MariMed Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

DEFERRED RENTS RECEIVABLE

DEFERRED RENTS RECEIVABLE

3 Months Ended

Mar. 31, 2022

NOTE 5 – 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 under Deferred Rents Receivable on the balance sheet. Contingent rentals are recognized only after tenants’ revenues are finalized and if such revenues exceed certain minimum levels.

The Company leases the following owned properties:

	●	Delaware – a 45,000 square foot cannabis cultivation, processing, and dispensary facility which is leased to a cannabis-licensed client under a triple net lease that expires in 2035.

	●	Maryland – a 180,000 square foot cultivation and processing facility which is leased to a licensed cannabis client under a triple net lease that expires in 2037.

	●	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 under a lease that expires in October 2022.

The Company subleases the following properties:

	●	Delaware – a 4,000 square foot cannabis dispensary which is subleased to its cannabis-licensed client under a 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.

At March 31, 2022 and December 31, 2021, cumulative fixed rental receipts under such leases approximated $19.9 million and $18.7 million, respectively, compared to revenue recognized on a straight-line basis of approximately $21.5 million and $20.4 million, respectively. Accordingly, the deferred rents receivable balance approximated $1.6 million and $1.7 million at March 31, 2022 and December 31, 2021, respectively.

Future minimum rental receipts for non-cancellable leases and subleases as of March 31, 2022 were (in thousands):


2022	$	3,620
2023		4,563
2024		4,626
2025		4,695
2026		3,916
Thereafter		35,830
Total	$	57,250