0001522767Q32023false12-31P20D2.5P3Y00015227672023-01-012023-09-3000015227672023-11-06xbrli:shares00015227672023-09-30iso4217:USD00015227672022-12-310001522767mrmd:SeriesBConvertiblePreferredStockMember2022-12-31iso4217:USDxbrli:shares0001522767mrmd:SeriesBConvertiblePreferredStockMember2023-09-300001522767mrmd:SeriesCConvertiblePreferredStockMember2023-09-300001522767mrmd:SeriesCConvertiblePreferredStockMember2022-12-3100015227672023-07-012023-09-3000015227672022-07-012022-09-3000015227672022-01-012022-09-300001522767us-gaap:CommonStockMember2022-12-310001522767mrmd:CommonStockSubscribedButNotIssuedMember2022-12-310001522767us-gaap:AdditionalPaidInCapitalMember2022-12-310001522767us-gaap:RetainedEarningsMember2022-12-310001522767us-gaap:NoncontrollingInterestMember2022-12-310001522767us-gaap:CommonStockMember2023-01-012023-03-310001522767mrmd:CommonStockSubscribedButNotIssuedMember2023-01-012023-03-310001522767us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-3100015227672023-01-012023-03-310001522767us-gaap:NoncontrollingInterestMember2023-01-012023-03-310001522767us-gaap:RetainedEarningsMember2023-01-012023-03-310001522767us-gaap:CommonStockMember2023-03-310001522767mrmd:CommonStockSubscribedButNotIssuedMember2023-03-310001522767us-gaap:AdditionalPaidInCapitalMember2023-03-310001522767us-gaap:RetainedEarningsMember2023-03-310001522767us-gaap:NoncontrollingInterestMember2023-03-3100015227672023-03-310001522767us-gaap:CommonStockMember2023-04-012023-06-300001522767mrmd:CommonStockSubscribedButNotIssuedMember2023-04-012023-06-300001522767us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-3000015227672023-04-012023-06-300001522767us-gaap:NoncontrollingInterestMember2023-04-012023-06-300001522767us-gaap:RetainedEarningsMember2023-04-012023-06-300001522767us-gaap:CommonStockMember2023-06-300001522767mrmd:CommonStockSubscribedButNotIssuedMember2023-06-300001522767us-gaap:AdditionalPaidInCapitalMember2023-06-300001522767us-gaap:RetainedEarningsMember2023-06-300001522767us-gaap:NoncontrollingInterestMember2023-06-3000015227672023-06-300001522767us-gaap:CommonStockMember2023-07-012023-09-300001522767us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001522767us-gaap:NoncontrollingInterestMember2023-07-012023-09-300001522767us-gaap:RetainedEarningsMember2023-07-012023-09-300001522767us-gaap:CommonStockMember2023-09-300001522767mrmd:CommonStockSubscribedButNotIssuedMember2023-09-300001522767us-gaap:AdditionalPaidInCapitalMember2023-09-300001522767us-gaap:RetainedEarningsMember2023-09-300001522767us-gaap:NoncontrollingInterestMember2023-09-300001522767us-gaap:CommonStockMember2021-12-310001522767mrmd:CommonStockSubscribedButNotIssuedMember2021-12-310001522767us-gaap:AdditionalPaidInCapitalMember2021-12-310001522767us-gaap:RetainedEarningsMember2021-12-310001522767us-gaap:NoncontrollingInterestMember2021-12-3100015227672021-12-310001522767mrmd:CommonStockSubscribedButNotIssuedMember2022-01-012022-03-3100015227672022-01-012022-03-310001522767us-gaap:CommonStockMember2022-01-012022-03-310001522767us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001522767us-gaap:NoncontrollingInterestMember2022-01-012022-03-310001522767us-gaap:RetainedEarningsMember2022-01-012022-03-310001522767us-gaap:CommonStockMember2022-03-310001522767mrmd:CommonStockSubscribedButNotIssuedMember2022-03-310001522767us-gaap:AdditionalPaidInCapitalMember2022-03-310001522767us-gaap:RetainedEarningsMember2022-03-310001522767us-gaap:NoncontrollingInterestMember2022-03-3100015227672022-03-3100015227672022-04-012022-06-300001522767mrmd:CommonStockSubscribedButNotIssuedMember2022-04-012022-06-300001522767us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001522767us-gaap:CommonStockMember2022-04-012022-06-300001522767us-gaap:NoncontrollingInterestMember2022-04-012022-06-300001522767us-gaap:RetainedEarningsMember2022-04-012022-06-300001522767us-gaap:CommonStockMember2022-06-300001522767mrmd:CommonStockSubscribedButNotIssuedMember2022-06-300001522767us-gaap:AdditionalPaidInCapitalMember2022-06-300001522767us-gaap:RetainedEarningsMember2022-06-300001522767us-gaap:NoncontrollingInterestMember2022-06-3000015227672022-06-300001522767mrmd:CommonStockSubscribedButNotIssuedMember2022-07-012022-09-300001522767us-gaap:CommonStockMember2022-07-012022-09-300001522767us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001522767us-gaap:NoncontrollingInterestMember2022-07-012022-09-300001522767us-gaap:RetainedEarningsMember2022-07-012022-09-300001522767us-gaap:CommonStockMember2022-09-300001522767mrmd:CommonStockSubscribedButNotIssuedMember2022-09-300001522767us-gaap:AdditionalPaidInCapitalMember2022-09-300001522767us-gaap:RetainedEarningsMember2022-09-300001522767us-gaap:NoncontrollingInterestMember2022-09-3000015227672022-09-3000015227672022-01-012022-12-31mrmd:acquisition0001522767mrmd:GreenGrowthGroupIncMember2022-05-05xbrli:pure0001522767mrmd:ErmontAcquisitionMember2023-01-012023-09-300001522767mrmd:ErmontAcquisitionMember2023-02-212023-02-210001522767mrmd:ErmontAcquisitionMembermrmd:PromissoryNotesMember2023-02-212023-02-210001522767mrmd:ErmontAcquisitionMembermrmd:PromissoryNotesMember2023-02-210001522767mrmd:ErmontAcquisitionMember2023-07-012023-09-300001522767mrmd:ErmontAcquisitionMember2023-02-210001522767mrmd:ErmontAcquisitionMemberus-gaap:TrademarksAndTradeNamesMember2023-02-210001522767mrmd:ErmontAcquisitionMemberus-gaap:CustomerRelationshipsMember2023-02-210001522767us-gaap:LicenseMembermrmd:ErmontAcquisitionMember2023-02-210001522767mrmd:KindTherapeuticsUSALLCMember2022-04-270001522767mrmd:KindTherapeuticsUSALLCMember2022-04-272022-04-270001522767mrmd:KindTherapeuticsUSALLCMembermrmd:KindNotesMembermrmd:PromissoryNotesMember2022-04-272022-04-270001522767mrmd:KindTherapeuticsUSALLCMembermrmd:KindNotesMembermrmd:PromissoryNotesMember2022-04-270001522767mrmd:KindTherapeuticsUSALLCMemberus-gaap:TrademarksAndTradeNamesMember2022-04-270001522767mrmd:KindTherapeuticsUSALLCMembermrmd:LicensesAndCustomerBaseMember2022-04-270001522767mrmd:KindTherapeuticsUSALLCMemberus-gaap:NoncompeteAgreementsMember2022-04-270001522767mrmd:MariHoldingsMDLLCAndMiaDevelopmentLLCMember2022-04-272022-04-27mrmd:member0001522767mrmd:MariHoldingsMDLLCAndMiaDevelopmentLLCMember2022-09-012022-09-300001522767mrmd:MariHoldingsMDLLCMember2022-09-300001522767mrmd:MiaDevelopmentLLCMember2022-09-300001522767mrmd:KindTherapeuticsUSALLCMember2022-01-012022-12-310001522767mrmd:GreenGrowthGroupIncMember2022-01-310001522767mrmd:GreenGrowthGroupIncMember2022-01-012022-01-310001522767mrmd:GreenGrowthGroupIncMember2022-05-052022-05-05utr:sqft0001522767mrmd:GreenhouseNaturalsLLCBeverlyAssetPurchaseMember2022-12-302022-12-300001522767srt:ScenarioForecastMembermrmd:AllgreensDispensaryLLCMember2023-12-310001522767srt:ScenarioForecastMembermrmd:AllgreensDispensaryLLCMember2023-01-012023-12-31mrmd:licensemrmd:dispensary0001522767mrmd:AllgreensDispensaryLLCMember2023-07-012023-09-300001522767mrmd:AllgreensDispensaryLLCMember2023-01-012023-09-300001522767mrmd:AllgreensDispensaryLLCMember2023-09-302023-09-300001522767mrmd:AllgreensDispensaryLLCMember2023-09-300001522767us-gaap:SubsequentEventMembermrmd:AllgreensDispensaryLLCMember2023-10-012023-10-310001522767srt:ScenarioForecastMembermrmd:RobustMissouriProcessAndManufacturing1LLCMember2023-12-310001522767srt:ScenarioForecastMembermrmd:RobustMissouriProcessAndManufacturing1LLCMember2023-01-012023-12-310001522767mrmd:RobustMissouriProcessAndManufacturing1LLCMember2022-09-012022-09-300001522767stpr:DE2023-09-300001522767stpr:MD2023-09-300001522767stpr:MA2023-09-300001522767mrmd:CannabisDispensaryMemberstpr:DE2023-09-300001522767srt:WarehouseMemberstpr:DE2023-09-300001522767mrmd:CultivationAndProcessingFacilityMemberstpr:DE2023-09-30mrmd:optionToRenew0001522767mrmd:CannabisProductionFacilityMemberstpr:DE2023-09-300001522767mrmd:FSCCInitialNoteMembermrmd:FirstStateCompassionCenterMember2023-09-300001522767mrmd:FSCCInitialNoteMembermrmd:FirstStateCompassionCenterMember2022-12-310001522767mrmd:FirstStateCompassionCenterMembermrmd:FSCCSecondaryNoteMember2023-09-300001522767mrmd:FirstStateCompassionCenterMembermrmd:FSCCSecondaryNoteMember2022-12-310001522767mrmd:FirstStateCompassionCenterMembermrmd:FSCCNewNoteMember2023-09-300001522767mrmd:FirstStateCompassionCenterMembermrmd:FSCCNewNoteMember2022-12-310001522767mrmd:HealerLLCMembermrmd:RevisedHealerNoteMember2023-09-300001522767mrmd:HealerLLCMembermrmd:RevisedHealerNoteMember2022-12-310001522767mrmd:FirstStateCompassionCenterMembermrmd:FSCCConsolidatedNoteMember2023-07-310001522767mrmd:FirstStateCompassionCenterMember2023-07-012023-07-310001522767mrmd:FirstStateCompassionCenterMembermrmd:FSCCConsolidatedNoteMember2023-07-012023-07-310001522767mrmd:FirstStateCompassionCenterMember2016-05-012016-05-310001522767mrmd:FirstStateCompassionCenterMember2016-05-310001522767mrmd:FirstStateCompassionCenterMember2023-06-300001522767mrmd:FirstStateCompassionCenterMember2022-12-310001522767mrmd:FirstStateCompassionCenterMembermrmd:ConvertiblePromissoryNoteMember2021-12-310001522767mrmd:FirstStateCompassionCenterMembermrmd:ConvertiblePromissoryNoteMember2022-12-310001522767mrmd:FirstStateCompassionCenterMembermrmd:FSCCSecondaryNoteMember2023-06-300001522767mrmd:FSCCNewNoteMember2022-12-310001522767mrmd:FSCCSecondNewNoteMember2023-06-300001522767mrmd:PromissoryNotesMembermrmd:HealerLLCMember2021-03-310001522767mrmd:HealerLLCMember2021-03-310001522767mrmd:HealerLLCMember2021-03-012021-03-310001522767mrmd:HealerLLCMembermrmd:RevisedHealerNoteMember2021-03-310001522767mrmd:HealerLLCMembermrmd:RevisedHealerNoteMember2022-12-310001522767mrmd:HealerLLCMembermrmd:RevisedHealerNoteMember2023-09-300001522767mrmd:WMTechnologyIncMember2023-09-300001522767mrmd:WMTechnologyIncMember2022-12-310001522767mrmd:ArtisLLCDbaLittleDogMember2023-09-300001522767mrmd:ArtisLLCDbaLittleDogMember2022-12-310001522767mrmd:AllgreensDispensaryLLCMember2023-09-300001522767mrmd:AllgreensDispensaryLLCMember2022-12-310001522767mrmd:ArtisLLCDbaLittleDogMember2023-04-300001522767mrmd:ArtisLLCDbaLittleDogMember2023-04-012023-04-300001522767mrmd:ArtisLLCDbaLittleDogMember2023-07-012023-09-300001522767mrmd:ArtisLLCDbaLittleDogMember2023-01-012023-09-300001522767mrmd:WMTechnologyIncFormerlyMembersRSVPLLCMember2022-02-012022-02-280001522767mrmd:WMTechnologyIncFormerlyMembersRSVPLLCMember2023-07-012023-09-300001522767mrmd:WMTechnologyIncFormerlyMembersRSVPLLCMember2023-01-012023-09-300001522767mrmd:WMTechnologyIncFormerlyMembersRSVPLLCMember2022-07-012022-09-300001522767mrmd:WMTechnologyIncFormerlyMembersRSVPLLCMember2022-01-012022-09-300001522767mrmd:FlowrCorpMember2022-07-012022-09-300001522767mrmd:FlowrCorpMember2022-01-012022-09-300001522767us-gaap:LandMember2023-09-300001522767us-gaap:LandMember2022-12-310001522767mrmd:BuildingsandBuildingImprovementsMember2023-09-300001522767mrmd:BuildingsandBuildingImprovementsMember2022-12-310001522767mrmd:TenantImprovementsMember2023-09-300001522767mrmd:TenantImprovementsMember2022-12-310001522767us-gaap:FurnitureAndFixturesMember2023-09-300001522767us-gaap:FurnitureAndFixturesMember2022-12-310001522767us-gaap:MachineryAndEquipmentMember2023-09-300001522767us-gaap:MachineryAndEquipmentMember2022-12-310001522767us-gaap:ConstructionInProgressMember2023-09-300001522767us-gaap:ConstructionInProgressMember2022-12-310001522767mrmd:TheHarvestFoundationLLCMember2023-01-012023-09-300001522767us-gaap:TrademarksAndTradeNamesMember2023-01-012023-09-300001522767us-gaap:TrademarksAndTradeNamesMember2023-09-300001522767mrmd:LicensesAndCustomerBaseMember2023-01-012023-09-300001522767mrmd:LicensesAndCustomerBaseMember2023-09-300001522767us-gaap:NoncompeteAgreementsMember2023-01-012023-09-300001522767us-gaap:NoncompeteAgreementsMember2023-09-300001522767us-gaap:TrademarksAndTradeNamesMember2022-01-012022-12-310001522767us-gaap:TrademarksAndTradeNamesMember2022-12-310001522767mrmd:LicensesAndCustomerBaseMember2022-01-012022-12-310001522767mrmd:LicensesAndCustomerBaseMember2022-12-310001522767us-gaap:NoncompeteAgreementsMember2022-01-012022-12-310001522767us-gaap:NoncompeteAgreementsMember2022-12-310001522767mrmd:ErmontAcquisitionMember2022-01-012022-09-300001522767mrmd:KindAcquisitionMember2023-01-012023-09-300001522767mrmd:KindAcquisitionMember2022-01-012022-09-300001522767us-gaap:LineOfCreditMembermrmd:LoanAndSecurityAgreementMemberus-gaap:SecuredDebtMember2023-01-240001522767us-gaap:SecuredDebtMembermrmd:LoanAndSecurityAgreementIncrementalTermLoanMemberus-gaap:SecuredDebtMember2023-01-240001522767us-gaap:SecuredDebtMembermrmd:LoanAndSecurityAgreementMemberus-gaap:SecuredDebtMember2023-01-242023-01-240001522767us-gaap:SecuredDebtMembermrmd:LoanAndSecurityAgreementIncrementalTermLoanMemberus-gaap:SecuredDebtMember2023-01-242023-01-240001522767us-gaap:SecuredDebtMembermrmd:LoanAndSecurityAgreementMemberus-gaap:SecuredDebtMember2023-01-240001522767us-gaap:SecuredDebtMember2023-01-242023-01-240001522767us-gaap:SecuredDebtMembermrmd:LoanAndSecurityAgreementMemberus-gaap:PrimeRateMemberus-gaap:SecuredDebtMember2023-01-242023-01-240001522767us-gaap:SecuredDebtMembermrmd:LoanAndSecurityAgreementMember2023-01-242023-01-240001522767us-gaap:SecuredDebtMembermrmd:LoanAndSecurityAgreementMember2023-01-240001522767us-gaap:SecuredDebtMembermrmd:LoanAndSecurityAgreementMember2023-09-300001522767us-gaap:MortgagesMembermrmd:BankOfNewEnglandNewBedfordMAandMiddleboreMAPropertyMember2023-09-300001522767us-gaap:MortgagesMembermrmd:BankOfNewEnglandNewBedfordMAandMiddleboreMAPropertyMember2022-12-310001522767mrmd:BankOfNewEnglandWilmingtonDEPropertyMemberus-gaap:MortgagesMember2023-09-300001522767mrmd:BankOfNewEnglandWilmingtonDEPropertyMemberus-gaap:MortgagesMember2022-12-310001522767us-gaap:MortgagesMembermrmd:DuQuoinStateBankAnnaILandHarrisburgILPropertiesMember2023-09-300001522767us-gaap:MortgagesMembermrmd:DuQuoinStateBankAnnaILandHarrisburgILPropertiesMember2022-12-310001522767us-gaap:MortgagesMembermrmd:DuQuoinStateBankMetropolisILPropertiesMember2023-09-300001522767us-gaap:MortgagesMembermrmd:DuQuoinStateBankMetropolisILPropertiesMember2022-12-310001522767us-gaap:MortgagesMembermrmd:DuQuoinStateBankMtVernonILPropertyMember2023-09-300001522767us-gaap:MortgagesMembermrmd:DuQuoinStateBankMtVernonILPropertyMember2022-12-310001522767us-gaap:MortgagesMembermrmd:SouthPorteBankMtVenonILPropertyMember2023-09-300001522767us-gaap:MortgagesMembermrmd:SouthPorteBankMtVenonILPropertyMember2022-12-310001522767us-gaap:MortgagesMember2023-09-300001522767us-gaap:MortgagesMember2022-12-310001522767us-gaap:MortgagesMembermrmd:AmendedBNEMortgageMember2023-09-300001522767us-gaap:MortgagesMembermrmd:BNEMortgageNewBedfordMAPropertyMember2023-01-012023-09-300001522767us-gaap:MortgagesMembermrmd:BNEMiddleboroMAPropertyMember2023-01-012023-09-300001522767us-gaap:MortgagesMembermrmd:AmendedBNEMortgageMember2022-12-310001522767us-gaap:MortgagesMembermrmd:BNEDelawareMortgageMember2023-09-300001522767us-gaap:MortgagesMembermrmd:BNEDelawareMortgageMemberus-gaap:PrimeRateMember2023-01-012023-09-300001522767us-gaap:MortgagesMembermrmd:BNEDelawareMortgageMembermrmd:FloorRateMember2023-09-300001522767us-gaap:MortgagesMembermrmd:BNEDelawareMortgageMember2022-12-310001522767us-gaap:MortgagesMembermrmd:DuQuoinMortgageMember2023-05-310001522767us-gaap:MortgagesMembermrmd:DuQuoinMortgageMember2023-09-300001522767us-gaap:MortgagesMembermrmd:DuQuoinMortgageMember2022-12-310001522767mrmd:MetropolisILFacilityMember2021-07-012021-07-310001522767us-gaap:MortgagesMembermrmd:MetropolisILFacilityMember2021-07-012021-07-310001522767us-gaap:MortgagesMembermrmd:DuQuoinMetropolisMortgageMember2021-07-310001522767mrmd:MetropolisILFacilityMembermrmd:MariHoldingsMetropolisLLCMember2021-07-012021-07-310001522767mrmd:MetropolisILFacilityMembermrmd:MariMedIncMember2021-07-310001522767us-gaap:MortgagesMembermrmd:DuQuoinMetropolisMortgageMember2023-09-300001522767us-gaap:MortgagesMembermrmd:DuQuoinMetropolisMortgageMember2022-12-310001522767us-gaap:SecuredDebtMembermrmd:DuQuoinMountVernonMortgageMembermrmd:MariHoldingsMtVernonLLCMember2022-07-310001522767us-gaap:MortgagesMembermrmd:DuQuoinMountVernonMortgageMember2022-07-310001522767us-gaap:MortgagesMemberus-gaap:PrimeRateMembermrmd:DuQuoinMountVernonMortgageMember2022-07-310001522767us-gaap:MortgagesMembermrmd:FloorRateMembermrmd:DuQuoinMountVernonMortgageMember2022-07-310001522767mrmd:SouthPorteBankMortgageMemberus-gaap:MortgagesMember2021-08-012021-08-310001522767mrmd:SouthPorteBankMortgageMemberus-gaap:MortgagesMember2023-05-262023-05-260001522767mrmd:ErmontPromissoryNoteMembermrmd:PromissoryNotesMember2023-09-300001522767mrmd:GreenhouseNaturalsLLCBeverlyAssetPurchaseMember2022-12-310001522767mrmd:GreenhouseNaturalsLLCBeverlyAssetPurchaseMembermrmd:BeverlyNoteMembermrmd:PromissoryNotesMember2022-12-310001522767mrmd:GreenhouseNaturalsLLCBeverlyAssetPurchaseMember2023-09-300001522767mrmd:KindNotesMembermrmd:KindAcquisitionMembermrmd:PromissoryNotesMember2022-04-272022-04-270001522767mrmd:KindNotesMembermrmd:KindAcquisitionMembermrmd:PromissoryNotesMember2022-04-270001522767mrmd:KindNotesMembermrmd:KindAcquisitionMembermrmd:PromissoryNotesMember2022-12-310001522767mrmd:KindNotesMembermrmd:KindAcquisitionMembermrmd:PromissoryNotesMember2023-01-242023-01-240001522767mrmd:June2020PromissoryNoteConversionMember2022-03-310001522767mrmd:June2020PromissoryNoteConversionMember2022-01-012022-03-31mrmd:note0001522767us-gaap:SecuredDebtMembermrmd:ThreeVehicleNotesMember2023-09-300001522767us-gaap:SecuredDebtMembermrmd:ThreeVehicleNotesMember2022-12-31mrmd:owner0001522767mrmd:TwoUnaffiliatedInstitutionalShareholdersMembermrmd:ExchangeAgreementMembermrmd:SeriesBConvertiblePreferredStockMember2021-12-310001522767mrmd:TwoUnaffiliatedInstitutionalShareholdersMembermrmd:ExchangeAgreementMembermrmd:SeriesBConvertiblePreferredStockMember2021-01-012021-12-310001522767mrmd:SeriesBConvertiblePreferredStockMember2021-12-310001522767mrmd:SeriesBConvertiblePreferredStockMember2021-01-012021-12-310001522767mrmd:HadronHealthcareMasterFundFinancingFacilityMembermrmd:SeriesCConvertiblePreferredStockMembersrt:MaximumMemberus-gaap:ConvertibleDebtMembermrmd:SecuritiesPurchaseAgreementMember2021-03-310001522767mrmd:UnitsConsistingOfConvertiblePreferredStockAndWarrantsMembermrmd:SecuritiesPurchaseAgreementMember2021-03-012021-03-310001522767mrmd:UnitMembermrmd:SecuritiesPurchaseAgreementMember2021-03-310001522767mrmd:SeriesCConvertiblePreferredStockMembermrmd:HadronHealthcareStockPurchaseAgreementMember2021-03-012021-03-310001522767mrmd:HadronHealthcareStockPurchaseAgreementMember2021-03-310001522767us-gaap:CommonStockMembersrt:MaximumMember2021-03-310001522767us-gaap:CommonStockMember2021-03-3100015227672021-03-3100015227672021-03-012021-03-310001522767mrmd:SeriesCConvertiblePreferredStockMember2023-07-012023-09-300001522767us-gaap:CommonStockMember2023-09-30mrmd:transaction0001522767mrmd:SeriesCConvertiblePreferredStockMember2023-04-012023-06-300001522767us-gaap:CommonStockMember2023-06-30utr:Rate00015227672023-06-082023-06-080001522767mrmd:AmendedAndRestatedTwoThousandEighteenStockAwardAndIncentivePlanMember2023-01-012023-09-300001522767srt:MinimumMember2023-07-012023-09-300001522767srt:MinimumMember2023-01-012023-09-300001522767srt:MaximumMember2023-07-012023-09-300001522767srt:MaximumMember2023-01-012023-09-300001522767us-gaap:RestrictedStockUnitsRSUMember2022-12-310001522767us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001522767us-gaap:RestrictedStockUnitsRSUMember2023-09-300001522767mrmd:MinorityInterestHolderMemberus-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001522767us-gaap:WarrantMembermrmd:MinorityInterestHolderMember2023-09-300001522767mrmd:MinorityInterestHolderMember2023-09-300001522767mrmd:ShareBasedPaymentArrangementTwoEmployeesMemberus-gaap:RestrictedStockMember2023-01-012023-09-300001522767us-gaap:RestrictedStockMembermrmd:ErmontAcquisitionMember2023-01-012023-09-300001522767us-gaap:RestrictedStockMembermrmd:ErmontAcquisitionMember2023-09-300001522767mrmd:MariHoldingsMDLLCMember2023-09-300001522767us-gaap:SeriesCPreferredStockMember2023-01-012023-09-300001522767us-gaap:CommonStockMembermrmd:ShareBasedPaymentArrangementTwoNonemployeeServiceProvidersMemberus-gaap:RestrictedStockMember2023-01-012023-09-300001522767us-gaap:ShareBasedPaymentArrangementEmployeeMemberus-gaap:CommonStockMember2023-01-012023-09-300001522767mrmd:ShareBasedPaymentArrangementTwoEmployeesMemberus-gaap:RestrictedStockMember2022-01-012022-12-310001522767mrmd:ProductSalesRetailMember2023-07-012023-09-300001522767mrmd:ProductSalesRetailMember2022-07-012022-09-300001522767mrmd:ProductSalesRetailMember2023-01-012023-09-300001522767mrmd:ProductSalesRetailMember2022-01-012022-09-300001522767mrmd:ProductSalesWholesaleMember2023-07-012023-09-300001522767mrmd:ProductSalesWholesaleMember2022-07-012022-09-300001522767mrmd:ProductSalesWholesaleMember2023-01-012023-09-300001522767mrmd:ProductSalesWholesaleMember2022-01-012022-09-300001522767mrmd:ProductSalesMember2023-07-012023-09-300001522767mrmd:ProductSalesMember2022-07-012022-09-300001522767mrmd:ProductSalesMember2023-01-012023-09-300001522767mrmd:ProductSalesMember2022-01-012022-09-300001522767us-gaap:RealEstateMember2023-07-012023-09-300001522767us-gaap:RealEstateMember2022-07-012022-09-300001522767us-gaap:RealEstateMember2023-01-012023-09-300001522767us-gaap:RealEstateMember2022-01-012022-09-300001522767mrmd:SupplyProcurementMember2023-07-012023-09-300001522767mrmd:SupplyProcurementMember2022-07-012022-09-300001522767mrmd:SupplyProcurementMember2023-01-012023-09-300001522767mrmd:SupplyProcurementMember2022-01-012022-09-300001522767us-gaap:ManagementServiceMember2023-07-012023-09-300001522767us-gaap:ManagementServiceMember2022-07-012022-09-300001522767us-gaap:ManagementServiceMember2023-01-012023-09-300001522767us-gaap:ManagementServiceMember2022-01-012022-09-300001522767us-gaap:LicenseAndServiceMember2023-07-012023-09-300001522767us-gaap:LicenseAndServiceMember2022-07-012022-09-300001522767us-gaap:LicenseAndServiceMember2023-01-012023-09-300001522767us-gaap:LicenseAndServiceMember2022-01-012022-09-300001522767mrmd:OtherRevenueMember2023-07-012023-09-300001522767mrmd:OtherRevenueMember2022-07-012022-09-300001522767mrmd:OtherRevenueMember2023-01-012023-09-300001522767mrmd:OtherRevenueMember2022-01-012022-09-30mrmd:lease0001522767mrmd:RetailSpaceMemberstpr:DE2023-09-300001522767srt:WarehouseMemberstpr:DE2023-09-300001522767mrmd:CultivationAndProcessingFacilityMemberstpr:DE2023-09-300001522767mrmd:PremisesMemberstpr:DE2023-09-300001522767stpr:MAmrmd:OfficeSpaceMember2023-09-300001522767stpr:MAmrmd:RetailSpaceMember2023-09-300001522767stpr:MAmrmd:DispensaryAndCultivationFacilityMember2023-09-300001522767stpr:OHmrmd:RetailSpaceMember2023-09-300001522767stpr:MDmrmd:TwoUnitApartmentMember2023-07-310001522767srt:MinimumMember2023-09-300001522767srt:MaximumMember2023-09-300001522767stpr:OH2021-11-012021-11-30mrmd:retailProperty0001522767srt:MinimumMember2021-11-300001522767srt:MaximumMember2021-11-3000015227672021-11-3000015227672021-11-012021-11-300001522767mrmd:ExtendedOhioLeaseAgreementMember2021-11-012021-11-300001522767stpr:OH2022-04-012022-04-300001522767stpr:OH2022-04-3000015227672023-02-280001522767srt:ChiefExecutiveOfficerMember2023-09-300001522767srt:ChiefExecutiveOfficerMember2023-07-012023-09-300001522767srt:ChiefExecutiveOfficerMember2022-07-012022-09-300001522767srt:ChiefExecutiveOfficerMember2023-01-012023-09-300001522767srt:ChiefExecutiveOfficerMember2022-01-012022-09-300001522767srt:ChiefOperatingOfficerMember2023-07-012023-09-300001522767srt:ChiefOperatingOfficerMember2022-07-012022-09-300001522767srt:ChiefOperatingOfficerMember2023-01-012023-09-300001522767srt:ChiefOperatingOfficerMember2022-01-012022-09-300001522767srt:ExecutiveOfficerMember2021-01-012021-01-010001522767mrmd:BettysEddiesProductsMembersrt:ExecutiveOfficerMembermrmd:SalesChannelWholesaleMember2021-01-012021-01-010001522767us-gaap:SalesChannelThroughIntermediaryMembermrmd:BettysEddiesProductsMembersrt:MinimumMembersrt:ExecutiveOfficerMember2021-01-012021-01-010001522767us-gaap:SalesChannelThroughIntermediaryMembersrt:MaximumMembermrmd:BettysEddiesProductsMembersrt:ExecutiveOfficerMember2021-01-012021-01-010001522767mrmd:FutureDevelopedProductsMembersrt:ExecutiveOfficerMembermrmd:SalesChannelWholesaleMember2021-01-012021-01-010001522767mrmd:FutureDevelopedProductsMemberus-gaap:SalesChannelThroughIntermediaryMembersrt:MinimumMembersrt:ExecutiveOfficerMember2021-01-012021-01-010001522767mrmd:FutureDevelopedProductsMemberus-gaap:SalesChannelThroughIntermediaryMembersrt:MaximumMembersrt:ExecutiveOfficerMember2021-01-012021-01-010001522767mrmd:BettysEddiesProductsMembersrt:ExecutiveOfficerMember2023-07-012023-09-300001522767mrmd:BettysEddiesProductsMembersrt:ExecutiveOfficerMember2022-07-012022-09-300001522767mrmd:BettysEddiesProductsMembersrt:ExecutiveOfficerMember2023-01-012023-09-300001522767mrmd:BettysEddiesProductsMembersrt:ExecutiveOfficerMember2022-01-012022-09-300001522767mrmd:CEOandCAOMember2023-07-012023-09-300001522767mrmd:CEOandCAOMember2023-01-012023-09-300001522767mrmd:CEOandCAOMember2022-07-012022-09-300001522767mrmd:CEOandCAOMember2022-01-012022-09-300001522767mrmd:FirstStateCompassionCenterMember2022-07-012022-09-300001522767mrmd:FirstStateCompassionCenterMember2023-07-012023-09-300001522767mrmd:FirstStateCompassionCenterMember2023-01-012023-09-300001522767mrmd:FirstStateCompassionCenterMember2022-01-012022-09-300001522767mrmd:OGGUSABankruptcyProceedingsMembermrmd:GenCannaGlobalIncMembermrmd:OwnershipInterestMember2019-12-310001522767us-gaap:RelatedPartyMembermrmd:OGGUSABankruptcyProceedingsMember2019-12-310001522767mrmd:OGGUSABankruptcyProceedingsMembermrmd:MariMedHempIncMember2022-04-300001522767mrmd:OGGUSABankruptcyProceedingsMembermrmd:MariMedHempIncMember2019-12-310001522767mrmd:OGGUSABankruptcyProceedingsMembermrmd:MariMedHempIncMember2022-04-302022-04-300001522767us-gaap:RelatedPartyMembermrmd:OGGUSABankruptcyProceedingsMember2023-07-012023-07-310001522767mrmd:NonOfficerDirectorShareholderMember2023-09-300001522767mrmd:NonOfficerDirectorShareholderMember2021-01-012023-09-300001522767mrmd:NonOfficerDirectorShareholderMember2023-07-012023-09-300001522767us-gaap:SubsequentEventMember2023-10-272023-10-27
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended September 30, 2023
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________ to ___________________
Commission File number 0-54433
MARIMED INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware27-4672745
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
10 Oceana Way
Norwood, MA 02062
(Address of Principal Executive Offices)
781-277-0007
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None.
Title of each classTicker symbol(s)Name of each exchange on which registered
Not ApplicableNot ApplicableNot Applicable
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated filer o
Accelerated filerx
Non-accelerated filer o
Smaller reporting companyx
Emerging growth companyx
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of November 6, 2023, 376,121,958 shares of the registrant’s common stock were outstanding.


Table of Contents
MariMed Inc.
Table of Contents
Page
2

Table of Contents
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain forward-looking statements and information relating to MariMed Inc. that is based on the beliefs of MariMed Inc.’s management, as well as assumptions made by and information currently available to the Company. In some cases, you can identify these statements by forward-looking words such as “anticipates,” “believes,” “could,” “should,” “estimates,” “expects,” “intends,” “may,” “plans,” “predicts,” “projects,” “will,” or other similar or comparable words. Any statements contained in this Quarterly Report on Form 10-Q that are not statements of historical facts may be deemed to be forward-looking statements. Such statements reflect the current views of the Company with respect to future events, including consummation of pending transactions, launch of new products, expanded distribution of existing products, obtainment of new licenses, estimates and projections of revenue, EBITDA and Adjusted EBITDA and other information about the Company's business, business prospects and strategic growth plan, which are based on certain assumptions of its management, including those described in this Quarterly Report on Form 10-Q. These statements are not a guarantee of future performance and involve risk and uncertainties that are difficult to predict, including, among other factors, changes in demand for the Company’s services and products, changes in the law and its enforcement, timing and outcome of regulatory processes and changes in the economic environment.

Additional important factors that could cause actual results to differ materially from those in these forward-looking statements are also discussed in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this Quarterly Report on Form 10-Q and Part I, Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Any forward-looking statement made by the Company in this Quarterly Report on Form 10-Q speaks only as of the date on which this Quarterly Report on Form 10-Q was first filed. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.
3

Table of Contents
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
MariMed Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(unaudited)
September 30,
2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents$13,259 $9,737 
Accounts receivable, net of allowances of $564 and $4,603 at September 30, 2023 and December 31, 2022, respectively
6,352 4,157 
Inventory24,206 19,477 
Deferred rents receivable649 704 
Notes receivable, current portion52 2,637 
Investments, current portion161 123 
Due from related parties87 29 
Other current assets6,026 7,282 
Total current assets50,792 44,146 
Property and equipment, net85,195 71,641 
Intangible assets, net17,856 14,201 
Goodwill11,993 8,079 
Notes receivable, net of current portion814 7,467 
Investments, net of current portion164  
Operating lease right-of-use assets9,679 4,931 
Finance lease right-of-use assets2,717 713 
Other assets11,607 1,024 
Total assets$190,817 $152,202 
Liabilities, mezzanine equity and stockholders’ equity
Current liabilities:
Term loan$3,600 $ 
Mortgages and notes payable, current portion1,009 3,774 
Accounts payable8,494 6,626 
Accrued expenses and other5,347 3,091 
Income taxes payable14,014 11,489 
Operating lease liabilities, current portion1,865 1,273 
Finance lease liabilities, current portion963 237 
Total current liabilities35,292 26,490 
Term loan, net of current portion18,895  
Mortgages and notes payable, net of current portion27,444 25,943 
Operating lease liabilities, net of current portion8,449 4,173 
4

Table of Contents
MariMed Inc.
Condensed Consolidated Balance Sheets (continued)
(in thousands, except share and per share amounts)
(unaudited)
September 30,
2023
December 31,
2022
Finance lease liabilities, net of current portion1,775 461 
Other liabilities100 100 
Total liabilities91,955 57,167 
Commitments and contingencies
Mezzanine equity
Series B convertible preferred stock, $0.001 par value; 4,908,333 shares authorized, issued and outstanding at September 30, 2023 and December 31, 2022
14,725 14,725 
Series C convertible preferred stock $0.001 par value; 12,432,432 shares authorized; 1,155,274 and 6,216,216 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively
4,275 23,000 
Total mezzanine equity19,000 37,725 
Stockholders’ equity
Undesignated preferred stock, $0.001 par value; 32,659,235 shares authorized; zero shares issued and outstanding at September 30, 2023 and December 31, 2022
  
Common stock, $0.001 par value; 700,000,000 shares authorized; 375,871,958 and 341,474,728 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively
376 341 
Common stock subscribed but not issued 39 
Additional paid-in capital170,922 142,365 
Accumulated deficit(89,786)(83,924)
Noncontrolling interests(1,650)(1,511)
Total stockholders’ equity79,862 57,310 
Total liabilities, mezzanine equity and stockholders’ equity$190,817 $152,202 
See accompanying notes to the unaudited condensed consolidated financial statements.
5

Table of Contents
MariMed Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)

Three months ended Nine months ended
September 30,September 30,
2023202220232022
Revenue$38,800 $33,912 $109,699 $98,180 
Cost of revenue21,962 17,748 61,097 50,035 
Gross profit16,838 16,164 48,602 48,145 
Operating expenses:
Personnel5,916 3,746 16,191 10,170 
Marketing and promotion1,585 1,402 4,397 2,854 
General and administrative6,135 5,097 15,520 16,890 
Acquisition-related and other32 143 647 897 
Bad debt(122)40 (127)54 
Total operating expenses13,546 10,428 36,628 30,865 
Income from operations3,292 5,736 11,974 17,280 
Interest and other (expense) income:
Interest expense(2,482)(518)(7,627)(1,271)
Interest income29 239 243 720 
Other (expense) income, net(646)(251)(1,556)24 
Total interest and other expense, net(3,099)(530)(8,940)(527)
Income before income taxes193 5,206 3,034 16,753 
Provision for income taxes4,462 2,484 8,902 7,894 
Net (loss) income(4,269)2,722 (5,868)8,859 
Less: Net (loss) income attributable to noncontrolling interests(10)16 (6)142 
Net (loss) income attributable to common stockholders$(4,259)$2,706 $(5,862)$8,717 
Net (loss) earnings per share attributable to common stockholders:
Basic$(0.01)$0.01 $(0.02)$0.03 
Diluted$(0.01)$0.01 $(0.02)$0.02 
Weighted average common shares outstanding:
Basic373,081339,025359,156337,111
Diluted373,081381,071359,156379,868
See accompanying notes to the unaudited condensed consolidated financial statements.
6

Table of Contents
MariMed Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share amounts)
(unaudited)

Nine months ended September 30, 2023
Common stockCommon stock
subscribed but
 not issued
Additional
paid-in
capital
Accumulated
deficit
Non-
controlling
interests
Total
stockholders’
equity
SharesPar valueSharesAmount
Balances at January 1, 2023341,474,728$341 70,00039$39 $142,365 $(83,924)$(1,511)$57,310 
Issuance of subscribed shares70,000— (70,000)(39)39 — —  
Common stock subscribed but not issued— 5,0252 — — —  
Warrants issued in connection with debt— — 5,454 — — 5,454 
Shares issued as purchase consideration - business acquisition6,580,3907 — 2,987 — — 2,994 
Common stock issued under licensing agreement1,793— — 1 — — 1 
Distributions to non-controlling interests— — — — (34)(34)
Stock-based compensation— — 206 — — 206 
Net loss(645)(19)(664)
Balances at March 31, 2023348,126,9113485,0252151,052(84,569)(1,564)65,269 
Issuance of subscribed shares5,025(5,025)(2)2
Exercise of stock options157,7523535
Release of shares under stock grants349,9991(1)
Conversion of preferred stock to common stock21,383,0402115,80215,823
Purchase of minority interests in certain of the Company’s subsidiaries450,00014(5)
Common stock issued to settle obligations400,000160160
Common stock issued under licensing agreement1,290
Common stock issued to purchase property and equipment740,7411299300
Distributions to non-controlling interests(47)(47)
Stock-based compensation299299
Net (loss) income(958)23(935)
Balances at June 30, 2023371,614,758372167,652(85,527)(1,593)80,904
Exercise of stock options330,0007474
Conversion of preferred stock to common stock3,921,67042,8982,902
Common stock issued under licensing agreement5,530— — 2 — — 2 
Distributions to non-controlling interests— — — — (47)(47)
Stock-based compensation— — 296 — — 296 
Net loss— — — (4,259)(10)(4,269)
Balances at September 30, 2023375,871,958$376 $ $170,922 $(89,786)$(1,650)$79,862 





7

Table of Contents
MariMed Inc.
Condensed Consolidated Statements of Stockholders’ Equity (continued)
(in thousands, except share amounts)
(unaudited)

Nine months ended September 30, 2022
Common stockCommon stock
subscribed but
 not issued
Additional
paid-in
capital
Accumulated
deficit
Non-
controlling
interests
Total
stockholders’
equity
SharesPar valueSharesAmount
Balances at January 1, 2022334,030,348$334 $ $134,920 $(97,392)$(1,563)$36,299 
Common stock subscribed but not issued— 2,7172 — — — 2 
Exercise of stock options10,000— — 3 — — 3 
Conversion of promissory notes to equity1,142,8581 — 399 — — 400 
Common stock issued to settle obligations375,0001 — 273 — — 274 
Distributions to non-controlling interests— — — — (101)(101)
Stock-based compensation— — 2,469 — — 2,469 
Net income— — — 4,188 53 4,241 
Balances at March 31, 2022335,558,206 336 2,717 2 138,064 (93,204)(1,611)43,587 
Issuance of subscribed shares2,717— (2,717)(2)2 — —  
Cashless exercise of stock options200,000— — — — — — 
Cashless exercise of warrants234,961— — — — — — 
Release of shares under stock grants354,221— — — — — — 
Shares as purchase consideration - business combination2,343,7503 — 1,497 — — 1,500 
Purchase of minority interests in certain of the Company's subsidiaries— — (2,165)— 165 (2,000)
Distributions to non-controlling interests— — — — (83)(83)
Stock-based compensation— — 2,553 — — 2,553 
Net income— — — 1,823 73 1,896 
Balances at June 30, 2022338,693,855339  139,951 (91,381)(1,456)47,453 
Common stock subscribed but not issued— 74,58141 — — — 41 
Exercise of stock options45,000— — 7 — — 7 
Common stock issued to settle obligations531,532— — 363 — — 363 
Distributions to non-controlling interests— — — — (40)(40)
Stock-based compensation— — 1,331 — — 1,331 
Net income— — — 2,706 16 2,722 
Balances at September 30, 2022339,270,387$339 74,581$41 $141,652 $(88,675)$(1,480)$51,877 

See accompanying notes to the unaudited condensed consolidated financial statements.
8

Table of Contents
MariMed Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

Nine months ended
September 30,
20232022
Cash flows from operating activities:
Net (loss) income attributable to common stockholders$(5,862)$8,717 
Net (loss) income attributable to noncontrolling interests(6)142 
Adjustments to reconcile net (loss) income to cash provided by operating activities:
Depreciation and amortization of property and equipment3,838 2,469 
Amortization of intangible assets2,181 854 
Stock-based compensation801 6,396 
Amortization of original debt issuance discount206  
Amortization of debt discount1,840  
Payment-in-kind interest301  
Present value adjustment of notes payable719  
Bad debt (income) expense(127)54 
Obligations settled with common stock463 637 
Write-off of disposed assets906  
Gain on finance lease adjustment(31) 
(Gain) loss on changes in fair value of investments(16)930 
Write-down of prepaid purchase consideration200  
Other investment income (954)
Changes in operating assets and liabilities:
Accounts receivable, net(2,065)(4,856)
Deferred rents receivable55 111 
Inventory(4,728)(4,215)
Other current assets2,040 (1,973)
Other assets(300)(113)
Accounts payable1,868 2,372 
Accrued expenses and other(132)(193)
Income taxes payable2,525 (4,804)
Net cash provided by operating activities4,676 5,574 
Cash flows from investing activities:
Purchases of property and equipment(14,749)(9,985)
Business acquisitions, net of cash acquired(2,987)(12,746)
Advances toward future business acquisitions(250)(800)
Purchases of investments(187) 
Purchases of cannabis licenses(626)(330)
9

Table of Contents
MariMed Inc.
Condensed Consolidated Statements of Cash Flows (continued)
(in thousands)
(unaudited)
Nine months ended
September 30,
20232022
Issuance of notes receivable(879) 
Proceeds from notes receivable99 130 
Due from related party(58) 
Net cash used in investing activities(19,637)(23,731)
Cash flows from financing activities:
Proceeds from term loan29,100  
Payment of third-party debt issuance costs in connection with term loan(1,798) 
Principal payments of term loan(1,500) 
Principal payments of mortgages and promissory notes(519)(1,033)
Repayment and retirement of mortgage(778) 
Repayment and retirement of promissory notes(5,503) 
Proceeds from mortgages 3,000 
Proceeds from exercise of stock options109 10 
Principal payments of finance leases(500)(166)
Redemption of minority interests (2,000)
Distributions(128)(224)
Net cash provided by (used in) financing activities18,483 (413)
Net increase (decrease) in cash and cash equivalents3,522 (18,570)
Cash and equivalents, beginning of year9,737 29,683 
Cash and cash equivalents, end of period$13,259 $11,113 
Supplemental disclosure of cash flow information:
Cash paid for interest$4,766 $1,120 
Cash paid for income taxes$6,904 $12,582 
Non-cash activities:
Common stock issued as purchase consideration$2,994 $1,500 
Common stock issued to purchase minority interests in certain of the Company's subsidiaries$5 $ 
Conversion of promissory notes to equity$ $400 
Present value of promissory note issued as purchase consideration$4,569 $ 
Warrants to purchase common stock issued with debt$5,454 $ 
Liability recorded for building improvements$1,997 $ 
Notes payable issued to purchase motor vehicles$158 $ 
Entry into new operating leases$5,366 $378 
Entry into new finance leases$2,309 $781 
Issuance of common stock associated with subscriptions$41 $ 
Conversion of preferred stock to common stock$18,725 $ 
See accompanying notes to the unaudited condensed consolidated financial statements.
10

Table of Contents
MariMed Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
(1) BASIS OF PRESENTATION

Business

MariMed Inc. (“MariMed” or the “Company”) is a multi-state operator in the United States cannabis industry. MariMed develops, operates, manages and optimizes state-of-the-art, regulatory-compliant facilities for the cultivation, production, and dispensing of medical and adult use cannabis. MariMed also licenses its proprietary brands of cannabis, along with other top brands, in domestic markets.

Basis of Presentation

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

On March 9, 2023 (the "Ermont Acquisition Date"), the Company acquired the operating assets of Ermont, Inc. ("Ermont"), a medical-licensed vertical cannabis operator located in Quincy, Massachusetts (the "Ermont Acquisition"). The financial results of Ermont are included in the Company's condensed consolidated financial statements since the Ermont Acquisition Date.

On April 27, 2022 (the “Kind Acquisition Date”), the Company acquired Kind Therapeutics USA (“Kind”), the Company's former client in Maryland that holds licenses for the cultivation, production and dispensing of medical cannabis (the "Kind Acquisition"). The financial results of Kind are included in the Company’s condensed consolidated financial statements for the periods subsequent to the Kind Acquisition Date.

The Company completed two acquisitions during the year ended December 31, 2022 that it recorded as asset purchases. On May 5, 2022 (the "Green Growth Acquisition Date"), the Company completed the acquisition of 100% of the equity of Green Growth Group Inc. ("Green Growth"), an entity that holds a craft cultivation and production cannabis license in Illinois (the "Green Growth Acquisition"). On December 30, 2022 (the "Greenhouse Naturals Acquisition Date"), the Company completed an asset purchase under which it acquired a cannabis license and assumed a property lease for a dispensary in Beverly, Massachusetts that had never been operational.

Interim results are not necessarily indicative of results for the full fiscal year or any future interim period. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “Annual Report”), which was filed with the U.S. Securities and Exchange Commission (“SEC”) on March 3, 2023.

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in Note 2 to the Consolidated Financial Statements in the Annual Report. There were no material changes to the Company's significant accounting policies during the nine-month period ended September 30, 2023.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of MariMed and its wholly- and majority-owned subsidiaries. Intercompany transactions and balances have been eliminated in consolidation.

Noncontrolling interests represent third-party minority ownership interests in the Company’s majority-owned consolidated subsidiaries. Net income attributable to noncontrolling interests is reported in the condensed consolidated statements of operations, and the value of minority-owned interests is presented as a component of equity within the condensed consolidated balance sheets.

11

Table of Contents
Use of Estimates and Judgments

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenue and expenses during the reporting periods. Significant estimates and judgments relied upon in preparing these condensed consolidated financial statements include accounting for business combinations and asset purchases, inventory valuations, assumptions used to determine the fair value of stock-based compensation, and intangible assets and goodwill. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity date of three months or less to be cash equivalents. The fair values of these investments approximate their carrying values.

At September 30, 2023 and December 31, 2022, the Company had $0.2 million and $0.1 million, respectively, of cash held in escrow.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments approximate their fair values and include cash equivalents, accounts receivable, deferred rents receivable, notes receivable, term loans, mortgages and notes payable, and accounts payable.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The three-tier fair value hierarchy is based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows:

Level 1. Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2. Level 2 applies to assets or liabilities for which there are inputs that are directly or indirectly observable in the marketplace, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets).

Level 3. Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Recent Accounting Pronouncements

The Company has reviewed all recently issued, but not yet effective, Accounting Standards Updates (“ASUs”) and does not believe that the future adoption of any such ASUs will have a material impact on its financial condition or results of operations.


(2) BUSINESS COMBINATIONS AND ASSET PURCHASES

Business Combinations

Ermont

On February 21, 2023, the Company announced its intention to acquire the operating assets of Ermont, a medical licensed vertical cannabis operator, located in Quincy, Massachusetts, subject to approval by the Massachusetts Cannabis Control Commission (the "CCC"). In March 2023, the CCC approved the Company's acquisition of Ermont, and the Ermont Acquisition was completed on March 9, 2023. The Ermont Acquisition provided the Company with its third dispensary in
12

Table of Contents
Massachusetts, substantially completing its build-out to the maximum allowable by state regulations.

As consideration for the Ermont Acquisition, which totaled $13.0 million, the Company paid $3.0 million of cash, issued 6,580,390 shares of the Company's common stock, and issued a $7.0 million promissory note (the "Ermont Note" and collectively, the "Ermont Consideration"). The Ermont Note has a six-year term and bears interest at 6.0% per annum, with payments of interest-only for two years and thereafter, quarterly payments of principal and interest in arrears. The outstanding balance on the Ermont Note is due and payable in full if and when the Company raises $75.0 million of equity capital.

The Company rebranded the dispensary as Panacea Wellness Dispensary and commenced medical sales immediately after the Ermont Acquisition Date. The Ermont Acquisition also includes a Host Community Agreement with the city of Quincy to conduct adult-use cannabis sales. The Company expects to commence adult-use sales upon approval by the CCC. The Company also plans to expand the existing medical dispensary to accommodate expected increased traffic associated with adult-use sales and to repurpose Ermont's existing cultivation facility for its pheno-hunting activities. The Company has moved its pheno-hunting out of the New Bedford facility to use the freed space to cultivate its Nature's Heritage flower.

The Company's condensed consolidated statement of operations for the three months ended September 30, 2023 includes $1.2 million of revenue and $0.7 million of net loss attributable to Ermont. The Company's condensed consolidated statement of operations for the nine months ended September 30, 2023 includes $2.6 million of revenue and $1.9 million of net loss attributable to Ermont for the period since the Ermont Acquisition Date.

The Ermont Acquisition has been accounted for as a business combination. The Company did not assume any of Ermont's liabilities. A summary of the preliminary allocation of the Ermont Consideration to the acquired and identifiable intangible assets is as follows (in thousands):

Fair value of consideration transferred:
Cash consideration:
  Cash paid$3,000 
  Less cash acquired(13)
    Net cash consideration2,987 
  Common stock2,994 
  Promissory note4,569 
    Total fair value of consideration$10,550 
Fair value of assets acquired and (liabilities assumed):
Property and equipment$800 
Intangible assets:
Tradename and trademarks1,063 
Customer base4,642 
License131 
Goodwill3,914 
Fair value of net assets acquired$10,550 

The Company is amortizing the identifiable intangible assets arising from the Ermont Acquisition in relation to the expected cash flows from the individual intangible assets over their respective useful lives, which have a weighted average life of 10.71 years (see Note 9). Goodwill results from assets not separately identifiable as part of the transaction, and is not deductible for tax purposes.

Kind

In December 2021, the Company entered into a membership interest purchase agreement with the members of Kind to acquire 100% of the equity ownership of Kind in exchange for $13.5 million payable in cash (subject to certain adjustments) and $6.5 million, payable by the issuance of four-year 6.0% promissory notes to the members of Kind, secured by a first priority lien on the Company’s property in Hagerstown, Maryland (collectively, the “Kind Consideration”). Kind was the Company's client in Maryland that held licenses for the cultivation, production and
13

Table of Contents
dispensing of medical cannabis. Upon execution of the membership interest purchase agreement, the Company deposited $5.0 million into escrow as a contract down payment.

In April 2022, the Maryland Medical Cannabis Commission approved the Company’s acquisition of Kind, and the Kind Acquisition was completed on April 27, 2022. Following the Kind Acquisition, litigation between the Company and the members of Kind was dismissed (see Note 18).

The Kind Acquisition has been accounted for as a business combination. A summary of the final allocation of the Kind Consideration to the acquired assets, identifiable intangible assets and certain assumed liabilities is as follows (in thousands):

Fair value of consideration transferred:
Cash consideration:
Cash paid at closing$10,128 
Release of escrow2,444 
Severance paid from escrow556 
Less cash acquired(2,310)
Net cash consideration10,818 
Note payable5,634 
Write-off accounts receivable658 
Write-off of deferred accounts receivable842 
Total fair value of consideration transferred$17,952 
Fair value of assets acquired and (liabilities assumed):
Current assets, net of cash acquired$5,047 
Property and equipment622 
Intangible assets:
Tradename and trademarks2,041 
Licenses and customer base4,700 
Non-compete agreements42 
Goodwill6,011 
Current liabilities(511)
Fair value of net assets acquired$17,952 

The Company is amortizing the identifiable intangible assets arising from the Kind Acquisition in relation to the expected cash flows from the individual intangible assets over their respective useful lives, which have a weighted average life of 5.77 years (see Note 9). Goodwill results from assets not separately identifiable as part of the transaction, and is not deductible for tax purposes.

Concurrent with entering into the Kind membership purchase agreement, the Company entered into a membership interest purchase agreement with one of the members of Kind to acquire such member’s entire equity ownership interest in (i) Mari Holdings MD LLC (“Mari-MD”), the Company’s majority-owned subsidiary that owns production and retail cannabis facilities in Hagerstown, Maryland and Annapolis, Maryland, and (ii) Mia Development LLC (“Mia”), the Company’s majority-owned subsidiary that owns production and retail cannabis facilities in Wilmington, Delaware. Upon the dismissal in September 2022 of the derivative claims in the DiPietro lawsuit (see Note 18), the Company paid the aggregate purchase consideration of $2.0 million, and the transaction was completed, increasing the Company’s then-current ownership of Mari-MD and Mia to 99.7% and 94.3%, respectively.

The following unaudited pro forma information presents the condensed combined results of MariMed and Kind for the year ended December 31, 2022 as if the Kind Acquisition had been completed on January 1, 2021, with adjustments to give effect to pro forma events that are directly attributable to the Kind Acquisition. These pro forma adjustments include the reversal of MariMed revenue and related cost of sales derived from Kind prior to the Kind Acquisition Date, amortization expense for the acquired intangible assets, depreciation expense for property and equipment acquired by MariMed as part of the Kind Acquisition, and interest expense related to the Kind Notes. Pro forma adjustments also include the elimination of acquisition-related and other expenses directly attributable to the Kind Acquisition incurred during the year ended December 31, 2022.
14

Table of Contents

The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings that may result from the consolidation of the operations of MariMed and Kind. Accordingly, these unaudited pro forma results are presented for illustrative purposes and are not intended to represent or be indicative of the actual results of operations of the combined companies that would have been achieved had the Kind Acquisition occurred on January 1, 2022, nor are they intended to represent or be indicative of future results of operations. The pro forma financial results for the year ended December 31, 2022, giving effect to the Kind Acquisition as if it had occurred on January 1, 2021 are as follows (unaudited, in thousands):

Revenue$136,078 
Net income$15,823 

Valuation of Acquired Intangible Assets

The valuation of acquired intangible assets is inherently subjective and relies on significant unobservable inputs. The Company uses an income approach to value acquired tradename/trademarks, licenses/customer base, and non-compete intangible assets. The valuation for each of these intangible assets was based on estimated projections of expected cash flows to be generated by the assets discounted to the present value at discount rates commensurate with perceived risk. The valuation assumptions take into consideration the Company’s estimates of new markets, products and customers and its outcome through key assumptions driving asset values, including sales growth, royalty rates and other related costs.

Asset Purchases

Green Growth

In January 2022, the Company entered into a stock purchase agreement to acquire 100% of the equity ownership of Green Growth Group Inc. (“Green Growth”), an entity that holds a craft cultivation and production cannabis license issued by the Illinois Department of Agriculture, in exchange for cash of $1.9 million and shares of the Company’s common stock valued at $1.5 million. Concurrently, the Company made a good faith deposit of $0.1 million.

In April 2022, the Illinois Department of Agriculture approved the Company’s acquisition of Green Growth, and the Green Growth Acquisition was completed on May 5, 2022. The Company paid the remaining $1.8 million in cash and issued 2,343,750 shares of common stock to the sellers on the Green Growth Acquisition Date. With this license, the Company can cultivate up to 14,000 square feet of canopy to grow cannabis flower and produce cannabis concentrates. The Company has allocated the purchase price to its licenses/customer base intangible asset, with an estimated useful life of ten years.

Greenhouse Naturals

In November 2021, the Company entered into an asset purchase agreement with Greenhouse Naturals LLC (the "Greenhouse Naturals Sellers") to acquire the cannabis license and assume the property lease associated with a cannabis dispensary in Beverly, MA.

The Greenhouse Naturals Acquisition was completed on December 30, 2022, on which date the Company paid $0.1 million of cash and issued 2,000,000 shares of the Company's common stock, with a fair value of $0.7 million, to the Greenhouse Naturals Sellers. The Company issued a note to the Greenhouse Naturals Sellers for the remaining $5.0 million of the cash purchase price payable post-closing on a monthly basis as a percentage of the dispensary's monthly gross sales (the "Greenhouse Naturals Note"). The Company has recorded the Greenhouse Naturals Note at its present value of $4.3 million. The difference between the face value of the Greenhouse Naturals Note and the net present value recorded will be amortized to interest expense over the term of such note. The final inspection by the Commonwealth of Massachusetts was completed in April 2023, and the Company opened the dispensary on April 25, 2023. The Company has allocated the purchase price to a licenses/customer base intangible asset, with an estimated useful life of 10 years.

15

Table of Contents
Pending Transactions

Allgreens Dispensary, LLC ("Allgreens")

In August 2022, the Company entered into an agreement to purchase 100% of the membership interests in Allgreens Dispensary, LLC (the "Allgreens Agreement"), a conditional adult-use cannabis dispensary license in Illinois for $2.25 million of cash. Completion of the acquisition is dependent upon certain conditions, including resolution of any remaining legal challenges affecting nearly 200 social equity dispensary licenses, and regulatory approval of the acquisition. If the closing conditions are met and the acquisition is completed, the Company will have five adult-use dispensaries operating in Illinois. While the Company believes this may still occur in 2023, it is quite possible that the closing date may not occur until 2024. For the interim period until the acquisition is completed, the Company has entered into a management agreement with Allgreens, with the management fees calculated as a percentage of Allgreens' revenue. In connection with this agreement, the Company recorded expenses related to Allgreens aggregating $0.1 million for both the three and nine months ended September 30, 2023 as a component of Investments, net of current portion (see Note 7).

Pursuant to the Allgreens Agreement, as of September 30, 2023 the Company had made payments aggregating $0.5 million to the Allgreens members, with additional cash payments aggregating $1.75 million to be made as specific milestones are reached. Additionally, the Company made a cash payment of $875,000 to the Allgreens members in October 2023. The Company will issue promissory notes for the final payment of $1.0 million, which will be issued at closing (the "Allgreens Notes"). The Allgreens Notes will mature one year from the date the dispensary is permitted to commence operations.

Robust Missouri Process and Manufacturing, LLC ("Robust")

In September 2022, the Company entered into an agreement to acquire 100% of the membership interests in Robust Missouri Processing and Manufacturing 1, LLC (the "Robust Agreement"), a Missouri wholesale and cultivator, for $0.7 million of cash. Completion of the acquisition is dependent upon obtaining all requisite approvals from the Missouri Department of Health and Senior Services. While the Company believes this may still occur in 2023, it is quite possible that the closing date may not occur until 2024. Pursuant to the Robust Agreement, the Company has made an initial advance payment of $350,000 to the Robust members, with an additional payment of $350,000 to be made at closing.


(3) EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares outstanding during the period. For periods in which the Company reports net income, diluted net income per share is determined by using the weighted average number of common and dilutive common equivalent shares outstanding during the period, unless the effect is antidilutive.

The number of shares used to compute earnings (loss) per share were as follows (in thousands):

Three months endedNine months ended
September 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Weighted average shares outstanding - basic373,081 339,025 359,156 337,111 
Potential dilutive common shares 42,046  42,757 
Weighted average shares outstanding - diluted373,081 381,071 359,156 379,868 


(4) DEFERRED RENTS RECEIVABLE

The Company is the lessor under operating leases, which contain escalating rents over time, rent holidays; options to renew; requirements to pay property taxes; insurance and/or maintenance costs; and contingent rental payments based on a percentage of monthly tenant revenues. The Company is not the lessor under any finance leases.

The Company recognizes fixed rental receipts from such lease agreements on a straight-line basis over the expected lease term. Differences between amounts received and amounts recognized are recorded in Deferred rents receivable in the
16

Table of Contents
condensed consolidated balance sheets. Contingent rentals are recognized only after tenants’ revenues are finalized and if such revenues exceed certain minimum levels.

The Company is the lessor of the following owned properties:

Delaware – a 45,000 square foot cannabis cultivation, processing, and dispensary facility, which is leased to its cannabis-licensed client under a triple net lease that expires in 2035.
Maryland – a 180,000 square foot cultivation and processing facility that expires in 2037. This facility was leased to Kind prior to the Kind Acquisition Date.
Massachusetts – a 138,000 square foot industrial property, of which approximately half of the available square footage is leased to a non-cannabis manufacturing company (the "Tenant") under a lease that expired in February 2023. The Tenant currently continues to occupy this space on a month-to-month basis.

The Company is the sublessor of the following properties:

Delaware – a 4,000 square foot cannabis dispensary, which is subleased to its cannabis-licensed client under a sublease expiring in April 2027.
Delaware – a 100,000 square foot warehouse, of which the Company developed 60,000 square feet into a cultivation facility that is subleased to its cannabis-licensed client. The sublease expires in March 2030, with an option to extend the term for three additional five-year periods. The Company intends to develop the remaining space into a processing facility.
Delaware – a 12,000 square foot cannabis production facility with offices, which is subleased to its cannabis-licensed client. The sublease expires in January 2026 and contains an option to negotiate an extension at the end of the lease term.

The Company received rental payments aggregating $0.5 million and $0.4 million in the three months ended September 30, 2023 and 2022, respectively, and $1.3 million and $2.4 million in the nine months ended September 30, 2023 and 2022, respectively. Revenue from these payments was recognized on a straight-line basis and aggregated $0.4 million in each of the three months ended September 30, 2023 and 2022, respectively, and $1.2 million and $2.3 million in the nine months ended September 30, 2023 and 2022, respectively.

Future minimum rental receipts for non-cancellable leases and subleases as of September 30, 2023 were as follows (in thousands):

Year ending December 31,
Remainder of 2023$300 
20241,200 
20251,200 
20261,059 
2027969 
Thereafter3,644 
$8,372 


17

Table of Contents
(5) NOTES RECEIVABLE

Notes receivable, including accrued interest, at September 30, 2023 and December 31, 2022 consisted of the following (in thousands):
September 30,
2023
December 31,
2022
First State Compassion Center (FSCC Initial Note)$ $328 
First State Compassion Center (FSCC Secondary Notes) 8,160 
First State Compassion Center (FSCC New Note) 750 
Healer LLC (Revised Healer Note)866 866 
Total notes receivable866 10,104 
Less: Notes receivable, current portion(52)(2,637)
Notes receivable, less current portion$814 $7,467 

First State Compassion Center

Omnibus Agreement

On July 1, 2023 (the "Omnibus Agreement Date"), the Company entered into an Omnibus Agreement with First State Compassion Center ("FSCC"), the Company's cannabis-licensed client in Delaware: (a) consolidating all amounts owed by FSCC to the Company and its affiliated entities as described below, aggregating $11.0 million (the "Omnibus"); (b) providing for the automatic conversion of all amounts owed by FSCC to the Company, upon the approval of adult cannabis use in Delaware into 100% ownership of FSCC's licenses and business; and (c) extending to FSCC, in the Company's sole discretion, up to an additional $2.0 million of working capital loans. The Omnibus has a term of five years, with an automatic five-year extension if adult cannabis use is not approved in Delaware by the maturity date, bears interest, compounded semiannually and payable annually, at the appropriate rate of interest in effect under Sections 1274(d), 482 and 7872 of the Internal Revenue Code of 1986, as amended, as calculated under Rev. Ruling 86-17, 1986-1 C.B. 377, for the period for which the amount of interest is being determined. The state of Delaware recently approved the adult use of cannabis, with the implementation period expected to extend through approximately November 2024. The Company recorded the Omnibus as a component of Other assets in the condensed consolidated balance sheet at September 30, 2023.

Notes Receivable From FSCC Prior to the Omnibus Agreement Date

The notes receivable from FSCC described below in the aggregate were converted into the Omnibus on the Omnibus Agreement Date:

FSCC issued a 10-year promissory note to the Company in May 2016 for $0.7 million, which bore interest at a rate of 12.5% per annum and matured in April 2026, as amended (the “FSCC Initial Note”). The monthly payments on the FSCC Initial Note were approximately $10,000. At June 30, 2023 and December 31, 2022, the current portions of the FSCC Initial Note were approximately $90,000 and $85,000, respectively, and were included in Notes receivable, current portion, in the condensed consolidated balance sheets.

In December 2021, the Company converted financed trade accounts receivable balances from FSCC aggregating $7.8 million into notes receivable, which was net of the $1.3 million debt issuance discount recorded in connection with the conversion, whereby FSCC issued promissory notes aggregating $7.8 million to the Company (the “FSCC Secondary Notes”). The FSCC Secondary Notes bore interest at a rate of 6.0% per annum and matured in December 2025. FSCC was required to make periodic payments of principal and interest throughout the term of the FSCC Secondary Notes. At December 31, 2022, the FSCC Secondary Notes balance included approximately $49,000 of unpaid accrued interest. The balance at June 30, 2023 did not include accrued interest, as the Company granted FSCC an interest holiday for the six months then ended. The increase in the FSCC Secondary Notes in the six months ended June 30, 2023 was attributable to the accretion of the original debt discount, which increased the value of such notes. At each of June 30, 2023 and December 31, 2022, the current portions of the FSCC Secondary Notes aggregated $2.5 million.

In December 2022, the Company converted amounts due from FSCC aggregating $750,000 into a note receivable, whereby FSCC issued a promissory note to the Company for $750,000 (the "FSCC New Note"). The FSCC New
18

Table of Contents
Note bore interest at a rate of 6.0% per annum and matured in December 2026. FSCC was required to make quarterly interest payments, with the full amount of principal due on December 31, 2026; however, the Company had granted FSCC an interest holiday for the six months ended June 30, 2023. At each of June 30, 2023 and December 31, 2022, the entire balance of the FSCC New Note was long-term.

In the second quarter of 2023, the Company converted $879,000 due from FSCC into a note receivable (the "FSCC Second New Note").

Healer LLC

In March 2021, the Company was issued a promissory note in the principal amount of approximately $0.9 million from Healer LLC, an entity that provides cannabis education, dosage programs, and products developed by Dr. Dustin Sulak (“Healer”). The principal balance of the note represents previous loans extended to Healer by the Company of $0.8 million, plus accrued interest through the revised promissory note issuance date of approximately $94,000 (the “Revised Healer Note”). The Revised Healer Note bears interest at a rate of 6.0% per annum and requires quarterly payments of interest through the April 2026 maturity date.

The Company has the right to offset any licensing fees payable by the Company to Healer in the event Healer fails to make any payment when due. In March 2021, the Company offset approximately $28,000 of licensing fees payable to Healer against the principal balance of the Revised Healer Note, reducing the principal amount to approximately $866,000. Of the outstanding Revised Healer Note balance at each of September 30, 2023 and December 31, 2022, approximately $52,000 was current.


(6) INVENTORY

Inventory at September 30, 2023 and December 31, 2022 consisted of the following (in thousands):

September 30,
2023
December 31,
2022
Plants$3,427 $2,653 
Ingredients and other raw materials4,302 3,255 
Work-in-process9,159 7,635 
Finished goods7,318 5,934 
$24,206 $19,477 


(7) INVESTMENTS

The Company’s investments at September 30, 2023 and December 31, 2022 were comprised of the following (in thousands):
September 30,
2023
December 31,
2022
Investment – current:
WM Technology Inc.$161 $123 
Investments - non-current:
  Artis LLC (d/b/a Little Dog)$67 $ 
  Investment in Allgreens97  
    Total investments - non-current$164 $ 

The Company did not have any long-term investments at December 31, 2022.

19

Table of Contents
Allgreens

In connection with the pending acquisition of Allgreens and the management agreement the Company entered into with Allgreens for the interim period prior to the completion of the acquisition (see Note 2), the Company recorded expenses related to Allgreens aggregating $0.1 million for both the three and nine months ended September 30, 2023 as a component of Investments, net of current portion.

Artis LLC (d/b/a Little Dog)

In April, 2023, the Company purchased a 49% interest in Artis LLC, d/b/a Little Dog ("Little Dog"), a cannabis delivery service (the "Little Dog Investment") for $98,000 of cash. The Company recognizes changes in the fair value of the Little Dog Investment based on its proportional share of Little Dog's net income (loss). During the three and nine months ended September 30, 2023, the Company recognized losses in the Little Dog Investment of approximately $22,000 and $31,000, respectively, which are included as components of Other (expense) income, net, in the condensed consolidated statements of operations for the respective periods.

WM Technology Inc.

In February 2022, the Company received 121,968 shares of common stock of WM Technology Inc. (Nasdaq: MAPS) (the "WMT Shares"), a technology and software infrastructure provider to the cannabis industry, which represented the Company’s pro rata share of additional consideration pursuant to a 2021 asset purchase agreement between the Company and Members RSVP LLC. The Company recognized gains of approximately $59,000 and $38,000 in the three and nine months ended September 30, 2023, respectively, reflecting the changes in the fair value of the WMT Shares for the respective periods. The Company recognized losses of $0.2 million and $0.8 million in the three and nine months ended September 30, 2022, respectively, representing the changes in the fair value of the WMT Shares for such periods. Both the losses arising from the changes in the fair value of the WMT Shares and the gain arising from the receipt in February 2022 of the WMT Shares are reported as Other (expense) income, net, in the condensed consolidated statements of operations for the respective periods.

Flowr Corp.

In December 2021, the Company received shares of Flowr Corp. common stock (the "Flowr Stock") arising from the sale of its ownership interest in Terrace Inc., which was sold to Flowr Corp. (TSX.V: FLWR; OTC: FLWPF). The Flowr Stock was recorded at fair value, with changes in fair value recorded as a component of Other (expense) income, net, in the condensed consolidated statements of operations. The Company recorded losses of $0.1 million and $0.2 million in the three and nine months ended September 30, 2022, respectively, representing the changes in the fair value of the Flowr Stock in the respective periods. In the fourth quarter of 2022, the Company wrote off the remaining fair value of the Flowr Stock as a result of Flowr Corp.'s bankruptcy filing and delisting from the exchange on which its stock was traded.


(8) PROPERTY AND EQUIPMENT, NET

The Company’s property and equipment, net, at September 30, 2023 and December 31, 2022 was comprised of the following (in thousands):
September 30,
2023
December 31,
2022
Land$6,446 $4,450 
Buildings and building improvements44,202 43,542 
Tenant improvements19,600 17,016 
Furniture and fixtures2,079 2,009 
Machinery and equipment13,993 10,087 
Construction in progress12,321 4,761 
98,641 81,865 
Less: accumulated depreciation(13,446)(10,224)
Property and equipment, net$85,195 $71,641 

20

Table of Contents
The Company recorded depreciation expense related to property and equipment of $1.6 million and $0.9 million in the three months ended September 30, 2023 and 2022, respectively, and $3.8 million and $2.5 million in the nine months ended September 30, 2023 and 2022, respectively.

In the first quarter of 2023, the Company disposed of equipment it had previously purchased in connection with its planned acquisition of The Harvest Foundation LLC ("Harvest") in Nevada as a result of the Company's withdrawal from the agreement to purchase Harvest. The Company recorded a loss on the disposal of assets aggregating $0.9 million, which is included as a component of Other (expense) income, net, in the condensed consolidated statement of operations for the nine months ended September 30, 2023.


(9) INTANGIBLE ASSETS AND GOODWILL

The Company’s acquired intangible assets at September 30, 2023 and December 31, 2022 consisted of the following (in thousands):

September 30, 2023Weighted
average
amortization
period (years)
 CostAccumulated
amortization
Net
carrying
value
Tradename and trademarks7.11$3,104 $1,076 $2,028 
Licenses and customer base9.1518,033 2,217 15,816 
Non-compete agreements2.0042 30 12 
8.84$21,179 $3,323 $17,856 


December 31, 2022Weighted
average
amortization
period (years)
CostAccumulated
amortization
Net
carrying
value
Tradename and trademarks3.00$2,041 $453 $1,588 
Licenses and customer base8.9413,260 675 12,585 
Non-compete agreements2.0042 14 28 
8.13$15,343 $1,142 $14,201 


Estimated future amortization expense for the Company’s intangible assets at September 30, 2023 was as follows:

Year ending December 31,
Remainder of 2023$844 
20243,254 
20252,772 
20262,344 
20272,191 
Thereafter6,451 
Total$17,856 

The changes in the carrying value of the Company’s goodwill in the nine months ended September 30, 2023 and 2022 were as follows (in thousands):
20232022
Balance at January 1,$8,079 $2,068 
Ermont Acquisition3,914  
Kind Acquisition 6,011 
Balance at September 30,$11,993 $8,079 

21

Table of Contents

(10) TERM LOAN

Credit Agreement

On January 24, 2023, the Company entered into a Loan and Security Agreement, by and among the Company, subsidiaries of the Company from time-to-time party thereto (collectively with the Company, the “Borrowers”), lenders from time-to-time party thereto (the “Lenders”), and Chicago Atlantic Admin, LLC (“Chicago Atlantic”), as administrative agent for the Lenders (the "Credit Agreement").

Proceeds from the Credit Agreement were designated to complete the build-out of a new cultivation and processing facility in Illinois, complete the build-out of a new processing kitchen in Missouri, expand existing cultivation and processing facilities in Massachusetts and Maryland, fund certain capital expenditures, and repay in full the Kind Notes incurred in connection with the Kind Acquisition, which repayment occurred on January 24, 2023 (see Note 11). The remaining balance, if any, was expected to be used to fund acquisitions.

Principal, Security, Interest and Prepayments

The Credit Agreement provides for $35.0 million in principal borrowings at the Borrowers’ option in the aggregate and further provides the Borrowers with the right, subject to customary conditions, to request an additional incremental term loan in the aggregate principal amount of up to $30.0 million, provided that the Lenders elect to fund such incremental term loan. $30.0 million of loan principal was funded at the initial closing (the "Term Loan"), which amount was reduced by an original issuance discount of $0.9 million (the "Original Issuance Discount"). The Company had the option, during the six-month period following the initial closing, to draw down an additional $5.0 million, which it did not elect to do. The loan requires scheduled amortization payments of 1.0% of the principal amount outstanding under the Credit Agreement per month commencing in May 2023, and the remaining principal balance is due in full on January 24, 2026, subject to extension to January 24, 2028 under certain circumstances.

The Credit Agreement provides the Borrowers with the right, subject to specified limitations, to incur (a) seller provided debt in connection with future acquisitions, (b) additional mortgage financing from third-party lenders secured by real estate currently owned and acquired after the closing date, and (c) additional debt in connection with equipment leasing transactions.

The obligations under the Credit Agreement are secured by substantially all of the assets of the Borrowers, excluding specified parcels of real estate and other customary exclusions.

The Credit Agreement provides for a floating annual interest rate equal to the prime rate then in effect plus 5.75%, which rate may be increased by 3.00% upon an event of default or 7.50% upon a material event of default as provided in the Credit Agreement.

At any time, the Company may voluntarily prepay amounts due under the facility in $5.0 million increments, subject to a three-percent prepayment premium and, during the first 20-months of the term, a “make-whole” payment.

Representations, Warranties, Events of Default and Certain Covenants

The Credit Agreement includes customary representations and warranties and customary events of default, including, without limitation, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to material indebtedness, and events of bankruptcy and insolvency.

The Credit Agreement also includes customary negative covenants limiting the Borrowers’ ability to incur additional indebtedness and grant liens that are otherwise not permitted, among others. Additionally, the Credit Agreement requires the Borrowers to meet certain financial tests. At September 30, 2023, the Company was in compliance with the Credit Agreement covenants.

Warrant Issuance

The Credit Agreement provided for 30% warrant coverage against amounts funded under the facility, priced at a 20% premium to the trailing 20-day average price on the closing date of each such funding. At the initial closing, upon funding
22

Table of Contents
of the initial $30.0 million under the facility, the Company issued to the Lenders an aggregate of 19,148,936 warrants to purchase shares of the Company’s common stock at $0.47 per share, exercisable for a five-year period following issuance.

The Company recorded the warrants at present value of $5.5 million as a component of Additional paid-in capital on the condensed consolidated balance sheet as of January 24, 2023, and discounted the Term Loan by $5.5 million (the "Warrant Discount"). The Warrant Discount is being amortized to interest expense over the term of the Credit Agreement.

Prepaid Debt Issuance Costs

The Company incurred $1.8 million of third party costs (i.e., legal fees, referral fees, etc.) in connection with the Term Loan, which have been recorded as a discount to the Term Loan (the "Third-Party Costs Discount"), which is being amortized to interest expense over the term of the Credit Agreement.

Interest Amortization

The Company recorded $0.7 million and $1.9 million of aggregate interest amortization for the three and nine months ended September 30, 2023, respectively, related to the Original Issuance Discount, Warrant Discount and Third-Party Costs Discount.

Outstanding Balance

At September 30, 2023, the outstanding Term Loan balance reported on the Company's condensed consolidated balance sheet was $22.5 million, with the current portion totaling $3.6 million.


(11) MORTGAGES AND NOTES PAYABLE

The Company’s mortgages and notes payable are reported in the aggregate on the condensed consolidated balance sheets under the captions Mortgages and notes payable, current portion, and Mortgages and notes payable, net of current portion.

Mortgages

The Company’s mortgage balances at September 30, 2023 and December 31, 2022 were comprised of the following (in thousands):
September 30,
2023
December 31,
2022
Bank of New England – New Bedford, MA and Middleboro, MA properties$12,248 $12,141 
Bank of New England – Wilmington, DE property1,382 1,345 
DuQuoin State Bank – Anna, IL and Harrisburg, IL properties752 750 
DuQuoin State Bank – Metropolis, IL property2,528 2,508 
Du Quoin State Bank - Mt. Vernon, IL property2,981 2,974 
South Porte Bank – Mt. Vernon, IL property 801 
Total mortgages payable19,891 20,519 
Less: Mortgages payable, current(649)(1,491)
Mortgages payable, less current portion$19,242 $19,028 

The Company maintains an amended and restated mortgage agreement with the Bank of New England with an interest rate of 6.5% per annum, which matures in August 2025 (the “Amended BNE Mortgage”). The Amended BNE Mortgage is secured by the Company’s properties in New Bedford, Massachusetts and Middleboro, Massachusetts. Proceeds from the Amended BNE Mortgage were used to pay down a previous mortgage of $4.8 million with the Bank of New England on the New Bedford property and $7.2 million of outstanding promissory notes as discussed below. The current portions of the outstanding principal balance under the Amended BNE Mortgage at September 30, 2023 and December 31, 2022 were approximately $400,000 and $382,000, respectively.

The Company maintains a second mortgage with Bank of New England that is secured by the Company’s property in Wilmington, Delaware (the “BNE Delaware Mortgage”). The mortgage matures in 2031, with monthly principal and interest payments. The interest rate is 5.25% per annum, with the rate adjusting every five years to the then-prime rate plus
23

Table of Contents
1.5%, with a floor of 5.25% per annum. The next interest rate adjustment will occur in September 2026. The current portions of the outstanding principal balance under the BNE Delaware Mortgage at September 30, 2023 and December 31, 2022 were approximately $131,000 and $126,000, respectively.

The Company maintains a mortgage with DuQuoin State Bank (“DSB”) in connection with its purchase of properties in Anna, Illinois and Harrisburg, Illinois (the “DuQuoin Mortgage”). On May 5th of each year, the DuQuoin Mortgage becomes due unless it is renewed for another year at a rate determined by DSB’s executive committee. The DuQuoin Mortgage was renewed in May 2023 at a rate of 9.75% per annum. The current portions of the outstanding principal balance under the DuQuoin Mortgage at September 30, 2023 and December 31, 2022 were approximately $27,000 and $36,000, respectively.

In July 2021, the Company purchased the land and building in which it operates its cannabis dispensary in Metropolis, Illinois. The purchase price consisted of 750,000 shares of the Company’s common stock, which were valued at $705,000 on the date of the transaction, and payoff of the seller’s remaining mortgage balance of $1.6 million. In connection with this purchase, the Company entered into a second mortgage agreement with DSB for $2.7 million that matures in July 2041, and which initially bears interest at a rate of 6.25% per annum (the “DuQuoin Metropolis Mortgage”). The interest rate on the DuQuoin Metropolis Mortgage is adjusted each year based on a certain interest rate index plus a margin. As part of this transaction, the seller was provided with a 30.0% ownership interest in Mari Holdings Metropolis LLC (“Metro”), the Company’s subsidiary that owns the property and holds the related mortgage obligation, reducing the Company’s ownership interest in Metro to 70.0%. The current portions of the outstanding principal balance of the DuQuoin Metropolis Mortgage at September 30, 2023 and December 31, 2022 were approximately $45,000 and $77,000, respectively.

In July 2022, Mari Holdings Mt Vernon LLC, a wholly owned subsidiary of the Company, entered into a $3.0 million loan agreement and mortgage with DSB secured by property owned in Mt. Vernon, Illinois, which the Company is developing into a grow and production facility (the "DuQuoin Mt. Vernon Mortgage"). The DuQuoin Mt. Vernon Mortgage has a 20-year term and initially bears interest at the rate of 7.75% per annum, subject to upward adjustment on each annual anniversary date to the Wall Street Journal U.S. Prime Rate (with an interest rate floor of 7.75%). The proceeds of this loan are being utilized for the build-out of the property and other working capital needs. The current portions of the outstanding principal balance of the DuQuoin Mt. Vernon Mortgage were approximately $46,000 and $68,000 at September 30, 2023 and December 31, 2022, respectively.

In February 2020, the Company entered into a mortgage agreement with South Porte Bank for the purchase and development of a property in Mt. Vernon, Illinois, (the “South Porte Bank Mortgage”). Beginning in August 2021, pursuant to an amendment of the South Porte Bank Mortgage, the monthly payments of principal and interest aggregated approximately $6,000, with such payment amounts effective through June 2023, at which time all remaining principal, interest and fees were due. On May 26, 2023, the Company repaid the outstanding balance on the South Porte Bank Mortgage, which totaled approximately $778,000, and the Company currently owns this property outright.

Promissory Notes

Promissory Notes Issued as Purchase Consideration

Ermont Acquisition

In connection with the Ermont Acquisition, the Company issued the Ermont Note (see Note 2), totaling $