Annual report pursuant to Section 13 and 15(d)

NOTES RECEIVABLE

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NOTES RECEIVABLE
12 Months Ended
Dec. 31, 2020
Receivables [Abstract]  
NOTES RECEIVABLE

NOTE 7 – NOTES RECEIVABLE

 

At December 31, 2020 and 2019, notes receivable were comprised of the following:

    2020     2019  
First State Compassion Center   $ 468,985     $ 527,261  
Healer LLC     899,226       846,985  
High Fidelity Inc.     254,919       252,873  
Maryland Health & Wellness Center Inc.     -       323,526  
Total notes receivable     1,623,130       1,950,645  
Notes receivable, current portion     658,122       311,149  
Notes receivable, less current portion   $ 965,008     $ 1,639,496  

 

The Company’s cannabis-licensed client in Delaware, First State Compassion Center, issued a 10-year promissory note to the Company in May 2016 in the amount of $700,000 bearing interest at a rate of 12.5% per annum, as amended. The monthly payments of approximately $10,000 will continue through April 2026, at which time the note will be fully paid down. At December 31, 2020 and 2019, the current portion of this note was approximately $66,000 and $58,000, respectively, and was included in Notes Receivable, Current Portion on the respective balance sheets.

 

From August 2018 to June 2019, the Company loaned an aggregate of $800,000 to Healer LLC (“Healer”), an entity that provides cannabis education, dosage programs, and products developed by Dr. Dustin Sulak, an integrative medicine physician and nationally renowned cannabis practitioner. Healer issued promissory notes to the Company for the aggregate amount loaned that bear interest at 6% per annum, with principal and interest payable on maturity dates three years from the respective loan dates. At December 30, 2020, the current portion of this loan approximated $337,000. No portion was current at December 31, 2019. In March 2021, the Company was issued a revised promissory note from Healer replacing the previous promissory notes on these loans as discussed in Note 22 – Subsequent Events.

 

In August 2019, the Company loaned $250,000 to High Fidelity Inc., a company that owns and operates two seed-to sale medical marijuana facilities in the state of Vermont and produces its own line of CBD products. The note bears interest at a rate of 10.0% per annum, with interest-only month payments through its extended maturity in June 2021.

 

In January 2019, the Company provided Maryland Health & Wellness Center Inc. (“MHWC”), an entity that has been pre-approved by the state of Maryland for a cannabis dispensing license, with a $300,000 construction loan bearing interest at a rate of 8% per annum. In June 2020, MHWC repaid the principal and accrued interest thereon, at which time the parties agreed to terminate their business relationship and release each other from all other previously executed agreements.