DEFERRED RENTS RECEIVABLE |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lessor Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEFERRED RENTS RECEIVABLE | DEFERRED RENTS RECEIVABLE The Company is the lessor under operating leases which contain escalating rents over time, rent holidays, options to renew, and requirements to pay property taxes, insurance and/or maintenance costs. 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 condensed consolidated balance sheets.
The Company currently leases a cannabis cultivation, processing and dispensary facility that it owns in Delaware to a cannabis-licensed client under a triple net lease that expires in 2035. The Company had previously leased a portion of an owned property in Massachusetts under a lease that expired in February 2023, after which the tenant continued to rent the space on a month-to-month basis through November 2023. The Company expanded its cultivation footprint into this space and accordingly, it is currently utilizing this space for its operations.
The Company currently subleases two properties - a cannabis production facility with offices under a sublease that expires in January 2026 and contains an option to negotiate an extension of the sublease term, and a dispensary under a sublease that expires in April 2027. The Company also subleases a portion of a third property that it developed into a cultivation facility under a sublease that expires in March 2030, with an option to extend the term for three additional five-year periods. These properties are all subleased to a cannabis-licensed client in Delaware.
The Company received rental payments aggregating $0.3 million and $0.5 million in the three months ended September 30, 2024 and 2023, respectively, and $0.9 million and $1.3 million in the nine months ended September 30, 2024 and 2023, respectively. Revenue from these payments was recognized on a straight-line basis and aggregated $0.3 million and $0.4 million in the three months ended September 30, 2024 and 2023, respectively, and $0.9 million and $1.2 million in the nine months ended September 30, 2024 and 2023, respectively.
Future minimum rental receipts for non-cancellable leases and subleases as of September 30, 2024 were as follows (in thousands):
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