0001558370-23-009230 | 10-Q | XBRL Viewer | Medicine MAN Technologies INC

Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2023


	March 31, 2023				December 31, 2022
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
License Agreements	$	139,088,280	$	(16,117,017)	$	111,491,280	$	(12,154,237)
Tradename		7,541,500		(2,513,263)		6,021,500		(1,862,242)
Customer Relationships		5,150,000		(1,658,334)		5,150,000		(1,474,405)
Non-compete		1,963,000		(1,138,685)		1,265,000		(765,556)
Product License and Registration		57,300		(21,783)		57,300		(21,783)
Trade Secret		32,500		(12,639)		32,500		(12,639)
Total	$	153,832,580	$	(21,461,721)	$	124,017,580	$	(16,290,862)

Schedule of future projected annual amortization expense


Remainder of 2023	$	10,574,128
2024		11,795,636
2025		11,502,223
2026		10,634,720
2027		10,125,611
Thereafter		77,738,541
Total	$	132,370,859

Subsequent Events (Details) - Subsequent Event shares in Thousands	Apr. 21, 2023 USD ($)	Apr. 13, 2023 USD ($) item shares
Everest Apothecary, Inc.
Subsequent events
Aggregate purchase price	$ 38,000,000
Payable in cash	12,500,000
Unsecured promissory note issued on acquisition	$ 17,500,000
Interest rate (as percentage)	5.00%
Amount on acquisition	$ 8,000,000
Earn-out payments	$ 8,000,000
Term on acquisition	12 months
Number of retail dispensaries \| item		14
Number of cultivation facilities \| item		1
Number of manufacturing facilities \| item		1
Akimbo Acquisition
Subsequent events
Payable in cash		$ 5,000,000
Number of equity interest issued or issuable \| shares		5,540
Cash portion of purchase price		$ 1,000,000
Deferred cash payments		4,000,000
Hold back amount of each deferred cash payment		83,333
Stock portion of purchase price		4,500,000
Stock portion of purchase price held back		$ 1,040,000.00
Term of anniversary		18 months
Term of submission		120 days
Number of retail dispensaries \| item		1
Akimbo Acquisition \| Maximum
Subsequent events
Aggregate purchase price		$ 10,540,000
Deferred cash consideration payable		$ 750,000

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)	Preferred Stock	Common Stock	Additional Paid in Capital	Accumulated Deficit	Treasury Stock	Total
Beginning balance, value at Dec. 31, 2021	$ 87	$ 45,485	$ 162,815,097	$ (27,773,968)	$ (1,517,036)	$ 133,569,665
Beginning balance, shares at Dec. 31, 2021	86,994	45,484,314			517,044
Net income (loss)				(26,778,702)		(26,778,702)
Issuance of stock as payment for acquisitions		$ 8,029	13,191,971			13,200,000
Issuance of stock as payment for acquisitions, shares		8,029,330
Stock based compensation expense related to common stock options			991,083			991,083
Ending balance, value at Mar. 31, 2022	$ 87	$ 53,514	176,998,151	(54,552,670)	$ (1,517,036)	120,982,046
Ending balance, shares at Mar. 31, 2022	86,994	53,513,644			517,044
Beginning balance, value at Dec. 31, 2021	$ 87	$ 45,485	162,815,097	(27,773,968)	$ (1,517,036)	133,569,665
Beginning balance, shares at Dec. 31, 2021	86,994	45,484,314			517,044
Ending balance, value at Dec. 31, 2022	$ 87	$ 56,353	180,381,641	(46,241,583)	$ (2,033,127)	132,163,371
Ending balance, shares at Dec. 31, 2022	86,994	56,352,545			920,150
Net income (loss)				1,745,429		1,745,429
Stock based compensation expense related to common stock options			214,544			214,544
Ending balance, value at Mar. 31, 2023	$ 87	$ 56,353	$ 180,596,185	$ (44,496,153)	$ (2,033,127)	$ 134,123,345
Ending balance, shares at Mar. 31, 2023	86,994	56,352,545			920,150

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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Goodwill Accounting - Segment (Details) - USD ($)	3 Months Ended		12 Months Ended
Goodwill Accounting - Segment (Details) - USD ($)	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Goodwill [Roll Forward]
Beginning balance of goodwill	$ 94,605,301	$ 43,316,267	$ 43,316,267
Goodwill acquired		75,382,450
Measurement-period adjustment to prior year acquisition	(30,125,484)
Goodwill impairment	0		(11,719,306)
Ending balance of goodwill	64,479,817	118,698,717	94,605,301
Retail
Goodwill [Roll Forward]
Beginning balance of goodwill	52,583,794	26,349,025	26,349,025
Goodwill acquired		10,985,559
Measurement-period adjustment to prior year acquisition	2,192,958
Ending balance of goodwill	54,776,752	37,334,584	52,583,794
Wholesale
Goodwill [Roll Forward]
Beginning balance of goodwill	7,219,936	13,964,016	13,964,016
Goodwill acquired		32,418,546
Measurement-period adjustment to prior year acquisition	2,483,129
Ending balance of goodwill	9,703,065	46,382,562	7,219,936
Other
Goodwill [Roll Forward]
Beginning balance of goodwill	34,801,571	3,003,226	3,003,226
Goodwill acquired		31,978,345
Measurement-period adjustment to prior year acquisition	$ (34,801,571)
Ending balance of goodwill		$ 34,981,571	$ 34,801,571

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Related Party Transactions

3 Months Ended

Mar. 31, 2023

Related Party Transactions.

Related Party Transactions

16.Related Party Transactions

Transactions with Justin Dye and Entities Affiliated with Justin Dye

The Company has participated in several transactions involving Dye Capital, Dye Capital Cann Holdings, LLC (“Dye Cann I”) and Dye Capital Cann Holdings II, LLC (“Dye Cann II”). Justin Dye, the Company’s Chief Executive Officer, one of its directors, and the largest beneficial owner of Common Stock and Preferred Stock, controls Dye Capital and Dye Capital controls Dye Cann I and Dye Cann II. Dye Cann I is the largest holder of the Company’s outstanding Common Stock. Dye Cann II is a significant holder of our Preferred Stock. Mr. Dye has sole voting and dispositive power over the securities held by Dye Capital, Dye Cann I, and Dye Cann II.

The Company entered into a Securities Purchase Agreement with Dye Cann I on June 5, 2019, (as amended, the “Dye Cann I SPA”) pursuant to which the Company agreed to sell to Dye Cann I up to between 8,187,500 and 10,687,500 shares of Common Stock in several tranches at $2.00 per share and warrants to purchase 100% of the number of shares of Common Stock sold at a purchase price of $3.50 per share. At the initial closing on June 5, 2019, the Company sold to Dye Cann I 1,500,000 shares of Common Stock and warrants to purchase 1,500,000 shares of Common Stock for gross proceeds of $3,000,000, and the Company has consummated subsequent closings for an aggregate of 9,287,500 shares of Common Stock and warrants to purchase 9,287,500 shares of Common Stock for aggregate gross proceeds of $18,575,000 to the Company. The Company and Dye Cann I entered into a first amendment to the Dye Cann I SPA on July 15, 2019, a second amendment to the Dye Cann I SPA on May 20, 2020, and a Consent, Waiver and Amendment on December 16, 2020. At the time of the initial closing under the Dye Cann I SPA, Justin Dye became a director and the Company’s Chief Executive Officer.

The Company granted Dye Cann I certain demand and piggyback registration rights with respect to the shares of Common Stock sold under the Dye Cann I SPA and issuable upon exercise of the warrants sold under the Dye Cann I SPA. The Company also granted Dye Cann I the right to designate one or two individuals for election or appointment to the Company’s board of directors (the “Board”) and Board observer rights. Further, under the Dye Cann I SPA, until June 5, 2022, if the Company desires to pursue debt or equity financing, the Company must first give Dye Cann I an opportunity to provide a proposal to the Company with the terms upon which Dye Cann I would be willing to provide or secure such financing. If the Company does not accept Dye Cann I’s proposal, the Company may pursue such debt or equity financing from other sources but Dye Cann I has a right to participate in such financing to the extent required to enable Dye Cann I to maintain the percentage of Common Stock (on a fully-diluted basis) that it then owns, in the case of equity securities,

or, in the case of debt, a pro rata portion of such debt based on the percentage of Common Stock (on a fully-diluted basis) that it then owns. The warrants granted to Dye Cann I pursuant to the Dye Cann I SPA expired on June 5, 2022.

The Company entered into a Securities Purchase Agreement (as amended, the “Dye Cann II SPA”) with Dye Cann II on November 16, 2020 pursuant to which the Company agreed to sell to Dye Cann II shares of Preferred Stock in one or more tranches at a price of $1,000 per share. The Company and Dye Cann II entered into an amendment to the Dye Cann II SPA on December 16, 2020, a second amendment to the Dye Cann II SPA on February 3, 2021, and a third amendment to the Dye Cann II SPA on March 30, 2021. The Company issued and sold to Dye Cann II 7,700 shares of Preferred Stock on December 16, 2020, 1,450 shares of Preferred Stock on December 18, 2020, 1,300 shares of Preferred Stock on December 22, 2020, 3,100 shares of Preferred Stock on February 3, 2021, 1,300 shares of Preferred Stock on February 25, 2021, 2,500 shares of Preferred Stock on March 2, 2021 and 4,000 shares of Preferred Stock on March 30, 2021. As a result, the Company issued and sold an aggregate of 21,350 shares of Preferred Stock to Dye Cann II for aggregate gross proceeds of $21,350,000.

The Company granted Dye Cann II certain demand and piggyback registration rights with respect to the shares of Common Stock issuable upon conversion of the Preferred Stock under the Dye Cann II SPA. Further, the Company granted Dye Can II the right to designate one or more individuals for election or appointment to the Board and Board observer rights.

On December 16, 2020, the Company entered into a Secured Convertible Note Purchase Agreement with Dye Capital and issued and sold to Dye Capital a Convertible Note and Security Agreement in the principal amount of $5,000,000. On February 26, 2021, Dye Capital elected to convert the $5,000,000 principal amount and the $60,250 of accrued but unpaid interest under the Convertible Promissory Note and Security Agreement under its terms and Dye Capital and the Company entered into a Conversion Notice and Agreement pursuant to which the Company issued 5,060 shares of Preferred Stock to Dye Capital and also paid Dye Capital $230.97 in cash in lieu of issuing any fractional shares of Series Preferred Stock upon conversion.

For the year ended December 31, 2022 the Company recorded expenses of $382,622 with Tella Digital. As of March 31, 2023, the Company recorded expenses of $171,207 with Tella Digital, as compared to expenses of $214,908 recorded for the period ended March 31, 2022. Tella Digital provides on-premise digital experience solutions for our retail dispensary locations. Mr. Dye is an indirect partial owner of and serves as Chairman of Tella Digital.

Transactions with Entities Affiliated with Nirup Krishanmurthy

For the year ended December 31, 2022 the Company recorded expenses of $382,622 with Tella Digital. As of March 31, 2023, the Company recorded expenses of $171,207 with Tella Digital, as compared to expenses of $214,908 recorded for the period ended March 31, 2022. Tella Digital provides on-premise digital experience solutions for our retail dispensary locations. Nirup Krishnamurthy, the Company’s President and one of its directors, is an indirect partial owner of Tella Digital.

Transactions with Jeffrey Cozad and Entities Affiliated with Jeffrey Cozad

On February 26, 2021, the Company entered into a Securities Purchase Agreement (the “CRW SPA”) with CRW Capital Cann Holdings, LLC (“CRW”) pursuant to which the Company issued and sold 25,350 shares of Preferred Stock to CRW at a price of $1,000 per share for aggregate gross proceeds of $25,350,000. The transaction made CRW a beneficial owner of more than 5% of the Company’s common stock. The Company granted CRW certain demand and piggyback registration rights with respect to the shares of common stock issuable upon conversion of the Preferred Stock under the CRW SPA. On the same date, the Company entered into a letter agreement with CRW, granting CRW the right to designate one individual for election or appointment to the Board and Board observer rights. Under the letter agreement, for as long as CRW has the right to designate a Board member, if the Company, directly or indirectly, plans to issue, sell or grant any securities or options to purchase any of its securities, CRW has a right to purchase its pro rata portion of such securities, based on the number of shares of Preferred Stock beneficially held by CRW on the applicable date on an as-converted to common stock basis divided by the total number of shares of common stock outstanding on such date on an as-converted, fully-diluted basis (taking into account all outstanding securities of the Company regardless of whether the holders of such securities have the right to convert or exercise such securities for common stock at the time of determination). Further,

under the letter agreement, the Company paid CRW Capital, LLC, the sole manager of CRW and a holder of a carried interest in CRW, a monitoring fee equal to $150,000 in monthly installments of $12,500. The Company paid CRW a monitoring fee of $25,000 during 2022, and the Company did not pay any monitoring fees to CRW for the period ended March 31, 2023. On March 14, 2021, the Board appointed Jeffrey A. Cozad as a director to fill a vacancy on the Board. Mr. Cozad is a co-manager and owns 50% of CRW Capital, LLC, and he shares voting and disposition power over the shares of Preferred Stock held by CRW with Mr. Rubin. Mr. Cozad and his family members indirectly own membership interests in CRW.

On December 7, 2021, the Company entered into a Securities Purchase Agreement with Cozad Investments, L.P. pursuant to which the Company issued an Investor Note in the aggregate principal amount of $250,000 to Cozad Investments, L.P. for $245,000 in cash. The Investor Note bears interest at 13% per year payable quarterly commencing March 31, 2022 in cash for an amount equal to the amount payable on such date as if the Investor Note was subject to an annual interest rate of 9% with the remainder of the accrued interest payable as an increase to the principal amount of the Note. Mr. Cozad is the majority owner of Cozad Investments, L.P, and a member of the Board.

On May 4, 2022, and June 14, 2022, the Company issued 40,463 shares of Common Stock and 22,728 shares of Common Stock, respectively, to Mr. Cozad as compensation for service on the Board. These shares are valued at $70,001 and $35,001 for May and June 2022, respectively.

Transactions with Marc Rubin and Entities Affiliated with Marc Rubin

On February 26, 2021, the Company entered into the CRW SPA with CRW, of which Marc Rubin is a beneficial owner. Pursuant to the CRW SPA, the Company issued and sold 25,350 shares of Preferred Stock to CRW at a price of $1,000 per share for aggregate gross proceeds of $25,350,000. The transaction made CRW a beneficial owner of more than 5% of the Company’s common stock. The Company granted CRW certain demand and piggyback registration rights with respect to the shares of common stock issuable upon conversion of the Preferred Stock under the CRW SPA. Effective February 4, 2022, the Company registered the resale of the shares of common stock issuable upon conversion of the Preferred Stock on a Form S-3. Also on February 26, 2021, the Company entered into a letter agreement with CRW, granting CRW the right to designate one individual for election or appointment to the Board and Board observer rights. Under the letter agreement, for as long as CRW has the right to designate a Board member, if the Company, directly or indirectly, plans to issue, sell or grant any securities or options to purchase any of its securities, CRW has a right to purchase its pro rata portion of such securities, based on the number of shares of Preferred Stock beneficially held by CRW on the applicable date on an as-converted-to-common-stock basis divided by the total number of shares of common stock outstanding on such date on an as-converted, fully-diluted basis (taking into account all outstanding securities of the Company regardless of whether the holders of such securities have the right to convert or exercise such securities for common stock at the time of determination). Further, under the letter agreement, the Company paid CRW Capital, LLC, the sole manager of CRW and a holder of a carried interest in CRW, a monitoring fee equal to $25,000 in 2022, and the Company did not pay any monitoring fees to CRW for the period ended March 31, 2023. Mr. Rubin is a co-manager and 50% owner of CRW Capital, LLC, and he shares voting and disposition power over the shares of Preferred Stock held by CRW with Mr. Cozad.

On December 7, 2021, the Company entered into a Securities Purchase Agreement with The Rubin Revocable Trust U/A/D 05/09/2011 (the “Rubin Revocable Trust”) pursuant to which the Company issued an Investor Note in the aggregate principal amount of $100,000 to the Rubin Revocable Trust for $98,000 in cash. The Investor Note bears interest at 13% per year payable quarterly commencing March 31, 2022 in cash for the amount equal to the amount payable on such date as if the Investor Note was subject to an annual interest rate of 9% with the remainder of the accrued interest payable as an increase to the principal amount of the Note. Mr. Rubin is the majority owner of the Rubin Revocable Trust and a member of the Board. In October 2022, the Board appointed Mr. Rubin as a director to fill a vacancy on the Board.

Transactions with Jeffrey Garwood

On December 7, 2021, the Company entered into a Securities Purchase Agreement with Jeff Garwood pursuant to which the Company issued an Investor Note in the aggregate principal amount of $300,000 to Mr. Garwood for $294,000 in cash. The Investor Note bears interest at 13% per year paid quarterly commencing March 31, 2022 in cash for an amount equal

to the amount payable on such date as if the Note was subject to an annual interest rate of 9% with the remainder of the accrued interest payable as an increase to the principal amount of the Note. Mr. Garwood is a member of the Board.

On May 4, 2022, and June 14, 2022, the Company issued 40,463 shares of Common Stock and 22,728 shares of Common Stock, respectively, to Mr. Garwood, as compensation for service on the Board. These shares are valued at $70,001 and $35,001 for May and June 2022, respectively.

Transactions with Pratap Mukharji

On December 7, 2021, the Company entered into a Securities Purchase Agreement with Pratap Mukharji pursuant to which the Company issued an Investor Note in the aggregate principal amount of $200,000 to Mr. Mukharji for $196,000 in cash. The Investor Note bears interest at 13% per year paid quarterly commencing March 31, 2022 in cash for an amount equal to the amount payable on such date as if the Note was subject to an annual interest rate of 9% with the remainder of the accrued interest payable as an increase to the principal amount of the Note. Mr. Mukharji is a member of the Board.

On May 4, 2022, and June 14, 2022, the Company issued 40,463 shares of Common Stock and 22,728 shares of Common Stock, respectively, to Mr. Mukharji as compensation for service on the Board. These shares are valued at $70,001 and $35,001 for May and June 2022, respectively.

Transactions with Paul Montalbano

On May 4, 2022, and June 14, 2022, the Company issued 40,463 shares of Common Stock and 22,728 shares of Common Stock, respectively, to Mr. Montalbano as compensation for service on the Board. These shares are valued at $70,001 and $35,001 for May and June 2022, respectively.

Transactions with Jonathan Berger

On May 4, 2022, and June 14, 2022, the Company issued 40,463 shares of Common Stock and 22,728 shares of Common Stock, respectively, to Mr. Berger as compensation for service on the Board. These shares are valued at $70,001 and $35,001 for May and June 2022, respectively. On June 24, 2022, the Company issued 19,085 shares of Common Stock to Mr. Berger as compensation for service as the Chair of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee of the Board. These shares are valued at $25,001 for June 2022. On September 22, 2022, the Company issued 102,355 shares of Common Stock to Mr. Berger as compensation for service as Lead Independent Director of the Board. These shares are valued at $100,000 for September 2022.

Transactions with Star Buds Parties

The Company has participated in several transactions involving entities owned or affiliated with one or more of its directors or 5% or greater beneficial owners that are affiliated with Star Buds and/or the Star Buds Acquisitions. These individuals include: (i) Brian Ruden, a former director of the Company as of October 2022, and a beneficial owner of 10% or more of the Company’s voting stock, (ii) Salim Wahdan, a former director of the Company as of March 2023, and (iii) Naser Joudeh and Shadhaa Ramadan, jointly as the beneficial owner of 10% or more of the Company’s voting stock (the “Joudeh Owners” and together with Brian Ruden and Salim Wahdan, the “Star Buds Affiliates”). Each of Brian Ruden, Salim Wahdan, and the Joudeh Owners had an ownership stake in the Star Buds companies acquired by the Company between December 2021 and May 2022.

Between December 17, 2020 and March 2, 2021, the Company’s wholly-owned subsidiary SBUD LLC acquired Star Buds assets. The aggregate purchase price for the Star Buds assets was $118,000,000, paid as follows: (i) $44,250,000 in cash at the applicable closings, (ii) $44,250,000 in deferred cash, also referred to in this report as “seller note(s),” (iii) 29,506 shares of Preferred Stock, of which 25,078 shares were issued at the applicable closings and 4,428 shares were held back by the Company as collateral for potential indemnification obligations pursuant to the applicable purchase agreements. In addition, the Company issued warrants to purchase an aggregate of 5,531,250 shares of common stock to the sellers. Each Party’s interests in the seller notes is as follows: (i) Brian Ruden: 31%, (ii) Salim Wahdan: 3.5%, and (iii) the Joudeh Owners: 28%. The Company issued warrants to purchase an aggregate of (i) 1,715,936 shares of common stock to Mr.

Ruden, (ii) 193,929 shares of commons stock to Mr. Wahdan, and (iii) 1,522,457 shares of common stock to the Joudeh Owners.

As of December 31, 2022, the Company (i) owed an aggregate principal amount of $44,250,000 under the seller notes, (ii) paid an aggregate of $5,310,000 in interest on the seller notes, and (iii) held 944 shares of Preferred Stock in escrow as collateral for potential indemnification obligations pursuant to the applicable purchase agreements.

In connection with acquiring the Star Buds assets the Company also assumed and acquired a number of leases for which one or more of the Star Buds Affiliates serve as landlord or maintain an ownership interest in the landlord entity. The Company has entered into a lease with each of 428 S. McCulloch LLC, Colorado Real Estate Holdings LLC, 5844 Ventures LLC, 5238 W 44th LLC, 4690 Brighton Blvd LLC, 14655 Arapahoe LLC and Montview Real Estate LLC, on substantially the same terms. Each of the leases is for an initial three-year term. The lease with 428 S. McCulloch LLC is for the Company’s Pueblo West Star Buds location and was effective on December 17, 2020. The leases with Colorado Real Estate Holdings LLC and 5844 Ventures LLC is for the Company’s Niwot and Commerce City Star Buds location, respectively, and was effective on December 18, 2020. The lease with 5238 W 44th LLC is for the Company’s Lakeside Star Buds location and was effective on February 3, 2021. The lease with 4690 Brighton Blvd LLC is for the Company’s Brighton store in north Denver and was effective on February 3, 2021. The lease with 14655 Arapahoe LLC and Montview Real Estate LLC is for the Company’s Arapahoe and Aurora locations, respectively, and was effective on March 2, 2021. The 428 S McCulloch LLC, 5844 Ventures LLC and 5238 W 44th LLC provides for a monthly rent payment of $5,000 with an aggregate of $180,000 during the initial term of the leases. The Colorado Real Estate Holdings LLC lease provides for a monthly rent payment of $6,779 with an aggregate of $244,044 during the initial term of the lease. The 14655 Arapahoe LLC lease provides for a monthly rent payment of $12,367 with an aggregate of $445,212 during the initial term of the lease. The Montview Real Estate LLC lease provides for a monthly rent of $6,250 with an aggregate of $225,000 during the initial term of the lease. The Brighton Blvd LLC lease provides for a monthly rent payment of $7,250 with an aggregate of $261,000 during the initial term of the lease. SBUD LLC made aggregate rent payments of $142,938 and $571,752 for the periods ending March 31, 2023 and December 31, 2022, respectively, as compared to aggregate rent payments of $121,188 for the period ending March 31, 2022 made by SBUC LLC. In addition, SBUD LLC must pay each landlord’s expenses and disbursements incurred in connection with the ownership, operation, maintenance, repair and replacement of the premises. SBUD LLC has the option to renew each lease for two additional three-year terms with escalation. The Company has an option to purchase the premises at fair market value at any time during the lease term and also has a right of first refusal if the landlords desire to sell the premises to a third party.

On December 17, 2020, SBUD LLC entered into a Trademark License Agreement with Star Brands LLC under which Star Brands LLC licenses certain trademarks to SBUD LLC effective as of the closing of the acquisitions of all Star Buds assets. SBUD LLC has no payment obligation under this agreement. Mr. Ruden and Mr. Joudeh are partial owners of Star Brands LLC.

In connection with the Star Buds Acquisitions, the Company granted Mr. Ruden and Mr. Joudeh the right to jointly designate two or three individuals for election or appointment to the Board, depending on the size of the Board at a given time.

Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies

Commitments and Contingencies

17.Commitments and Contingencies

Definitive Agreement to Acquire Two Retail Dispensaries from Colorado-Based Smokey’s.

On January 25, 2023, the Company entered into an Asset Purchase Agreement (the “Smokey’s Purchase Agreement”) with Smoke Holdco, LLC, a wholly-owned indirect subsidiary of the Company (the “Smokey’s Purchaser”), Cannabis Care Wellness Centers, LLC d/b/a Smokey’s (“Cannabis Care”), Green Medicals Wellness Center #5, LLC d/b/a Smokey’s (“Green Medicals” and together with Cannabis Care, “Smokey’s”), Thomas Jerome Wilczynski, as Representative, and the owners of Smokey’s, Jeremy Ryan Lewchuk, T&B Holdings LLC, and Thomas Jerome Wilczynski, pursuant to which the Smokey’s Purchaser will purchase two retail and medical marijuana stores located in Fort Collins, Colorado and Garden City, Colorado, on the terms and subject to the conditions set forth in the Smokey’s Purchase Agreement (collectively, the “Smokey’s Acquisition”). The aggregate consideration for the Smokey’s Acquisition will be up to $7.5 million, payable in cash and shares of common stock. At the closing, the Company will pay

the purchase price (i) in cash in the amount of $3.75 million and (ii) in shares of the Company’s common stock in the amount of $3,150,000 divided by the price per share of the Company’s common stock as of market close on the first trading day immediately before the closing of the Smokey’s Acquisition. At closing, the Company will use a portion of the purchase price to pay off certain indebtedness and transaction expenses of Smokey’s and then pay the balance to Smokey’s. The Company will hold back from issuance additional shares of the Company’s common stock in the amount of $600,000 divided by the price per share of the Company’s common stock as of market close on the first trading day immediately before the closing of the Smokey’s Acquisition and $150,000 of the cash portion of the purchase price as collateral for potential claims for indemnification from Smokey’s under the Smokey’s Purchase Agreement. Any portion of the holdback consideration not used to satisfy indemnification claims will be issued or released (as applicable) to the owners of Smokey’s on the 18-month anniversary of the closing date of the Smokey’s Acquisition in accordance with the Smokey’s Purchase Agreement. The cash holdback is also subject to post-closing reduction if any of the actual marijuana inventory or cash at closing is less than certain targets stated in the Smokey’s Purchase Agreement.

The Smokey’s Purchase Agreement contains customary representations and warranties, covenants, and indemnification provisions for a transaction of this nature, including, without limitation, covenants regarding the operation of Smokey’s’ business before the closing of the Smokey’s Acquisition, and confidentiality, non-compete and non-solicitation undertakings by Smokey’s and the owners of Smokey’s. The Smokey’s Purchase Agreement also contains certain termination rights for each of the Smokey’s Purchaser (on its own behalf and on behalf of the Company) and Smokey’s (on its own behalf and on behalf of the owners), subject to the conditions set forth in the Smokey’s Purchase Agreement, including, without limitation, if the closing has not occurred within 120 days of submission of the state regulatory application required pursuant to the Smokey’s Purchase Agreement. The closing of the Smokey’s Acquisition is subject to closing conditions customary for a transaction of this nature, including, without limitation, obtaining licensing approval from the Colorado Marijuana Enforcement Division and local regulatory authorities.

Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt

Schedule of debt


	March 31,		December 31,
	2023		2022

Term loan dated February 26, 2021, in the original amount of $10,000,000. An additional $5,000,000 was added to the loan agreement on July 28, 2021. Interest of 15% per annum, due quarterly. Principal payments begin June 1, 2023.	$	15,000,000	$	15,000,000

Seller notes dated December 17, 2020 in the original amount of $44,250,000. Interest of 12% per annum, due monthly. Principal payments begin December 17, 2025.		44,250,000		44,250,000

Investor note dated December 3, 2021, in the original amount of $95,000,000. Interest of 13% per annum, 9% payable in cash and 4% accreting to the principal amount.		100,109,574		99,118,391

Nuevo note dated February 7, 2022 in the original amount of $17,000,000. Interest of 5% per annum, due monthly. Principal balance is due February 7, 2025.		17,000,000		17,000,000

Less: unamortized debt issuance costs		(6,182,181)		(6,603,695)
Less: unamortized debt discount		(38,993,243)		(40,993,176)

Total long term debt		131,184,150		127,771,520
Less: current portion of long term debt		(3,000,000)		(2,250,000)

Long term debt and unamortized debt issuance costs	$	128,184,150	$	125,521,520

Schedule of Maturities of Long-term Debt


	March 31,		December 31,
	2023		2022

Term loan dated February 26, 2021, in the original amount of $10,000,000. An additional $5,000,000 was added to the loan agreement on July 28, 2021. Interest of 15% per annum, due quarterly. Principal payments begin June 1, 2023.	$	15,000,000	$	15,000,000

Seller notes dated December 17, 2020 in the original amount of $44,250,000. Interest of 12% per annum, due monthly. Principal payments begin December 17, 2025.		44,250,000		44,250,000

Investor note dated December 3, 2021, in the original amount of $95,000,000. Interest of 13% per annum, 9% payable in cash and 4% accreting to the principal amount.		100,109,574		99,118,391

Nuevo note dated February 7, 2022 in the original amount of $17,000,000. Interest of 5% per annum, due monthly. Principal balance is due February 7, 2025.		17,000,000		17,000,000

Less: unamortized debt issuance costs		(6,182,181)		(6,603,695)
Less: unamortized debt discount		(38,993,243)		(40,993,176)

Total long term debt		131,184,150		127,771,520
Less: current portion of long term debt		(3,000,000)		(2,250,000)

Long term debt and unamortized debt issuance costs	$	128,184,150	$	125,521,520


			Unamortized
	Principal		Debt Issuance		Unamortized		Total Long
	Payments		Costs		Debt Discount		Term Debt
2023		2,250,000		1,264,535		6,523,560		(5,538,095)
2024		3,000,000		1,686,049		9,734,935		(8,420,984)
2025		40,651,759		1,686,049		11,057,799		27,907,911
2026		130,457,815		1,545,548		11,676,949		117,235,318
2027		—		—		—		—
Thereafter		—		—		—		—
Total	$	176,359,574	$	6,182,181	$	38,993,243	$	131,184,150

Commitments and Contingencies (Details) - Smoke Holdco Llc	Jan. 25, 2023 USD ($) item
Deposit of purchase price	$ 150,000
Equity consideration transferred	3,150,000
Consideration paid in cash	3,750,000
Equity additional consideration transferred	600,000
Aggregate consideration	$ 7,500,000
Number of retail and medical marijuana stores acquired \| item	2
Term of anniversary	18 months
Term of submission	120 days

Tax Provision (Tables)

3 Months Ended

Mar. 31, 2023

Tax Provision

Schedule of components of income tax (benefit) expense


	Three Months Ended March 31,
	2023		2022
Income (loss) before income taxes	$	6,407,607	$	(25,518,808)
Income tax expense		4,662,178		1,259,894
Effective tax rate		72.76%		(4.94)%

Earnings per share (Basic and Dilutive) (Tables)

3 Months Ended

Mar. 31, 2023

Earnings per share (Basic and Dilutive)

Schedule of reconciliation of the numerator and denominator used in the basic and diluted EPS calculations


	For the Three Months Ended
	March 31,
	2023		2022
Numerator:
Net income (loss)	$	1,745,429	$	(26,778,702)
Less: Accumulated preferred stock dividends for the period		(2,029,394)		(1,743,444)
Net income (loss) attributable to common stockholders	$	(283,965)	$	(28,522,146)

Denominator:
Weighted-average shares of common stock		55,835,501		46,841,971

Basic earnings (loss) per share	$	(0.01)	$	(0.61)

Numerator:
Net income (loss) attributable to common stockholders – Basic		(283,965)		(28,522,146)
Add: Investor note accrued interest		421,514		—
Add: Investor note amortized debt discount		1,999,933		—
Less: Gain on derivative liability related to investor note		(8,501,685)		—
Net income (loss) attributable to common stockholders – dilutive	$	(6,364,203)	$	(28,522,146)

Denominator:
Weighted-average shares of common stock		55,835,501		46,841,971
Dilutive effect of investor notes		45,772,777		—
Diluted weighted-average shares of common stock		101,608,278		46,841,971

Diluted earnings (loss) per share	$	(0.06)	$	(0.61)

Inventory (Tables)

3 Months Ended

Mar. 31, 2023

Inventory

Schedule of Inventory


		March 31, 2023		December 31, 2022
Raw Materials	$	1,506,435	$	2,325,482
Work in Process		16,215,540		14,504,490
Finished Goods		7,855,458		5,724,210
Total Inventories	$	25,577,433	$	22,554,182

Intangible Assets - Amortization expense (Details)	Mar. 31, 2023 USD ($)
Intangible Assets
Remainder of 2023	$ 10,574,128
2024	11,795,636
2025	11,502,223
2026	10,634,720
2027	10,125,611
Thereafter	77,738,541
Total	$ 132,370,859

Derivative Liability (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Liability

Schedule of reconciliation of the beginning and ending balances of the derivative liabilities


Balance as of December 31, 2021	$	34,923,013
Loss on derivative liability		13,417,472
Balance as of March 31, 2022	$	48,340,485
Balance as of December 31, 2022	$	16,508,253
Gain on derivative liability		(8,501,685)
Balance as of March 31, 2023	$	8,006,568

Business Combinations (Details)								3 Months Ended
Business Combinations (Details)	Jan. 25, 2023 item	Dec. 15, 2022 USD ($) item	May 31, 2022 USD ($) shares	Feb. 15, 2022 USD ($) ft²	Feb. 09, 2022 USD ($) item shares	Feb. 08, 2022 USD ($) item director	Jan. 26, 2022 USD ($) item shares	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Business Acquisition [Line Items]
Cash									$ 59,691,039
Goodwill								$ 64,479,817	$ 118,698,717	$ 94,605,301	$ 43,316,267
Intangible assets								132,370,859		$ 107,726,718
Measurement-period adjustment to prior year acquisition								(30,125,484)
Lightshade Labs Llc
Business Acquisition [Line Items]
Number of Retail Dispensaries Acquired \| item	2
Nuevo Holding LLC
Business Acquisition [Line Items]
Number of call option agreement entered \| item						2
Call option agreement, option to acquire equity or assets percentage						100.00%
Purchase price of call option						$ 100
Drift
Business Acquisition [Line Items]
Number of retail dispensaries acquired \| item							2
Number of retail dispensaries leased \| item							2
Cash							$ 1,920,000
Shares consideration issued \| shares							1,146,099
Goodwill							$ 2,138,270
Intangible assets							1,030,000
Amortization booked to selling, general and administrative expenses							$ 189,278
Reynold Greenleaf & Associates, LLC.
Business Acquisition [Line Items]
Cash						32,200,000
Payments required potential earn out						$ 4,500,000
Reynold Greenleaf & Associates, LLC. \| Nuevo Holding LLC
Business Acquisition [Line Items]
Licenses for facilities held by non-for-profit entities \| item						2
Number of Not For Profit Entities Acquired \| director						2
Notes payable						$ 17,000,000.0
Percentage of investor note						5.00%
RGA
Business Acquisition [Line Items]
Goodwill						$ 6,196,571
Intangible assets						$ 28,785,000
Amortization booked to cost of goods and services								885,792
Amortization booked to selling, general and administrative expenses								$ 1,645,684
MCG
Business Acquisition [Line Items]
Number of retail dispensaries acquired \| item					2
Cash					$ 16,000,000.0
Shares consideration issued \| shares					6,547,239
Goodwill					$ 19,852,080
Intangible assets					12,400,000
Aggregate consideration					29,000,000
Amount held back as collateral for potential claims for indemnification					$ 2,320,000
Brow
Business Acquisition [Line Items]
Cash				$ 6,200,000
Goodwill				1,792,000
Intangible assets				3,970,000
Aggregate consideration				6,700,000
Amount held back as collateral for potential claims for indemnification				$ 500,000
Area of building acquired \| ft²				37,000
Urban Dispensary Member
Business Acquisition [Line Items]
Cash			$ 1,320,000
Shares consideration issued \| shares			1,230,534
Amount held back as collateral for potential claims for indemnification			$ 288,000
Goodwill and intangibles			$ 2,849,868
Lightshade Labs Llc
Business Acquisition [Line Items]
Number of retail dispensaries acquired \| item		2
Number of retail dispensaries leased \| item		2
Aggregate consideration		$ 2,750,000
Escrow held consideration cash		300,000
Measurement-period adjustment to prior year acquisition		$ 2,589,865
Elemental
Business Acquisition [Line Items]
Ownership percentage								100.00%

Notes Receivable (Details) - USD ($)	Mar. 12, 2021	Mar. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable
Notes receivable			$ 11,944
Colorado Cannabis
Accounts, Notes, Loans and Financing Receivable
Due from related parties	$ 215,000
Equal monthly installments (in months)	18 months
Notes receivable		$ 0	$ 11,944

- Definition

Aggregate amount of receivables to be collected from related parties where one party can exercise control or significant influence over another party; including affiliates, owners or officers and their immediate families, pension trusts, and so forth, at the financial statement date, which are usually due after one year (or one business cycle).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 1
-Subparagraph (d)
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-Name Accounting Standards Codification
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(11))
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-Name Accounting Standards Codification
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+ Details

Stockholders' Equity

3 Months Ended

Mar. 31, 2023

Stockholders' Equity

Stockholders' Equity

13.Stockholders’ Equity

The Company is authorized to issue two classes of stock, preferred stock and Common Stock.

Preferred Stock

The number of shares of preferred stock authorized is 10,000,000, par value $0.001 per share (“Preferred Stock”). The preferred stock may be divided into such number or series as the Board may determine. The Board is authorized to determine and alter the rights, preferences, privileges, and restrictions granted and imposed upon any wholly unissued series of preferred stock, and to fix the number and designation of shares of any series of preferred stock. The Board, within limits and restrictions stated in any resolution of the Board, originally fixing the number of shares constituting any series may increase or decrease, but not below the number of such series then outstanding, the shares of any subsequent series.

The Company had 86,994 shares of Preferred Stock issued (including 944 shares in escrow) as of March 31, 2023 and 86,994 shares of Preferred Stock issued (including 944 shares in escrow) as of December 31, 2022. Among other terms, each share of Preferred Stock (i) earns an annual dividend of 8% on the “preference amount,” which initially is equal to

the $1,000 per-share purchase price and subject to increase, by having such dividends automatically accrete to, and increase, the outstanding preference amount, (ii) is entitled to a liquidation preference under certain circumstances, (iii) is convertible into shares of Common Stock by dividing the preference amount by $1.20 per share under certain circumstances, and (iv) is subject to a redemption right or obligation under certain circumstances. Preferred dividends were $2,029,394 and $1,743,444 for the three months ended March 31, 2023, and March 31, 2022, respectively.

Common Stock

The Company is authorized to issue 250,000,000 shares of Common Stock, par value $0.001 per share (“Common Stock”). The Company had 56,352,545 shares of Common Stock issued, 55,212,547 shares of Common Stock outstanding, 920,150 shares of Common Stock in treasury, and 441,247 shares of Common Stock in escrow as of March 31, 2023, and 56,352,545 shares of Common Stock issued, 55,212,547 shares of Common Stock outstanding, 920,150 shares of Common Stock in treasury, and 219,848 shares of Common Stock in escrow as of December 31, 2022.

Employee Stock Option Plan

The Company’s stock option plan permits the grant of share options to its employees. Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those option awards generally vest based on 4 years of continuous service and have a 10-year contractual terms.

The Company recognized $214,544 and $991,083 in expense for stock-based compensation from Common Stock options and Common Stock issued to employees, officers, and directors during the three months ended March 31, 2023 and March 31, 2022, respectively.

Common Stock Issued as Compensation to Employees, Officers, and Directors

For the year ended December 31, 2022, the Company issued 717,546 shares of Common Stock valued at $1,027,288 to employees and directors as compensation.

For the three months ended March 31, 2023, the Company did not issue any shares of Common Stock as compensation to directors.

Common and Preferred Stock Issued as Payment for Acquisitions

The Company issued an aggregate of 1,146,099 shares of Common Stock valued at $1,948,620 in connection with the acquisition of the assets of Drift during 2022.

On February 9, 2022, the Company issued 7,116,564 shares of Common Stock valued at $11,600,000 for the acquisition of MCG.

On May 31, 2022, the Company issued 1,670,230 shares of Common Stock valued at $1,900,000 (of which 219,847 shares valued at $288,000 were placed in escrow) for the acquisition of Urban Dispensary.

Warrants

The Company accounts for Common Stock purchase warrants in accordance with ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity. The Company estimates the fair value of warrants at date of grant using the Black-Scholes option pricing model. There is a moderate degree of subjectivity involved when using option pricing models to estimate the warrants, and the assumptions used in the Black Scholes option-pricing model are moderately judgmental.

For the year ended December 31, 2021, the Company issued warrants to purchase an aggregate of 5,531,249 shares of Common Stock as consideration for the Star Buds Acquisition. These warrants have an exercise price of $1.20 per share and expiration dates five years from the dates of issuance. In addition, the Company issued a warrant to purchase an

aggregate of 1,500,000 shares of Common Stock to Altmore in connection with entering into a loan agreement. This warrant has an exercise price of $2.50 per share and expires five years from the date of issuance. The Company estimated the fair value of these warrants at date of grant using the Black-Scholes option pricing model using the following inputs: (i) stock price on the date of grant of $1.20 and $2.50, respectively, (ii) the contractual term of the warrant of five years, (iii) a risk-free interest rate ranging between 0.21% - 1.84% and (iv) an expected volatility of the price of the underlying Common Stock ranging between 157.60% - 194.56%. No new warrants were issued as of March 31, 2023.

The following table reflects the change in Common Stock purchase warrants for the period ended March 31, 2023:


	Equity Classified Warrants		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life
Balance as of December 31, 2022	7,218,750	$	1.76	2.99
Warrants exercised	—		—	—
Warrants forfeited/expired	—		—	—
Warrants issued	—		—	—
Balance as of March 31, 2023	7,218,750	$	1.76	2.74

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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+ Details

Stockholders' Equity - Black-Scholes model valuation assumption (Details) - Employee Stock Option Plan	3 Months Ended
	Mar. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting period (in years)	4 years
Service contractual term	10 years

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 35,166,629	$ 38,949,253
Accounts receivable, net of allowance for doubtful accounts	4,590,159	4,471,978
Inventory	25,577,433	22,554,182
Note receivable - current, net		11,944
Marketable securities, net of unrealized gain of $1,816 and loss of $39,270, respectively	456,099	454,283
Prepaid expenses and other current assets	8,330,194	5,293,393
Total current assets	74,120,514	71,735,033
Non-current assets
Fixed assets, net accumulated depreciation of $5,880,513 and $4,899,977, respectively	29,332,369	27,089,026
Investments	2,000,000	2,000,000
Goodwill	64,479,817	94,605,301
Intangible assets, net accumulated amortization of $21,461,721 and $16,290,862, respectively	132,370,859	107,726,718
Note receivable - noncurrent, net	1,313
Deferred tax assets, net	135,155
Other noncurrent assets	1,166,582	1,527,256
Operating lease right of use assets	19,783,067	18,199,399
Total non-current assets	249,269,162	251,147,700
Total assets	323,389,676	322,882,733
Current liabilities
Accounts payable	4,258,510	7,848,613
Accounts payable - related party	48,276	22,380
Accrued expenses	10,414,494	10,314,958
Derivative liabilities	8,006,568	16,508,253
Lease liabilities - current	3,648,395	3,139,289
Current portion of long term debt	3,000,000	2,250,000
Income taxes payable	12,597,218	7,297,815
Total current liabilities	41,973,461	47,381,308
Long term debt, net of debt discount and issuance costs	128,184,150	125,521,520
Lease liabilities	19,108,720	17,314,464
Deferred income taxes, net		502,070
Total long-term liabilities	147,292,870	143,338,054
Total liabilities	189,266,331	190,719,362
Stockholders' equity
Preferred stock, $0.001 par value. 10,000,000 shares authorized; 86,994 shares issued as of March 31, 2023 and 86,994 shares issued as of December 31, 2022, 86,994 outstanding at March 31, 2023 and 86,994 outstanding at December 31, 2022.	87	87
Common stock, $0.001 par value. 250,000,000 shares authorized; 56,352,545 shares issued and 55,212,547 shares outstanding as of March 31, 2023 and 56,352,545 shares issued and 55,212,547 shares outstanding as of December 31, 2022.	56,353	56,353
Additional paid-in capital	180,596,185	180,381,641
Accumulated deficit	(44,496,153)	(46,241,583)
Common stock held in treasury, at cost, 920,150 shares held as of March 31, 2023 and 920,150 shares held as of December 31, 2022	(2,033,127)	(2,033,127)
Total stockholders' equity	134,123,345	132,163,371
Total liabilities and stockholders' equity	$ 323,389,676	$ 322,882,733

Goodwill Accounting (Tables)

3 Months Ended

Mar. 31, 2023

Goodwill Accounting

Schedule of goodwill


	Retail		Wholesale		Other		Total

Balance as of January 1, 2023	$	52,583,794	$	7,219,936	$	34,801,571	$	94,605,301
Goodwill acquired during Q1 2023		—		—		—		—
Measurement-period adjustment to prior year acquisition		2,192,958		2,483,129		(34,801,571)		(30,125,484)
Balance as of March 31, 2023	$	54,776,752		9,703,065	$	—	$	64,479,817


	Retail			Wholesale		Other		Total

Balance as of January 1, 2022	$	26,349,025	$	13,964,016	$	3,003,226	$	43,316,267
Goodwill acquired during Q1 2022		10,985,559		32,418,546		31,978,345		75,382,450
Measurement-period adjustment to prior year acquisition		—		—		—		—
Goodwill Impairment during 2022		—		—		—		—
Balance as of March 31, 2022	$	37,334,584		46,382,562	$	34,981,571	$	118,698,717

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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-Name Accounting Standards Codification
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+ Details

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities
Net income (loss) for the period	$ 1,745,429	$ (26,778,702)
Adjustments to reconcile net income (loss) to cash for operating activities
Depreciation and amortization	6,151,395	2,540,796
Non-cash interest expense	991,184	1,203,333
Non-cash lease expense	2,251,459	1,079,913
Deferred taxes	(637,225)
Change in derivative liabilities	(8,501,685)	13,417,472
Amortization of debt issuance costs	421,513	421,512
Amortization of debt discount	1,999,933	1,756,173
(Gain) loss on investment, net	(1,816)	8,549
Stock based compensation	214,544	991,083
Changes in operating assets and liabilities (net of acquired amounts):
Accounts receivable	(118,181)	(120,388)
Inventory	(3,023,251)	6,628,633
Prepaid expenses and other current assets	(3,036,801)	104,888
Other assets	360,674	(867,401)
Change in operating lease liability	(1,531,765)	(921,947)
Accounts payable and other liabilities	(3,464,671)	2,898,513
Income taxes payable	5,299,403	1,259,894
Net cash (used in) provided by operating activities	(879,861)	3,622,321
Cash flows from investing activities:
Collection of notes receivable	10,631
Cash consideration for acquisition of business, net of cash acquired		(59,691,039)
Purchase of fixed assets	(2,913,394)	(2,643,404)
Net cash used in investing activities	(2,902,763)	(62,334,443)
Net (decrease) in cash and cash equivalents	(3,782,624)	(58,712,122)
Cash and cash equivalents at beginning of period	38,949,253	106,400,216
Cash and cash equivalents at end of period	35,166,629	47,688,094
Supplemental disclosure of cash flow information:
Cash paid for interest	6,540,748	4,722,639
Supplemental disclosure of non-cash investing and financing activities:
Lease liability arising from right of use asset	$ 3,160,499	5,921,148
Settling of note receivable for equipment		35,833
Issuance of debt for acquisition		17,000,000
Issuance of stock as payment for acquisitions		$ 13,200,000

Tax Provision (Details) - USD ($)	3 Months Ended
Tax Provision (Details) - USD ($)	Mar. 31, 2023	Mar. 31, 2022
Tax Provision
Income (loss) before income taxes	$ 6,407,607	$ (25,518,808)
Income tax expense	$ 4,662,178	$ 1,259,894
Effective tax rate	72.76%	(4.94%)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

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+ Details

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Notes Receivable

3 Months Ended

Mar. 31, 2023

Notes Receivable

Notes Receivable

4.Notes Receivable

On March 12, 2021, the Company sold equipment to Colorado Cannabis Company LLC (“Colorado Cannabis”). Colorado Cannabis is obligated to pay $215,000, payable in equal monthly installments for 18 months commencing 30 days from the date of taking possession of the equipment pursuant to the Purchase and Sale Agreement, dated January 29, 2021, between the Company and Colorado Cannabis. As of March 31, 2023 and December 31, 2022, the outstanding balance, including penalties for late payments, on the receivable from Colorado Cannabis totaled $0 and $11,944, respectively.

Stockholders' Equity (Details)					3 Months Ended		12 Months Ended
Stockholders' Equity (Details)	May 31, 2022 USD ($) shares	Feb. 09, 2022 USD ($) shares	Jan. 26, 2022 USD ($) shares	Mar. 02, 2021 shares	Mar. 31, 2023 USD ($) item $ / shares shares	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 $ / shares shares
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of classes of stock \| item					2
Preferred stock, authorized (in shares)					10,000,000		10,000,000
Preferred stock, par value (in dollars per share) \| $ / shares					$ 0.001		$ 0.001
Preferred stock, issued (in shares)					86,994		86,994
Escrow shares					944		944
Preferred stock, dividend rate					8.00%
Preferred stock dividend rate, per share amount \| $ / shares					$ 1,000
Preferred stock, conversion price \| $ / shares					$ 1.20
Accumulated preferred dividends \| $					$ 2,029,394	$ 1,743,444
Common stock, authorized (in shares)					250,000,000		250,000,000
Common stock, par value (in dollars per share) \| $ / shares					$ 0.001		$ 0.001
Common stock, issued (in shares)					56,352,545		56,352,545
Common stock, outstanding (in shares)					55,212,547		55,212,547
Common stock held in treasury (in shares)					920,150		920,150
Common stock held in escrow					441,247		219,848
Shares issued for acquisition, value \| $						13,200,000
Stock based compensation expense \| $					$ 214,544	$ 991,083
Star Buds
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock issued for acquisition placed in escrow, value				5,531,250
Drift
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares agreed to be issued in future			1,146,099
Shares issued for acquisition, value \| $			$ 1,948,620
MCG
Accumulated Other Comprehensive Income (Loss) [Line Items]
Issuance of stock as payment for acquisitions (in shares)		7,116,564
Shares issued for acquisition, value \| $		$ 11,600,000
Urban Dispensary Member
Accumulated Other Comprehensive Income (Loss) [Line Items]
Issuance of stock as payment for acquisitions (in shares)	1,670,230
Shares issued for acquisition, value \| $	$ 1,900,000
Stock issued for acquisition placed in escrow, share	219,847
Stock issued for acquisition placed in escrow, value \| $	$ 288,000
Employees, Officers, and Directors
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock issued for compensation, shares							717,546
Stock issued for compensation, value \| $							$ 1,027,288
Preferred Stock \| Star Buds
Accumulated Other Comprehensive Income (Loss) [Line Items]
Issuance of stock as payment for acquisitions (in shares)				25,078
Warrants
Accumulated Other Comprehensive Income (Loss) [Line Items]
Warrants issued					0
Warrant contractual term								5 years
Warrants \| Minimum
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share price (in dollars per share) \| $ / shares								$ 1.20
Risk-free interest rate								0.21%
Expected volatility rate								157.60%
Warrants \| Maximum
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share price (in dollars per share) \| $ / shares								$ 2.50
Risk-free interest rate								1.84%
Expected volatility rate								194.56%
Warrants \| Altmore
Accumulated Other Comprehensive Income (Loss) [Line Items]
Warrant term								5 years
Stock issued for acquisition placed in escrow, value								1,500,000
Purchase price (in dollars per share) \| $ / shares								$ 2.50
Warrants \| Star Buds
Accumulated Other Comprehensive Income (Loss) [Line Items]
Warrant term								5 years
Stock issued for acquisition placed in escrow, value								5,531,249
Purchase price (in dollars per share) \| $ / shares								$ 1.20

Leases - Maturities of Lease Liabilities (Details)	Mar. 31, 2023 USD ($)
Leases
2023	$ 35,528,050
Less: Interest	12,250,813
Present value of lease liabilities	$ 23,277,237

Inventory (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Inventory
Raw Materials	$ 1,506,435	$ 2,325,482
Work in Process	16,215,540	14,504,490
Finished Goods	7,855,458	5,724,210
Total Inventories	$ 25,577,433	$ 22,554,182

Stockholders' Equity - Warrant Activity (Details) - Warrants - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Offsetting Assets [Line Items]
Warrants outstanding, beginning balance	7,218,750
Warrants outstanding, ending balance	7,218,750	7,218,750
Weighted Average Exercise Price	$ 1.76	$ 1.76
Weighted Average Remaining Contractual Life	2 years 8 months 26 days	2 years 11 months 26 days

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2023	May 01, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	000-55450
Entity Registrant Name	MEDICINE MAN TECHNOLOGIES, INC.
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	46-5289499
Entity Address, Address Line One	4880 Havana Street
Entity Address, Address Line Two	Suite 201
Entity Address, City or Town	Denver
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80239
City Area Code	(303)
Local Phone Number	371-0387
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		55,561,244
Entity Central Index Key	0001622879
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

Derivative Liability - Reconciliation of Beginning and Ending Balances of Derivative Liabilities (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Derivative Liability
Derivative liability, beginning	$ 16,508,253	$ 34,923,013
Gain (loss) on derivative liability	(8,501,685)	13,417,472
Derivative liability, ending	$ 8,006,568	$ 48,340,485

Derivative Liability

3 Months Ended

Mar. 31, 2023

Derivative Liability

Derivative Liability

10.Derivative Liability

Investor Note

On December 3, 2021, the Company and its subsidiaries, as guarantors (the “Subsidiary Guarantors”) entered into a Securities Purchase Agreement with 31 accredited investors (the “Note Investors”) pursuant to which the Company agreed to issue and sell to the Note Investors 13% senior secured convertible notes due December 7, 2026 (the “Investor Notes”) in an aggregate principal amount of $95,000,000 for an aggregate purchase price of $93,100,000 (reflecting an original issue discount of $1,900,000, or 2%) in a private placement. On December 7, 2021, the Company consummated the private placement and issued and sold the Investor Notes pursuant to the Indenture entered into among the Company, the Subsidiary Guarantors, Chicago Atlantic Admin, LLC, as collateral agent, and Ankura Trust Company, LLC, as trustee (as may be supplemented and/or amended from time to time, the “Indenture”). The Company received net proceeds of approximately $92,000,000 at the closing, after deducting a commission to the placement agent and estimated offering expenses associated with the private placement payable by the Company. The Investor Notes will mature five years after issuance unless earlier repurchased, redeemed, or converted pursuant to the Indenture. The Investor Notes bear interest at 13% per year paid quarterly commencing March 31, 2022 in cash for an amount equal to the amount payable on such date as if the Investor Notes were subject to an annual interest rate of 9%, with the remainder of the accrued interest payable as an increase to the principal amount of the Investor Notes.

A reconciliation of the beginning and ending balances of the derivative liabilities for the periods ended March 31, 2023 and December 31, 2022 were as follows:


Balance as of December 31, 2021	$	34,923,013
Loss on derivative liability		13,417,472
Balance as of March 31, 2022	$	48,340,485
Balance as of December 31, 2022	$	16,508,253
Gain on derivative liability		(8,501,685)
Balance as of March 31, 2023	$	8,006,568

The Company accounts for derivative instruments in accordance with the GAAP accounting guidance under ASC 815 Derivatives and Hedging Activities. In accordance with GAAP, a contract to issue a variable number of equity shares fails to meet the definition of equity and must instead be classified as a derivative liability and measured at fair value with changes in fair value recognized in the consolidated statements of operations at each period-end. The Company utilizes a Monte Carlo simulation in determining the appropriate fair value. The derivative liability will ultimately be converted into the Company’s equity when the Investor Notes are converted or will be extinguished on the repayment of the Investor Notes. The derivative liability will not result in the outlay of any additional cash by the Company. Upon initial recognition, the Company recorded a derivative liability and debt discount of $16,508,253 in relation to the derivative liability portion of the Investor Notes. The Company recorded $1,999,933 and $1,745,179 for the three months ended March 31, 2023, respectively, in amortization related to the debt discount.

Debt

3 Months Ended

Mar. 31, 2023

Debt

Debt

11.Debt

Term Loan — On February 26, 2021, the Company entered into a Loan Agreement with SHWZ Altmore, LLC (“Altmore”), as lender, and GGG Partners LLC, as collateral agent. Upon execution of the Loan Agreement, the Company received $10,000,000 of loan proceeds. In connection with the Company’s acquisition of Southern Colorado Growers, the Company received an additional $5,000,000 of loan proceeds under the Loan Agreement. The term loan incurs 15% interest per annum, payable quarterly on March 1, June 1, September 1, and December 1 of each year. The Company will be required to make principal payments beginning on June 1, 2023 in the amount of $750,000, payable quarterly with the remainder of the principal due upon maturity on February 26, 2025.

Under the terms of the loan, the Company must comply with certain restrictions. These include customary events of default and various financial covenants including, maintaining (i) a consolidated fixed charge coverage ratio of at least 1.3 at the end of each fiscal quarter beginning in the first quarter of 2022, and (ii) a minimum of $3,000,000 in a deposit account in

which the lender has a security interest. As of March 31, 2023, the Company was in compliance with the requirements described above.

Seller Notes — As part of the acquisition of thirteen Star Buds branded dispensaries under separate asset purchase agreements (the “Star Buds Acquisition(s)”), the Company entered into a deferred payment arrangement with the Star Buds sellers in an aggregate amount of $44,250,000, also referred to in this Report as the “seller note(s)”. The seller note incurs 12% interest per annum, payable on the first of every month through November 2025. Principal payments are due as follows: $13,901,759 on December 17, 2025, $3,474,519 on February 3, 2026, and $26,873,722 on March 2, 2026.

As part of the acquisition under the Nuevo Purchase Agreement, the company entered into a deferred payment arrangement with the sellers in an aggregate amount of $17,000,000. The deferred payment arrangement incurs 5% interest per year, payable on the first of each month. The principal is due February 7, 2025.

Investor Notes – On December 3, 2021, the Company and the Subsidiary Guarantors entered into a Securities Purchase Agreement with the Note Investors pursuant to which the Company agreed to issue and sell to the Note Investors Investor Notes in a private placement. On December 7, 2021, the Company consummated the private placement and issued and sold the Investor Notes pursuant to the Indenture. The Company received net proceeds of approximately $92,000,000 at the closing, after deducting a commission to the placement agent and estimated offering expenses associated with the private placement payable by the Company. The Investor Notes will mature five years after issuance unless earlier repurchased, redeemed, or converted. A holder of an Investor Note may convert all or any portion of the Investor Note into shares of Common Stock at any time until the close of business on the business day immediately preceding the maturity date of the Inventor Notes, at a conversion price equal to $2.24 per share (“Conversion Price”). The Conversion Price will be adjusted in the event of any change in the outstanding Common Stock by way of stock subdivision (including a stock split), stock combination, issuance of stock or cash dividends, distributions of other securities or assets and other corporate actions. The number of shares issuable upon conversion of the Investor Notes will be equal to the principal amount of the Investor Note plus accrued interest divided by the conversion price (the “Conversion Rate”).

The Company may, at its option, elect to redeem all, but not less than all, of the Investor Notes for cash, subject to certain conditions, at a repurchase price equal to the principal amount of the Notes plus accrued and unpaid interest thereon on such date as more fully discussed in the agreement.

On the fourth anniversary of the issuance date, the investors will have the right, at their option, to require the Company to repurchase some or all their Notes for cash in an amount equal to the principal amount of the Investor Notes being repurchased plus accrued and unpaid interest up to the date of repurchase.

On or after the second anniversary of the issuance date, the Company may, at its option, convert up to 12.5% of the outstanding Investor Notes each quarter, if (i) the last reported sale price of the Common Stock exceeds 150% of the applicable Conversion Price, (ii) either (a) the Common Stock is listed on a Permitted Exchange (as defined in the Indenture) or (b) the Company’s daily volume weighted average price for the Common Stock exceeds $2,500,000, in each case for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date of conversion for the Conversion Price plus accrued and unpaid interest and (iii) there is an effective registration statement covering the resale by the holders of the Investor Notes of all Common Stock to be received in such conversion. The Company will be required to pay a Make-Whole Premium (as defined in the Indenture), payable in cash or Common Stock, to the Investors if the Investor Notes are voluntarily converted before the third anniversary of the Issuance Date and the Company’s daily volume weighted average price for the Common Stock does not exceed 175% of the Conversion Rate during the five consecutive trading days immediately preceding the date of conversion.

The notes have a contingent redemption feature that involves a substantial premium, requiring the same to be bifurcated as a derivative liability.

The Investor Notes bear interest at 13% per year paid quarterly commencing March 31, 2022 in cash for an amount equal to the amount payable on such date as if the Investor Notes were subject to an annual interest rate of 9%, with the remainder of the accrued interest payable as an increase to the principal amount of the Investor Notes. The proceeds from the Investor

Notes are required to be used to fund previously identified acquisitions and other growth initiatives. The principal is due December 7, 2026.

The Indenture includes customary affirmative and negative covenants, including limitations on liens, additional indebtedness, repurchases and redemptions of any equity interest in the Company or any Subsidiary Guarantor (as defined in the Indenture), certain investments, and dividends and other restricted payments, and customary events of default. Starting on December 7, 2022, the Company must maintain a Consolidated Fixed Charge Coverage Ratio (as defined in the Indenture) of no less than 1.30 to 1.00 as of the last day of each quarter, and the Company and the Subsidiary Guarantors are required to have at least $10,000,000 in cash (in aggregate) on the last day of each quarter in deposit accounts for which the collateral agent has a perfected security interest in. The Company and the Subsidiary Guarantors are restricted from making certain payments, including but not limited to (i) payment of dividends, (ii) repurchase, redemption, retire, or otherwise acquire any equity interest, option, or warrant of the Company or any Subsidiary Guarantor, and (iii) payment to any equity holder of the Company or a Subsidiary Guarantor for services provided pursuant to management, consulting, or other service agreement (the “Restricted Payments”) but the Company may declare and pay dividends if payable solely in its own equity, or, in the case of the Subsidiary Guarantors, amounts payable to such subsidiaries with respect to its applicable equity ownership. Provided the Company is not in default under the terms of the Indenture, the Company may make Restricted Payments not otherwise permitted thereunder (a) in an amount not to exceed $500,000 until discharge of the Indenture, or (b) after December 7, 2024, so long as the Company’s Consolidated Leverage Ratio (as defined in the Indenture) is between 1.00 and 2.25 for the applicable reference period at the time of the Restricted Payment after giving pro forma effect thereto.

The Indenture contains restrictions and limitations on the Company’s ability to incur additional debt and grant liens on its assets. The Company and its Subsidiary Guarantors are not permitted to incur additional debt or issue Disqualified Equity Interests (as defined in the Indenture) unless the Company’s Consolidated Leverage Ratio is between 1.00 and 2.25 after giving pro forma effect thereto. In addition, the Company is not permitted to grant a senior lien on its assets (excluding acquisition target assets that are identified in the Indenture) to secure indebtedness unless and until (a) at least $80,000,000 of the net proceeds from the Notes (plus the proceeds of certain sale-leaseback transactions) have been used to consummate Permitted Acquisitions prior to the granting of any such lien, and (b) the Consolidated Leverage Ratio for the applicable reference period, calculated on a pro forma basis giving effect to such acquisition and all related transactions, is less than 1.40 to 1.00. As of March 31, 2023, the Company expended approximately $81,780,000 of the proceeds from the Investor Notes on acquisitions. The Indenture provides that the Company and its Subsidiary Guarantors may incur debt under certain circumstances, including but not limited to, (i) debt incurred related to certain acquisitions and dispositions, including capital lease obligations and sale-leaseback transactions not to exceed $5,500,000 (plus up to an additional $2,200,000 in connection with certain transactions identified prior to the Issuance Date) in the aggregate at any time, (ii) certain transactions in the ordinary course of business, and (iii) any other unsecured debt not to exceed $1,000,000 at any time.

The following tables sets forth our indebtedness as of March 31, 2023 and December 31, 2022, respectively, and future obligations:


	March 31,		December 31,
	2023		2022

Term loan dated February 26, 2021, in the original amount of $10,000,000. An additional $5,000,000 was added to the loan agreement on July 28, 2021. Interest of 15% per annum, due quarterly. Principal payments begin June 1, 2023.	$	15,000,000	$	15,000,000

Seller notes dated December 17, 2020 in the original amount of $44,250,000. Interest of 12% per annum, due monthly. Principal payments begin December 17, 2025.		44,250,000		44,250,000

Investor note dated December 3, 2021, in the original amount of $95,000,000. Interest of 13% per annum, 9% payable in cash and 4% accreting to the principal amount.		100,109,574		99,118,391

Nuevo note dated February 7, 2022 in the original amount of $17,000,000. Interest of 5% per annum, due monthly. Principal balance is due February 7, 2025.		17,000,000		17,000,000

Less: unamortized debt issuance costs		(6,182,181)		(6,603,695)
Less: unamortized debt discount		(38,993,243)		(40,993,176)

Total long term debt		131,184,150		127,771,520
Less: current portion of long term debt		(3,000,000)		(2,250,000)

Long term debt and unamortized debt issuance costs	$	128,184,150	$	125,521,520


			Unamortized
	Principal		Debt Issuance		Unamortized		Total Long
	Payments		Costs		Debt Discount		Term Debt
2023		2,250,000		1,264,535		6,523,560		(5,538,095)
2024		3,000,000		1,686,049		9,734,935		(8,420,984)
2025		40,651,759		1,686,049		11,057,799		27,907,911
2026		130,457,815		1,545,548		11,676,949		117,235,318
2027		—		—		—		—
Thereafter		—		—		—		—
Total	$	176,359,574	$	6,182,181	$	38,993,243	$	131,184,150

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
CONDENSED CONSOLIDATED BALANCE SHEETS
Marketable securities, unrealized gain	$ 1,816	$ 39,270
Accumulated depreciation	5,880,513	4,899,977
Accumulated amortization	$ 21,461,721	$ 16,290,862
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized (in shares)	10,000,000	10,000,000
Preferred stock, issued (in shares)	86,994	86,994
Preferred stock, outstanding (in shares)	86,994	86,994
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	56,352,545	56,352,545
Common stock, shares outstanding	55,212,547	55,212,547
Treasury stock, common shares	920,150	920,150

Property and Equipment

3 Months Ended

Mar. 31, 2023

Property and Equipment.

Property and Equipment

6.Property and Equipment

Property and equipment are recorded at cost, net of accumulated depreciation and are comprised of the following:


	March 31,		December 31,
	2023		2022
Land	$	3,716,438	$	3,716,438
Building		4,830,976		4,830,976
Leasehold improvements		6,852,483		4,100,165
Furniture and fixtures		655,696		655,698
Vehicles, machinery, and tools		4,055,176		3,796,695
Software, servers and equipment		4,364,350		4,132,621
Construction in process		10,737,763		10,756,410
Total Asset Cost	$	35,212,882	$	31,989,003
Less: Accumulated depreciation		(5,880,513)		(4,899,977)
Total property and equipment, net of depreciation	$	29,332,369	$	27,089,026

Construction in process represents construction in progress related to both cultivation and dispensary facilities not yet completed or otherwise not ready for use.

Depreciation expense for the three months ended March 31, 2023 and 2022 was $980,536 and $401,949, respectively.

Intangible Assets

3 Months Ended

Mar. 31, 2023

Intangible Assets

Intangible Assets

9.Intangible Assets

Intangible assets as of March 31, 2023 and December 31, 2022 were comprised of the following:


	March 31, 2023				December 31, 2022
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
License Agreements	$	139,088,280	$	(16,117,017)	$	111,491,280	$	(12,154,237)
Tradename		7,541,500		(2,513,263)		6,021,500		(1,862,242)
Customer Relationships		5,150,000		(1,658,334)		5,150,000		(1,474,405)
Non-compete		1,963,000		(1,138,685)		1,265,000		(765,556)
Product License and Registration		57,300		(21,783)		57,300		(21,783)
Trade Secret		32,500		(12,639)		32,500		(12,639)
Total	$	153,832,580	$	(21,461,721)	$	124,017,580	$	(16,290,862)

Amortization expense was $5,170,859 and $2,138,847 for the three months ended March 31, 2023 and 2022, respectively.

The following table presents the Company's future projected annual amortization expense as of March 31, 2023:


Remainder of 2023	$	10,574,128
2024		11,795,636
2025		11,502,223
2026		10,634,720
2027		10,125,611
Thereafter		77,738,541
Total	$	132,370,859

Intangible Assets - Intangible Assets (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 153,832,580	$ 124,017,580
Accumulated Amortization	(21,461,721)	(16,290,862)
License agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	139,088,280	111,491,280
Accumulated Amortization	(16,117,017)	(12,154,237)
Tradename
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	7,541,500	6,021,500
Accumulated Amortization	(2,513,263)	(1,862,242)
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	5,150,000	5,150,000
Accumulated Amortization	(1,658,334)	(1,474,405)
Non-compete
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,963,000	1,265,000
Accumulated Amortization	(1,138,685)	(765,556)
Product license and registration
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	57,300	57,300
Accumulated Amortization	(21,783)	(21,783)
Trade secret
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	32,500	32,500
Accumulated Amortization	$ (12,639)	$ (12,639)

Debt - Indebtedness (Details) - USD ($)	Feb. 07, 2022	Dec. 03, 2021	Feb. 26, 2021	Dec. 17, 2020	Mar. 31, 2023	Dec. 31, 2022	Jul. 28, 2021
Debt Instrument [Line Items]
Less: unamortized debt issuance costs					$ (6,182,181)	$ (6,603,695)
Less: unamortized debt discount					(38,993,243)	(40,993,176)
Total long term debt					131,184,150	127,771,520
Less: current portion of long term debt					(3,000,000)	(2,250,000)
Long term debt and unamortized debt issuance costs					128,184,150	125,521,520
Star Buds
Debt Instrument [Line Items]
Principal amount						44,250,000
Term Loan
Debt Instrument [Line Items]
Original issue discount					15,000,000	15,000,000
Principal amount			$ 10,000,000				$ 5,000,000
Interest rate (as percentage)			15.00%
Interest payable in cash			Jun. 01, 2023
Seller Notes
Debt Instrument [Line Items]
Original issue discount					44,250,000	44,250,000
Seller Notes \| Star Buds
Debt Instrument [Line Items]
Principal amount				$ 44,250,000
Interest rate (as percentage)				12.00%
Interest payable in cash				Dec. 17, 2025
Investor Note
Debt Instrument [Line Items]
Original issue discount					100,109,574	99,118,391
Principal amount		$ 95,000,000
Interest rate (as percentage)		13.00%
Interest payable in cash (as percentage)		9.00%
Accreting interest rate to principal amount (as percentage)		4
Seller Note 2022
Debt Instrument [Line Items]
Original issue discount					$ 17,000,000	$ 17,000,000
Seller Note 2022 \| Nuevo Holding LLC
Debt Instrument [Line Items]
Principal amount	$ 17,000,000
Interest rate (as percentage)	5.00%
Interest payable in cash	Feb. 07, 2025

Organization and Nature of Operations (Details)	3 Months Ended
Organization and Nature of Operations (Details)	Mar. 31, 2023 segment
Accounting Policies and Estimates.
Number of segments	3

Leases - Future Minimum Lease Obligation (Details)	Mar. 31, 2023 USD ($)
Leases
2023	$ 4,730,948
2024	5,343,579
2025	4,976,285
2026	4,496,205
2027	3,215,732
Thereafter	12,765,301
Total	$ 35,528,050

Organization and Nature of Operations

3 Months Ended

Mar. 31, 2023

Organization and Nature of Operations

Organization and Nature of Operations

1.Organization and Nature of Operations

Medicine Man Technologies, Inc. (“we,” “us,” “our” or the “Company”) was incorporated in Nevada on March 20, 2014. On May 1, 2014, the Company entered into an exclusive Technology License Agreement with Futurevision, Inc. f/k/a Medicine Man Production Corp. d/b/a Medicine Man Denver (“Medicine Man Denver”) whereby Medicine Man Denver granted us a license to use all of their proprietary processes they have developed, implemented and practiced at their cannabis facilities relating to the commercial growth, cultivation, marketing, and distribution of medical marijuana and recreational marijuana pursuant to relevant state laws and the right to use and to license such information, including trade secrets, skills and experience (present and future). The Company’s operations are organized into three different segments as follows: (i) Retail, consisting of retail locations for sale of cannabis products in Colorado and New Mexico, (ii) Wholesale, consisting of manufacturing, cultivation and sale of wholesale cannabis and non-cannabis products, and (iii) Other, consisting of all other income and expenses, including those related to certain in-store marketing and promotional activities and corporate operations.

On April 20, 2020, the Company rebranded and conducts its business under the trade name, Schwazze. The corporate name of the Company continues to be Medicine Man Technologies, Inc. The Company’s common stock is listed for trading in the United States on the OTCQX Best Market under the symbol “SHWZ” and also listed for trading in Canada on the NEO Exchange under the symbol “SHWZ.”

The accompanying unaudited interim condensed consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These unaudited interim consolidated financial statements include all the adjustments, which in the opinion of management, are necessary to present a fair presentation of the Company’s financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2022, and 2021, as presented in the Company’s Annual Report on Form 10-K filed on March 29, 2023 with the SEC. In accordance with ASC 230 Statement of Cash Flows, certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on the Company’s net earnings and financial position.

Property and Equipment - Narrative (Details) - USD ($)	3 Months Ended
Property and Equipment - Narrative (Details) - USD ($)	Mar. 31, 2023	Mar. 31, 2022
Property and Equipment.
Depreciation	$ 980,536	$ 401,949

Goodwill Accounting

3 Months Ended

Mar. 31, 2023

Goodwill Accounting

Goodwill Accounting

8.Goodwill Accounting

The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination. The purchase price of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets

acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase.


	Retail		Wholesale		Other		Total

Balance as of January 1, 2023	$	52,583,794	$	7,219,936	$	34,801,571	$	94,605,301
Goodwill acquired during Q1 2023		—		—		—		—
Measurement-period adjustment to prior year acquisition		2,192,958		2,483,129		(34,801,571)		(30,125,484)
Balance as of March 31, 2023	$	54,776,752		9,703,065	$	—	$	64,479,817

The Company performed its annual fair value assessment as of December 31, 2022 on its subsidiaries with material goodwill on their respective balance sheets and recognized a goodwill impairment charge of $ 11,719,306, of which $3,708,226 is presented under loss from business disposition in the accompanying consolidated statements of comprehensive income as it was related to ceased operations during 2022. No such impairment existed as of March 31, 2023. Impairment is recorded when the carrying values of the reporting units exceed the estimated fair value.


	Retail			Wholesale		Other		Total

Balance as of January 1, 2022	$	26,349,025	$	13,964,016	$	3,003,226	$	43,316,267
Goodwill acquired during Q1 2022		10,985,559		32,418,546		31,978,345		75,382,450
Measurement-period adjustment to prior year acquisition		—		—		—		—
Goodwill Impairment during 2022		—		—		—		—
Balance as of March 31, 2022	$	37,334,584		46,382,562	$	34,981,571	$	118,698,717

Debt - Maturities of Long-term Debt (Details)	Mar. 31, 2023 USD ($)
Principal Payments
2023	$ 2,250,000
2024	3,000,000
2025	40,651,759
2026	130,457,815
Total	176,359,574
Unamortized Debt Issuance Costs
2023	1,264,535
2024	1,686,049
2025	1,686,049
2026	1,545,548
Total	6,182,181
Unamortized Debt Discount
2023	6,523,560
2024	9,734,935
2025	11,057,799
2026	11,676,949
Total	38,993,243
Total Long Term Debt
2023	(5,538,095)
2024	(8,420,984)
2025	27,907,911
2026	117,235,318
Total	$ 131,184,150

Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2023

Property and Equipment.

Schedule of property and equipment


	March 31,		December 31,
	2023		2022
Land	$	3,716,438	$	3,716,438
Building		4,830,976		4,830,976
Leasehold improvements		6,852,483		4,100,165
Furniture and fixtures		655,696		655,698
Vehicles, machinery, and tools		4,055,176		3,796,695
Software, servers and equipment		4,364,350		4,132,621
Construction in process		10,737,763		10,756,410
Total Asset Cost	$	35,212,882	$	31,989,003
Less: Accumulated depreciation		(5,880,513)		(4,899,977)
Total property and equipment, net of depreciation	$	29,332,369	$	27,089,026

Derivative Liability - Narrative (Details)			3 Months Ended
Derivative Liability - Narrative (Details)	Dec. 07, 2021 USD ($)	Dec. 03, 2021 USD ($) item	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Original issue discount			$ 38,993,243		$ 40,993,176
Amortization of debt discount			1,999,933	$ 1,756,173
Derivative Liability
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Original issue discount			16,508,253
Investor Notes
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Original issue discount		$ 1,900,000
Number of accredited investors \| item		31
Aggregate purchase price		$ 93,100,000
Net proceeds	$ 92,000,000
Face amount		$ 95,000,000
Interest payable in cash (as percentage)	9.00%	9.00%
Percentage of investor note	13.00%	13.00%
Debt term	5 years	5 years
Amortization of debt discount			$ 1,999,933	$ 1,745,179

Property and Equipment (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment
Total Asset Cost	$ 35,212,882	$ 31,989,003
Less: Accumulated depreciation	(5,880,513)	(4,899,977)
Total property and equipment, net of depreciation	29,332,369	27,089,026
Land
Property, Plant and Equipment
Total Asset Cost	3,716,438	3,716,438
Building
Property, Plant and Equipment
Total Asset Cost	4,830,976	4,830,976
Leasehold Improvements
Property, Plant and Equipment
Total Asset Cost	6,852,483	4,100,165
Furniture and Fixtures
Property, Plant and Equipment
Total Asset Cost	655,696	655,698
Vehicles Machinery And Tools
Property, Plant and Equipment
Total Asset Cost	4,055,176	3,796,695
Software Servers And Equipment
Property, Plant and Equipment
Total Asset Cost	4,364,350	4,132,621
Construction in Progress
Property, Plant and Equipment
Total Asset Cost	$ 10,737,763	$ 10,756,410

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND (LOSS) INCOME - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating revenues
Total revenue	$ 40,000,936	$ 31,777,554
Total cost of goods and services	16,968,270	20,840,051
Gross profit	23,032,666	10,937,503
Operating expenses
Selling, general and administrative expenses	10,215,805	6,855,711
Professional services	1,187,364	2,584,472
Salaries	5,764,993	5,296,777
Stock based compensation	214,544	991,083
Total operating expenses	17,382,706	15,728,043
Income from operations	5,649,960	(4,790,540)
Other income (expense)
Interest expense, net	(7,745,854)	(7,302,254)
Unrealized gain (loss) on derivative liabilities	8,501,685	(13,417,472)
Other loss		7
Unrealized gain (loss) on investments	1,816	(8,549)
Total other income (expense)	757,647	(20,728,268)
Pre-tax net income (loss)	6,407,607	(25,518,808)
Provision for income taxes	4,662,178	1,259,894
Net income (loss)	1,745,429	(26,778,702)
Less: Accumulated preferred stock dividends for the period	(2,029,394)	(1,743,444)
Net income (loss) attributable to common stockholders	$ (283,965)	$ (28,522,146)
Earnings (loss) per share attributable to common shareholders
Basic (loss) earnings per share	$ (0.01)	$ (0.61)
Diluted (loss) earnings per share	$ (0.06)	$ (0.61)
Weighted average number of shares outstanding - basic	55,835,501	46,841,971
Weighted average number of shares outstanding - diluted	101,608,278	46,841,971
Comprehensive income (loss)	$ 1,745,429	$ (26,778,702)
Retail
Operating revenues
Total revenue	35,820,111	26,525,716
Wholesale
Operating revenues
Total revenue	4,058,925	5,207,388
Other
Operating revenues
Total revenue	$ 121,900	$ 44,450

Leases - Balance Sheet Classification (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Leases
Operating lease right of use assets	$ 19,783,067	$ 18,199,399
Lease liabilities	3,648,395	3,139,289
Lease liabilities	$ 19,108,720	$ 17,314,464

Segment Information

3 Months Ended

Mar. 31, 2023

Segment Information

Segment Information

18.Segment Information

The Company has three identifiable segments as of March 31, 2023; (i) retail, (ii) wholesale and (iii) and other. The retail segment represents our dispensaries which sell merchandise directly to customers via retail locations and e-commerce portals. The wholesale segment represents our manufacturing, cultivation, and wholesale business which sells merchandise to customers via e-commerce portals, a retail location, and a manufacturing facility. The other segment derives its revenue from in-store advertisements and vendor promotions offered in the Company’s retail dispensaries.

The following information represents segment activity as of and for the three months ended March 31, 2023:


	Retail		Wholesale		Other		Total
External revenues	$	35,820,111	$	4,058,925	$	121,900	$	40,000,936
Depreciation and Intangible assets amortization		2,427,861		744,653		258,127		3,430,641
Segment profit		18,761,566		(660,110)		(8,758,551)		9,342,905
Segment assets		201,194,400		74,479,695		50,301,180		325,975,275

The following information represents segment activity as of and for the three months ended March 31, 2022:


	Retail		Wholesale		Other		Total
External Revenues		26,525,716		5,207,388		44,450		31,777,554
Depreciation and Intangible assets amortization		2,004,408		326,573		209,815		2,540,796
Segment profit		3,761,943		(421,864)		(30,118,781)		(26,778,702)
Segment assets		184,138,812		64,813,396		73,930,525		322,882,733

Segment assets from Other are mainly related to goodwill from the Nuevo acquisition.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI https://asc.fasb.org/topic&trid=2134510

+ Details

Debt (Details)						3 Months Ended
Debt (Details)	Dec. 07, 2021 USD ($)	Dec. 03, 2021 USD ($) $ / shares	Jul. 21, 2021 USD ($)	Feb. 26, 2021 USD ($)	Dec. 17, 2020 USD ($) item	Mar. 31, 2023 USD ($) D	Dec. 31, 2022 USD ($)	Feb. 07, 2022 USD ($)	Jul. 28, 2021 USD ($)
Star Buds
Debt Instrument [Line Items]
Number of dispensaries acquired \| item					13
Principal amount							$ 44,250,000
Term Loan
Debt Instrument [Line Items]
Proceeds from loans				$ 10,000,000
Interest rate (as percentage)				15.00%
Principal payment				$ 750,000
Maturity date				Feb. 26, 2025
Consolidated fixed charge coverage ratio				1.3
Cash deposit in account in which the lender has a security interest				$ 3,000,000
Principal amount				$ 10,000,000					$ 5,000,000
Seller Notes \| Star Buds
Debt Instrument [Line Items]
Interest rate (as percentage)					12.00%
Principal amount					$ 44,250,000
Seller Notes \| Star Buds \| Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
Principal payment						$ 13,901,759
Seller Notes \| Star Buds \| Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Principal payment						3,474,519
Seller Notes \| Star Buds \| Debt Instrument, Redemption, Period Three
Debt Instrument [Line Items]
Principal payment						$ 26,873,722
Investor Notes
Debt Instrument [Line Items]
Interest rate (as percentage)	13.00%	13.00%
Principal amount		$ 95,000,000
Proceeds from issuance of private placement	$ 92,000,000
Percentage of debt converted						12.50%
Conversion price \| $ / shares		$ 2.24
Common stock						$ 2,500,000
Threshold Number of trading days \| D						20
Threshold number of consecutive trading days \| D						30
Debt term	5 years	5 years
Interest payable in cash (as percentage)	9.00%	9.00%
Maximum restricted payment until discharge of indenture						$ 500,000
Net Proceeds						80,000,000
Amount expended from proceeds from the Investor nots on acquisitions						81,780,000
Investor Notes \| As on December 7, 2022
Debt Instrument [Line Items]
Cash deposit in account in which the lender has a security interest						$ 10,000,000
Investor Notes \| Common stock price exceeds 150% of conversion price
Debt Instrument [Line Items]
Percentage of common stock sale price exceeding conversion price						150.00%
Investor Notes \| Common stock price does not exceeds 175% of conversion price
Debt Instrument [Line Items]
Percentage of common stock sale price exceeding conversion price						175.00%
Investor Notes \| Minimum
Debt Instrument [Line Items]
Consolidated fixed charge coverage ratio						1.00
Investor Notes \| Minimum \| As on December 7, 2022
Debt Instrument [Line Items]
Consolidated fixed charge coverage ratio						1.30
Investor Notes \| Minimum \| After December 7, 2024
Debt Instrument [Line Items]
Consolidated fixed charge coverage ratio						1.00
Investor Notes \| Maximum
Debt Instrument [Line Items]
Consolidated fixed charge coverage ratio						2.25
Investor Notes \| Maximum \| After December 7, 2024
Debt Instrument [Line Items]
Consolidated fixed charge coverage ratio						2.25
Investor Notes \| Maximum \| Applicable reference period
Debt Instrument [Line Items]
Consolidated fixed charge coverage ratio						1.40
Investor Notes \| Maximum \| Certain acquisition and disposition, not to exceed $5,500,000
Debt Instrument [Line Items]
Capital lease obligations and sale-leaseback transactions						$ 5,500,000
Additional debt incurred						2,200,000
Investor Notes \| Maximum \| Other unsecured debt, not to exceed $1,000,000 at any time
Debt Instrument [Line Items]
Unsecured debt						$ 1,000,000
Seller Note 2022 \| Nuevo Holding LLC
Debt Instrument [Line Items]
Interest rate (as percentage)								5.00%
Principal amount								$ 17,000,000
Loan Agreement \| Term Loan \| Southern Colorado Growers
Debt Instrument [Line Items]
Proceeds from loans			$ 5,000,000

Inventory

3 Months Ended

Mar. 31, 2023

Inventory

Inventory

5.Inventory

The Company’s inventory consists of the following as of March 31, 2023 and December 31, 2022:


		March 31, 2023		December 31, 2022
Raw Materials	$	1,506,435	$	2,325,482
Work in Process		16,215,540		14,504,490
Finished Goods		7,855,458		5,724,210
Total Inventories	$	25,577,433	$	22,554,182

As of March 31, 2023 and December 31, 2022, the Company did not recognize any adjustment to net realizable value within its inventory.

Related Party Transactions (Details)																		1 Months Ended			3 Months Ended		12 Months Ended
Related Party Transactions (Details)	Sep. 22, 2022 USD ($) shares	Jun. 24, 2022 shares	Jun. 14, 2022 USD ($) shares	May 04, 2022 USD ($) shares	Dec. 07, 2021 USD ($)	Dec. 03, 2021 USD ($)	Mar. 30, 2021 shares	Mar. 02, 2021 USD ($) item shares	Feb. 26, 2021 USD ($) $ / shares shares	Feb. 25, 2021 shares	Feb. 03, 2021 USD ($) shares	Dec. 22, 2020 shares	Dec. 18, 2020 USD ($) shares	Dec. 17, 2020 USD ($)	Dec. 16, 2020 USD ($) shares	Nov. 16, 2020 USD ($) $ / shares shares	Jun. 05, 2019 USD ($) $ / shares shares	Oct. 31, 2022	Jun. 30, 2022 USD ($)	Dec. 31, 2021 $ / shares shares	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($) shares	Dec. 31, 2022 USD ($) shares	Mar. 14, 2021
Related Party Transaction [Line Items]
Payments to acquire businesses																						$ 59,691,039
Star Buds
Related Party Transaction [Line Items]
Stock issued for acquisition placed in escrow, value \| shares								5,531,250
Face amount																							$ 44,250,000
Business Combination, Consideration Transferred								$ 118,000,000
Payments to acquire businesses								44,250,000
Deferred cash								$ 44,250,000
Equity interest held in escrow (in shares) \| shares																							944
Interest paid																							$ 5,310,000
Initial lease term (in years)								3 years
Star Buds \| Minimum
Related Party Transaction [Line Items]
Threshold percent of beneficial ownership to be held								5.00%
Investor Notes
Related Party Transaction [Line Items]
Interest rate (as percentage)					13.00%	13.00%
Interest payable in cash (as percentage)					9.00%	9.00%
Interest rate						2.00%
Face amount						$ 95,000,000
Seller Notes
Related Party Transaction [Line Items]
Outstanding debt amount																					$ 44,250,000		44,250,000
Seller Notes \| Star Buds
Related Party Transaction [Line Items]
Interest rate (as percentage)														12.00%
Face amount														$ 44,250,000
Preferred Stock \| Star Buds
Related Party Transaction [Line Items]
Shares consideration issued \| shares								29,506
Issuance of stock as payment for acquisitions, shares \| shares								25,078
Equity interest held in escrow (in shares) \| shares								4,428
Common Stock
Related Party Transaction [Line Items]
Issuance of stock as payment for acquisitions, shares \| shares																						8,029,330
Warrants \| Star Buds
Related Party Transaction [Line Items]
Purchase price (in dollars per share) \| $ / shares																				$ 1.20
Stock issued for acquisition placed in escrow, value \| shares																				5,531,249
SBUD LLC \| Star Buds
Related Party Transaction [Line Items]
Rent payment																					142,938	$ 121,188	571,752
Number of option for lease renewal \| item								2
Lease renewal term (in years)								3 years
SBUD LLC \| Star Buds \| 428 S. McCulloch LLC
Related Party Transaction [Line Items]
Monthly rent payment														5,000
SBUD LLC \| Star Buds \| Colorado Real Estate Holdings LLC
Related Party Transaction [Line Items]
Monthly rent payment													$ 6,779
Rent payment													$ 244,044
SBUD LLC \| Star Buds \| 5844 Ventures LLC
Related Party Transaction [Line Items]
Rent payment														$ 180,000
SBUD LLC \| Star Buds \| 14655 Arapahoe LLC
Related Party Transaction [Line Items]
Monthly rent payment								$ 12,367
Rent payment								445,212
SBUD LLC \| Star Buds \| Montview Real Estate LLC
Related Party Transaction [Line Items]
Monthly rent payment								6,250
Rent payment								$ 225,000
SBUD LLC \| Star Buds \| Brighton Blvd LLC
Related Party Transaction [Line Items]
Monthly rent payment											$ 7,250
Rent payment											$ 261,000
Securities Purchase Agreement \| Investor Notes
Related Party Transaction [Line Items]
Interest rate (as percentage)																						13.00%
Interest payable in cash (as percentage)					9.00%
C R W Capital LLC
Related Party Transaction [Line Items]
Ownership interest (as percentage)																								50.00%
C R W Capital LLC \| Common Stock \| Minimum
Related Party Transaction [Line Items]
Ownership interest (as percentage)									5.00%
Dye Capital \| Convertible Promissory Note and Security Agreement [Member]
Related Party Transaction [Line Items]
Face amount															$ 5,000,000
Debt converted, amount converted									$ 5,000,000
Debt interest amount converted									$ 60,250
Shares issued on conversion of debt (in shares) \| shares									5,060
Cash paid on conversion of debt									$ 230.97
Dye Cann I \| Securities Purchase Agreement
Related Party Transaction [Line Items]
Percentage of warrants to purchase common stock																	100.00%
Purchase price (in dollars per share) \| $ / shares																	$ 3.50
Stock issued for acquisition placed in escrow, value \| shares															9,287,500		1,500,000
Proceeds from sale of equity															$ 18,575,000
Dye Cann I \| Securities Purchase Agreement \| Common Stock
Related Party Transaction [Line Items]
Stock issued new, shares \| shares															9,287,500		1,500,000
Share price (in dollars per share) \| $ / shares																	$ 2.00
Proceeds from sale of equity																	$ 3,000,000
Dye Cann I \| Securities Purchase Agreement \| Common Stock \| Minimum
Related Party Transaction [Line Items]
Stock issued new, shares \| shares																	8,187,500
Dye Cann I \| Securities Purchase Agreement \| Common Stock \| Maximum
Related Party Transaction [Line Items]
Stock issued new, shares \| shares																	10,687,500
Dye Cann II \| Securities Purchase Agreement \| Preferred Stock
Related Party Transaction [Line Items]
Stock issued new, shares \| shares							4,000	2,500		1,300	3,100	1,300	1,450		7,700	21,350
Share price (in dollars per share) \| $ / shares																$ 1,000
Proceeds from sale of equity																$ 21,350,000
Tella Digital
Related Party Transaction [Line Items]
Costs and expenses to related party																					171,207	$ 214,908	382,622
CRW \| Series A Preferred Stock
Related Party Transaction [Line Items]
Share price (in dollars per share) \| $ / shares									$ 1,000
CRW \| Preferred Stock \| Securities Purchase Agreement
Related Party Transaction [Line Items]
Stock issued new, shares \| shares									25,350
Proceeds from sale of equity									$ 25,350,000
CRW \| Securities Purchase Agreement
Related Party Transaction [Line Items]
Monitoring fee									150,000
Monitoring fee																					0		$ 25,000
Monitoring fee per month									$ 12,500												$ 0	$ 25,000
Cozad Investments, L.P. \| Securities Purchase Agreement \| Investor Notes
Related Party Transaction [Line Items]
Note receivable - related party					$ 245,000
Face amount					$ 250,000
Mr Cozad \| Common Stock
Related Party Transaction [Line Items]
Stock issued new, shares \| shares			22,728	40,463
Number of shares issued, Value			$ 35,001	$ 70,001
Rubin Revocable Trust \| Securities Purchase Agreement
Related Party Transaction [Line Items]
Interest rate (as percentage)																						13.00%
Interest payable in cash (as percentage)					9.00%
Note receivable balance					$ 98,000
Face amount					$ 100,000
Brian Ruden \| Star Buds
Related Party Transaction [Line Items]
Interest rate (as percentage)								31.00%
Stock issued for acquisition placed in escrow, value \| shares								1,715,936
Brian Ruden \| Star Buds \| Minimum
Related Party Transaction [Line Items]
Percent of beneficial ownership held by related party																		10.00%
Brian Ruden \| C R W Capital LLC
Related Party Transaction [Line Items]
Ownership interest (as percentage)									50.00%
Jeffrey Garwood \| Common Stock
Related Party Transaction [Line Items]
Stock issued new, shares \| shares			22,728	40,463
Number of shares issued, Value			$ 35,001	$ 70,001
Jeffrey Garwood \| Securities Purchase Agreement
Related Party Transaction [Line Items]
Interest payable in cash (as percentage)					9.00%
Interest rate					13.00%
Note receivable balance					$ 294,000
Face amount					$ 300,000
Pratap Mukharji \| Common Stock
Related Party Transaction [Line Items]
Stock issued new, shares \| shares			22,728	40,463
Number of shares issued, Value			$ 35,001	$ 70,001
Pratap Mukharji \| Securities Purchase Agreement
Related Party Transaction [Line Items]
Interest payable in cash (as percentage)					9.00%
Interest rate					13.00%
Note receivable balance					$ 196,000
Face amount					$ 200,000
Jonathan Berger \| Common Stock
Related Party Transaction [Line Items]
Stock issued new, shares \| shares			22,728	40,463
Number of shares issued, Value			$ 35,001	$ 70,001
Jonathan Berger \| Common Stock
Related Party Transaction [Line Items]
Stock issued new, shares \| shares	102,355	19,085	22,728	40,463
Number of shares issued, Value	$ 100,000		$ 35,001	$ 70,001															$ 25,001
Salim Wahdan \| Star Buds
Related Party Transaction [Line Items]
Interest rate (as percentage)								3.50%
Stock issued for acquisition placed in escrow, value \| shares								193,929
Joudeh Owners \| Star Buds
Related Party Transaction [Line Items]
Interest rate (as percentage)								28.00%
Stock issued for acquisition placed in escrow, value \| shares								1,522,457
Joudeh Owners \| Star Buds \| Minimum
Related Party Transaction [Line Items]
Percent of beneficial ownership held by related party																				10.00%

Earnings per share (Basic and Dilutive)

3 Months Ended

Mar. 31, 2023

Earnings per share (Basic and Dilutive)

Earnings per share (Basic and Dilutive)

14.Earnings per share (Basic and Dilutive)

The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted Earnings Per Share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to Common Stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

The following is a reconciliation of the numerator and denominator used in the basic and diluted EPS calculations for the three months ended March 31, 2023 and 2022.


	For the Three Months Ended
	March 31,
	2023		2022
Numerator:
Net income (loss)	$	1,745,429	$	(26,778,702)
Less: Accumulated preferred stock dividends for the period		(2,029,394)		(1,743,444)
Net income (loss) attributable to common stockholders	$	(283,965)	$	(28,522,146)

Denominator:
Weighted-average shares of common stock		55,835,501		46,841,971

Basic earnings (loss) per share	$	(0.01)	$	(0.61)

Numerator:
Net income (loss) attributable to common stockholders – Basic		(283,965)		(28,522,146)
Add: Investor note accrued interest		421,514		—
Add: Investor note amortized debt discount		1,999,933		—
Less: Gain on derivative liability related to investor note		(8,501,685)		—
Net income (loss) attributable to common stockholders – dilutive	$	(6,364,203)	$	(28,522,146)

Denominator:
Weighted-average shares of common stock		55,835,501		46,841,971
Dilutive effect of investor notes		45,772,777		—
Diluted weighted-average shares of common stock		101,608,278		46,841,971

Diluted earnings (loss) per share	$	(0.06)	$	(0.61)

Basic net loss per share attributable to common stockholders is computed by dividing reported net loss attributable to common stockholders by the weighted average number of common shares outstanding for the reported period. Note that for purposes of basic earnings (loss) per share calculation, shares of Preferred Stock are excluded from the calculation for the three months ending March 31, 2023 and March 31, 2022, as the inclusion of the common share equivalents would be anti-dilutive.

Earnings per share (Basic and Dilutive) - Reconciliation of Numerator and Denominator used in Basic and Diluted EPS Calculations (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Numerator:
Net income (loss)	$ 1,745,429	$ (26,778,702)
Less: Accumulated preferred stock dividends for the period	(2,029,394)	(1,743,444)
Net income (loss) attributable to common stockholders	$ (283,965)	$ (28,522,146)
Denominator:
Weighted-average shares of common stock	55,835,501	46,841,971
Basic earnings (loss) per share	$ (0.01)	$ (0.61)
Add: Investor note accrued interest	$ 421,514
Add: Investor note amortized debt discount	1,999,933	$ 1,756,173
Less: Gain on derivative liability related to investor note	(8,501,685)	13,417,472
Net income (loss) attributable to common stockholders - dilutive	$ (6,364,203)	$ (28,522,146)
Dilutive effect of investor notes	45,772,777
Dilutive weighted-average shares of common stock	101,608,278	46,841,971
Dilutive earnings (loss) per share	$ (0.06)	$ (0.61)

Business Combinations

3 Months Ended

Mar. 31, 2023

Business Combinations

Business Combinations

7.Business Combinations

On January 26, 2022, the Company acquired two retail dispensaries located in Boulder Colorado pursuant to an asset purchase agreement dated June 25, 2021 with Double Brow, BG3 Investments, LLC d/b/a Drift (“Drift”), Black Box Licensing, LLC, and Brian Searchinger, as the sole equityholder of Drift, as amended on October 28, 2021 (the “Drift Purchase Agreement”). The acquired assets included (i) the assets used in or related to Drift’s business of distributing, marketing, and selling recreational cannabis products and (ii) the leases for two retail dispensaries located in Boulder, Colorado. The aggregate closing consideration for the acquisition was (i) $1.92 million in cash, and (ii) 1,146,099 shares of Common Stock issued to Drift. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting resulted in $2,138,270 of goodwill and $1,030,000 of intangibles. Amortization of $189,278 was recorded at March 31, 2023, to selling, general and administrative expenses.

On February 8, 2022, the Company acquired its New Mexico business pursuant to a purchase agreement with Nuevo Holding, LLC, a wholly-owned subsidiary of the Company (“Nuevo Purchaser”), Nuevo Elemental Holding, LLC (“Elemental Purchaser” and together with Nuevo Purchaser, the “Nuevo Purchasers”), Reynold Greenleaf & Associates LLC (“RGA”), Elemental Kitchen and Laboratories, LLC, a wholly-owned subsidiary of RGA (“Elemental”), the equity holders of RGA and Elemental, and William N. Ford, in his capacity as Representative, as amended on February 9, 2022 (the “Nuevo Purchase Agreement”). The Nuevo Purchasers acquired substantially all the operating assets of RGA and all of the equity of Elemental and assumed specified liabilities of RGA and Elemental. Pursuant to existing laws and regulations in New Mexico, the cannabis licenses for certain facilities managed by RGA were held by two not-for-profit entities: Medzen Services, Inc. (“Medzen”) and R. Greenleaf Organics, Inc. (“R. Greenleaf” and together with Medzen, the “NFPs”). At the closing, Nuevo Purchaser gained control over the NFPs by becoming the sole member of each of the NFPs and replacing the directors of the two NFPs with executive officers of the Company. The business acquired from RGA was a management company, providing branding, marketing and consulting services, licensing certain intellectual property related to the business, and supporting Elemental and the NFPs to promote, support, and develop sales and distribution of products. Elemental is engaged in the business of creating and distributing cannabis-derived products to licensed cannabis producers. Elemental and the NFPs are in the business of cultivating, processing and dispensing marijuana in New Mexico. At the closing of the Nuevo Purchase Agreement, Nuevo Purchaser entered into two separate Call Option Agreements containing substantially identical terms with each of the NFPs. Each Call Option Agreement gives Nuevo Purchaser the right to acquire 100% of the equity or 100% of the assets of the applicable NFP for a purchase price of $100 if, in the future, the New Mexico legislature adopts legislation that permits a NFP to (i) convert to a for-profit corporation and maintain its cannabis license or (ii) sell its assets (including its cannabis license) to a for-profit corporation. The aggregate closing consideration for the acquisitions was approximately (i) $32.2 million in cash, which included a $4.5 million cash earnout based on EBITDA of the acquired businesses for the calendar year 2021, and (ii) $17.0 million in the form of an unsecured promissory note issued by Nuevo Purchaser to RGA, the principal amount of which is payable on February 8, 2025 with interest payable monthly at an annual interest rate of 5% (the “Nuevo Note”). The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting resulted in $6,196,571 of goodwill and $28,785,000 of intangibles. Amortization of $885,792 and $1,645,684 was recorded at March 31, 2023, to cost of goods and services, and selling, general and administrative expenses, respectively.

On February 9, 2022, the Company acquired MCG, LLC (“MCG”), which operates two dispensaries located in Denver and Manitou Springs, Colorado pursuant to the terms of an Agreement and Plan of Merger, dated November 15, 2021, with Emerald Fields Merger Sub, LLC, a wholly-owned subsidiary of the Company (“Emerald Fields”), MCG, MCG’s owners and Donald Douglas Burkhalter and James Gulbrandsen in their capacity as the Member Representatives, as amended on February 9, 2022 (the “MCG Merger Agreement”). Under the MCG Merger Agreement, MCG merged with and into Emerald Fields, with Emerald Fields continuing as the surviving entity. The aggregate closing consideration for the merger was $29 million, consisting of: (i) $16.0 million in cash; (ii) 6,547,239 shares of the Common Stock issued to the members of MCG; and (iii) an aggregate of $2.32 million was held back as collateral for potential claims for indemnification under the MCG Merger Agreement. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting resulted in $19,852,080 of goodwill and $12,400,000 of intangibles.

On February 15, 2022, the Company acquired substantially all of the operating assets of Brow 2, LLC (“Brow”) related to its indoor cannabis cultivation operations located in Denver, Colorado (other than assets expressly excluded) and assumed certain liabilities for contracts acquired pursuant to the terms of the Asset Purchase Agreement, dated August 20, 2021, among Double Brow, Brow, and Brian Welsh, as the owner of Brow (the “Brow Purchase Agreement”). The acquired assets included a 37,000 square foot building, the associated lease, and equipment designed for indoor cultivation. After purchase price adjustments for pre-closing inventory, the aggregate consideration was $6.7 million, of which Double Brow paid $6.2 million at closing and held back $500,000 as collateral for potential claims for indemnification under the Brow Purchase Agreement. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting resulted in $1,792,000 of goodwill and $3,970,000 of intangibles.

On May 31, 2022, the Company acquired substantially all of the operating assets of Urban Dispensary, which operates a dispensary and indoor cultivation in Colorado, pursuant to the terms of an Asset and Personal Goodwill Purchase Agreement, dated March 11, 2022, with Double Brow, Urban Health & Wellness, Inc. d/b/a Urban Dispensary (“Urban Dispensary”), Productive Investments, LLC, and Patrick Johnson (the “Urban Purchase Agreement”). Urban Dispensary operated an indoor cannabis cultivation facility and a single retail dispensary, each located in Denver, Colorado. The aggregate consideration for the Urban Dispensary acquisition was $1.32 million in cash and 1,230,534 shares of Common Stock. The Company held back $288,000 of the stock consideration at closing as collateral for potential claims for indemnification from Urban Dispensary under the Urban Purchase Agreement. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting resulted in $2,849,868 of goodwill and intangibles, however valuation has not been finalized.

On December 15, 2022, the Company acquired substantially all of the operating assets associated with two retail dispensaries located in Denver and Aurora, Colorado owned by Lightshade Labs LLC (“Lightshade”) pursuant to the terms of two Asset Purchase Agreements, dated September 9, 2022, among Double Brow, the Company, Lightshade, and Lightshade’s owners, Thomas Van Alsburg, Steve Brooks, and John Fritzel, as amended on December 15, 2021 (the “Lightshade Purchase Agreements”). After purchase price adjustments for transaction and related expenses, the aggregate consideration for the acquisition was approximately $2.75 million, all of which was paid in cash. The Company deposited $300,000 of the purchase price in escrow as collateral for potential claims for indemnification from Lightshade under the Lightshade Purchase Agreements. The Company utilized purchase price accounting to value assets acquired, which values such assets at approximately fair market value. The purchase price accounting resulted in $2,589,865 of goodwill and intangibles, however valuation has not been finalized.

As of March 31, 2023, the Company acquired cannabis assets of Drift, RGA, MCG, Brow, Urban Dispensary, Lightshade, and 100% of the equity of Elemental as discussed above.

These transactions were accounted for as a business combination in accordance with ASC 805, Business Combinations (“ASC 805”) in the period acquired. Refer to the Company’s business combination note as described in Note 7, “Business Combinations,” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

The goodwill, which is not expected to be deductible for income tax purposes, consists largely of the synergies, assembled workforce and economies of scale expected from combining the operations of the acquired entities with the Company.

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2023

Stockholders' Equity

Schedule of warrant activity


	Equity Classified Warrants		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life
Balance as of December 31, 2022	7,218,750	$	1.76	2.99
Warrants exercised	—		—	—
Warrants forfeited/expired	—		—	—
Warrants issued	—		—	—
Balance as of March 31, 2023	7,218,750	$	1.76	2.74

Accounting Policies and Estimates

3 Months Ended

Mar. 31, 2023

Accounting Policies and Estimates.

Accounting Policies and Estimates

2.Accounting Policies and Estimates

There have been no changes in the Company’s accounting policies as described in Note 2, “Accounting Policies and Estimates,” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases

Schedule of balance sheet classification of operating lease assets and liabilities


	Balance Sheet Line	March 31, 2023
Asset
Operating lease right of use assets	Noncurrent assets	$	19,783,067
Liabilities
Lease liabilities	Current Liabilities	$	3,648,395
Lease liabilities	Noncurrent liabilities		19,108,720

Schedule of maturities of lease liabilities


2023	$	35,528,050
Less: Interest		12,250,813
Present value of lease liabilities	$	23,277,237

Schedule of future minimum lease obligation under ASC 842


2023	$	4,730,948
2024		5,343,579
2025		4,976,285
2026		4,496,205
2027		3,215,732
Thereafter		12,765,301
Total	$	35,528,050

Segment Information (Details)	3 Months Ended
Segment Information (Details)	Mar. 31, 2023 USD ($) segment	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Segment Information
Number of identifiable segments \| segment	3
External revenues	$ 40,000,936	$ 31,777,554
Intangible assets amortization	5,170,859	2,138,847
Depreciation	980,536	401,949
Segment pre tax profit	6,407,607	(25,518,808)
Segment profit	1,745,429	(26,778,702)
Goodwill	64,479,817	118,698,717	$ 94,605,301	$ 43,316,267
Retail
Segment Information
Goodwill	54,776,752	37,334,584	52,583,794	26,349,025
Wholesale
Segment Information
Goodwill	9,703,065	46,382,562	7,219,936	13,964,016
Other
Segment Information
Goodwill		34,981,571	$ 34,801,571	$ 3,003,226
Segments
Segment Information
External revenues	40,000,936	31,777,554
Depreciation and intangible assets amortization	3,430,641	2,540,796
Segment profit	9,342,905	(26,778,702)
Segment assets	325,975,275	322,882,733
Segments \| Retail
Segment Information
External revenues	35,820,111	26,525,716
Depreciation and intangible assets amortization	2,427,861	2,004,408
Segment profit	18,761,566	3,761,943
Segment assets	201,194,400	184,138,812
Segments \| Wholesale
Segment Information
External revenues	4,058,925	5,207,388
Depreciation and intangible assets amortization	744,653	326,573
Segment profit	(660,110)	(421,864)
Segment assets	74,479,695	64,813,396
Segments \| Other
Segment Information
External revenues	121,900	44,450
Depreciation and intangible assets amortization	258,127	209,815
Segment profit	(8,758,551)	(30,118,781)
Segment assets	$ 50,301,180	$ 73,930,525

Tax Provision

3 Months Ended

Mar. 31, 2023

Tax Provision

Tax Provision

15.Tax Provision

The following table summarizes the Company’s income tax expense and effective tax rates for three months ended March 31, 2023 and March 31, 2022:


	Three Months Ended March 31,
	2023		2022
Income (loss) before income taxes	$	6,407,607	$	(25,518,808)
Income tax expense		4,662,178		1,259,894
Effective tax rate		72.76%		(4.94)%

The Company has computed its provision for income taxes under the discrete method which treats the year-to-date 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. We believe that, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method as the estimated annual effective tax rate method is not reliable due to the high degree of uncertainty in estimating annual pre-tax income due to the early growth stage of the business.

Due to its cannabis operations, the Company is subject to the limitations of IRC Section 280E under which the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E. Therefore, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income or loss.

The effective tax rate for the three months ended March 31, 2023 varies from the three months ended March 31, 2022 primarily due to the change in the Company's expenses that are nondeductible under IRC Section 280E as a proportion of total expenses in the current year and the Company's release of its full valuation allowance against is deferred tax assets at December 31, 2022.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. At December 31, 2022, the Company determined that it was more likely than not that its deferred tax assets will be realized and released its full valuation allowance. The Company has additional sources of income, primarily related to acquired deferred tax liabilities with known reversal periods, that will result in future taxable income in excess of its deferred tax assets. Management assesses the need for a valuation allowance each period and continues to have no valuation allowance recorded against its deferred tax assets as of March 31, 2023.

The Company is subject to Federal and state income tax within the United States. The Federal statute of limitation remains open for the 2018 tax year to present. The state statutes of limitation remain open for the 2018 tax year to present.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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+ Details

Recently Adopted Accounting Pronouncements

3 Months Ended

Mar. 31, 2023

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

3.Recently Adopted Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements. Pronouncements that are not applicable to the Company or where it has been determined to not have a significant impact on the financial statements have been excluded herein.

In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No (ASU). 2016-02, Leases (Topic 842), which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. As of January

1, 2022, the Company adopted ASU 2016-02, Leases (Topic 842), the adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

On August 5, 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

+ References

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+ Details

Leases (Details)	Mar. 31, 2023
Minimum
Weighted average lease discount rate	6.00%
Maximum
Weighted average lease discount rate	12.00%
Lessee, Operating Lease, Remaining Lease Term	2 years

Intangible Assets - Narrative (Details) - USD ($)	3 Months Ended
Intangible Assets - Narrative (Details) - USD ($)	Mar. 31, 2023	Mar. 31, 2022
Intangible Assets
Intangible assets amortization	$ 5,170,859	$ 2,138,847

Leases

3 Months Ended

Mar. 31, 2023

Leases

Leases

12.Leases

Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Leases with a term greater than one year are recognized on the balance sheet at the time of lease commencement or modification of a Right of Use (“ROU”) operating lease asset and a lease liability, initially measured at the present value of the lease payments. Lease costs are recognized in the income statement over the lease term on a straight-line basis. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

The Company’s leases consist of real estate leases for office, retail, cultivation, and manufacturing facilities. The Company elected to combine the lease and related non-lease components for its operating leases.

The Company’s operating leases include options to extend or terminate the lease, which are not included in the determination of the ROU asset or lease liability unless reasonably certain to be exercised. The Company’s operating leases have remaining lease terms of less than two. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As the Company’s leases do not provide an implicit rate, we used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The discount rate used in the computations ranged between 6% and 12%.

Balance Sheet Classification of Operating Lease Assets and Liabilities


	Balance Sheet Line	March 31, 2023
Asset
Operating lease right of use assets	Noncurrent assets	$	19,783,067
Liabilities
Lease liabilities	Current Liabilities	$	3,648,395
Lease liabilities	Noncurrent liabilities		19,108,720

Maturities of Lease Liabilities

Maturities of lease liabilities as of March 31, 2023 are as follows:


2023	$	35,528,050
Less: Interest		12,250,813
Present value of lease liabilities	$	23,277,237

The following table presents the Company’s future minimum lease obligation under ASC 842 as of March 31, 2023:


2023	$	4,730,948
2024		5,343,579
2025		4,976,285
2026		4,496,205
2027		3,215,732
Thereafter		12,765,301
Total	$	35,528,050

Segment Information (Tables)

3 Months Ended

Mar. 31, 2023

Segment Information

Schedule of information represents segment activity

The following information represents segment activity as of and for the three months ended March 31, 2023:


	Retail		Wholesale		Other		Total
External revenues	$	35,820,111	$	4,058,925	$	121,900	$	40,000,936
Depreciation and Intangible assets amortization		2,427,861		744,653		258,127		3,430,641
Segment profit		18,761,566		(660,110)		(8,758,551)		9,342,905
Segment assets		201,194,400		74,479,695		50,301,180		325,975,275

The following information represents segment activity as of and for the three months ended March 31, 2022:


	Retail		Wholesale		Other		Total
External Revenues		26,525,716		5,207,388		44,450		31,777,554
Depreciation and Intangible assets amortization		2,004,408		326,573		209,815		2,540,796
Segment profit		3,761,943		(421,864)		(30,118,781)		(26,778,702)
Segment assets		184,138,812		64,813,396		73,930,525		322,882,733

Subsequent Events

3 Months Ended

Mar. 31, 2023

Subsequent Events

Subsequent Events

19.Subsequent Events

In accordance with FASB ASC 855-10, Subsequent Events, the Company has analyzed its operations subsequent to March 31, 2023 to the date these condensed consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements, except as follows:

Definitive Agreement to Acquire One Medical Retail Dispensary from Colorado-Based Standing Akimbo.

On April 13, 2023, the Company and its indirect wholly-owned subsidiary, Double Brow, LLC (“Double Brow”) entered into an Asset Purchase Agreement (the “Akimbo Purchase Agreement”) with Standing Akimbo, LLC (“Standing Akimbo”), Spencer A. Kirson (“Kirson”), John G. Murphy (“Murphy” together with Kirson, the “Akimbo Equityholders” and each an “Akimbo Equityholder”), pursuant to which Double Brow will purchase substantially all of Standing Akimbo’s assets used or held for use in its business of owning and operating a medical marijuana store located in Denver, Colorado, on the terms and subject to the conditions set forth in the Akimbo Purchase Agreement (collectively, the “Akimbo Acquisition”). The aggregate consideration for the Akimbo Acquisition will be up to $10.54 million, payable $5 million in cash and approximately $5.54 million in shares of Company’s common stock priced at the closing of the Akimbo Purchase Agreement. Double Brow will pay the cash portion of the purchase price in the amount of $1 million at closing and $4 million in deferred cash payments to be paid to Standing Akimbo in installments over twelve months following the closing of the Akimbo Acquisition. Double Brow will hold back $83,333 from each deferred cash payment (up to $750,000 in the aggregate from the deferred cash consideration) for the purpose of securing Kirson’s performance pursuant to the employment agreement entered into between Kirson and the Company in connection with the Akimbo Purchase Agreement. The deferred cash consideration is also subject to post-closing reduction if any of the actual marijuana inventory or cash at closing is less than certain targets stated in the Purchase Agreement. The stock portion of the purchase price will be payable in the amount of (i) approximately $4.5 million divided by the price per share of the Company’s common stock as of market close on the first trading day immediately before the closing of the Akimbo Acquisition, due to Standing Akimbo at the closing of the Akimbo Acquisition, and (ii) approximately $1.04 million divided by the price per share of the Company’s common stock as of market close on the first trading day immediately before the closing of the Akimbo Acquisition will be held back by the Company as collateral for potential claims for indemnification from Standing Akimbo under the Akimbo Purchase Agreement. Any portion of the holdback consideration not used to satisfy indemnification claims will be issued to the Akimbo Equityholders on the later of (i) the 18-month anniversary of the closing date of the Akimbo Acquisition, or (ii) the date of satisfaction of all amounts payable by Standing Akimbo to government authorities for taxes in accordance with the Akimbo Purchase Agreement.

The Purchase Agreement contains customary representations and warranties, covenants, and indemnification provisions for a transaction of this nature, including, without limitation, covenants regarding the operation of Standing Akimbo’s business before the closing of the Akimbo Acquisition, and confidentiality, non-compete and non-solicitation undertakings by Standing Akimbo and the Akimbo Equityholders. The Akimbo Purchase Agreement also contains certain termination rights for each Double Brow (on its own behalf and on behalf of the Company) and Standing Akimbo (on its own behalf and on behalf of the Akimbo Equityholders), subject to the conditions set forth in the Akimbo Purchase Agreement, including, without limitation, if the closing has not occurred within 120 days of submission of the state regulatory application required pursuant to the Akimbo Purchase Agreement. The closing of the Akimbo Acquisition is subject to closing conditions customary for a transaction of this nature, including, without limitation, obtaining licensing approval from the Colorado Marijuana Enforcement Division and local regulatory authorities. The Company will enter into customary lock-up agreements with the recipients of the stock consideration providing limitations on the resale of the shares of Company common stock received as part of the consideration.

Definitive Agreement to Acquire 14 Retail Dispensaries, One Cultivation Facility, and One Manufacturing Facility from New Mexico-Based Everest Apothecary.

On April 21, 2023, the Company and its indirect wholly-owned subsidiary, Evergreen Holdco, LLC, a New Mexico limited liability company (the “Everest Purchaser”), entered into an Asset Purchase Agreement with Sucellus, LLC, a New Mexico limited liability company (“Everest Seller”), James Griffin, Brook Laskey, William Baldwin, Andrew Dolan, and Greg Templeton (the “Everest Equityholders”), and Brook Laskey, as Representative (the “Everest Purchase Agreement”), pursuant to which Everest Purchaser will acquire substantially all of the operating assets of Everest Seller and assume

specified liabilities of Everest Seller, subject to the terms and conditions set forth in the Everest Purchase Agreement (the “Everest Acquisition”). Pursuant to existing laws and regulations in New Mexico, the cannabis licenses for the facilities managed by Everest Seller are held by a not-for-profit entity: Everest Apothecary, Inc., (“Everest Apothecary”). The aggregate purchase price for the Everest Acquisition will be up to approximately $38 million (subject to customary adjustments for working capital, inventory, debt, seller transaction costs, and cash), payable $12.5 million in cash, $17.5 million in the form of an unsecured promissory note, the principal of which is payable on the last day of the calendar quarter following the fourth anniversary of the closing of the Everest Acquisition with interest payable quarterly at an annual interest rate of 5% (the “Everest Note”), $8 million in Company common stock priced at closing of the Everest Purchase Agreement, and a potential “earn-out” payment of up to an additional $8 million, payable in Company common stock priced at closing of the Everest Purchase Agreement, based on the revenue performance of certain retail stores of Everest Apothecary for 12 months following such store opening for business.

Everest Purchaser will have control of the board of directors of Everest Apothecary following closing of the Everest Purchase Agreement. Further, the Everest Purchase Agreement contemplates that Everest Purchaser will enter into a Call Option Agreement with Everest Apothecary that would provide Everest Purchaser with an option to purchase the equity or assets of Everest Apothecary, including the cannabis licenses, at such time as such an acquisition would be permitted under applicable New Mexico laws and regulations. The Everest Purchase Agreement provides for potential indemnification claims by the Company and Everest Purchaser against Everest Apothecary and the Everest Equityholders subject to certain limitations and conditions. Permitted indemnification claims can be offset against the Everest Note. The Company and Everest Purchaser have also agreed to indemnify certain seller indemnified parties subject to certain limitations and conditions. The Everest Purchase Agreement contains customary representations and warranties, covenants, and indemnification provisions for a transaction of this nature, including, without limitation, covenants regarding the operation of Everest Apothecary’s business before closing, and confidentiality, non-disparagement, non-solicitation and non-competition undertakings by the Everest Equityholders, among others. The Everest Purchase Agreement also contains certain termination rights for parties, subject to the conditions set forth in the Everest Purchase Agreement, including, without limitation, if the closing has not occurred on or before July 20, 2023. The closing of the Everest Purchase Agreement is subject to other closing conditions customary for a transaction of this nature, including, without limitation, obtaining approval from the New Mexico state and local regulatory authorities. The Company will enter into customary lock-up agreements with the recipients of the stock consideration providing limitations on the resale of the shares of Company common stock received as part of the consideration.

Goodwill Accounting (Details) - USD ($)	3 Months Ended	12 Months Ended
Goodwill Accounting (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Restructuring Cost and Reserve [Line Items]
Goodwill impairment charges	$ 0	$ 11,719,306
Other expense
Restructuring Cost and Reserve [Line Items]
Goodwill impairment charges		$ 3,708,226