OF THIS AGREEMENT (WHETHER ARISING IN CONTRACT, EQUITY, TORT OR OTHERWISE).

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payment on the earlier of (A) the first regular payroll date of the seventh month following the Executive’s separation from service or (B) the 10th business day following the Executive’s death (but not earlier than such payment would have been made absent such death). If the Executive’s termination of employment hereunder does not constitute a “separation from service” within the meaning of Code Section 409A, then any amounts payable hereunder on account of a termination of the Executive’s employment and which are subject to Code Section 409A shall not be paid until the Executive has experienced a “separation from service” within the meaning of Code Section 409A. In addition, no reimbursement or in-kind benefit shall be subject to liquidation or exchange for another benefit and the amount available for reimbursement, or in-kind benefits provided, during any calendar year shall not affect the amount available for reimbursement, or in-kind benefits to be provided, in a subsequent calendar year. Any reimbursement to which the Executive is entitled hereunder shall be made no later than the last day of the calendar year following the calendar year in which such expenses were incurred. Notwithstanding anything herein to the contrary, neither the Company nor any of its affiliates shall have any liability to the Executive or to any other person or entity if this Agreement is, or if the payments and benefits provided in this Agreement that are intended to be exempt from or compliant with Code Section 409A are, not so exempt or compliant. Each payment payable hereunder shall be treated as a separate payment in a series of payments within the meaning of, and for purposes of, Code Section 409A.

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IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the Company, by its duly authorized representative, and by the Executive, as of the date first above written.

THE EXECUTIVE

ASCEND WELLNESS HOLDINGS, INC.

/s/ Samuel Brill

By:

/s/ Abner Kurtin

Name: Samuel Brill

Name:

Abner Kurtin

Title:

Executive Chairman of the Board of Directors

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Exhibit A

1.The closing of the current confidential M&A transaction of The Firelands Company, LLC.

2.Executive will remain Chairman of the Board of Invacare Holdings Corporation and continue to perform such duties until the closing of the sale of its North American operations and its Europe/Asia operations.

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Exhibit 10.2

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) dated as of August 26, 2024 (the “Effective Date”) is made and entered into by and between Ascend Wellness Holdings, Inc., a Delaware corporation with a principal place of business at 44 Whippany Road, Suite 101, Morristown, NJ 07960 (the “Company”), and Francis Perullo, an individual whose principal business address is in care of the Company at 44 Whippany Road, Suite 101, Morristown, NJ 07960 (the “Executive”).

RECITALS

WHEREAS, the Company formerly employed Executive as Executive Vice President, Corporate Affairs of the Company;

WHEREAS, the Company and Executive wish to enter into a new employment relationship with one another in connection with Executive’s new role with the Company as President.

WHEREAS, the parties desire to memorialize the terms of the Executive’s employment as President, on the terms and conditions hereinafter set forth.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, terms, provisions, and conditions set forth in this Agreement, the parties hereby agree:

1.Employment. Subject to the terms and conditions set forth in this Agreement, the Company hereby offers, and the Executive hereby accepts, employment as President of the Company, commencing August 26, 2024 (the “Commencement Date”).

2.At Will. The Executive is an employee at will and nothing in this Agreement is intended to change that status in any way. As a result, the Executive and/or the Company can terminate the employment relationship at any time. The parties agree, however, that if the Company terminates the employment relationship without Cause or the employee resigns for Good Reason (as each term is defined herein), then the Executive shall be eligible to receive the Severance Benefits as defined in Section 5.

3.Capacity and Performance.

a.During the term hereof, the Executive shall serve the Company as President, reporting directly to the Chief Executive Officer (the “CEO”) of the Company.

b.During the term hereof, the Executive shall be employed by the Company on a full-time and diligent basis and shall perform such duties and responsibilities on behalf of the Company as are customarily performed by a President of a company of comparable size and as may be reasonably designated from time to time by the CEO.

c.During the term hereof, the Executive shall not, directly or indirectly, render any material services of a business, commercial or professional nature to any person or entity other than the Company (or any affiliate thereof), whether for compensation or otherwise, without the prior written consent of the Company’s Board of Directors (the “Board”), which shall not be unreasonably withheld. For the avoidance of doubt, notwithstanding the foregoing, the Executive may (i) engage in the activities set forth on Exhibit A hereto so long as such activities do not (A) individually or in the aggregate, interfere with the performance of the Executive’s duties under this Agreement and (B) materially change in nature or scope of the Executive’s engagement after the Commencement Date, in which case the Executive shall not be permitted to continue such engagement without the prior written consent of the Board and (ii) engage in educational, charitable and civic activities and manage the Executive’s personal investments and affairs, in each case, so long as such activities (A) do not, individually or in the aggregate, interfere with the performance of the Executive’s duties under this Agreement and (B) are not contrary to the interests of

the Company or any of its affiliates or competitive with the Company or any of its affiliates.

4.Compensation and Benefits. As compensation for all services performed by the Executive under this Agreement and during the term hereof and subject to performance of the Executive’s duties and obligations to the Company pursuant to this Agreement:

c.Equity Incentives. Executive shall be eligible to participate in the Company’s Long Term Incentive Program, starting in the 2025 fiscal year, the terms of which are subject to the Board or its designee’s discretion from year to year.

d.Vacations. During the term hereof, the Executive shall be entitled to vacation, personal days, sick time and similar paid time off benefits in accordance with the applicable policies of the Company, as in effect from time to time.

e.Insurance Benefits. During the term hereof and subject to any contribution therefor generally required of employees of the Company, the Executive shall be eligible to participate in any medical, dental and disability insurance plans maintained by the Company from time to time (collectively, the “Insurance Benefits”). The Executive’s participation in such Insurance Benefits shall be subject to applicable law, the terms of the applicable plan documents and generally applicable Company policies. Notwithstanding anything herein to the contrary, the Company may amend, modify or terminate any Insurance Benefits at any time in its discretion.

f.Business Expenses. During the term hereof, the Company shall promptly pay or reimburse the Executive for all reasonable, customary and necessary business expenses incurred or paid by the Executive in the performance of his duties and responsibilities hereunder, subject to any reasonable maximum annual limit and other restrictions on such expenses set by the Board and otherwise in accordance with the Company’s then-prevailing policies and procedures for expense reimbursement (including such reasonable substantiation and documentation as may be specified by the Company from time to time).

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a.Death. In the event of the Executive’s death during the term hereof, the Executive’s employment hereunder shall immediately and automatically terminate. In such event, the Company shall pay to the Executive’s designated beneficiary or, if no beneficiary has been designated by the Executive, to his estate, (i) the Base Salary earned but not paid through the date of termination (to be paid in accordance with the Company’s normal payroll policies or at such earlier time as required by applicable law), (ii) the value of any vacation time earned but not used through the date of termination (to be paid in accordance with the Company’s policies and applicable law), and (iii) any business expenses incurred by the Executive but unreimbursed as of the date of termination, provided that such expenses are reimbursable under Company policy (with such expenses to be reimbursed in accordance with the Company’s expense reimbursement policies as in effect from time to time) (all of the foregoing, “Final Compensation”). In addition to Final Compensation, if the Executive’s employment terminates due to his death during the term hereof, the Executive’s estate will be entitled to (x) the Benefit Continuation he would have been entitled to receive under clause (iii) of Section 5(d) below had the Executive been terminated by the Company other than for Cause in accordance with such Section 5(d). The Company shall have no further obligation to the Executive or his estate hereunder.

b.Disability.

i.The Company may terminate the Executive’s employment hereunder, upon notice to the Executive, in the event that the Executive becomes disabled during his employment hereunder through any illness, injury, accident or condition of either a physical or psychological nature and, as a result, is unable to perform substantially all of his duties and responsibilities hereunder, with or without reasonable accommodation, for any period of ninety (90) consecutive days or more, or one hundred eighty (180) days (whether or not consecutive) during any period of three hundred and sixty-five (365) consecutive calendar days. In the event of such termination, the Company shall pay to the Executive the Final Compensation and shall otherwise comply with the provisions of this Section 5(b). In addition to such Final Compensation, the Executive will be entitled to (x) the Benefit Continuation he would have been entitled to receive under clause (iii) of Section 5(d) below had the Executive been terminated by the Company other than for Cause in accordance with such Section 5(d). The Company shall have no further obligation to the Executive hereunder.

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iv.Any determination as to whether during any period the Executive is disabled through any illness, injury, accident or condition of either a physical or psychological nature so as to be unable to perform substantially all of his duties and responsibilities hereunder shall be made by a physician satisfactory to both the Executive (or his duly appointed guardian) and the Company, provided that if the Executive and the Company do not agree on a physician, the Executive and the Company shall each select a physician and these two together shall select a third physician, whose determination as to disability shall be binding on all parties. If the Executive fails to submit to such medical examination, the Company’s determination of the issue shall be binding on the Executive.

c.By the Company for Cause. The Company may terminate the Executive’s employment hereunder for Cause at any time upon notice to the Executive setting forth in reasonable detail the nature of such Cause. The following shall constitute “Cause” for termination:

ii.Material non-performance by the Executive of such duties and responsibilities on behalf of the Company as are customarily performed by a President of a company of comparable size;

iii.The Executive’s committing any act of fraud, embezzlement, misappropriation, or theft;

iv.The Executive’s material violation of the Company’s policies;

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to interfere with the ability of the Company or any of its affiliates to maintain a license to harvest, cultivate, process, or sell cannabis or otherwise continue to operate its business;

ix.The Executive’s material breach of the terms of this Agreement.

Upon the termination of the Executive’s employment hereunder for Cause, the Company shall have no further obligation hereunder to the Executive, other than for Final Compensation.

d.By the Company Other than for Cause. The Company may terminate the Executive’s employment hereunder other than for Cause (and other than in connection with the Executive’s death or disability) at any time upon written notice to the Executive. In the event of such termination, then (i) the Company shall pay to the Executive the Final Compensation, (ii) the Company shall pay the Executive an amount equal to the sum of fifty-percent (50%) of the Base Salary earned by the Executive for the full fiscal year immediately preceding the fiscal year in which such termination occurs (the “Termination Compensation”), payable in substantially equal installments in accordance with the Company’s normal payroll practices as in effect from time to time, over the six (6) month period immediately following the termination date (with the first payment to be made on the first payroll date following the effective date of the Employee Release (as defined below) and to include a catch-up to cover any payment that would have been made prior to such date had the Employee Release been effective on the termination date); provided that, if the period from the termination date through the last day that the payments could begin spans two calendar years, such payments shall commence in the second calendar year; provided further that if such termination date occurs prior to the conclusion of one full fiscal year of employment from the original hire date, it shall be assumed, for purposes of determining the Termination Compensation, that Executive earned one full fiscal year of his current Base Salary; provided, further, that, if (and only if) such termination date occurs within eighteen (18) months after a Change of Control Event (as defined below), then the Termination Compensation shall be increased to one-hundred percent (100%) of Executive’s Base Salary and shall be payable to the Executive in a lump sum payment on the first payroll date following the Effective date of the Employee Release (rather than in installments, as provided above in this clause (ii)) and any unvested Time-Vesting Initial RSUs shall vest, (iii) subject to any employee contribution applicable to the Executive as of immediately prior to the date of termination, the Company shall continue to pay the cost of the Executive’s participation in the Company’s medical and dental insurance plans for a period of six (6) months, provided that if the Executive’s continued participation in such plans would result in a violation of any non-discrimination rules or result in any fines, penalties or excise taxes to the Company or any of its affiliates or if the Executive is otherwise not eligible to continue participation in such plans under applicable law or plan terms, then, to the extent possible without resulting in such violation, fines, penalties or excise taxes, the Company shall instead make monthly cash payments to the Executive in an amount equal to the employer portion of the monthly insurance premiums that would have been applicable had the Executive been eligible to continue such participation (the benefit described in this clause (iii), collectively, the

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“Benefit Continuation”) (items (i) – (iii) collectively shall be defined as the “Severance Benefits”).

For purposes of this Agreement, “Change of Control Event” shall mean the consummation, after the Commencement Date, of (i) the sale of all or substantially all of the Company’s assets or at least a majority of voting power of the capital stock of the Company, (ii) any liquidation, dissolution or winding up of the Company, or (iii) the merger or consolidation of the Company with or into another entity, except a merger or consolidation in which the holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of the capital stock of the Company or the surviving or acquiring entity, as applicable; provided, however, that no event described in the foregoing clauses (i), (ii) and (iii) shall constitute a Change of Control Event for purposes of this Agreement unless it satisfies the requirements of Treasury Regulation Section 1.409A-3(i)(5)(v) or (vii).

e.Resignation for Good Reason. Executive may terminate this Agreement at any time for Good Reason, provided that the Company shall have thirty (30) days from such notice of termination in which to cure (if curable) any act or omission constituting Good Reason pursuant to subsections (i) to (iv) below prior to the effective termination date. If the Company fails to cure the act or omission constituting Good Reason, Executive shall be entitled to the Severance Benefits. For purposes of this Agreement, “Good Reason” means: (i) any material reduction in the Executive’s Base Salary other than in connection with a general reduction in base salaries that affects all similarly situated executives in substantially the same proportions; (ii) any material reduction in the Executive’s target Annual Bonus (other than solely as a result of a reduction in Base Salary); (iii) any material diminution in the Executive’s responsibilities or authority within the Company so as to fundamentally change the nature and extent of the job other than that which occurs as a result of a Change of Control Event; (iv); and any failure by the Company to comply with any material provision of this Agreement that remains uncured after thirty (30) days.

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severance agreement or executive severance plan of the Company. Upon request of the Company, the Executive shall promptly give the Company notice of all facts necessary for the Company to determine the amount and duration of its obligations in connection with any termination pursuant to Section 5 hereof.

b.Except for the Benefit Continuation, all benefits shall terminate pursuant to the terms of the applicable benefit plans based on the date of termination of the Executive’s employment without regard to any continuation of any applicable Termination Compensation or other payment to the Executive following such date of termination.

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d.Non-Disparagement. During the term hereof and at all times thereafter, (I) the Executive shall not, directly or through any other person or entity, make any public or private statements (whether orally, in writing, via electronic transmission, or otherwise) that disparage, denigrate or malign (i) the Company or any of its affiliates, (ii) any of the businesses, activities, operations, affairs, reputations or prospects of the Company or any of its affiliates, or (iii) any of the officers, employees, directors, managers, partners (general and limited), agents, members or shareholders of any of the persons or entities described in any of clauses (i) or (ii) and (II) none of the members of the Board shall, and the Company shall not instruct any of its employees or employees of any of its affiliates to, directly or through any other person or entity, make any public or private statements (whether orally, in writing, via electronic transmission, or otherwise) that disparage, denigrate or malign the Executive. For purposes of clarification, and not limitation, a statement shall be deemed to disparage, denigrate or malign a person or entity if such statement could be reasonably construed to adversely affect the opinion any other person or entity may have or form of such first person or entity. No obligation under this Section 7(d) shall be violated by truthful statements (x) made to any governmental authority, (y) which are in connection with legal process, required governmental testimony or filings, or administrative or arbitral proceedings (including, without limitation, depositions in connection with such proceedings) or (z) made in performance reviews.

e.Confidentiality; Return of Property. During the term hereof and at all times thereafter, the Executive shall not, without the prior express written consent of the

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Company, directly or indirectly, use on the Executive’s behalf or on behalf of any other person or entity, or divulge, disclose or make available or accessible to any person or entity, any Confidential Information (as defined below), other than when required to do so in good faith to perform the Executive’s duties and responsibilities hereunder while employed by the Company, or when required to do so by a lawful order of a court of competent jurisdiction, any governmental authority or agency, or any recognized subpoena power. Nothing in this Section 7(e) or in this Agreement prohibits the Executive from reporting possible violations of federal law or regulation to any governmental agency or entity, or making other disclosures that are protected under the whistleblower provisions of applicable law or regulation. Further, in accordance with the Defend Trade Secrets Act of 2016, (I) the Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal, and (II) if the Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Executive may disclose a trade secret to his attorney and use the trade secret information in the court proceeding, if the Executive files any document containing the trade secret under seal and does not disclose the trade secret except pursuant to court order. In the event that the Executive becomes legally compelled (by oral questions, interrogatories, request for information or documents, subpoena, criminal or civil investigative demand or similar process) to disclose any Confidential Information, then prior to such disclosure, the Executive will provide the Board with prompt written notice so that the Company may seek (with the Executive’s cooperation) a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement. In the event that such protective order or other remedy is not obtained, then the Executive will furnish only that portion of the Confidential Information which is legally required (as may be advised by Executive’s legal counsel), and will cooperate with the Company in the Company’s efforts to obtain reliable assurance that confidential treatment will be accorded to the Confidential Information. In addition, the Executive shall not create any derivative work or other product based on or resulting from any Confidential Information (except in the good faith performance of the Executive’s duties under this Agreement while employed by the Company). The Executive shall also proffer to the Board’s designee, no later than the Termination Date (or upon the earlier request of the Company), and without retaining any copies, notes or excerpts thereof, all property of the Company and its affiliates in whatever form, including, without limitation, memoranda, computer disks or other media, computer programs, diaries, notes, records, data, customer or client lists, marketing plans and strategies, and any other documents consisting of or containing Confidential Information, that are in the Executive’s actual or constructive possession or which are subject to the Executive’s control at such time. To the extent the Executive has retained any such property or Confidential Information on any electronic or computer equipment belonging to the Executive or under the Executive’s control, the Executive agrees to so advise Company and to follow Company’s instructions in permanently deleting all such property or Confidential Information and all copies. For purposes of this Agreement, “Confidential Information” shall mean all information of a sensitive, confidential or proprietary nature respecting the business and activities of the Company or any of its affiliates, including, without limitation, the terms and provisions of this Agreement (except for the terms and provisions of Section 7), and the clients, customers, suppliers, computer or other files, projects, products, computer disks or other media, computer hardware or computer software programs, marketing plans, financial information, methodologies, Inventions (as defined below), know-how, research, developments, processes, practices, approaches, projections, forecasts, formats, systems, data gathering methods and/or strategies of the Company or any of its affiliates. Confidential Information also includes all information received by the Company or any of its affiliates under an obligation of confidentiality to a third party of which the

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Executive has knowledge. Notwithstanding the foregoing, Confidential Information shall not include any information that is generally available, or is made generally available, to the public other than as a result of a direct or indirect unauthorized disclosure by the Executive or any other person or entity subject to a confidentiality obligation.

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service, technology, strategy, software, work of authorship or other Works (as defined below), trade secret, innovation, trademark, data, database, or the like, whether or not patentable, together with all intellectual property rights therein.

i.Notification Requirement. Until the expiration of the period or periods for Restrictive Covenants (as applicable), the Executive shall, upon a reasonable request by the Company, give notice to the Company of any new business activity in which he is engaged. Such notice shall state the name and address of the individual, corporation, limited liability company, association, partnership, estate, trust and other entity or organization, other than the Company or any of its affiliates (any such individual or entity being hereinafter referred to as a “Person”) for whom such activity is undertaken and the nature of the Executive’s business relationship(s) and position(s) with such Person. The Executive shall provide the Company with such other pertinent information concerning such business activity as the Company may

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reasonably request in order to determine the Executive’s continued compliance with the Restrictive Covenants.

8.Excise Tax.

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“Determination”), together with detailed supporting calculations and documentation to the Company and Executive, within 10 business days of the termination of Executive’s employment or at such other time mutually agreed by the Company and Executive. If the Determining Party determines that no Excise Tax is payable by Executive with respect to the Total Payments, it shall furnish Executive with an opinion reasonably acceptable to Executive that no Excise Tax will be imposed with respect to any such payments and, absent manifest error, such Determination shall be binding, final and conclusive upon the Company and Executive. If the Determining Party determines that an Excise Tax would be payable, the Company shall have the right to accept the Determination as to the extent of the reduction, if any, pursuant to Section 8(a), or to have such Determination reviewed by another accounting firm selected by the Company, at the Company’s expense. If the two accounting firms do not agree, a third accounting firm shall be jointly chosen by Executive and the Company, in which case the determination of such third accounting firm shall be binding, final and conclusive upon the Company and Executive.

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11.Withholding. All payments made by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law.

a.if to the Executive, at his last known address on the books of the Company, with a copy to ; and

b.if to the Company, at its principal place of business, attention, Secretary, with a copy to legal@awholdings.com; or

c.to such other address as either party may specify by notice to the other actually received.

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17.Headings. The headings and captions in this Agreement are for convenience only and in no way define or describe the scope or content of any provision of this Agreement.

20.Code Section 409A Compliance. This Agreement is intended to comply with Code Section 409A (to the extent applicable) and the parties hereto agree to interpret this Agreement in the least restrictive manner necessary to comply therewith and without resulting in any increase in the amounts owed hereunder by the Company. To the maximum extent possible, any severance owed under this Agreement shall be construed to fit within the “short-term deferral rule” under Code Section 409A and/or the “two times two year” involuntary separation pay exception under Code Section 409A. Notwithstanding any other provision of this Agreement to the contrary, if the Executive is a “specified employee” within the meaning of Code Section 409A and the regulations issued thereunder, and a payment or benefit provided for in this Agreement would be subject to additional tax under Code Section 409A if such payment or benefit is paid within six (6) months after the Executive’s “separation from service” (within the meaning of Code Section 409A), then such payment or benefit required under this Agreement (i) shall not be paid (or commence) during the six-month period immediately following the Executive’s separation from service and (ii) shall instead be paid to the Executive in a lump-sum cash payment on the earlier of (A) the first regular payroll date of the seventh month following the Executive’s separation from service or (B) the 10th business day following the Executive’s death (but not earlier than such payment would have been made absent such death). If the Executive’s termination of employment hereunder does not constitute a “separation from service” within the meaning of Code Section 409A, then any amounts payable hereunder on account of a termination of the Executive’s employment and which are subject to Code Section 409A shall not be paid until the Executive has experienced a “separation from service” within the meaning of Code Section 409A. In addition, no reimbursement or in-kind benefit shall be subject to liquidation or exchange for another benefit and the amount available for reimbursement, or in-kind benefits provided, during any calendar year shall not affect the amount available for reimbursement, or in-kind benefits to be provided, in a subsequent calendar year. Any reimbursement to which the Executive is entitled hereunder shall be made no later than the last day of the calendar year

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following the calendar year in which such expenses were incurred. Notwithstanding anything herein to the contrary, neither the Company nor any of its affiliates shall have any liability to the Executive or to any other person or entity if this Agreement is, or if the payments and benefits provided in this Agreement that are intended to be exempt from or compliant with Code Section 409A are, not so exempt or compliant. Each payment payable hereunder shall be treated as a separate payment in a series of payments within the meaning of, and for purposes of, Code Section 409A.

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IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the Company, by its duly authorized representative, and by the Executive, as of the date first above written.

THE EXECUTIVE

ASCEND WELLNESS HOLDINGS, INC.

By:

/s/ Francis Perullo

By:

/s/ Samuel Brill

Name:

Francis Perullo

Name:

Samuel Brill

Title:

Chief Executive Officer

-17-

Exhibit A

None.

-18-

Exhibit 10.3

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) dated as of August 26, 2024 (the “Effective Date”) is made and entered into by and between Ascend Wellness Holdings, Inc., a Delaware corporation with a principal place of business at 44 Whippany Road, Suite 101, Morristown, NJ 07960 (the “Company”), and Roman O. Nemchenko, an individual whose principal business address is in care of the Company at 44 Whippany Road, Suite 101, Morristown, NJ 07960 (the “Executive”).

RECITALS

WHEREAS, the Company formerly employed Executive as Chief Accounting Officer of the Company;

WHEREAS, the Company and Executive wish to enter into a new employment relationship with one another in connection with Executive’s new role with the Company as Chief Financial Officer.

WHEREAS, the parties desire to memorialize the terms of the Executive’s employment as Chief Financial Officer, on the terms and conditions hereinafter set forth.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, terms, provisions, and conditions set forth in this Agreement, the parties hereby agree:

1.Employment. Subject to the terms and conditions set forth in this Agreement, the Company hereby offers, and the Executive hereby accepts, employment as Chief Financial Officer of the Company, commencing August 26, 2024 (the “Commencement Date”).

3.Capacity and Performance.

a.During the term hereof, the Executive shall serve the Company as Chief Financial Officer, reporting directly to the Chief Executive Officer (the “CEO”) of the Company.

b.During the term hereof, the Executive shall be employed by the Company on a full-time and diligent basis and shall perform such duties and responsibilities on behalf of the Company as are customarily performed by a Chief Financial Officer of a company of comparable size and as may be reasonably designated from time to time by the CEO.

-1-

Executive’s personal investments and affairs, in each case, so long as such activities (A) do not, individually or in the aggregate, interfere with the performance of the Executive’s duties under this Agreement and (B) are not contrary to the interests of the Company or any of its affiliates or competitive with the Company or any of its affiliates.

a.Base Salary. The Company shall pay the Executive a base salary at the rate of $450,000 per annum (the “Base Salary”). The Executive’s base salary shall be payable in accordance with the payroll practices of the Company for its executives and subject to increase from time to time by the Board, in its sole discretion. The base salary set forth in this Section 4(a), as from time to time increased, is hereafter referred to as the “Base Salary.”

b.Annual Incentive Plan. For fiscal year 2024 only and, subject to Executive’s continued employment in good standing with the Company, Executive will receive a guaranteed cash bonus in the amount of $175,000 (the “2024 Guaranteed Bonus”) to be paid in accordance with the Company’s regular payroll practices (currently March 2025), subject to applicable tax reporting and withholding requirements. Beginning in 2025 and for each complete fiscal year thereafter, the Executive shall be eligible to earn an annual performance-based bonus (the “Annual Bonus”). The Executive’s annual target bonus opportunity for each such fiscal year shall be based on the achievement of financial, operational, and strategic/individual objectives established by the Board, in its sole discretion. The terms of the Annual Bonus, including Executive’s financial, operational, and strategic/individual objectives, are subject to approval by the Board and/or its designees, and may be modified from time to time. Except for the 2024 Guaranteed Bonus, all payouts are based on achieving such financial, operational, and strategic/individual objectives, are discretionary, and if such threshold performance objectives are not achieved for any fiscal year after 2024, then the Executive shall not receive an Annual Bonus for such fiscal year. Executive must be employed at the time of payout and, with the exception of the 2024 Guaranteed Bonus, payout may be made via any method of payment determined by the Board to include equity and/or cash.

c.Equity Incentives. Subject to approval of the Board, on or as soon as reasonably practicable after the Commencement Date, the Executive will be granted 350,000 Restricted Stock Units pursuant to and as defined in the Ascend Wellness Holdings, Inc. 2021 Stock Incentive Plan (the “Plan”) and subject to the terms and conditions of the applicable award agreement (“Initial RSU Grant”). The Initial RSU Grant shall vest twenty-five percent (25%) annually over a four (4) year period. Executive shall be eligible to participate in the Company’s Long Term Incentive Program, starting in the 2025 fiscal year, the terms of which are subject to the Board or its designee’s discretion from year to year. The Initial RSU Grant shall be subject to the terms and conditions of the Plan. In the event of a conflict between the terms of this Agreement and the Plan, the Plan shall govern.

-2-

Notwithstanding anything herein to the contrary, the Company may amend, modify or terminate any Insurance Benefits at any time in its discretion.

b.Disability.

i.The Company may terminate the Executive’s employment hereunder, upon notice to the Executive, in the event that the Executive becomes disabled during his employment hereunder through any illness, injury, accident or condition of either a physical or psychological nature and, as a result, is unable to perform substantially all of his duties and responsibilities hereunder, with or without reasonable accommodation, for any period of ninety (90) consecutive days or more, or one hundred eighty (180) days (whether or not consecutive) during any period of three hundred and sixty-five (365) consecutive calendar days. In the event of such termination, the Company shall pay to the Executive the Final Compensation and shall otherwise comply with the provisions of this Section 5(b). In addition to such Final Compensation, the Executive will be entitled to (x) the Benefit Continuation he would have been entitled to receive under clause (iii) of Section 5(d) below had the Executive been terminated by the Company other than for Cause in accordance with such Section 5(d). The Company shall have no further obligation to the Executive hereunder.

-3-

Company’s disability income plan (or any disability insurance policy of the Company).

iv.Any determination as to whether during any period the Executive is disabled through any illness, injury, accident or condition of either a physical or psychological nature so as to be unable to perform substantially all of his duties and responsibilities hereunder shall be made by a physician satisfactory to both the Executive (or his duly appointed guardian) and the Company, provided that if the Executive and the Company do not agree on a physician, the Executive and the Company shall each select a physician and these two together shall select a third physician, whose determination as to disability shall be binding on all parties. If the Executive fails to submit to such medical examination, the Company’s determination of the issue shall be binding on the Executive.

ii.Material non-performance by the Executive of such duties and responsibilities on behalf of the Company as are customarily performed by a Chief Financial Officer of a company of comparable size;

iii.The Executive’s committing any act of fraud, embezzlement, misappropriation, or theft;

iv.The Executive’s material violation of the Company’s policies;

vii.The Executive’s conviction of a felony (including pleading guilty or nolo contendere to a felony) or commitment of other acts causing a material

-4-

detriment to the reputation, the business or a business relationship of the Company or any of its affiliates; provided, however, that for the avoidance of doubt, no conviction or plea of nolo contendere of a felony or crime that occurs solely as a result of a violation of U.S. federal law concerning cannabis or the cannabis industry shall be deemed to constitute “Cause”, so long as (A) the acts, omissions, conduct or activity related to cannabis or the cannabis industry giving rise to any such conviction or plea of nolo contendere of a felony or crime could be reasonably believed to be in compliance with applicable state and local laws and (B) such conviction or plea of nolo contendere is not likely to interfere with the ability of the Company or any of its affiliates to maintain a license to harvest, cultivate, process, or sell cannabis or otherwise continue to operate its business;

ix.The Executive’s material breach of the terms of this Agreement.

Upon the termination of the Executive’s employment hereunder for Cause, the Company shall have no further obligation hereunder to the Executive, other than for Final Compensation.

-5-

any of its affiliates or if the Executive is otherwise not eligible to continue participation in such plans under applicable law or plan terms, then, to the extent possible without resulting in such violation, fines, penalties or excise taxes, the Company shall instead make monthly cash payments to the Executive in an amount equal to the employer portion of the monthly insurance premiums that would have been applicable had the Executive been eligible to continue such participation (the benefit described in this clause (iii), collectively, the “Benefit Continuation”) (items (i) – (iii) collectively shall be defined as the “Severance Benefits”).

e.Resignation for Good Reason. Executive may terminate this Agreement at any time for Good Reason, provided that the Company shall have thirty (30) days from such notice of termination in which to cure (if curable) any act or omission constituting Good Reason pursuant to subsections (i) to (iv) below prior to the effective termination date. If the Company fails to cure the act or omission constituting Good Reason, Executive shall be entitled to the Severance Benefits. For purposes of this Agreement, “Good Reason” means: (i) any material reduction in the Executive’s Base Salary other than in connection with a general reduction in base salaries that affects all similarly situated executives in substantially the same proportions; (ii) any material reduction in the Executive’s target Annual Bonus (other than solely as a result of a reduction in Base Salary); (iii) any material diminution in the Executive’s responsibilities or authority within the Company so as to fundamentally change the nature and extent of the job other than that which occurs as a result of a Change of Control Event; (iv); and any failure by the Company to comply with any material provision of this Agreement that remains uncured after thirty (30) days.

-6-

-7-

indirectly, on the Executive’s own behalf or on behalf of any other person or entity, contact, solicit, divert, induce, call on, take away, or do business with (or attempt to do any of the foregoing) any customer or client of the Company or any of its affiliates (or any person or entity who, during the twelve (12) months prior to the Termination Date, was engaged in mutual contact, discussion or correspondence with the Company in respect of becoming a customer or client of the Company or any of its affiliates) with whom the Executive had contact within the twelve (12) months immediately prior to the Termination Date.

-8-

which are in connection with legal process, required governmental testimony or filings, or administrative or arbitral proceedings (including, without limitation, depositions in connection with such proceedings) or (z) made in performance reviews.

-9-

methods and/or strategies of the Company or any of its affiliates. Confidential Information also includes all information received by the Company or any of its affiliates under an obligation of confidentiality to a third party of which the Executive has knowledge. Notwithstanding the foregoing, Confidential Information shall not include any information that is generally available, or is made generally available, to the public other than as a result of a direct or indirect unauthorized disclosure by the Executive or any other person or entity subject to a confidentiality obligation.

-10-

software, work of authorship or other Works (as defined below), trade secret, innovation, trademark, data, database, or the like, whether or not patentable, together with all intellectual property rights therein.

-11-

8.Excise Tax.

b.The determination of whether the Total Payments shall be reduced as provided in Section 8(a) and the amount of such reduction shall be made at the Company’s expense by an accounting firm selected by Company from among the 10 largest accounting firms in the United States or by qualified independent tax counsel (the “Determining Party”); provided, that Executive shall be given advance notice of the Determining Party selected by the Company, and shall have the opportunity to reject the selection, within two business days of being notified of the selection, on the basis of that Determining Party’s having a conflict of interest or other reasonable basis, in which case the Company shall select an alternative firm among the 10 largest accounting firms in the United States or alternative independent qualified tax counsel, which shall become the Determining Party. Such Determining Party shall provide its determination (the “Determination”), together with detailed supporting calculations and documentation to the Company and Executive, within 10 business days of the termination of Executive’s employment or at such other time mutually agreed by the Company and Executive. If the Determining Party determines that no Excise Tax is payable by Executive with respect to the Total Payments, it shall furnish Executive with an opinion reasonably acceptable to

-12-

Executive that no Excise Tax will be imposed with respect to any such payments and, absent manifest error, such Determination shall be binding, final and conclusive upon the Company and Executive. If the Determining Party determines that an Excise Tax would be payable, the Company shall have the right to accept the Determination as to the extent of the reduction, if any, pursuant to Section 8(a), or to have such Determination reviewed by another accounting firm selected by the Company, at the Company’s expense. If the two accounting firms do not agree, a third accounting firm shall be jointly chosen by Executive and the Company, in which case the determination of such third accounting firm shall be binding, final and conclusive upon the Company and Executive.

-13-

11.Withholding. All payments made by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law.

a.if to the Executive, at his last known address on the books of the Company, with a copy to ; and

b.if to the Company, at its principal place of business, attention, Secretary, with a copy to legal@awholdings.com; or

c.to such other address as either party may specify by notice to the other actually received.

-14-

17.Headings. The headings and captions in this Agreement are for convenience only and in no way define or describe the scope or content of any provision of this Agreement.

-15-

[Remainder of page intentionally left blank]

-16-

IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the Company, by its duly authorized representative, and by the Executive, as of the date first above written.

THE EXECUTIVE

ASCEND WELLNESS HOLDINGS, INC.

By:

/s/ Roman O. Nemchenko

By:

/s/ Samuel Brill

Name:

Roman O. Nemchenko

Name:

Samuel Brill

Title:

Chief Executive Officer

-17-

Exhibit A

None.

-18-

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECURITIES EXCHANGE ACT OF 1934

RULE 13a-14(a) OR 15d-14(a)

I, Samuel Brill, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Ascend Wellness Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


November 12, 2024						/s/ Samuel Brill
						Samuel Brill
						Chief Executive Officer (Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECURITIES EXCHANGE ACT OF 1934

RULE 13a-14(a) OR 15d-14(a)

I, Roman Nemchenko, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Ascend Wellness Holdings, Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


November 12, 2024						/s/ Roman Nemchenko
						Roman Nemchenko
						Chief Financial Officer (Principal Financial Officer)

EXHIBIT 32

CERTIFICATIONS PURSUANT TO SECURITIES EXCHANGE ACT OF 1934

RULE 13a-14(b) OR 15d-14(b) AND

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Ascend Wellness Holdings, Inc. (the “Company”) for the quarter ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Samuel Brill, Chief Executive Officer of the Company, and Roman Nemchenko, Chief Financial Officer of the Company, each certifies for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


November 12, 2024						/s/ Samuel Brill
						Samuel Brill
						Chief Executive Officer (Principal Executive Officer)


November 12, 2024						/s/ Roman Nemchenko
						Roman Nemchenko
						Chief Financial Officer (Principal Financial Officer)

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Nov. 08, 2024
Entity Listings [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	333-254800
Entity Registrant Name	ASCEND WELLNESS HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	83-0602006
Entity Address, Address Line One	44 Whippany Rd.
Entity Address, Address Line Two	Suite 101
Entity Address, City or Town	Morristown
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07960
City Area Code	646
Local Phone Number	661-7600
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001756390
Current Fiscal Year End Date	--12-31
Class A common stock
Entity Listings [Line Items]
Entity Common Stock, Shares Outstanding		214,365,317
Class B common stock
Entity Listings [Line Items]
Entity Common Stock, Shares Outstanding		65,000

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets
Cash and cash equivalents	$ 65,279	$ 72,508
Accounts receivable, net	38,775	28,298
Inventory	97,387	95,294
Notes receivable	1,764	13,116
Other current assets	10,373	19,644
Total current assets	213,578	228,860
Property and equipment, net	263,491	268,082
Operating lease right-of-use assets	138,776	130,556
Intangible assets, net	212,191	221,452
Goodwill	49,599	47,538
Other noncurrent assets	18,238	23,062
TOTAL ASSETS	895,873	919,550
Current liabilities
Accounts payable and accrued liabilities	58,894	71,112
Current portion of debt, net	73,739	11,148
Operating lease liabilities, current	5,125	3,660
Income taxes payable	753	0
Other current liabilities	6,618	6,766
Total current liabilities	145,129	92,686
Long-term debt, net	232,162	297,565
Operating lease liabilities, noncurrent	267,414	261,087
Deferred tax liabilities, net	25,568	35,745
Other non-current liabilities	136,691	89,595
Total liabilities	806,964	776,678
Commitments and contingencies (Note 15)
Stockholders' Equity
Preferred stock, $0.001 par value per share; 10,000 shares authorized, none issued and outstanding as of September 30, 2024 and December 31, 2023	0	0
Additional paid-in capital	471,436	458,027
Accumulated deficit	(383,565)	(315,362)
Total stockholders' equity	88,086	142,872
Non-controlling interests	823	0
Total stockholders' equity	88,909	142,872
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	895,873	919,550
Class A common stock
Stockholders' Equity
Class A and Class B common stock	215	207
Class B common stock
Stockholders' Equity
Class A and Class B common stock	$ 0	$ 0

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Class A common stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	750,000,000	750,000,000
Common stock shares issued (in shares)	214,346,000	206,810,000
Common stock, shares outstanding (in shares)	214,346,000	206,810,000
Class B common stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000	100,000
Common stock shares issued (in shares)	65,000	65,000
Common stock, shares outstanding (in shares)	65,000	65,000

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Statement [Abstract]
Revenue, net	$ 141,647	$ 141,268	$ 425,593	$ 378,432
Cost of goods sold	(97,918)	(97,712)	(288,254)	(270,853)
Gross profit	43,729	43,556	137,339	107,579
Operating expenses
General and administrative expenses	46,146	40,009	138,703	111,762
Operating (loss) profit	(2,417)	3,547	(1,364)	(4,183)
Other (expense) income
Interest expense	(16,481)	(8,963)	(33,554)	(28,419)
Other, net	409	902	1,098	25,211
Total other expense	(16,072)	(8,061)	(32,456)	(3,208)
Loss before income taxes	(18,489)	(4,514)	(33,820)	(7,391)
Income tax expense	(9,767)	(6,726)	(34,383)	(21,480)
Net loss	$ (28,256)	$ (11,240)	$ (68,203)	$ (28,871)
Net loss per share attributable to Class A and Class B common stockholders — basic (in dollars per share)	$ (0.13)	$ (0.05)	$ (0.32)	$ (0.15)
Net loss per share attributable to Class A and Class B common stockholders — diluted (in dollars per share)	$ (0.13)	$ (0.05)	$ (0.32)	$ (0.15)
Weighted-average common shares outstanding — basic (in shares)	214,290	205,710	212,134	196,616
Weighted-average common shares outstanding — diluted (in shares)	214,290	205,710	212,134	196,616

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Stockholders’ Equity	Class A and Class B Common Stock	Additional Paid-In Capital	Accumulated Deficit	Non- Controlling Interests
Beginning balance (in shares) at Dec. 31, 2022			188,064
Beginning balance at Dec. 31, 2022	$ 163,415		$ 188	$ 430,375	$ (267,148)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Vesting of equity-based payment awards (in shares)			2,023
Vesting of equity-based payment awards	0		$ 2	(2)
Equity-based compensation expense	4,555			4,555
Taxes withheld under equity-based compensation plans, net (in shares)			(521)
Taxes withheld under equity-based compensation plans, net	(537)		$ (1)	(536)
Net (loss) income	(18,472)				(18,472)
Ending balance (in shares) at Mar. 31, 2023			189,566
Ending balance at Mar. 31, 2023	148,961		$ 189	434,392	(285,620)
Beginning balance (in shares) at Dec. 31, 2022			188,064
Beginning balance at Dec. 31, 2022	163,415		$ 188	430,375	(267,148)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Recognition of non-controlling interests	0
Net (loss) income	(28,871)
Ending balance (in shares) at Sep. 30, 2023			205,935
Ending balance at Sep. 30, 2023	159,465		$ 206	455,278	(296,019)
Beginning balance (in shares) at Mar. 31, 2023			189,566
Beginning balance at Mar. 31, 2023	148,961		$ 189	434,392	(285,620)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued in private placement, net of offering expenses (in shares)			9,859
Shares issued in private placement, net of offering expenses	7,000		$ 10	6,990
Shares issued in acquisitions or asset purchases (in shares)			5,185
Shares issued in acquisitions or asset purchases	4,770		$ 5	4,765
Vesting of equity-based payment awards (in shares)			382
Vesting of equity-based payment awards	0		$ 1	(1)
Equity-based compensation expense	4,457			4,457
Taxes withheld under equity-based compensation plans, net (in shares)			(102)
Taxes withheld under equity-based compensation plans, net	(74)			(74)
Net (loss) income	841				841
Ending balance (in shares) at Jun. 30, 2023			204,890
Ending balance at Jun. 30, 2023	165,955		$ 205	450,529	(284,779)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Vesting of equity-based payment awards (in shares)			1,384
Vesting of equity-based payment awards	0		$ 1	(1)
Equity-based compensation expense	4,964			4,964
Taxes withheld under equity-based compensation plans, net (in shares)			(339)
Taxes withheld under equity-based compensation plans, net	(214)			(214)
Net (loss) income	(11,240)				(11,240)
Ending balance (in shares) at Sep. 30, 2023			205,935
Ending balance at Sep. 30, 2023	159,465		$ 206	455,278	(296,019)
Beginning balance (in shares) at Dec. 31, 2023			206,875
Beginning balance at Dec. 31, 2023	142,872	$ 142,872	$ 207	458,027	(315,362)	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Vesting of equity-based payment awards (in shares)			7,053
Vesting of equity-based payment awards	0		$ 7	(7)
Equity-based compensation expense	13,554	13,554		13,554
Taxes withheld under equity-based compensation plans, net (in shares)			(2,433)
Taxes withheld under equity-based compensation plans, net	(3,483)	(3,483)	$ (2)	(3,481)
Recognition of non-controlling interests	1,050					1,050
Net (loss) income	(18,163)	(18,163)			(18,163)
Ending balance (in shares) at Mar. 31, 2024			211,495
Ending balance at Mar. 31, 2024	135,830	134,780	$ 212	468,093	(333,525)	1,050
Beginning balance (in shares) at Dec. 31, 2023			206,875
Beginning balance at Dec. 31, 2023	$ 142,872	142,872	$ 207	458,027	(315,362)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)	206
Recognition of non-controlling interests	$ 1,050
Net (loss) income	(68,203)
Ending balance (in shares) at Sep. 30, 2024			214,411
Ending balance at Sep. 30, 2024	88,909	88,086	$ 215	471,436	(383,565)	823
Beginning balance (in shares) at Mar. 31, 2024			211,495
Beginning balance at Mar. 31, 2024	135,830	134,780	$ 212	468,093	(333,525)	1,050
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Vesting of equity-based payment awards (in shares)			3,712
Vesting of equity-based payment awards	0		$ 4	(4)
Equity-based compensation expense	5,284	5,284		5,284
Taxes withheld under equity-based compensation plans, net (in shares)			(1,387)
Taxes withheld under equity-based compensation plans, net	(1,787)	(1,787)	$ (1)	(1,786)
Net (loss) income	(21,784)	(21,784)			(21,784)
Ending balance (in shares) at Jun. 30, 2024			213,820
Ending balance at Jun. 30, 2024	117,543	116,493	$ 215	471,587	(355,309)	1,050
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Vesting of equity-based payment awards (in shares)			529
Vesting of equity-based payment awards	0		$ 0	0
Equity-based compensation expense	(195)	(195)		(195)
Taxes withheld under equity-based compensation plans, net (in shares)			(144)
Taxes withheld under equity-based compensation plans, net	(131)	(131)		(131)
Exercise of stock options (in shares)			206
Exercise of stock options	175	175		175
Distributions to non-controlling interests	(227)					(227)
Net (loss) income	(28,256)	(28,256)			(28,256)
Ending balance (in shares) at Sep. 30, 2024			214,411
Ending balance at Sep. 30, 2024	$ 88,909	$ 88,086	$ 215	$ 471,436	$ (383,565)	$ 823

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash flows from operating activities
Net loss	$ (68,203)	$ (28,871)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	48,689	44,192
Amortization of operating lease assets	1,451	827
Non-cash interest expense	6,380	7,082
Equity-based compensation expense	15,805	13,976
Deferred income taxes	(10,177)	(10,875)
Gain on sale of assets	(11)	(226)
Other	11,765	17,837
Changes in operating assets and liabilities, net of effects of acquisitions
Accounts receivable	(10,477)	(11,278)
Inventory	(4,760)	(5,693)
Other current assets	1,186	(5,726)
Other noncurrent assets	(759)	(484)
Accounts payable and accrued liabilities	(5,079)	12,601
Other current liabilities	(148)	615
Lease liabilities	(1,767)	(569)
Income taxes payable	54,231	25,258
Net cash provided by operating activities	38,126	58,666
Cash flows from investing activities
Additions to capital assets	(17,510)	(16,012)
Investments in notes receivable	(600)	(15,169)
Collection of notes receivable	8,345	245
Proceeds from sale of assets	11	15,000
Acquisition of businesses, net of cash acquired	(9,800)	(19,857)
Purchase of intangible assets	(10,450)	(15,943)
Net cash used in investing activities	(30,004)	(51,736)
Cash flows from financing activities
Proceeds from issuance of common stock in private placement	0	7,000
Proceeds from issuance of debt	217,413	0
Repayments of debt	(215,786)	(23,188)
Debt issuance costs	(6,658)	0
Repayments under finance leases	(366)	(256)
Taxes withheld under equity-based compensation plans, net	(5,060)	(711)
Proceeds from the exercise of stock options	175	0
Payment of contingent consideration	(4,842)	0
Distributions to non-controlling interests	(227)	0
Net cash used in financing activities	(15,351)	(17,155)
Net decrease in cash, cash equivalents, and restricted cash	(7,229)	(10,225)
Cash, cash equivalents, and restricted cash at beginning of period	72,508	74,146
Cash, cash equivalents, and restricted cash at end of period	65,279	63,921
Supplemental Cash Flow Information
Interest paid	15,460	20,579
Income tax (refunds) payments, net	(9,671)	7,057
Non-cash investing and financing activities
Capital expenditures incurred but not yet paid	2,981	6,102
Taxes withheld under equity-based compensation plans, net	953	214
Financing costs incurred but not yet paid	535	0
Non-controlling interest recognized upon initial consolidation of variable interest entities	1,050	0
Issuance of shares in business acquisitions	$ 0	$ 4,770

THE COMPANY AND NATURE OF OPERATIONS	9 Months Ended
THE COMPANY AND NATURE OF OPERATIONS	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
THE COMPANY AND NATURE OF OPERATIONS	THE COMPANY AND NATURE OF OPERATIONS Ascend Wellness Holdings, Inc., which operates through its subsidiaries (collectively referred to as “AWH,” “Ascend,” “we,” “us,” “our,” or the “Company”), is a vertically integrated multi-state operator in the United States cannabis industry. AWH owns, manages, and operates cannabis cultivation facilities and dispensaries in several states across the United States, including Illinois, Maryland, Massachusetts, Michigan, New Jersey, Ohio, and Pennsylvania. Our core business is the cultivation, manufacturing, and distribution of cannabis consumer packaged goods, which are sold through company-owned retail stores and to third-party licensed retail cannabis stores. AWH is headquartered in Morristown, New Jersey. Shares of the Company’s Class A common stock are listed on the Canadian Securities Exchange (the “CSE”) under the ticker symbol “AAWH.U” and are quoted on the OTCQX® Best Market (the “OTCQX”) under the symbol “AAWH.”

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with (i) United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information, and (ii) the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of our management, our unaudited condensed consolidated financial statements and accompanying notes (the “Financial Statements”) include all normal recurring adjustments that are necessary for the fair statement of the interim periods presented. Interim results of operations are not necessarily indicative of results for the full year, or any other period. The Financial Statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “Annual Report”), as filed with the United States Securities and Exchange Commission (“SEC”) and with the relevant Canadian securities regulatory authorities under its profile on the System for Electronic Document Analysis and Retrieval Plus (“SEDAR+”). Except as noted below, there have been no material changes to the Company’s significant accounting policies and estimates during the nine months ended September 30, 2024. The Financial Statements include the accounts of Ascend Wellness Holdings, Inc. and its subsidiaries. Refer to Note 8, “Variable Interest Entities,” for additional information regarding certain entities that are not wholly-owned by the Company. We include the results of acquired businesses in the consolidated statements of operations from their respective acquisition dates. All intercompany accounts and transactions have been eliminated in consolidation. We round amounts in the Financial Statements to thousands, except per unit or per share amounts or as otherwise stated. We calculate all percentages, per-unit, and per-share data from the underlying whole-dollar amounts. Thus, certain amounts may not foot, crossfoot, or recalculate based on reported numbers due to rounding. The Financial Statements are expressed in U.S. dollars, which is the Company’s functional currency. Unless otherwise indicated, all references to years are to our fiscal year, which ends on December 31. We are an emerging growth company under federal securities laws and as such we are able to elect to follow scaled disclosure requirements for this filing and can delay adopting new or revised accounting standards until such time as those standards apply to private companies. Use of Estimates The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts. We base our estimates on historical experience, known or expected trends, independent valuations, and various other measurements that we believe to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Liquidity As reflected in the Financial Statements, the Company had an accumulated deficit as of September 30, 2024 and December 31, 2023, as well as a net loss for the nine months ended September 30, 2024 and 2023, which are indicators that raise substantial doubt of our ability to continue as a going concern. Management believes that substantial doubt of our ability to continue as a going concern for at least one year from the issuance of these Financial Statements has been alleviated due to: (i) cash on hand and (ii) continued growth of sales from our consolidated operations. Management plans to continue to access capital markets for additional funding through debt and/or equity financings to supplement future cash needs, as may be required. However, management cannot provide any assurances that the Company will be successful in accomplishing its business plans. If the Company is unable to raise additional capital whenever necessary, it may be forced to decelerate or curtail certain of its operations until such time as additional capital becomes available. Cash and Cash Equivalents and Restricted Cash As of September 30, 2024 and December 31, 2023, we did not hold significant restricted cash or cash equivalents. Fair Value of Financial Instruments During the nine months ended September 30, 2024 and 2023, we had no transfers of assets or liabilities between any of the hierarchy levels. In addition to assets and liabilities that are measured at fair value on a recurring basis, we are also required to measure certain assets at fair value on a non-recurring basis that are subject to fair value adjustments in specific circumstances. These assets can include: goodwill; intangible assets; property and equipment; and lease-related right-of-use (“ROU”) assets. We estimate the fair value of these assets using primarily unobservable Level 3 inputs. Basic and Diluted Earnings (Loss) per Share The Company computes earnings (loss) per share (“EPS”) using the two-class method required for multiple classes of common stock. The rights, including the liquidation and dividend rights, of the Class A common stock and Class B common stock are substantially identical, except for voting and conversion rights. As the liquidation and dividend rights are identical, undistributed earnings are allocated on a proportionate basis to each class of common stock and the resulting basic and diluted net loss per share attributable to common stockholders are, therefore, the same for both Class A and Class B common stock on both an individual and combined basis. Basic EPS is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects potential dilution and is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period increased by the number of additional common shares that would have been outstanding if all potential common shares had been issued and were dilutive. However, potentially dilutive securities are excluded from the computation of diluted EPS to the extent that their effect is anti-dilutive. Potential dilutive securities include incremental shares of common stock issuable upon the exercise of warrants, unvested restricted stock awards, unvested restricted stock units, and outstanding stock options, as applicable. At September 30, 2024 and 2023, 15,273 and 26,840 shares of common stock equivalents, respectively, were excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive. Shares of restricted stock granted by us are considered to be legally issued and outstanding as of the date of grant, notwithstanding that the shares remain subject to the risk of forfeiture if the vesting conditions for such shares are not met, and are included in the number of shares of Class A common stock outstanding, as applicable. Weighted-average common shares outstanding excludes time-based and performance-based unvested shares of restricted Class A common stock, as restricted shares are treated as issued and outstanding for financial statement presentation purposes only after such shares have vested and, therefore, have ceased to be subject to a risk of forfeiture. Recently Issued Accounting Pronouncements The following standards have been recently issued by the Financial Accounting Standards Board (“FASB”). Pronouncements that are not applicable to the Company or where it has been determined do not have a significant impact on us have been excluded herein. Reference Rate Reform In March 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This guidance was effective upon issuance as of March 12, 2020 and could be adopted as reference rate reform activities occurred through December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, to extend the sunset date of the transition guidance included in ASU 2020-04 to December 31, 2024. This guidance can be adopted prospectively as reference rate reform activities occur, with early adoption permitted, and is not expected to have a material impact on our consolidated financial statements. Segment Reporting In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands and enhances the disclosures required for reportable segments in annual and interim consolidated financial statements, including reportable segment expenses, interim segment profit or loss, and how an entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The guidance in this update is effective for the Company for the fiscal year ending December 31, 2024 and interim periods beginning with the fiscal period commencing January 1, 2025 and should be adopted retrospectively unless it is impractical to do so. Early adoption is permitted. We are currently evaluating the impact of this update on our disclosures in the consolidated financial statements. Income Taxes In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures, including disaggregation in the rate reconciliation table and disaggregation information related to income taxes paid. The amendments in this update are effective for the Company for the fiscal year ending December 31, 2026 on a prospective or retrospective basis, with early adoption permitted. We are currently evaluating the impact of this update on our disclosures in the consolidated financial statements.

REPORTABLE SEGMENTS AND REVENUE

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

REPORTABLE SEGMENTS AND REVENUE

Disaggregation of Revenue


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Retail revenue	$	93,599	$	101,263	$	281,882	$	273,862
Wholesale revenue	77,894		68,671		236,436		188,263
	171,493		169,934		518,318		462,125
Elimination of inter-company revenue	(29,846)		(28,666)		(92,725)		(83,693)
Total revenue, net	$	141,647	$	141,268	$	425,593	$	378,432

ACQUISITIONS

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

ACQUISITIONS

Business Combinations

2024 Acquisition

The following table summarizes the preliminary purchase price allocation, which remains preliminary as management refines certain estimates during the measurement period:


(in thousands)
Assets acquired (liabilities assumed):


Property and equipment(1)	$	1,525
Other assets	76
Licenses(2)	6,210
Goodwill(3)	2,261
Accounts payable and accrued liabilities	(72)
Net assets acquired	$	10,000

2023 Acquisition

Asset Acquisitions

2024 Asset Acquisitions

Massachusetts Purchase Agreement

Detroit License

Previous Asset Acquisitions

Ohio Patient Access

Illinois Licenses

INVENTORY

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

INVENTORY

The components of inventory are as follows:


(in thousands)	September 30, 2024		December 31, 2023
Materials and supplies	$	10,983	$	16,824
Work in process	40,114		36,612
Finished goods	46,290		41,858
Total	$	97,387	$	95,294

NOTES RECEIVABLE

9 Months Ended

Sep. 30, 2024

Receivables [Abstract]

NOTES RECEIVABLE


(in thousands)	September 30, 2024		December 31, 2023
Massachusetts Note(1)	$	1,764	$	147
MMNY - working capital loan(2)	—		2,422
Maryland Loan Receivable(3)	—		10,547
Total	$	1,764	$	13,116

No impairment losses on notes receivable were recognized during the nine months ended September 30, 2024 or 2023, other than as described above.

PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Property and equipment consists of the following:


(in thousands)	September 30, 2024		December 31, 2023
Leasehold improvements	$	202,341	$	192,807
Buildings	83,703		72,204
Furniture, fixtures, and equipment	75,833		71,474
Construction in progress	3,329		6,511
Land	5,782		5,242
Property and equipment, gross	370,988		348,238
Less: accumulated depreciation	107,497		80,156
Property and equipment, net	$	263,491	$	268,082

VARIABLE INTEREST ENTITIES

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

VARIABLE INTEREST ENTITIES

Recent Transactions

January 2024 Loan Agreement

February 2024 Loan Agreement

Financial Information



(in thousands)	September 30, 2024		December 31, 2023
Current assets	$	4,414	$	585
Other noncurrent assets	61,754		44,722
Current liabilities	6,144		25,460
Noncurrent liabilities	13,418		9,516

Deficit	(8,838)		(3,476)



	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Revenue, net	$	5,980	$	—	$	7,752	$	—


Net loss	(891)		(672)		(5,362)		(1,869)

INTANGIBLE ASSETS AND GOODWILL

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS AND GOODWILL


(in thousands)	September 30, 2024		December 31, 2023
Intangible Assets
Licenses and permits	$	262,017	$	250,867
In-place leases	19,963		19,963
Trade names	380		380
	282,360		271,210
Accumulated amortization:
Licenses and permits	(53,708)		(34,427)
In-place leases	(16,081)		(14,951)
Trade names	(380)		(380)
	(70,169)		(49,758)

Total intangible assets, net	$	212,191	$	221,452

No impairment indicators were noted during the nine months ended September 30, 2024 or 2023 and, as such, we did not record any impairment charges during either period.

Goodwill


(in thousands)
Balance, December 31, 2023	$	47,538
Acquisitions(1)	2,261
Adjustments to purchase price allocation(1)	(200)
Balance, September 30, 2024	$	49,599

(1)Refer to Note 4, “Acquisitions,” for additional information.

LEASES

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

LEASES

The components of lease assets and lease liabilities and their classification on the unaudited Condensed Consolidated Balance Sheets were as follows:


(in thousands)	Classification	September 30, 2024		December 31, 2023
Lease assets
Operating leases	Operating lease right-of-use assets	$	138,776	$	130,556
Finance leases	Property and equipment, net	1,355		1,772
Total lease assets		$	140,131	$	132,328

Lease liabilities
Current liabilities
Operating leases	Operating lease liabilities, current	$	5,125	$	3,660
Finance leases	Current portion of debt, net	549		496
Noncurrent liabilities
Operating leases	Operating lease liabilities, noncurrent	267,414		261,087
Finance leases	Long-term debt, net	777		1,196
Total lease liabilities		$	273,865	$	266,439

The components of lease costs and classification within the unaudited Condensed Consolidated Statements of Operations were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Operating lease costs
Capitalized to inventory	$	9,349	$	9,262	$	27,459	$	25,960
General and administrative expenses	980		651		3,117		1,914
Total operating lease costs	$	10,329	$	9,913	$	30,576	$	27,874

Finance lease costs
Amortization of leased assets(1)	$	139	$	138	$	417	$	320
Interest on lease liabilities	48		68		154		138
Total finance lease costs	$	187	$	206	$	571	$	458

(1)Included as a component of depreciation expense within “General and administrative expenses” on the accompanying unaudited Condensed Consolidated Statements of Operations.

At September 30, 2024 and December 31, 2023, $7,312 and $6,028, respectively, of lease costs remained capitalized in inventory.

The following table presents information on short-term and variable lease costs:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023


Total short-term and variable lease costs	$	1,195	$	1,176	$	3,162	$	3,353

Sublease income generated during the three and nine months ended September 30, 2024 and 2023 was immaterial.

The following table includes supplemental cash and non-cash information related to our leases:


	Nine Months Ended September 30,
(in thousands)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	30,898	$	27,581
Operating cash flows from finance leases	154		138
Financing cash flows from finance leases	366		256
ROU assets obtained in exchange for new lease obligations
Operating leases	$	9,560	$	34,583
Finance leases	—		1,159

The following table summarizes the weighted-average remaining lease term and discount rate:


	September 30, 2024		December 31, 2023
Weighted-average remaining term (years)
Operating leases	13.5		14.3
Finance leases	2.3		3.0
Weighted-average discount rate
Operating leases	15.1	%	15.1	%
Finance leases	13.7	%	13.7	%


(in thousands)	Operating Lease Liabilities		Finance Lease Liabilities
Remainder of 2024	$	10,586	$	173
2025	43,257		693
2026	43,595		572
2027	44,759		103
2028	45,967		—
Thereafter	488,667		—
Total lease payments	676,831		1,541
Less: imputed interest	404,292		215
Present value of lease liabilities	$	272,539	$	1,326

Sale Leaseback Transactions


(in thousands)	Remainder of 2024		2025		2026		2027		2028		Thereafter		Total
Cash payments due under financing liabilities	$	623	$	2,525	$	2,599	$	2,676	$	2,755	$	6,722	$	17,900

LEASES

The components of lease assets and lease liabilities and their classification on the unaudited Condensed Consolidated Balance Sheets were as follows:


(in thousands)	Classification	September 30, 2024		December 31, 2023
Lease assets
Operating leases	Operating lease right-of-use assets	$	138,776	$	130,556
Finance leases	Property and equipment, net	1,355		1,772
Total lease assets		$	140,131	$	132,328

Lease liabilities
Current liabilities
Operating leases	Operating lease liabilities, current	$	5,125	$	3,660
Finance leases	Current portion of debt, net	549		496
Noncurrent liabilities
Operating leases	Operating lease liabilities, noncurrent	267,414		261,087
Finance leases	Long-term debt, net	777		1,196
Total lease liabilities		$	273,865	$	266,439

The components of lease costs and classification within the unaudited Condensed Consolidated Statements of Operations were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Operating lease costs
Capitalized to inventory	$	9,349	$	9,262	$	27,459	$	25,960
General and administrative expenses	980		651		3,117		1,914
Total operating lease costs	$	10,329	$	9,913	$	30,576	$	27,874

Finance lease costs
Amortization of leased assets(1)	$	139	$	138	$	417	$	320
Interest on lease liabilities	48		68		154		138
Total finance lease costs	$	187	$	206	$	571	$	458

(1)Included as a component of depreciation expense within “General and administrative expenses” on the accompanying unaudited Condensed Consolidated Statements of Operations.

At September 30, 2024 and December 31, 2023, $7,312 and $6,028, respectively, of lease costs remained capitalized in inventory.

The following table presents information on short-term and variable lease costs:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023


Total short-term and variable lease costs	$	1,195	$	1,176	$	3,162	$	3,353

Sublease income generated during the three and nine months ended September 30, 2024 and 2023 was immaterial.

The following table includes supplemental cash and non-cash information related to our leases:


	Nine Months Ended September 30,
(in thousands)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	30,898	$	27,581
Operating cash flows from finance leases	154		138
Financing cash flows from finance leases	366		256
ROU assets obtained in exchange for new lease obligations
Operating leases	$	9,560	$	34,583
Finance leases	—		1,159

The following table summarizes the weighted-average remaining lease term and discount rate:


	September 30, 2024		December 31, 2023
Weighted-average remaining term (years)
Operating leases	13.5		14.3
Finance leases	2.3		3.0
Weighted-average discount rate
Operating leases	15.1	%	15.1	%
Finance leases	13.7	%	13.7	%


(in thousands)	Operating Lease Liabilities		Finance Lease Liabilities
Remainder of 2024	$	10,586	$	173
2025	43,257		693
2026	43,595		572
2027	44,759		103
2028	45,967		—
Thereafter	488,667		—
Total lease payments	676,831		1,541
Less: imputed interest	404,292		215
Present value of lease liabilities	$	272,539	$	1,326

Sale Leaseback Transactions


(in thousands)	Remainder of 2024		2025		2026		2027		2028		Thereafter		Total
Cash payments due under financing liabilities	$	623	$	2,525	$	2,599	$	2,676	$	2,755	$	6,722	$	17,900

DEBT

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

DEBT


(in thousands)	September 30, 2024		December 31, 2023
2024 Term Notes(1)	$	235,000	$	—
2021 Credit Facility(2)	60,000		275,000
Finance liabilities(3)	18,100		18,100
Sellers’ notes(4)	11,996		18,591
Financing Agreement(5)	1,964		1,766
Finance leases(6)	1,326		1,692
Total debt	$	328,386	$	315,149

Current portion of debt	74,509		11,148
Less: unamortized deferred financing costs	770		—
Current portion of debt, net	$	73,739	$	11,148

Long-term debt	253,877		304,001
Less: unamortized deferred financing costs	21,715		6,436
Long-term debt, net	$	232,162	$	297,565

(3)Finance liabilities related to failed sale leaseback transactions. See Note 10, “Leases,” for additional information.

(6)Liabilities related to finance leases. See Note 10, “Leases,” for additional information.

Debt Maturities

As of September 30, 2024, the following cash payments are payable under our debt arrangements:


(in thousands)	Remainder of 2024		2025		2029		Total
Sellers’ notes(1)	$	1,250	$	11,060	$	—	$	12,310
Term note maturities	—		60,000		235,000		295,000

(1)Certain cash payments include an interest accretion component. The timing of certain payments may vary based on regulatory approval of the underlying transactions.

Interest Expense

Interest expense during the three and nine months ended September 30, 2024 and 2023 consisted of the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Cash interest	$	8,707	$	6,515	$	21,699	$	19,479
Loss on extinguishment of debt(1)	5,475		—		5,475		—
Accretion	1,636		1,802		4,432		7,082
Interest on financing liabilities(2)	615		578		1,794		1,720
Interest on finance leases	48		68		154		138
Total	$	16,481	$	8,963	$	33,554	$	28,419

(2)Interest on financing liability related to failed sale leaseback transactions. See Note 10, “Leases,” for additional details.

STOCKHOLDERS’ EQUITY

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

STOCKHOLDERS’ EQUITY

The following table summarizes the total shares of Class A common stock and Class B common stock outstanding as of September 30, 2024 and December 31, 2023:


(in thousands)	September 30, 2024	December 31, 2023
Shares of Class A common stock	214,346	206,810
Shares of Class B common stock	65	65
Total	214,411	206,875

Warrants

The following table summarizes the warrants activity during the nine months ended September 30, 2024:


	Number of Warrants (in thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Exercise Period (years)	Aggregate Intrinsic Value (in thousands)(1)
Outstanding, December 31, 2023	4,568	$	3.33	2.3	$	—


Outstanding, September 30, 2024(2)	4,568	$	3.33	1.5	$	—

(1)Based on the amount by which the closing market price of our Class A common stock exceeds the exercise price on each date indicated.

EQUITY-BASED COMPENSATION EXPENSE

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

EQUITY-BASED COMPENSATION EXPENSE

Equity Incentive Plans

Stock Options

The following table summarizes stock option activity during the nine months ended September 30, 2024:


	Options Outstanding
(in thousands, except per share amounts)	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (years)	Aggregate Intrinsic Value(1)
Outstanding, December 31, 2023	4,010	$	1.80	3.9	$	353


Exercised	(206)	0.85			8
Forfeited	(112)	1.15
Expired	(346)	2.91
Outstanding, September 30, 2024	3,346	$	1.77	3.2	$	—
Exercisable at September 30, 2024	2,212	$	1.91	3.1	$	—

(1)Based on the amount by which the closing market price of our Class A common stock exceeds the exercise price on each date indicated.

Restricted Stock Units

The following table summarizes the RSU activity during the nine months ended September 30, 2024:


	Number of Shares (in thousands)	Weighted-Average Grant Date Fair Value per Share



Unvested, December 31, 2023	12,021	$	2.15
Granted(1)	12,110	1.29
Vested(1)(2)	(11,294)	2.29
Forfeited	(5,478)	1.10
Unvested, September 30, 2024	7,359	$	1.31

(2)Includes 3,964 vested shares that were withheld to cover tax obligations and were subsequently cancelled.

As of September 30, 2024, total unrecognized compensation cost related to the RSUs was $8,154, which is expected to be recognized over a weighted-average remaining period of 2.8 years.

Performance Based Awards

Compensation Expense by Type of Award

The following table details the equity-based compensation expense by type of award for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
RSUs(1)	$	(287)	$	4,656	$	14,575	$	13,133
Stock Options	92		308		1,230		728
Restricted Common Shares	—		—		—		115
Total equity-based compensation expense	$	(195)	$	4,964	$	15,805	$	13,976

(1)The three months ended September 30, 2024 reflects the reversal of equity-based compensation associated with RSUs and performance based awards that were forfeited during the period.

Employee Stock Purchase Plan

INCOME TAXES

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES


	Three Months Ended September 30,						Nine Months Ended September 30,
($ in thousands)	2024			2023			2024			2023
Loss before income taxes	$	(18,489)		$	(4,514)		$	(33,820)		$	(7,391)
Income tax expense	9,767			6,726			34,383			21,480
Effective tax rate	(52.8)		%	(149.0)		%	(101.7)		%	(290.6)		%

Gross profit	$	43,729		$	43,556		$	137,339		$	107,579
Effective tax rate on gross profit	22.3		%	15.4		%	25.0		%	20.0		%


	Nine Months Ended September 30, 2024
Balance, December 31, 2023	$	72,955
Additions for tax positions related to the current year	26,315
Additions for tax positions related to prior years(1)	27,131
Balance, September 30, 2024	$	126,401

(1)Includes approximately $17,000 of IRC Section 280E refunds received during the nine months ended September 30, 2024.

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Commitments The Company does not have significant future annual commitments, other than related to leases and debt, which are disclosed in Notes 10 and 11, respectively, and certain payments related to acquisitions, as disclosed in Note 4. The Company has commercial relationships with license holders across the markets in which it operates with mutually beneficial purchasing and supply arrangements entered into in the ordinary course of business. Through the acquisition of Story of PA CR, LLC (“Story of PA”) in April 2022, the Company is party to a research collaboration agreement with the Geisinger Commonwealth School of Medicine (“Geisinger”), a Pennsylvania Department of Health-Certified Medical Marijuana Academic Clinical Research Center, through which to which the Company will help fund clinical research to benefit the patients of Pennsylvania. A total of up to $10,000 of additional funding may be provided pursuant to the research collaboration agreement and is expected to be funded over the course of the ten years following the transaction date based on a percentage of annual revenues associated with the underlying operations, of which none has been funded to date. This additional $10,000 is included within “Other non-current liabilities” on the unaudited Condensed Consolidated Balance Sheets at September 30, 2024 and December 31, 2023. Legal and Other Matters The Company’s operations are subject to a variety of local and state regulations. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, or losses of permits that could result in the Company ceasing operations. While management believes that the Company is in compliance with applicable local and state regulations as of September 30, 2024 in all material respects, cannabis regulations continue to evolve and are subject to differing interpretations, and accordingly, the Company may be subject to regulatory fines, penalties, or restrictions in the future. State laws that permit and regulate the production, distribution, and use of cannabis for adult-use or medical purposes are in direct conflict with the Controlled Substances Act (21 U.S.C. § 811) (the “CSA”), which makes cannabis use and possession federally illegal. Although certain states and territories of the United States authorize medical and/or adult-use cannabis production and distribution by licensed or registered entities, under United States federal law, the possession, use, cultivation, and transfer of cannabis and any related drug paraphernalia is illegal and any such acts are criminal acts under federal law under the CSA. Although the Company’s activities are believed to be compliant with applicable state and local laws, strict compliance with state and local laws with respect to cannabis may neither absolve the Company of liability under United States federal law, nor may it provide a defense to any federal proceeding which may be brought against the Company. The Company may be, from time to time, subject to various administrative, regulatory, and other legal proceedings arising in the ordinary course of business. Contingent liabilities associated with legal proceedings are recorded when a liability is probable and the contingent liability can be estimated. We do not accrue for contingent losses that, in our judgment, are considered to be reasonably possible but not probable. At September 30, 2024 there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on our consolidated results of operations, other than as disclosed below. MedMen NY Litigation On February 25, 2021, the Company entered into a definitive investment agreement (the “Investment Agreement”) with subsidiaries of MedMen Enterprises Inc. (“MedMen”), under which we would have, subject to regulatory approval, completed an investment (the “Investment”) of approximately $73,000 in MedMen NY, Inc. (“MMNY”), a licensed medical cannabis operator in the state of New York. Following the completion of the transactions contemplated by the Investment Agreement, we were expected to hold all the outstanding equity of MMNY. Specifically, the Investment Agreement provided that at closing, the Company was going to pay to MedMen’s senior lenders $35,000, less certain transaction costs and a prepaid deposit of $4,000, and AWH New York, LLC was going to issue a senior secured promissory note in favor of MMNY’s senior secured lender in the principal amount of $28,000, guaranteed by AWH, which cash investment and note would be used to reduce the amounts owed to MMNY’s senior secured lender. Following its investment, AWH would hold a controlling interest in MMNY equal to approximately 86.7% of the equity in MMNY, and be provided with an option to acquire MedMen’s remaining interest in MMNY in the future for a nominal additional payment, which option the Company intended to exercise. The Investment Agreement also required AWH to make an additional investment of $10,000 in MMNY, which investment would also be used to repay MMNY’s senior secured lender, if adult-use cannabis sales commenced in MMNY’s dispensaries. The Company contends that, in December 2021, the parties to the Investment Agreement received the required approvals from the State of New York to close the transactions contemplated by the Investment Agreement, but MedMen has disputed the adequacy of the approvals provided by the State of New York. The Company delivered notice to MedMen in December 2021 that it wished to close the transactions as required by the Investment Agreement. Nevertheless, MedMen, on January 2, 2022, gave notice to the Company that MedMen purported to terminate the Investment Agreement. Following receipt of such notice, on January 13, 2022, the Company filed a complaint against MedMen and others in the Commercial Division of the Supreme Court of the State of New York (the “Court”), requesting specific performance that the transactions contemplated by the Investment Agreement must move forward, and such other relief as the Court may deem appropriate. The Company simultaneously moved for a temporary restraining order and preliminary injunction (the “Motion”) requiring MedMen to operate its New York business in the ordinary course of business and to refrain from any activities or transactions that might impair, encumber, or dissipate MedMen’s New York assets. The parties resolved the Motion via a “Stipulation and Order” entered by the Court on January 21, 2022 that required that MMNY operate only in compliance with the law and in a manner consistent with its ordinary course of business that preserved all assets of MMNY. It further required MMNY to not take certain actions, including any actions that would have a material adverse effect on MedMen’s New York business. On March 27, 2023, the parties entered a further stipulation that modified the January 21, 2022 Stipulation and Order by lifting the Court’s prohibition against a sale or transfer of MMNY or its assets, without waiver of any claims that the Company might have in the event of such a transaction. That further stipulation modifying the January 21, 2022 Stipulation and Order was entered by the Court on August 1, 2023. On January 24, 2022, MedMen filed counterclaims against the Company, alleging that Ascend had breached the Investment Agreement, and seeking declaratory relief that MedMen had properly terminated the Investment Agreement. On February 14, 2022, the Company moved to dismiss MedMen’s counterclaims and filed an amended complaint (the “First Amended Complaint”) that included additional claims against MedMen for breach of contract. The First Amended Complaint contained several causes of action, including for breach of contract and breach of the covenant of good faith and fair dealing. The First Amended Complaint sought damages in addition to continuing to seek injunctive and declaratory relief. On March 7, 2022, MedMen filed amended counterclaims, an answer, and affirmative defenses to the First Amended Complaint. On March 28, 2022, the Company moved to dismiss MedMen’s amended counterclaims. On April 20, 2022, the parties entered into a stipulation extending the time for MedMen to oppose the Company’s motion to dismiss until May 5, 2022. In addition, the parties agreed to stay all discovery, including both party and non-party discovery. On May 5, 2022, the parties filed another stipulation order with the Court adjourning until further notice from the Court MedMen’s time to oppose the Company’s motion to dismiss MedMen’s amended counterclaims. The parties again stipulated that all discovery remains stayed pending further order from the Court. On May 10, 2022, the Company and MedMen signed a term sheet (the “Term Sheet”), pursuant to which the parties agreed to use best efforts to enter into a settlement agreement and enter into new or amended transactional documents. Specifically, if consummated, the agreements contemplated by the Term Sheet would have entailed, among other things, the Company paying MedMen $15,000 in additional transaction consideration, and MedMen withdrawing its counterclaims against the Company. Per the amended transaction terms contemplated in the Term Sheet, upon closing, the Company would have received a 99.99% controlling interest in MMNY and the Company would have paid MedMen $74,000, which reflected the original transaction consideration plus an additional $11,000 per the parties’ Term Sheet, less a $4,000 deposit that the Company already paid. The amended transaction terms contemplated in the Term Sheet also would have required MedMen to provide a representation and warranty that the status of the MMNY assets had not materially changed since December 31, 2021 and an acknowledgement that the representations and warranties from the Investment Agreement would survive for three months after the closing of the contemplated transactions. However, after the Company determined that MedMen could not make or provide the representations and warranties that MedMen would have been required to make as part of the contemplated transactions, the Company determined that it no longer intended to consummate the contemplated transactions. On September 30, 2022, the Company sought leave from the Court to file a second amended complaint (the “Second Amended Complaint”). The Second Amended Complaint contains breach of contract claims against MedMen, as well as a claim for the breach of the implied covenant of good faith and fair dealing, and a claim for anticipatory breach of contract. In connection with those claims, the Company is no longer seeking injunctive or declaratory relief; however, the Company continues to seek damages from MedMen, including, but not limited to, the return of the $4,000 deposit, approximately $2,400 of advances pursuant to a working capital loan agreement (as described in Note 6, “Notes Receivable”) and other capital expenditure advances paid to MMNY by the Company. On November 21, 2022, the parties entered into a stipulation whereby MedMen agreed to the filing of the Second Amended Complaint, which is now the Company’s operative pleading in the litigation. In addition, in the stipulation, the Company agreed that it would not contest MedMen’s filing of second amended counterclaims against the Company while reserving all rights with respect to any such counterclaims. Because the parties agreed to the filing of each side’s amended pleadings, on November 28, 2022, the Court determined that Ascend’s March 2022 motion to dismiss was moot. On December 21, 2022, MedMen filed its second amended counterclaims, an answer, and affirmative defenses to the Company’s Second Amended Complaint. In addition to the allegations in MedMen’s earlier pleadings, MedMen now also alleged that the Company breached the Term Sheet. On January 20, 2023, the Company moved to dismiss MedMen’s second amended counterclaims. On August 18, 2023, the Court issued a Decision and Order on the Company’s motion to dismiss, dismissing seven of MedMen’s ten counterclaims, including each of the counterclaims brought by MedMen relating to the Term Sheet. On September 26, 2023, MedMen filed a motion seeking leave to file its third amended counterclaims, in which MedMen seeks to revive its previously dismissed counterclaims relating to the Term Sheet. On October 24, 2023, the Company filed an opposition to that motion for leave. As further discussed below, the Court denied that motion on February 2, 2024. In addition, on October 18, 2023, MedMen filed a Notice of Appeal of the Court’s August 18, 2023 Decision and Order with respect to the dismissal of MedMen’s three counterclaims relating to the Term Sheet. On November 1, 2023 the Company filed a Notice of Cross-Appeal with respect to the Court’s determination that the Company’s motion to dismiss was not subject to New York’s anti-SLAPP statute. Both parties have yet to perfect the appeals. On February 2, 2024, the Court issued a Decision and Order denying MedMen’s motion for leave to file its third amended counterclaims. On February 21, 2024, the current counsel-of-record for MedMen filed an order to show cause with the Court seeking leave to withdraw as counsel and stay proceedings for thirty days to permit MedMen time to obtain new counsel. On March 20, 2024, the Court granted such withdrawal motion and appointed April 25, 2024 as the deadline for MedMen to obtain new counsel, which, as of the date of filing of this Form 10-Q, had not occurred. On April 26, 2024, MedMen announced that it made an assignment into bankruptcy pursuant to Canada’s Bankruptcy and Insolvency Act on April 24, 2024 and B. Riley Farber Inc. was appointed as its bankruptcy trustee. In addition, MedMen announced that MedMen’s wholly owned subsidiary, MM CAN USA, Inc., a California corporation, was placed into receivership in the Los Angeles Superior Court, Santa Monica Division on April 23, 2024 to effectuate an orderly dissolution and liquidation of its California-based assets. MedMen further announced that it intends to initiate additional receivership proceedings in those U.S. states where MM CAN USA, Inc. controls or owns assets, through which the operations and assets of MedMen’s subsidiaries will be dissolved or liquidated pursuant to applicable laws in the United States. On May 21, 2024, the Los Angeles Superior Court issued an order confirming the appointment a receiver for MM CAN USA, Inc. The receiver has submitted monthly reports to the Los Angeles Superior Court estimating that the liabilities of MedMen’s subsidiaries likely significantly exceed the estimated liquidated value of MedMen's subsidiaries and their respective assets, and such reports indicate that efforts to dissolve, liquidate, or abandon such assets are ongoing. During the year ended December 31, 2022, following the Company’s decision to no longer consummate the contemplated transactions, the Company established an estimated reserve of $3,700 related to the amounts that it has been actively pursuing collecting, which reserve is included within “Other current assets” on the unaudited Condensed Consolidated Balance Sheet as of December 31, 2023. During the nine months ended September 30, 2024, the Company increased the estimated reserve by $5,447, which is included within “General and administrative expenses” on the unaudited Condensed Consolidated Statements of Operations and within “Other” on the unaudited Condensed Consolidated Statements of Cash Flows. The total reserve as of September 30, 2024 is reflective of all outstanding balances and of which $2,422 is included within “Notes receivable” on the unaudited Condensed Consolidated Balance Sheet, $6,695 is included within “Other current assets,” and the remainder is included within “Other noncurrent assets.” Other Matter In April 2021, the Company, through a subsidiary, entered into a settlement agreement with TVP, LLC, TVP Grand Rapids, LLC and, TVP Alma, LLC (collectively, the “TVP Parties”) regarding a dispute related to a purchase agreement for the Company’s potential acquisition of certain real estate properties in Michigan. As part of that settlement, the Company issued historical equity units to the TVP Parties to be held in the name of an escrow agent (the “Escrow Units”). The Escrow Units were fully issued and outstanding as of the settlement date and were to remain in the escrow account until such time as the TVP Parties exercised an option to hold the Escrow Units directly (the “Put Option”), which could be exercised for three years. In February 2024, the TVP Parties notified the Company that they were exercising the Put Option and the transfer was completed in May 2024, at which time the Escrow Units were released to the TVP Parties and the TVP Parties transferred to the Company the equity interests of the entities that hold three real estate properties. The underlying properties were determined to have a total fair value of $5,400 as of the settlement date, which was included within “Other noncurrent assets” on the unaudited Condensed Consolidated Balance Sheet as of December 31, 2023 and was reclassified to “Property and equipment, net” as of the transfer date. Prior to the completion of the transfer, the Company operated dispensaries at these locations pursuant to lease agreements, which operations will continue at the now-owned properties.

RELATED PARTY TRANSACTIONS	9 Months Ended
RELATED PARTY TRANSACTIONS	Sep. 30, 2024
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	RELATED PARTY TRANSACTIONS There were no significant related party transactions during the nine months ended September 30, 2024, other than as disclosed in Note 6, “Notes Receivable.”

SUPPLEMENTAL INFORMATION

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

SUPPLEMENTAL INFORMATION

The following table presents supplemental information regarding our other current assets:


(in thousands)	September 30, 2024		December 31, 2023
Prepaid expenses	$	5,928	$	7,270
Deposits and other receivables	3,972		9,302
Construction deposits	210		569
Tenant improvement allowance	—		1,010
Other	263		1,493
Total	$	10,373	$	19,644

The following table presents supplemental information regarding our accounts payable and accrued liabilities:


(in thousands)	September 30, 2024		December 31, 2023
Accounts payable	$	29,346	$	34,687
Accrued payroll and related expenses	9,799		21,306
Accrued interest	6,239		—

Fixed asset purchases	2,981		5,738
Other	10,529		9,381


Total	$	58,894	$	71,112

The following table presents supplemental information regarding our general and administrative expenses:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Compensation	$	16,441	$	17,855	$	57,267	$	49,043
Depreciation and amortization	8,764		7,495		26,058		21,927
Rent and utilities	5,943		5,859		16,782		15,059
Professional services	7,763		3,217		16,037		9,864
Insurance	1,420		1,165		4,365		3,908
Marketing	1,887		1,034		4,031		3,303
Gain on sale of assets	—		—		(11)		(226)
Other	3,928		3,384		14,174		8,884
Total	$	46,146	$	40,009	$	138,703	$	111,762

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS Management has evaluated subsequent events to determine if events or transactions occurring through the filing date of this Quarterly Report on Form 10-Q require adjustment to or disclosure in the Company’s Financial Statements. There were no events that require adjustment to or disclosure in the Financial Statements, except as disclosed.

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with (i) United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information, and (ii) the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of our management, our unaudited condensed consolidated financial statements and accompanying notes (the “Financial Statements”) include all normal recurring adjustments that are necessary for the fair statement of the interim periods presented. Interim results of operations are not necessarily indicative of results for the full year, or any other period. The Financial Statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “Annual Report”), as filed with the United States Securities and Exchange Commission (“SEC”) and with the relevant Canadian securities regulatory authorities under its profile on the System for Electronic Document Analysis and Retrieval Plus (“SEDAR+”). Except as noted below, there have been no material changes to the Company’s significant accounting policies and estimates during the nine months ended September 30, 2024. We round amounts in the Financial Statements to thousands, except per unit or per share amounts or as otherwise stated. We calculate all percentages, per-unit, and per-share data from the underlying whole-dollar amounts. Thus, certain amounts may not foot, crossfoot, or recalculate based on reported numbers due to rounding. The Financial Statements are expressed in U.S. dollars, which is the Company’s functional currency. Unless otherwise indicated, all references to years are to our fiscal year, which ends on December 31. We are an emerging growth company under federal securities laws and as such we are able to elect to follow scaled disclosure requirements for this filing and can delay adopting new or revised accounting standards until such time as those standards apply to private companies.
Principles of Consolidation	The Financial Statements include the accounts of Ascend Wellness Holdings, Inc. and its subsidiaries. Refer to Note 8, “Variable Interest Entities,” for additional information regarding certain entities that are not wholly-owned by the Company. We include the results of acquired businesses in the consolidated statements of operations from their respective acquisition dates. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts. We base our estimates on historical experience, known or expected trends, independent valuations, and various other measurements that we believe to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.
Cash and Cash Equivalents and Restricted Cash	Cash and Cash Equivalents and Restricted Cash As of September 30, 2024 and December 31, 2023, we did not hold significant restricted cash or cash equivalents.
Fair Value of Financial Instruments	Fair Value of Financial Instruments During the nine months ended September 30, 2024 and 2023, we had no transfers of assets or liabilities between any of the hierarchy levels. In addition to assets and liabilities that are measured at fair value on a recurring basis, we are also required to measure certain assets at fair value on a non-recurring basis that are subject to fair value adjustments in specific circumstances. These assets can include: goodwill; intangible assets; property and equipment; and lease-related right-of-use (“ROU”) assets. We estimate the fair value of these assets using primarily unobservable Level 3 inputs.
Basic and Diluted Earnings (Loss) per Share	Basic and Diluted Earnings (Loss) per Share The Company computes earnings (loss) per share (“EPS”) using the two-class method required for multiple classes of common stock. The rights, including the liquidation and dividend rights, of the Class A common stock and Class B common stock are substantially identical, except for voting and conversion rights. As the liquidation and dividend rights are identical, undistributed earnings are allocated on a proportionate basis to each class of common stock and the resulting basic and diluted net loss per share attributable to common stockholders are, therefore, the same for both Class A and Class B common stock on both an individual and combined basis. Basic EPS is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects potential dilution and is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period increased by the number of additional common shares that would have been outstanding if all potential common shares had been issued and were dilutive. However, potentially dilutive securities are excluded from the computation of diluted EPS to the extent that their effect is anti-dilutive. Potential dilutive securities include incremental shares of common stock issuable upon the exercise of warrants, unvested restricted stock awards, unvested restricted stock units, and outstanding stock options, as applicable. At September 30, 2024 and 2023, 15,273 and 26,840 shares of common stock equivalents, respectively, were excluded from the calculation of diluted EPS because their inclusion would have been anti-dilutive. Shares of restricted stock granted by us are considered to be legally issued and outstanding as of the date of grant, notwithstanding that the shares remain subject to the risk of forfeiture if the vesting conditions for such shares are not met, and are included in the number of shares of Class A common stock outstanding, as applicable. Weighted-average common shares outstanding excludes time-based and performance-based unvested shares of restricted Class A common stock, as restricted shares are treated as issued and outstanding for financial statement presentation purposes only after such shares have vested and, therefore, have ceased to be subject to a risk of forfeiture.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements The following standards have been recently issued by the Financial Accounting Standards Board (“FASB”). Pronouncements that are not applicable to the Company or where it has been determined do not have a significant impact on us have been excluded herein. Reference Rate Reform In March 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This guidance was effective upon issuance as of March 12, 2020 and could be adopted as reference rate reform activities occurred through December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, to extend the sunset date of the transition guidance included in ASU 2020-04 to December 31, 2024. This guidance can be adopted prospectively as reference rate reform activities occur, with early adoption permitted, and is not expected to have a material impact on our consolidated financial statements. Segment Reporting In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands and enhances the disclosures required for reportable segments in annual and interim consolidated financial statements, including reportable segment expenses, interim segment profit or loss, and how an entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The guidance in this update is effective for the Company for the fiscal year ending December 31, 2024 and interim periods beginning with the fiscal period commencing January 1, 2025 and should be adopted retrospectively unless it is impractical to do so. Early adoption is permitted. We are currently evaluating the impact of this update on our disclosures in the consolidated financial statements. Income Taxes In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures, including disaggregation in the rate reconciliation table and disaggregation information related to income taxes paid. The amendments in this update are effective for the Company for the fiscal year ending December 31, 2026 on a prospective or retrospective basis, with early adoption permitted. We are currently evaluating the impact of this update on our disclosures in the consolidated financial statements.

REPORTABLE SEGMENTS AND REVENUE (Tables)

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

Schedule of Disaggregation of Revenue


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Retail revenue	$	93,599	$	101,263	$	281,882	$	273,862
Wholesale revenue	77,894		68,671		236,436		188,263
	171,493		169,934		518,318		462,125
Elimination of inter-company revenue	(29,846)		(28,666)		(92,725)		(83,693)
Total revenue, net	$	141,647	$	141,268	$	425,593	$	378,432

ACQUISITIONS (Tables)

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Schedule of Recognized Identified Assets Acquired

The following table summarizes the preliminary purchase price allocation, which remains preliminary as management refines certain estimates during the measurement period:


(in thousands)
Assets acquired (liabilities assumed):


Property and equipment(1)	$	1,525
Other assets	76
Licenses(2)	6,210
Goodwill(3)	2,261
Accounts payable and accrued liabilities	(72)
Net assets acquired	$	10,000

INVENTORY (Tables)

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

Schedule of Inventory

The components of inventory are as follows:


(in thousands)	September 30, 2024		December 31, 2023
Materials and supplies	$	10,983	$	16,824
Work in process	40,114		36,612
Finished goods	46,290		41,858
Total	$	97,387	$	95,294

NOTES RECEIVABLE (Tables)

9 Months Ended

Sep. 30, 2024

Receivables [Abstract]

Schedule of Notes Receivable


(in thousands)	September 30, 2024		December 31, 2023
Massachusetts Note(1)	$	1,764	$	147
MMNY - working capital loan(2)	—		2,422
Maryland Loan Receivable(3)	—		10,547
Total	$	1,764	$	13,116

PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consists of the following:


(in thousands)	September 30, 2024		December 31, 2023
Leasehold improvements	$	202,341	$	192,807
Buildings	83,703		72,204
Furniture, fixtures, and equipment	75,833		71,474
Construction in progress	3,329		6,511
Land	5,782		5,242
Property and equipment, gross	370,988		348,238
Less: accumulated depreciation	107,497		80,156
Property and equipment, net	$	263,491	$	268,082

VARIABLE INTEREST ENTITIES (Tables)

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Variable Interest Entities



(in thousands)	September 30, 2024		December 31, 2023
Current assets	$	4,414	$	585
Other noncurrent assets	61,754		44,722
Current liabilities	6,144		25,460
Noncurrent liabilities	13,418		9,516

Deficit	(8,838)		(3,476)



	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Revenue, net	$	5,980	$	—	$	7,752	$	—


Net loss	(891)		(672)		(5,362)		(1,869)

INTANGIBLE ASSETS AND GOODWILL (Tables)

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets


(in thousands)	September 30, 2024		December 31, 2023
Intangible Assets
Licenses and permits	$	262,017	$	250,867
In-place leases	19,963		19,963
Trade names	380		380
	282,360		271,210
Accumulated amortization:
Licenses and permits	(53,708)		(34,427)
In-place leases	(16,081)		(14,951)
Trade names	(380)		(380)
	(70,169)		(49,758)

Total intangible assets, net	$	212,191	$	221,452

Schedule of Goodwill

Goodwill


(in thousands)
Balance, December 31, 2023	$	47,538
Acquisitions(1)	2,261
Adjustments to purchase price allocation(1)	(200)
Balance, September 30, 2024	$	49,599

(1)Refer to Note 4, “Acquisitions,” for additional information.

LEASES (Tables)

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Schedule of Components of Lease Assets and Lease Liabilities

The components of lease assets and lease liabilities and their classification on the unaudited Condensed Consolidated Balance Sheets were as follows:


(in thousands)	Classification	September 30, 2024		December 31, 2023
Lease assets
Operating leases	Operating lease right-of-use assets	$	138,776	$	130,556
Finance leases	Property and equipment, net	1,355		1,772
Total lease assets		$	140,131	$	132,328

Lease liabilities
Current liabilities
Operating leases	Operating lease liabilities, current	$	5,125	$	3,660
Finance leases	Current portion of debt, net	549		496
Noncurrent liabilities
Operating leases	Operating lease liabilities, noncurrent	267,414		261,087
Finance leases	Long-term debt, net	777		1,196
Total lease liabilities		$	273,865	$	266,439

Schedule of Lease Cost

The components of lease costs and classification within the unaudited Condensed Consolidated Statements of Operations were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Operating lease costs
Capitalized to inventory	$	9,349	$	9,262	$	27,459	$	25,960
General and administrative expenses	980		651		3,117		1,914
Total operating lease costs	$	10,329	$	9,913	$	30,576	$	27,874

Finance lease costs
Amortization of leased assets(1)	$	139	$	138	$	417	$	320
Interest on lease liabilities	48		68		154		138
Total finance lease costs	$	187	$	206	$	571	$	458

(1)Included as a component of depreciation expense within “General and administrative expenses” on the accompanying unaudited Condensed Consolidated Statements of Operations.

The following table presents information on short-term and variable lease costs:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023


Total short-term and variable lease costs	$	1,195	$	1,176	$	3,162	$	3,353

Schedule of Supplemental Cash and Non-Cash Information for Leases

The following table includes supplemental cash and non-cash information related to our leases:


	Nine Months Ended September 30,
(in thousands)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	30,898	$	27,581
Operating cash flows from finance leases	154		138
Financing cash flows from finance leases	366		256
ROU assets obtained in exchange for new lease obligations
Operating leases	$	9,560	$	34,583
Finance leases	—		1,159

Schedule Of Weighted Average Remaining Lease Term and Discount Rate

The following table summarizes the weighted-average remaining lease term and discount rate:


	September 30, 2024		December 31, 2023
Weighted-average remaining term (years)
Operating leases	13.5		14.3
Finance leases	2.3		3.0
Weighted-average discount rate
Operating leases	15.1	%	15.1	%
Finance leases	13.7	%	13.7	%

Schedule of Operating Lease, Liability Maturity


(in thousands)	Operating Lease Liabilities		Finance Lease Liabilities
Remainder of 2024	$	10,586	$	173
2025	43,257		693
2026	43,595		572
2027	44,759		103
2028	45,967		—
Thereafter	488,667		—
Total lease payments	676,831		1,541
Less: imputed interest	404,292		215
Present value of lease liabilities	$	272,539	$	1,326

Schedule of Finance Lease Liability Maturity


(in thousands)	Operating Lease Liabilities		Finance Lease Liabilities
Remainder of 2024	$	10,586	$	173
2025	43,257		693
2026	43,595		572
2027	44,759		103
2028	45,967		—
Thereafter	488,667		—
Total lease payments	676,831		1,541
Less: imputed interest	404,292		215
Present value of lease liabilities	$	272,539	$	1,326

Schedule of Financing Liability, Maturity Schedule


(in thousands)	Remainder of 2024		2025		2026		2027		2028		Thereafter		Total
Cash payments due under financing liabilities	$	623	$	2,525	$	2,599	$	2,676	$	2,755	$	6,722	$	17,900

DEBT (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of Debt Instruments


(in thousands)	September 30, 2024		December 31, 2023
2024 Term Notes(1)	$	235,000	$	—
2021 Credit Facility(2)	60,000		275,000
Finance liabilities(3)	18,100		18,100
Sellers’ notes(4)	11,996		18,591
Financing Agreement(5)	1,964		1,766
Finance leases(6)	1,326		1,692
Total debt	$	328,386	$	315,149

Current portion of debt	74,509		11,148
Less: unamortized deferred financing costs	770		—
Current portion of debt, net	$	73,739	$	11,148

Long-term debt	253,877		304,001
Less: unamortized deferred financing costs	21,715		6,436
Long-term debt, net	$	232,162	$	297,565

(3)Finance liabilities related to failed sale leaseback transactions. See Note 10, “Leases,” for additional information.

(6)Liabilities related to finance leases. See Note 10, “Leases,” for additional information.

Schedule of Maturities of Debt

As of September 30, 2024, the following cash payments are payable under our debt arrangements:


(in thousands)	Remainder of 2024		2025		2029		Total
Sellers’ notes(1)	$	1,250	$	11,060	$	—	$	12,310
Term note maturities	—		60,000		235,000		295,000

(1)Certain cash payments include an interest accretion component. The timing of certain payments may vary based on regulatory approval of the underlying transactions.

Schedule of Interest Expense

Interest expense during the three and nine months ended September 30, 2024 and 2023 consisted of the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Cash interest	$	8,707	$	6,515	$	21,699	$	19,479
Loss on extinguishment of debt(1)	5,475		—		5,475		—
Accretion	1,636		1,802		4,432		7,082
Interest on financing liabilities(2)	615		578		1,794		1,720
Interest on finance leases	48		68		154		138
Total	$	16,481	$	8,963	$	33,554	$	28,419

(2)Interest on financing liability related to failed sale leaseback transactions. See Note 10, “Leases,” for additional details.

STOCKHOLDERS’ EQUITY (Tables)

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Schedule of Common Stock Outstanding

The following table summarizes the total shares of Class A common stock and Class B common stock outstanding as of September 30, 2024 and December 31, 2023:


(in thousands)	September 30, 2024	December 31, 2023
Shares of Class A common stock	214,346	206,810
Shares of Class B common stock	65	65
Total	214,411	206,875

Schedule of Warrants

The following table summarizes the warrants activity during the nine months ended September 30, 2024:


	Number of Warrants (in thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Exercise Period (years)	Aggregate Intrinsic Value (in thousands)(1)
Outstanding, December 31, 2023	4,568	$	3.33	2.3	$	—


Outstanding, September 30, 2024(2)	4,568	$	3.33	1.5	$	—

(1)Based on the amount by which the closing market price of our Class A common stock exceeds the exercise price on each date indicated.

EQUITY-BASED COMPENSATION EXPENSE (Tables)

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Options Roll Forward

The following table summarizes stock option activity during the nine months ended September 30, 2024:


	Options Outstanding
(in thousands, except per share amounts)	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (years)	Aggregate Intrinsic Value(1)
Outstanding, December 31, 2023	4,010	$	1.80	3.9	$	353


Exercised	(206)	0.85			8
Forfeited	(112)	1.15
Expired	(346)	2.91
Outstanding, September 30, 2024	3,346	$	1.77	3.2	$	—
Exercisable at September 30, 2024	2,212	$	1.91	3.1	$	—

(1)Based on the amount by which the closing market price of our Class A common stock exceeds the exercise price on each date indicated.

Schedule of Unvested Restricted Stock Units Roll Forward

The following table summarizes the RSU activity during the nine months ended September 30, 2024:


	Number of Shares (in thousands)	Weighted-Average Grant Date Fair Value per Share



Unvested, December 31, 2023	12,021	$	2.15
Granted(1)	12,110	1.29
Vested(1)(2)	(11,294)	2.29
Forfeited	(5,478)	1.10
Unvested, September 30, 2024	7,359	$	1.31

(2)Includes 3,964 vested shares that were withheld to cover tax obligations and were subsequently cancelled.

Schedule of Share-based Compensation

The following table details the equity-based compensation expense by type of award for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
RSUs(1)	$	(287)	$	4,656	$	14,575	$	13,133
Stock Options	92		308		1,230		728
Restricted Common Shares	—		—		—		115
Total equity-based compensation expense	$	(195)	$	4,964	$	15,805	$	13,976

(1)The three months ended September 30, 2024 reflects the reversal of equity-based compensation associated with RSUs and performance based awards that were forfeited during the period.

INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation


	Three Months Ended September 30,						Nine Months Ended September 30,
($ in thousands)	2024			2023			2024			2023
Loss before income taxes	$	(18,489)		$	(4,514)		$	(33,820)		$	(7,391)
Income tax expense	9,767			6,726			34,383			21,480
Effective tax rate	(52.8)		%	(149.0)		%	(101.7)		%	(290.6)		%

Gross profit	$	43,729		$	43,556		$	137,339		$	107,579
Effective tax rate on gross profit	22.3		%	15.4		%	25.0		%	20.0		%

Schedule of Unrecognized Tax Benefits Roll Forward

The following table shows a reconciliation of the beginning and ending amount of unrecognized tax benefits:


	Nine Months Ended September 30, 2024
Balance, December 31, 2023	$	72,955
Additions for tax positions related to the current year	26,315
Additions for tax positions related to prior years(1)	27,131
Balance, September 30, 2024	$	126,401

(1)Includes approximately $17,000 of IRC Section 280E refunds received during the nine months ended September 30, 2024.

SUPPLEMENTAL INFORMATION (Tables)

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Other Current Assets

The following table presents supplemental information regarding our other current assets:


(in thousands)	September 30, 2024		December 31, 2023
Prepaid expenses	$	5,928	$	7,270
Deposits and other receivables	3,972		9,302
Construction deposits	210		569
Tenant improvement allowance	—		1,010
Other	263		1,493
Total	$	10,373	$	19,644

Schedule of Accounts Payable and Accrued Liabilities

The following table presents supplemental information regarding our accounts payable and accrued liabilities:


(in thousands)	September 30, 2024		December 31, 2023
Accounts payable	$	29,346	$	34,687
Accrued payroll and related expenses	9,799		21,306
Accrued interest	6,239		—

Fixed asset purchases	2,981		5,738
Other	10,529		9,381


Total	$	58,894	$	71,112

Schedule of General and Administrative Expenses

The following table presents supplemental information regarding our general and administrative expenses:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Compensation	$	16,441	$	17,855	$	57,267	$	49,043
Depreciation and amortization	8,764		7,495		26,058		21,927
Rent and utilities	5,943		5,859		16,782		15,059
Professional services	7,763		3,217		16,037		9,864
Insurance	1,420		1,165		4,365		3,908
Marketing	1,887		1,034		4,031		3,303
Gain on sale of assets	—		—		(11)		(226)
Other	3,928		3,384		14,174		8,884
Total	$	46,146	$	40,009	$	138,703	$	111,762

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - shares shares in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Anti-dilutive units excluded from the calculation of earnings per share (in shares)	15,273	26,840

REPORTABLE SEGMENTS AND REVENUE - Narrative (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2024 USD ($) segment	Dec. 31, 2023 USD ($)
Segment Reporting [Abstract]
Number of operating segments \| segment	1
Number of reportable segments \| segment	1
Customer loyalty program liability \| $	$ 1,566	$ 1,317
Allowance for doubtful accounts \| $	$ 2,047	$ 1,939

REPORTABLE SEGMENTS AND REVENUE - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Segment Reporting, Revenue Reconciling Item [Line Items]
Total revenue, net	$ 141,647	$ 141,268	$ 425,593	$ 378,432
Operating Segments
Segment Reporting, Revenue Reconciling Item [Line Items]
Total revenue, net	171,493	169,934	518,318	462,125
Operating Segments \| Retail revenue
Segment Reporting, Revenue Reconciling Item [Line Items]
Total revenue, net	93,599	101,263	281,882	273,862
Operating Segments \| Wholesale revenue
Segment Reporting, Revenue Reconciling Item [Line Items]
Total revenue, net	77,894	68,671	236,436	188,263
Elimination of inter-company revenue
Segment Reporting, Revenue Reconciling Item [Line Items]
Total revenue, net	$ (29,846)	$ (28,666)	$ (92,725)	$ (83,693)

ACQUISITIONS - Narrative (Details) shares in Thousands, $ in Thousands						1 Months Ended						3 Months Ended				9 Months Ended
	Oct. 01, 2024 USD ($)	Dec. 31, 2023 USD ($) license	Apr. 27, 2023 USD ($) dispensary shares	Aug. 12, 2022 USD ($) dispensary	Aug. 11, 2022 USD ($) license	Sep. 30, 2024 USD ($)	Jun. 30, 2024 license	Apr. 30, 2024 USD ($) dispensary	Jan. 31, 2024 USD ($)	Dec. 31, 2023 USD ($) dispensary	Aug. 31, 2022 license	Sep. 30, 2024 USD ($)	Jun. 30, 2024 USD ($)	Mar. 31, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)
Business Acquisition [Line Items]
Present value of lease liabilities						$ 272,539						$ 272,539				$ 272,539
Operating lease right-of-use assets		$ 130,556				138,776				$ 130,556		138,776				138,776
Reduction in goodwill																200
Purchase of intangible assets																10,450	$ 15,943
Massachusetts Agreement - Cultivation And Manufacturer Licenses
Business Acquisition [Line Items]
Present value of lease liabilities									$ 761
Operating lease right-of-use assets									761
Purchase price									2,750
Purchase of intangible assets									$ 1,500
Massachusetts Agreement - Cultivation And Manufacturer Licenses \| Subsequent Event
Business Acquisition [Line Items]
Purchase of intangible assets	$ 1,250
Detroit License Holder \| Variable Interest Entity, Primary Beneficiary
Business Acquisition [Line Items]
Purchase price						$ 1,140
Variable interest entity, qualitative or quantitative information, ownership percentage						49.00%
Cash consideration						$ 850
Asset acquisition, consideration transferred, contingent consideration, maximum						2,250
Earn-out provisions						$ 290
Ohio Patient Access LLC (“OPA”)
Business Acquisition [Line Items]
Purchase price				$ 24,132
Cash consideration				11,300
Earn-out provisions				$ 7,300
Business acquisition, percentage of voting interests acquired				100.00%
Number of dispensary granted with right to operate \| dispensary				3
Working capital requirements				$ 10,000
Number of dispensaries opened \| dispensary										2
Purchase of intangible assets				22,300
Number of licenses acquired \| license							2
Fair value of cash consideration				19,290
Assets acquired long-term debt				11,000
Intangible assets acquired				21,684
Properties acquired fair value				2,448
Deferred tax liability recorded															$ 9,516		9,516
Asset acquisition, contingent consideration, liability		6,670								$ 6,670
Asset acquisition contingent consideration, increase (decrease) in fair value																630
Ohio Patient Access LLC (“OPA”) \| Estimated fair value
Business Acquisition [Line Items]
Earn-out provisions				4,842
Illinois Licenses
Business Acquisition [Line Items]
Purchase of intangible assets		$ 8,100		5,600	$ 3,000			$ 2,500
Purchase of intangible assets					$ 5,500
Number of licenses acquired \| license		2			1						2
Assets acquired long-term debt					$ 2,500
Deferred tax liability recorded				$ 2,458	$ 2,414
Chicago Partner Dispensaries , (Illinois MSAs Agreement)
Business Acquisition [Line Items]
Number of businesses acquired \| dispensary								2
Consideration transferred								$ 10,000
Payments to acquire businesses, gross													$ 8,500	$ 1,500
Present value of lease liabilities								3,065
Operating lease right-of-use assets								3,065
Net revenue												1,323				1,435
Net income (loss)												(160)				(493)
Devi Holdings, Inc. (Maryland Agreement)
Business Acquisition [Line Items]
Payments to acquire businesses, gross			$ 12,000
Net revenue												9,719			9,541	28,860	11,270
Net income (loss)												$ 1,080			$ 688	$ 3,006	$ 15
Business acquisition, percentage of voting interests acquired			100.00%
Business acquisition, number of dispensaries acquired \| dispensary			4
Shares issued in business combination (in shares) \| shares			5,185
Business acquisition common stock with an estimated fair value			$ 4,770
Reduction in consideration								200
Reduction in goodwill								$ 200

ACQUISITIONS - Schedule of Net Assets Acquired (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2024	Apr. 30, 2024	Dec. 31, 2023
Assets acquired (liabilities assumed):
Goodwill	$ 49,599		$ 47,538
Chicago Partner Dispensaries , (Illinois MSAs Agreement)
Assets acquired (liabilities assumed):
Property and equipment		$ 1,525
Other assets		76
License		6,210
Goodwill		2,261
Accounts payable and accrued liabilities		(72)
Net assets acquired		$ 10,000
Measurement period purchase accounting adjustment	1,307
Chicago Partner Dispensaries , (Illinois MSAs Agreement) \| License
Assets acquired (liabilities assumed):
Acquired assets, amortization period (in years)		10 years
Measurement period adjustment to fair value of acquired intangibles	$ 1,740
Chicago Partner Dispensaries , (Illinois MSAs Agreement) \| Leasehold improvements
Assets acquired (liabilities assumed):
Property and equipment		$ 1,398
Chicago Partner Dispensaries , (Illinois MSAs Agreement) \| Furniture, fixtures, and equipment
Assets acquired (liabilities assumed):
Property and equipment		$ 127

INVENTORY - Schedule of Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Materials and supplies	$ 10,983	$ 16,824
Work in process	40,114	36,612
Finished goods	46,290	41,858
Total	$ 97,387	$ 95,294

INVENTORY - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
INVENTORY - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Inventory Disclosure [Abstract]
Compensation costs capitalized during the period	$ 19,566	$ 18,552	$ 58,539	$ 52,847
Capitalized compensation costs included in inventory	16,030		16,030		$ 13,730
Inventory write-down	$ 1,749	$ 2,938	$ 2,223	$ 13,052

NOTES RECEIVABLE - Schedule of Notes Receivable (Details) - USD ($) $ in Thousands		1 Months Ended		6 Months Ended	9 Months Ended
	Feb. 25, 2021	Dec. 31, 2023	Jun. 30, 2023	Jun. 30, 2024	Sep. 30, 2024	Apr. 30, 2024	May 30, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, notes and working capital receivables		$ 13,116			$ 1,764
Massachusetts Note
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, notes and working capital receivables		$ 147			1,764
Massachusetts Note \| Massachusetts Note
Accounts, Notes, Loans and Financing Receivable [Line Items]
Working capital loan						$ 4,100	$ 3,500
Notes receivable interest rate (as percent)		12.50%
Financing receivable, due repayment period (in months)		24 months
Notes receivable, after allowance for credit loss		$ 3,500			4,100
Notes receivable, after allowance for credit loss, current		147			1,764
Notes receivable, after allowance for credit loss, noncurrent		3,353			2,336
MMNY - working capital loan \| MedMen NY, Inc.
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, notes and working capital receivables		2,422			0
Working capital loan	$ 10,000
Working capital line of credit, maximum borrowing amount if amended	$ 17,500
Period due following investment agreement termination	3 days
Maryland Loan Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, notes and working capital receivables		10,547			0
Purchase outstanding principal			$ 12,027
Interest rate, outstanding balance (as percent)			10.00%
Base interest rate (as percent)			12.00%
Variable rate, floor (as percent)			1.00%
Interest rate, paid in kind (as percent)			4.50%
Amortized cost basis			$ 12,622
Transaction related expenses			$ 595
Reserve for potential collectability				$ 1,804
Collection of notes receivable					8,100
Supply agreement, inventory receivable in exchange for note receivable, contract amount					$ 6,000
Term of supply agreement (in years)					3 years
Supply agreement, inventory receivable in exchange for note receivable, maximum quarterly amount					$ 500
Receivable with Imputed Interest, Discount					984
Financing receivable, accrued interest, after allowance for credit loss		$ 2,859
Supply agreement, inventory supplied					500
Supply agreement, inventory receivable provision					2,083
Maryland Loan Receivable \| Other current assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Supply agreement, inventory receivable in exchange for note receivable, contract amount					1,000
Supply agreement, inventory receivable provision					1,000
Maryland Loan Receivable \| Other Noncurrent Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Supply agreement, inventory receivable in exchange for note receivable, contract amount					1,543
Supply agreement, inventory receivable provision					$ 1,083

NOTES RECEIVABLE - Narrative (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, notes and working capital receivables	$ 1,764		$ 13,116
Impairment loss	0	$ 0
Promissory Notes Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, notes and working capital receivables	3,891		4,018
Promissory note receivable, current	175		170
Promissory note receivable, noncurrent	$ 3,716		$ 3,848

PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 370,988	$ 348,238
Less: accumulated depreciation	107,497	80,156
Property and equipment, net	263,491	268,082
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	202,341	192,807
Buildings
Property, Plant and Equipment [Line Items]
Property and equipment, gross	83,703	72,204
Furniture, fixtures, and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	75,833	71,474
Construction in progress
Property, Plant and Equipment [Line Items]
Property and equipment, gross	3,329	6,511
Land
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 5,782	$ 5,242

PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 9,057	$ 8,531	$ 27,341	$ 24,958
Depreciation expense capitalized during the period	6,380	$ 6,227	19,431	$ 18,628
Inventory, depreciation costs	4,211		4,211		$ 5,510
Equipment rented under finance leases	2,321		2,321		2,321
Amortization of leased asset	966		966		$ 549
Aggregate number of leases that can be entered into	$ 3,000		$ 3,000

VARIABLE INTEREST ENTITIES - Narrative (Details)	1 Months Ended
VARIABLE INTEREST ENTITIES - Narrative (Details)	Feb. 29, 2024 USD ($)	Jan. 31, 2024 USD ($) extension
January 2024 Loan Agreement
Variable Interest Entity [Line Items]
Aggregate loan amount		$ 2,500,000
Conversion option, equity of borrower, percent at initial funding (as percent)		35.00%
Conversion option, equity of borrower, additional percent provisioned (as percent)		65.00%
Loan agreement stated interest rate (as percent)		20.00%
Covenants, default penalty interest (as percent)		6.00%
Financing arrangement maturity (in years)		6 years
Number of term extensions available \| extension		2
Extension term (in years)		2 years
January 2024 Loan Agreement \| Licenses and permits
Variable Interest Entity [Line Items]
Fair value of license		$ 1,050,000
February 2024 Loan Agreement
Variable Interest Entity [Line Items]
Aggregate loan amount	$ 3,750,000
Conversion option, equity of borrower, additional percent provisioned (as percent)	100.00%
Loan agreement stated interest rate (as percent)	20.00%
Covenants, default penalty interest (as percent)	5.00%
Financing arrangement maturity (in years)	10 years

VARIABLE INTEREST ENTITIES - Schedule of Variable Interest Entities (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Variable Interest Entity [Line Items]
Current assets	$ 213,578						$ 213,578		$ 228,860
Other noncurrent assets	18,238						18,238		23,062
Current liabilities	145,129						145,129		92,686
Deficit	88,086						88,086		142,872
Revenue, net	141,647			$ 141,268			425,593	$ 378,432
Net loss	(28,256)	$ (21,784)	$ (18,163)	(11,240)	$ 841	$ (18,472)	(68,203)	(28,871)
Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Current assets	4,414						4,414		585
Other noncurrent assets	61,754						61,754		44,722
Current liabilities	6,144						6,144		25,460
Noncurrent liabilities	13,418						13,418		9,516
Deficit	(8,838)						(8,838)		$ (3,476)
Revenue, net	5,980			0			7,752	0
Net loss	$ (891)			$ (672)			$ (5,362)	$ (1,869)

INTANGIBLE ASSETS AND GOODWILL - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible Assets	$ 282,360	$ 271,210
Accumulated amortization	(70,169)	(49,758)
Total intangible assets, net	212,191	221,452
Licenses and permits
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible Assets	262,017	250,867
Accumulated amortization	(53,708)	(34,427)
In-place leases
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible Assets	19,963	19,963
Accumulated amortization	(16,081)	(14,951)
Trade names
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible Assets	380	380
Accumulated amortization	$ (380)	$ (380)

INTANGIBLE ASSETS AND GOODWILL - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 6,842,000	$ 5,876,000	$ 20,411,000	$ 17,703,000
Amortization expense capitalized to inventory during the period	755,000	$ 685,000	2,263,000	2,106,000
Inventory, capitalized amortization	$ 1,278,000		1,278,000		$ 916,000
Intangible asset impairment			$ 0	$ 0

INTANGIBLE ASSETS AND GOODWILL - Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2024 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 47,538
Acquisitions	2,261
Adjustments to purchase price allocation	(200)
Goodwill, ending balance	$ 49,599

LEASES - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Lessee, Lease, Description [Line Items]
Capitalized lease costs	$ 7,312	$ 6,028
Minimum
Lessee, Lease, Description [Line Items]
Operating lease term (in years)	1 year
Maximum
Lessee, Lease, Description [Line Items]
Operating lease term (in years)	20 years

LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Lease assets
Operating lease right-of-use assets	$ 138,776	$ 130,556
Finance lease, right-of-use asset	1,355	1,772
Total lease assets	140,131	132,328
Lease liabilities
Operating lease liabilities, current	5,125	3,660
Finance lease, liability, current	549	496
Operating lease liabilities, noncurrent	267,414	261,087
Finance lease, liability, noncurrent	777	1,196
Total lease liabilities	$ 273,865	$ 266,439
Finance lease, right-of-use asset, statement of financial position [Extensible Enumeration]	Property and equipment, net	Property and equipment, net
Finance lease, liability, current, statement of financial position [Extensible Enumeration]	Current portion of debt, net	Current portion of debt, net
Finance lease, liability, noncurrent, statement of financial position [Extensible Enumeration]	Long-term debt, net	Long-term debt, net

LEASES - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
LEASES - Lease Cost (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Lessee, Lease, Description [Line Items]
Operating lease costs	$ 10,329	$ 9,913	$ 30,576	$ 27,874
Amortization of leased assets	139	138	417	320
Interest on lease liabilities	48	68	154	138
Total finance lease costs	187	206	571	458
General and administrative expenses
Lessee, Lease, Description [Line Items]
Operating lease costs	980	651	3,117	1,914
Capitalized to inventory
Lessee, Lease, Description [Line Items]
Operating lease costs	$ 9,349	$ 9,262	$ 27,459	$ 25,960

LEASES - Short-term and Variable Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Leases [Abstract]
Total short-term and variable lease costs	$ 1,195	$ 1,176	$ 3,162	$ 3,353

LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Leases [Abstract]
Operating cash flows from operating leases	$ 30,898	$ 27,581
Operating cash flows from finance leases	154	138
Financing cash flows from finance leases	366	256
ROU assets obtained in exchange for new lease obligations - Operating leases	9,560	34,583
ROU assets obtained in exchange for new lease obligations - Finance leases	$ 0	$ 1,159

LEASES - Weighted Average Remaining Lease Term and Discount Rate (Details)	Sep. 30, 2024	Dec. 31, 2023
Leases [Abstract]
Operating lease, weighted average remaining lease term (in years)	13 years 6 months	14 years 3 months 18 days
Finance lease, weighted average remaining lease term (in years)	2 years 3 months 18 days	3 years
Operating lease, weighted average discount rate (as percent)	15.10%	15.10%
Finance lease, weighted average discount rate (as percent)	13.70%	13.70%

LEASES - Lease Liability Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Operating Lease Liabilities
Remainder of 2024	$ 10,586
2025	43,257
2026	43,595
2027	44,759
2028	45,967
Thereafter	488,667
Total lease payments	676,831
Less: imputed interest	404,292
Present value of lease liabilities	272,539
Finance Lease Liabilities
Remainder of 2024	173
2025	693
2026	572
2027	103
2028	0
Thereafter	0
Total lease payments	1,541
Less: imputed interest	215
Present value of lease liabilities	$ 1,326	$ 1,692

LEASES - Financing Liability Maturity (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Leases [Abstract]
Remainder of 2024	$ 623
2025	2,525
2026	2,599
2027	2,676
2028	2,755
Thereafter	6,722
Total	$ 17,900

DEBT - Components of Debt (Details) shares in Thousands							1 Months Ended					3 Months Ended				9 Months Ended
DEBT - Components of Debt (Details) shares in Thousands	Oct. 01, 2024 USD ($)	Jul. 16, 2024 USD ($)	Dec. 31, 2023 USD ($) license	Aug. 12, 2022 USD ($)	Aug. 11, 2022 USD ($) license	Aug. 27, 2021 USD ($) quarter covenant shares	Jul. 31, 2024 USD ($)	Jun. 30, 2024 license	Apr. 30, 2024 USD ($)	Dec. 31, 2022 USD ($)	Aug. 31, 2022 license	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)
Debt Instrument [Line Items]
Finance leases			$ 1,692,000									$ 1,326,000				$ 1,326,000
Total debt			315,149,000									328,386,000				328,386,000
Current portion of debt			11,148,000									74,509,000				74,509,000
Less: unamortized deferred financing costs			0									770,000				770,000
Current portion of debt, net			11,148,000									73,739,000				73,739,000
Long-term debt			304,001,000									253,877,000				253,877,000
Less: unamortized deferred financing costs			6,436,000									21,715,000				21,715,000
Long-term debt, net			297,565,000									232,162,000				232,162,000
Prepayments of outstanding borrowings																215,786,000	$ 23,188,000
Loss on extinguishment of debt												5,475,000	$ 0			5,475,000	0
Purchase of intangible assets																10,450,000	15,943,000
Proceeds from issuance of debt																217,413,000	$ 0
Outstanding claim amount, total														$ 22,794,000
Illinois Licenses
Debt Instrument [Line Items]
Assets acquired long-term debt					$ 2,500,000
Purchase of intangible assets			$ 8,100,000	$ 5,600,000	$ 3,000,000				$ 2,500,000
Number of licenses acquired \| license			2		1						2
Ohio Patient Access LLC (“OPA”)
Debt Instrument [Line Items]
Assets acquired long-term debt				$ 11,000,000
Asset acquisition, net of discount																3,010,000
Number of licenses acquired \| license								2
Ohio Patient Access LLC (“OPA”) \| Subsequent Event
Debt Instrument [Line Items]
Prepayments of outstanding borrowings	$ 1,250,000
2024 Term Notes
Debt Instrument [Line Items]
Debt			$ 0									235,000,000				235,000,000
2024 Term Notes \| Senior Secured Term Notes
Debt Instrument [Line Items]
Aggregate principal amount		$ 235,000,000
Percentage of notes issued at face value (as percent)		94.75%
Interest rate (as percent)		12.75%
Unamortized original issue discount and other direct financing fees		$ 21,200,000
Additional borrowing capacity permitted		$ 60,000,000
Redemption price (as percent)		101.00%
Threshold holding of aggregate principal (as percent)		25.00%
Minimum liquidity required to be maintained		$ 20,000,000
2024 Term Notes \| Senior Secured Term Notes \| Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
Prepayment premium (as percent)		0.00%
2024 Term Notes \| Senior Secured Term Notes \| Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Prepayment premium (as percent)		4.50%
2024 Term Notes \| Senior Secured Term Notes \| Debt Instrument, Redemption, Period Three
Debt Instrument [Line Items]
Prepayment premium (as percent)		3.00%
2024 Term Notes \| Senior Secured Term Notes \| Debt Instrument, Redemption, Period Four [Member]
Debt Instrument [Line Items]
Prepayment premium (as percent)		0.00%
2024 Term Notes \| Senior Secured Term Notes \| Minimum
Debt Instrument [Line Items]
Prior notice required to prepay Term Notes		15 days
2024 Term Notes \| Senior Secured Term Notes \| Maximum
Debt Instrument [Line Items]
Prior notice required to prepay Term Notes		60 days
2021 Credit Facility
Debt Instrument [Line Items]
Debt			275,000,000				$ 60,000,000					60,000,000				60,000,000
Aggregate principal amount						$ 210,000,000
Interest rate (as percent)						9.50%
Prepayments of outstanding borrowings		$ 215,000,000
Other general and administrative expense		3,600,000
Maximum borrowing capacity if amended						$ 275,000,000
Extension term (in days)						364 days
Loss on extinguishment of debt							5,475,000
Prepayment fees and accrued interest							3,527,000
Deferred debt issuance cost, write-off							1,948,000
Debt instrument prepayment fee							1,579,000									5,106,000
Unamortized debt issuance expense		$ 943,000					$ 1,428,000
Number of financial covenants \| covenant						2
Covenant, minimum liquidity at fiscal quarter end						$ 20,000,000
Number of consecutive quarters used for covenant measurement \| quarter						4
2021 Credit Facility \| Debt Instrument, Covenant, Period Two
Debt Instrument [Line Items]
Covenant, maximum EBITDA to cash interest expense ratio						2.50
Finance liabilities
Debt Instrument [Line Items]
Debt			18,100,000									18,100,000				18,100,000
Sellers' Notes
Debt Instrument [Line Items]
Debt			18,591,000									11,996,000				11,996,000
Current portion of debt, net												1,310,000				1,310,000
Sellers' Notes \| Ohio Patient Access LLC (“OPA”)
Debt Instrument [Line Items]
Current portion of debt, net												10,686,000				10,686,000
Long-term debt, net			9,705,000
Financing Agreement
Debt Instrument [Line Items]
Debt			1,766,000									$ 1,964,000				$ 1,964,000
Interest rate (as percent)												10.00%				10.00%
Proceeds from issuance of debt										$ 19,364,000
Interests in a retention tax credit claim										$ 22,794,000
Outstanding claim amount, remaining			$ 1,964,000									$ 1,964,000				$ 1,964,000
2022 Loan
Debt Instrument [Line Items]
Additional borrowings															$ 65,000,000
Deferred finance fees						$ 8,806,000
Additional debt issuance cost						$ 7,606,000
2022 Loan \| Class A common stock
Debt Instrument [Line Items]
Stock and warrants issued during period shares preferred stock and warrants ( in shares) \| shares						3,130
Stock and warrants issued during period, value, preferred stock and warrants						$ 2,639,000
Sellers Note, Noncontrolling Interest
Debt Instrument [Line Items]
Repayments of notes payable																$ 786,000

DEBT - Debt Maturities - Narrative (Details) $ in Thousands	9 Months Ended
DEBT - Debt Maturities - Narrative (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Sellers Note, Noncontrolling Interest
Debt Instrument [Line Items]
Repayments of notes payable	$ 786

DEBT - Maturities of Debt (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Sellers' notes
Debt Instrument [Line Items]
Remainder of 2024	$ 1,250
2025	11,060
2029	0
Long-term debt, net	12,310
Term note maturities
Debt Instrument [Line Items]
Remainder of 2024	0
2025	60,000
2029	235,000
Long-term debt, net	$ 295,000

DEBT - Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
DEBT - Interest Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Debt Instrument [Line Items]
Cash interest	$ 8,707	$ 6,515	$ 21,699	$ 19,479
Loss on extinguishment of debt	5,475	0	5,475	0
Accretion	1,636	1,802	4,432	7,082
Interest on financing liabilities	615	578	1,794	1,720
Interest on finance leases	48	68	154	138
Total	16,481	$ 8,963	33,554	$ 28,419
2021 Credit Facility Member
Debt Instrument [Line Items]
Prepayment fees and accrued interest	3,527		3,527
Deferred debt issuance cost, write-off	$ 1,948		$ 1,948

STOCKHOLDERS’ EQUITY - Narrative (Details)	Sep. 30, 2024 vote $ / shares shares	Dec. 31, 2023 $ / shares shares
Class of Stock [Line Items]
Preferred stock, shares authorized (in shares) \| shares	10,000,000	10,000,000
Preferred stock, par value (in dollars per share) \| $ / shares	$ 0.001	$ 0.001
Class A common stock
Class of Stock [Line Items]
Common stock, shares authorized (in shares) \| shares	750,000,000	750,000,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0.001	$ 0.001
Number of votes per common share \| vote	1
Class B common stock
Class of Stock [Line Items]
Common stock, shares authorized (in shares) \| shares	100,000	100,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0.001	$ 0.001
Number of votes per common share \| vote	1,000
Stock conversion ratio	1

STOCKHOLDERS’ EQUITY - Schedule of Shares Outstanding (Details) - shares shares in Thousands	Sep. 30, 2024	Dec. 31, 2023
Class of Stock [Line Items]
Common stock shares outstanding (in shares)	214,411	206,875
Class A common stock
Class of Stock [Line Items]
Common stock shares outstanding (in shares)	214,346	206,810
Class B common stock
Class of Stock [Line Items]
Common stock shares outstanding (in shares)	65	65

STOCKHOLDERS’ EQUITY - Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Number of Warrants
Outstanding, ending balance (in shares)	4,568,000	4,568,000
Outstanding, ending balance (in shares)	4,568,000	4,568,000
Weighted-Average Exercise Price
Exercise price of warrants, ending (in dollars per share)	$ 3.33	$ 3.33
Exercise price of warrants, ending (in dollars per share)	$ 3.33	$ 3.33
Weighted-Average Remaining Exercise Period (years)	1 year 6 months	2 years 3 months 18 days
Aggregate intrinsic value	$ 0	$ 0
Class of warrant exercised (in shares)	0
Minimum
Weighted-Average Exercise Price
Grant date fair value per warrant (in dollars per share)	$ 0.06
Volatility rate (as percent)	70.00%
Risk free interest rate (as percent)	0.30%
Maximum
Weighted-Average Exercise Price
Grant date fair value per warrant (in dollars per share)	$ 0.84
Volatility rate (as percent)	87.50%
Risk free interest rate (as percent)	4.20%

EQUITY-BASED COMPENSATION EXPENSE - Narrative (Details) - USD ($)		1 Months Ended	3 Months Ended		9 Months Ended
	Mar. 09, 2023	Aug. 31, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023	Jul. 31, 2021	Nov. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of issued and outstanding shares (as percent)	10.00%
Equity-based compensation expense (reversal)			$ (195,000)	$ 4,964,000	$ 15,805,000	$ 13,976,000
Equity-based compensation costs capitalized during the period			164,000	1,830,000	6,516,000	5,689,000
Inventory, equity-based compensation cost			1,707,000		1,707,000		$ 1,968,000
General and administrative expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense (reversal)			(359,000)	3,134,000	9,289,000	8,287,000
Cost of goods sold
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense (reversal)			$ 230,000	2,476,000	$ 6,777,000	4,457,000
Restricted Common Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, equity instruments other than options, nonvested, number			0		0
Equity-based compensation expense, cost not yet recognized			$ 0		$ 0
Equity-based compensation expense (reversal)			$ 0	0	$ 0	115,000
Stock Appreciation Rights (SARs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards issued to date (in shares)			0		0
Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards issued to date (in shares)			0		0
Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense, cost not yet recognized			$ 742,000		$ 742,000
Equity-based compensation expense, cost not yet recognized, period for recognition (in years)					2 years
RSUs(1)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, equity instruments other than options, nonvested, number			7,359,000		7,359,000		12,021,000
Equity-based compensation expense, cost not yet recognized			$ 8,154,000		$ 8,154,000
Equity-based compensation expense, cost not yet recognized, period for recognition (in years)					2 years 9 months 18 days
Equity-based compensation expense (reversal)			(287,000)	$ 4,656,000	$ 14,575,000	$ 13,133,000
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of stock reserved for issuance under equity incentive plan (in shares)								4,000,000
Performance Based Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)		4,000,000
Equity-based compensation reversed			$ 638,000
2020 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of awards to be issued (in shares)									10,031,000
Awards issued to date (in shares)			9,994,000		9,994,000
2020 Plan \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)					2 years
2020 Plan \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)					3 years
2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of stock reserved for issuance under equity incentive plan (in shares)			10,729,000		10,729,000			17,000,000
2021 Plan \| Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of awards to be issued (in shares)			0		0

EQUITY-BASED COMPENSATION EXPENSE - Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2024 USD ($) $ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares
Number of Options
Outstanding beginning balance (in shares) \| shares	4,010
Exercised (in shares) \| shares	(206)
Forfeited (in shares) \| shares	(112)
Expired (in shares) \| shares	(346)
Outstanding ending balance (in shares) \| shares	3,346	4,010
Exercisable (in shares) \| shares	2,212
Weighted-Average Exercise Price
Outstanding beginning balance (in dollars per share) \| $ / shares	$ 1.80
Exercised (in dollars per share) \| $ / shares	0.85
Forfeited (in dollars per share) \| $ / shares	1.15
Expired (in dollars per share) \| $ / shares	2.91
Outstanding ending balance (in dollars per share) \| $ / shares	1.77	$ 1.80
Exercisable (in dollars per share) \| $ / shares	$ 1.91
Stock Options Additional Disclosures
Weighted average remaining contractual term (in years)	3 years 2 months 12 days	3 years 10 months 24 days
Exercisable, weighted average remaining contractual term (in years)	3 years 1 month 6 days
Outstanding aggregate intrinsic value \| $	$ 0	$ 353
Exercised, intrinsic value \| $	8
Exercisable, intrinsic value \| $	$ 0

EQUITY-BASED COMPENSATION EXPENSE - Equity Award Activity (Details) - RSUs(1) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Number of Shares (in thousands)
Beginning balance (in shares)	12,021,000
Granted (in shares)	12,110,000
Vested (in shares)	(11,294,000)
Forfeited (in shares)	(5,478,000)
Ending balance (in shares)	7,359,000	12,021,000
Weighted-Average Grant Date Fair Value per Share
Beginning balance (in dollars per share)	$ 2.15
Granted (in dollars per share)	1.29
Vested (in dollars per share)	2.29
Forfeited (in dollars per share)	1.10
Ending balance (in dollars per share)	$ 1.31	$ 2.15
Taxes withheld under equity-based compensation plans, net (in shares)	3,964,000
2023 Annual Performance Bonus
Weighted-Average Grant Date Fair Value per Share
Value of awards vested at issuance		$ 3,304
2023 Annual Performance Bonus \| Accounts payable and accrued expenses
Weighted-Average Grant Date Fair Value per Share
Value of awards vested at issuance		$ 2,838

EQUITY-BASED COMPENSATION EXPENSE - Equity-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total equity-based compensation expense	$ (195)	$ 4,964	$ 15,805	$ 13,976
RSUs(1)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total equity-based compensation expense	(287)	4,656	14,575	13,133
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total equity-based compensation expense	92	308	1,230	728
Restricted Common Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total equity-based compensation expense	$ 0	$ 0	$ 0	$ 115

INCOME TAXES - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Loss before income taxes	$ (18,489)	$ (4,514)	$ (33,820)	$ (7,391)
Income tax expense	$ 9,767	$ 6,726	$ 34,383	$ 21,480
Effective tax rate	(52.80%)	(149.00%)	(101.70%)	(290.60%)
Gross profit	$ 43,729	$ 43,556	$ 137,339	$ 107,579
Effective tax rate on gross profit	22.30%	15.40%	25.00%	20.00%

INCOME TAXES - Schedule of Unrecognized Tax Benefits (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2024 USD ($)
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Beginning balance	$ 72,955
Additions for tax positions related to the current year	26,315
Additions for tax positions related to prior years	27,131
Ending balance	126,401
Refunds received	$ 17,000

INCOME TAXES - Narrative (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Income Tax Contingency [Line Items]
Income tax penalties and interest expense	$ 15,809
Tax Year 2024
Income Tax Contingency [Line Items]
Income tax penalties and interest expense	10,385
Tax Years Before 2024
Income Tax Contingency [Line Items]
Income tax penalties and interest expense	$ 5,424

COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands					1 Months Ended	9 Months Ended	12 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	Aug. 18, 2023 claim	Sep. 30, 2022 USD ($)	Apr. 14, 2021 property	Feb. 25, 2021 USD ($)	Apr. 30, 2022 USD ($)	Sep. 30, 2024 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2023 USD ($)	Dec. 21, 2022 claim	May 10, 2022 USD ($)	Apr. 30, 2021 USD ($)
Med Men N Y Second Amended Complaint
Loss Contingencies [Line Items]
Loss contingency, damages sought, value (in excess of)		$ 2,400
Number of counterclaims dismissed \| claim	7
Number of counterclaims that had been brought \| claim									10
Estimated reserve						$ 5,447	$ 3,700
Med Men N Y Second Amended Complaint \| Notes receivable
Loss Contingencies [Line Items]
Current portion of total reserve						2,422
Med Men N Y Second Amended Complaint \| Other current assets
Loss Contingencies [Line Items]
Current portion of total reserve						6,695
TVP Parties Matter
Loss Contingencies [Line Items]
Put option, term (in years)			3 years
Number of properties that remain suitable for original business purpose \| property			3
Fair value of properties to be acquired											$ 5,400
MedMen NY, Inc.
Loss Contingencies [Line Items]
Ownership interest (as percent)				86.70%						99.99%
MedMen NY, Inc.
Loss Contingencies [Line Items]
Commitment				$ 73,000
MedMen NY, Inc. \| MedMen NY Promissory Note
Loss Contingencies [Line Items]
Total debt				28,000
MedMen NY, Inc. \| Cash investment
Loss Contingencies [Line Items]
Commitment				35,000
MedMen NY, Inc. \| Prepaid deposit
Loss Contingencies [Line Items]
Commitment				4,000
Loss contingency, damages sought, value (in excess of)				4,000
MedMen NY, Inc. \| Amount due upon first adult-use cannabis sale
Loss Contingencies [Line Items]
Commitment				$ 10,000
MedMen NY, Inc. \| Additional transaction consideration
Loss Contingencies [Line Items]
Commitment										$ 15,000
MedMen NY, Inc. \| Original transaction consideration, cash at closing
Loss Contingencies [Line Items]
Commitment										74,000
MedMen NY, Inc. \| Additional transaction consideration, cash at closing
Loss Contingencies [Line Items]
Commitment										$ 11,000
Story
Loss Contingencies [Line Items]
Clinical funding commitment, additional commitment					$ 10,000	$ 10,000		$ 10,000
Clinical funding commitment, additional commitment term (in years)					10 years

RELATED PARTY TRANSACTIONS (Details) $ in Thousands	9 Months Ended
RELATED PARTY TRANSACTIONS (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Related Party Transactions [Abstract]
Significant related party transactions	$ 0

SUPPLEMENTAL INFORMATION - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Prepaid expenses	$ 5,928	$ 7,270
Deposits and other receivables	3,972	9,302
Construction deposits	210	569
Tenant improvement allowance	0	1,010
Other	263	1,493
Total	$ 10,373	$ 19,644

SUPPLEMENTAL INFORMATION - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accounts payable	$ 29,346	$ 34,687
Accrued payroll and related expenses	9,799	21,306
Accrued interest	6,239	0
Fixed asset purchases	2,981	5,738
Other	10,529	9,381
Total	$ 58,894	$ 71,112

SUPPLEMENTAL INFORMATION - Schedule of General and Administrative Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Compensation	$ 16,441	$ 17,855	$ 57,267	$ 49,043
Depreciation and amortization	8,764	7,495	26,058	21,927
Rent and utilities	5,943	5,859	16,782	15,059
Professional services	7,763	3,217	16,037	9,864
Insurance	1,420	1,165	4,365	3,908
Marketing	1,887	1,034	4,031	3,303
Gain on sale of assets	0	0	(11)	(226)
Other	3,928	3,384	14,174	8,884
Total	$ 46,146	$ 40,009	$ 138,703	$ 111,762

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