Quarterly report pursuant to Section 13 or 15(d)

REVENUE

v3.24.3
REVENUE
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
REVENUE REVENUE
The Company’s main sources of revenue are comprised of the following:

•Product sales (retail and wholesale) – direct sales of cannabis and cannabis-infused products by the Company’s retail dispensaries and wholesale operations. This revenue is recognized when products are delivered or at retail points-of-sale.
•Real estate rental income – rental income generated from leasing of the Company’s state-of-the-art, regulatory-compliant cannabis facilities to its cannabis-licensed clients. Rental income is generally a fixed amount per month that escalates over the respective lease terms.
•Supply procurement fees – fees from facilitating purchases of cultivation and production resources, supplies and equipment for the Company's cannabis-licensed clients and third parties. The Company recognizes this revenue after the delivery and acceptance of goods by a purchaser.
•Management fees – fees for providing the Company’s cannabis clients with comprehensive oversight of their cannabis cultivation, production and dispensary operations.
•Licensing fees – revenue from the licensing of the Company's branded products, including Betty's Eddies, Bubby's Baked, Vibations and Kalm Fusion, to wholesalers and to regulated dispensaries throughout the United States and Puerto Rico. The Company recognizes this revenue when the products are delivered.

The Financial Accounting Standards Board Accounting Standards Codification 606, Revenue from Contract with Customers, as amended by subsequently issued Accounting Standards Updates, requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to in exchange for those goods or services. The recognition of revenue is determined by performing the following consecutive steps:

•Identify the contract(s) with a customer;
•Identify the performance obligations in the contract(s);
•Determine the transaction price;
•Allocate the transaction price to the performance obligations in the contract(s); and
•Recognize revenue as the performance obligation is satisfied.

Additionally, when another party is involved in providing goods or services to the Company’s clients, a determination is made as to who - the Company or the other party - is acting in the capacity as the principal in the sale transaction, and who is the agent arranging for goods or services to be provided by the other party.

The Company is typically considered the principal if it controls the specified good or service before such good or service is transferred to its client, and typically considered the agent if it does not exert such control. The Company may also be deemed to be the principal even if it engages another party (an agent) to satisfy some of the performance obligations on its behalf, provided the Company (i) takes on certain responsibilities, obligations and risks, (ii) possesses certain abilities and discretion, or (iii) fulfills other relevant indicators of the sale. If deemed an agent, the Company does not recognize revenue for the performance obligations it does not satisfy.

Revenue for the three and nine months ended September 30, 2024 and 2023 was comprised of the following (in thousands):

Three months ended Nine months ended
September 30,
2024		 September 30,
2023		 September 30,
2024		 September 30,
2023
Product revenue:
Product revenue - retail $ 23,384  $ 24,121  $ 69,353  $ 71,640 
Product revenue - wholesale 16,310  13,643  46,683  35,050 
Total product revenue 39,694  37,764  116,036  106,690 
Other revenue:
Real estate rentals 319  631  976  1,570 
Supply procurement 323  321  1,020  1,125 
Management fees 189  37  787  91 
Licensing fees 66  47  143  223 
Total other revenue 897  1,036  2,926  3,009 
Total revenue $ 40,591  $ 38,800  $ 118,962  $ 109,699