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Item 9A. Controls and Procedures

2023-03-16 compared with 2022-03-10 · 115 added, 144 removed, 97 unchanged (73% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are controls and other procedures designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

As of December 31, 2022, an evaluation was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act).

Our management concluded that as of December 31, 2022 our disclosure controls and procedures were not effective because of the material weaknesses in our internal control over financial reporting described below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that a reasonable possibility exists that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) and based upon the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“the COSO framework”).

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with GAAP.

As permitted by the Securities and Exchange Commission guidance, management excluded from its assessment of internal control for Charcoir, which was acquired March 12, 2021, which accounted for 4% of total assets and 2% of total revenues for the year ended December 31, 2021, Agron, which was acquired March 19, 2021, which accounted for 3% of total assets and 3% of total revenues for the year ended December 31, 2021, and MMI which accounted for 3% of total assets and zero% of total revenues for the year ended December 31, 2021.

As of December 31, 2021, we concluded that our disclosure controls and procedures were not effective due to a material weakness.

We have concluded that significant progress has been made toward mitigating the control weakness as of December 31, 2021, but we have not been able to adequately confirm the design and confirm the control weakness has been remediated as of the date of this report.

In making this assessment, management used the criteria set forth by the COSO framework.

Controls Environment

The following were contributing factors to the material weaknesses in control activities as of December 31, 2021, several of which also were determined to be the material weaknesses at December 31, 2020:

• Insufficient resources within the accounting and financial reporting department to review the accounting for complex financial reporting transactions including areas such as business combinations, share based compensation, and the related income tax reporting.

• There are inadequate segregation of duties within the various bank accounts of the Company to prevent and detect unauthorized transactions in a timely manner.

Additionally, there are deficiencies in the segregation of duties issues within IT, human resources, and manual journal entry posting processes.

• There are inadequate information and technology general controls, including segregation of duties, change management, and user access, which were inadequate to support financial reporting applications and support automated controls and functionality.

• There are inadequate controls over physical inventory counts.

Deficiencies in control activities contributed to material accounting errors identified and corrected through 2021 and prior years.

These design deficiencies in control activities contributed to the potential for there to have been material accounting errors in multiple financial statement account balances and disclosures.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, except for the implementation of remediation plans to address the material weakness identified below.

Material Weakness Remediation Plan and Status

Our remediation efforts are ongoing and we will continue our initiatives to implement and document policies, procedures, and internal controls.

In 2021, the Company completed the following remedial actions:

• Hired and trained additional resources within the accounting and financial reporting departments to review the accounting for warrant compensation accounting, share-based compensation accounting, and rebates.

• Hired and trained additional resources to specifically manage cash and ensure adequate segregation of duties.

• Implemented numerous general and access controls over all information technology (IT) systems that supports the Company's financial reporting processes.

• Implementation and redesign of controls over inventory count procedures.

Our management believes that these actions, and additional actions to be taken, are reasonably designed to remediate the control deficiencies identified and strengthen our internal control over financial reporting.

As we continue to evaluate and work to improve our internal control over financial reporting, management may determine to take additional measures to address control deficiencies or modify certain of the remediation measures described above.

Remediation of the identified material weaknesses and strengthening our internal control environment will continue throughout 2022 and beyond, as necessary.

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

The Company’s internal control over financial reporting is a process designed by or under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, and overseen by the Board of Directors, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes policies and procedures that:

• Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;

• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with the authorization of its management and directors;

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of the Company’s consolidated financial statements would be prevented or detected.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting using the criteria in Internal Control - Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO Framework”).

As a result of this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2022 because of the material weaknesses in internal control over financial reporting discussed below.

• Control Environment:

The Company did not maintain an effective control environment based on the criteria established in the COSO framework, which resulted in deficiencies in principles associated with the control environment.

In addition, the following material weaknesses were previously identified and contributed to the material weakness in the control environment:

• Insufficient resources within the accounting and financial reporting department to review the accounting of complex financial reporting transactions including areas such as business combinations, share based compensation and the related income tax reporting

• Ineffective controls over updating and distributing accounting policies and procedures across the organization.

The control environment material weaknesses contributed to other material weaknesses within our system of internal controls over financial reporting related to the following COSO components:

• Risk Assessment:

The Company did not design and implement an effective risk assessment based on the criteria established in the COSO framework and identified deficiencies in the principles associated with the risk assessment component of the COSO framework.

• Information and Communication:

The Company did not have an effective information and communication process that identified and assessed the source of and controls necessary to ensure the reliability of information used in financial reporting and that communicates relevant information about roles and responsibilities for internal control over financial reporting.

• Monitoring Activities:

The Company did not have effective monitoring activities to assess the operation of internal control over financial reporting, including the continued appropriateness of control design and level of documentation maintained to support control effectiveness.

• Control Activities:

As a consequence of the material weaknesses described above, internal control deficiencies related to the design and operation of process-level controls and general information technology controls were determined to be pervasive throughout the Company’s financial reporting processes.

In addition, the following material weaknesses were previously identified and contributed to the material weakness in control activities:

• Inadequate information and technology general controls, including segregation of duties, change management, and user access, which were inadequate to support financial reporting applications and support automated controls and functionality.

• Inadequate controls over physical inventory counts.

• Inadequate controls over valuations, inclusive of appropriate valuation model inputs and appropriate forecasting for prospective financial information.

• Inadequate segregation of duties within human resources, manual journal entry posting processes, and various bank accounts of the Company to prevent and detect unauthorized transactions in a timely manner.

While these material weaknesses did not result in material misstatements of the Company’s consolidated financial statements as of and for the year ended December 31, 2022, these material weaknesses create a reasonable possibility that a material misstatement of account balances or disclosures in annual or interim consolidated financial statements may not be prevented or detected in a timely manner.

The Company’s independent registered public accounting firm, Grant Thornton LLP, which audited the 2022 consolidated financial statements included in this Form 10-K, has expressed an adverse opinion on the Company's internal control over financial reporting.

Remediation Plan and Status

Our management is committed to remediating identified control deficiencies (including both those that rise to the level of a material weakness and those that do not), fostering continuous improvement in our internal controls and enhancing our overall internal controls environment.

Through the full year of 2022, the Company initiated and will continue efforts toward implementation of certain steps in its remediation plan, including:

• Engaged a third-party CPA firm to assist with the redesign of the Sarbanes-Oxley program inclusive of entity-level controls.

• Created and staffed a controls compliance analyst charged with monitoring and facilitating compliance with the Company’s responsibilities under the Sarbanes Oxley Act of 2002 (“SOX”).

• Implemented a global risk and compliance software to assist in monitoring and documenting compliance with SOX.

• For certain processes, developed new and revised existing process narratives and identified risks inherent to those processes.

• Developed new controls and revised the design of existing controls for a significant number of relevant key controls to mitigate the aforementioned risks, inclusive of general information technology controls and entity-level controls.

• Certain business functions have been restructured or consolidated to align more closely with effective business operation as well as to enable appropriate segregation of duties.

The following remaining activities are scheduled to occur in the first half of 2023 in anticipation of conducting management’s testing that will begin in the first half of 2023 in support of issuing management’s assessment of internal control over financial reporting as of December 31, 2023:

• Conduct initial organization-wide training sessions with all control owners.

• Implementation of new business systems to support information technology general controls.

• Completion of the identification of risks arising from inappropriate segregation of duties and fraud risks.

• Completion of risk assessment and control design for the remaining populations of processes and controls.

• Implementation of controls across all financial reporting processes and information technology environments.

• Development of effective communication plans relating to, among other things, identification of deficiencies and recommendations for corrective actions.

These plans will apply to all parties responsible for remediation.

• Implement periodic compliance reports are made to the Nominating and Governance Committee of the Board of Directors.

• Ongoing training with control owners, as necessary.

• Ongoing migration of certain components of a legacy information technology system onto a common information technology environment, including risk assessment, control design and implementation of new and revised controls.

Our management believes that these remediation actions, when fully implemented, will remediate the material weaknesses we have identified and strengthen our internal control over financial reporting.

Our remediation efforts are ongoing and additional remediation initiatives may be necessary.

We will continue our initiatives to implement and document the strengthening of existing, and development of new policies, procedures, and internal controls.

Remediation of the identified material weaknesses and strengthening our internal control environment will require a substantial effort throughout 2023.

We will test the ongoing operating effectiveness of the new and existing controls in future periods.

The material weaknesses cannot be considered completely remediated until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Inherent Limitations on Effectiveness of Controls

Management, including our CEO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems, including the possibility of human error,

the circumvention or overriding of controls, or fraud, no evaluation of controls can provide absolute assurance that all control issues, misstatements, errors, and instances of fraud, if any, within our organization have been or will be prevented or detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

Controls also can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Projections of any evaluation of controls effectiveness to future periods are subject to risks.

Over time, internal controls may become inadequate as a result of changes in conditions, or through the deterioration of the degree of compliance with policies or procedures.

While we believe the steps taken to date and those planned for implementation will remediate the ineffectiveness of our internal control over financial reporting, we have not completed all remediation efforts identified herein.

Accordingly, as we continue to monitor the effectiveness of our internal control over financial reporting in the areas affected by the material weaknesses described above, we have and will continue to perform additional procedures prescribed by management, including the use of manual mitigating control procedures and employing any additional tools and resources deemed necessary, to ensure that our consolidated financial statements are fairly stated in all material respects.

Other Information.

9 unchanged sentences

Michael Salaman 60 President and Director

Jeff Lasher 57 Chief Financial Officer

Paul Rutenis 55 Chief Merchant Officer

Gregory Sanders 34 Chief Financial Officer

Eula Adams 73 Director

1 unchanged sentence

Paul Ciasullo 64 Director

Sean Stiefel 34 Director

Darren Lampert has been our Chief Executive Officer and a Director since our inception in 2014.

2 unchanged sentences

From 1999 to 2014, Mr.

Lampert worked as a portfolio manager and proprietary trader at a number of broker-dea;ler firms.

Lampert worked as a portfolio manager and proprietary trader at a number of broker-dealer firms.

From 2010 to 2014, Mr.

1 unchanged sentence

Lampert graduated in 1982 with a Bachelor of Science degree in business administration from Ithaca College.

Lampert received a Juris Doctor degree from Bridgeport University School of Law in 1985.

Lampert received a J.D.

from Bridgeport University School of Law in 1985.

Lampert was admitted to practice law in New York in 1986 and is also admitted to practice before the United States District Courts for the Southern and Eastern Districts of New York.

Michael Salaman has been our President and a Director since our inception.

Salaman served as the Chairman of Skinny Nutritional Corp.

from January 2002 to March 2014 and as Chief Executive Officer and President of Skinny Nutritional Corp.

from June 2010 to March 2014.

He also served as Chief Executive Officer of Skinny Nutritional Corp.

Salaman served as the Chairperson of Skinny Nutritional Corp.

from 2002 to 2014 and as Chief Executive Officer and President of Skinny Nutritional Corp.

from 2010 to 2014.

Skinny Nutritional Corp.

filed for Chapter 11 Bankruptcy protection in 2013 and the assets were sold to a private equity firm in March 2014.

filed for Chapter 11 Bankruptcy protection in 2013 and the assets were sold to a private equity firm in 2014.

Salaman has over 20 years’ experience in the area of start-ups, new product development, distribution and marketing.

Salaman began his business career as Vice President of Business Development for National Media Corp., an infomercial marketing company in the United States from 1985-1993.

From 1995-2001, Mr.

Salaman began his business career as Vice President of Business Development for National Media Corp., an infomercial marketing company in the United States, from 1985 to 1993.

From 1993 to 1995, Mr.

Salaman worked as a consultant.

From 1995 to 2001, Mr.

Salaman started a digital media company called American Interactive Media, Inc., a developer of Web TV set-top boxes and ISP services.

Salaman became the principal officer of that entity and directed its operations as a marketing and distribution company and in 2005 focused its efforts in the enhanced water business.

Salaman became the principal officer of that entity, directing its operations as a marketing and distribution company, and in 2005 focused its efforts in the enhanced water business.

Salaman received a Bachelor of Business Administration degree in business from Temple University in 1986.

Jeff Lasher joined the Company as Chief Financial Officer in April 2021.

Lasher was CFO at Crocs from 2009 to 2015, which grew from $700 million to $1.2 billion during this time.

At West Marine, (formerly Nasdaq:

WMAR), then a publicly traded $700 million specialty retailer of boating supplies, apparel, and accessories with 250 stores in 38 states, he became CFO in November of 2015 and then became interim CEO.

He helped lead the Company's sale to Monomoy Capital, which was finalized in September 2017.

Most recently, Jeff was the CFO at a private equity backed multi-unit services company, International Car Wash Group, Inc.

now a division of Driven Brands, Inc.

DRVN), with over 900 car washes in 14 countries.

Directly prior to his start with GrowGeneration, he has served as CFO of Coravin, Inc.

Lasher is a graduate of the University of Alabama and received an MBA from Pennsylvania State University.

Paul Rutenis joined the company in June 2022 as Chief Merchant.

He started his career at the May Company in 1991 as an Executive trainee and held many buying and management positions at Foleys Departments stores within the company before it was sold to Federated Department Stores.

From there Paul joined Dicks Sporting Goods in 2005 leading the outdoor division in Camping, Water Sports and Wheeled Sports helping Dicks Sporting goods go from 120 stores location to over 400 in 2010.

Paul has held similar roles at JCPenney and RadioShack .

In 2015, Paul joined as Chief Merchant of

At West Marine, (formerly Nasdaq:

WMAR), then a publicly traded $700 million specialty retailer of boating supplies, apparel, and accessories with 250 stores in 38 states.

West Marine was sold to Monomoy Capital partners in 2017.

Paul left the company in 2018 and was a professor at the University of North Texas teaching retail and marketing courses prior to Grow Generation.

Paul is a graduate of Clemson University and received an MBA from St.

Louis University.

Gregory Sanders has been Chief Financial Officer of the Company since August 2022.

Immediately prior, Mr.

Sanders served as Vice President and Corporate Controller at GrowGeneration for nearly five years.

He came to GrowGeneration with prior public company experience, having served in various accounting positions for Enterprise Holdings and Arrow Electronics.

Sanders also led the Finance and Accounting Department, as well as Administrative and Human Resources functions, for Machol & Johannes LLC.

Sanders holds a B.S.

in Accounting from the University of Minnesota.

Eula Adams has been a Director of the Company since September 2021.

Adams also currently serves on the boards of Intrado Corporation, Harvest Health & Recreation (HRV/HRVSF- TSV/OTC), Volunteers of America, CareerWise Colorado, and the Transportation Commission of Colorado since November 2019.

Adams served recently as Chief Executive Officer of Neuromonics, Inc., a global medical device company providing standalone and cloud based software and hardware solutions for the treatment of tinnitus.

He previously served as President and Chief Operating Officer of Xcore Corporation, a computer hardware design, assembly, and distribution company.

Adams has an extensive background leading large, diverse organizations.

He was Senior Vice President of Sun MicroSystems from 2004 to 2007, Chief Operating Officer of Pay By Touch and Western Union, and President of numerous divisions of First Data (now part of Fiserv) from 1991 to 2003.

Within First Data, he held the positions of President of Merchant Services, President of Card Issuer Services, and President of Teleservices.

Earlier in his career, from 1972 to 1991, Mr.

Adams spent 19 years with Deloitte, in the greater Atlanta area and in New York City, where he was an Audit Partner.

Adams holds a Bachelor of Science degree from Morris Brown College in Atlanta and a Master of Business Administration degree from Harvard University.

He is a licensed Certified Public Accountant in the state of Colorado.

Stephen Aiello has been a Director of the Company since May 2014.

Aiello was a partner at Jones and Company from 2004-2008.

From 2001-2003, he worked at 033 Asset Management.

From 1986-2001, he was a partner at Montgomery Securities.

Aiello received a B.A.

in Psychology from Ithaca College and an MBA from Fordham University.

Since 2010, Mr.

Aiello has been a private investor and owner of real estate properties.

Paul Ciasullo has been a Director of the Company since May 2020.

He has also been a board member of Leafline Labs, LLC since 2018, which is a provider, manufacturer and distributor of medical cannabis in Minnesota.

Ciasullo founded Wallstreet Research Solutions, LLC, which provided sales, marketing and customer account services primarily in partnership with and to build a fixed income research firm specializing in bond and loan covenants called Covenant Review, LLC (with which he had been working to build the business since 2007).

Covenant Review and Wallstreet Research Solutions merged and later re-branded as Fulcrum Financial Data LLC and Mr.

Adams began his career as an auditor at Touche Ross in 1972, eventually becoming an audit partner there (which became Deloitte & Touche following a merger in 1989) until 1991.

From 1991 to 2003, Mr.

Adams worked at First Data Corporation (now Fiserv), holding positions as President of Merchant Services, President of Card Issuer Services and President of Teleservices.

From 2004 to 2008, Mr.

Adams served as Senior Vice President at Sun Microsystems responsible for systems, software and data storage.

From 2008 to 2013, Mr.

Adams was Chief Operating Officer of Xcore Corporation.

Most recently, Mr.

Adams was Chief Executive Officer and director at Neuromonics, Inc.

from 2013 to 2019.

Adams currently serves on the board of directors of Your Way Cannabis Brands Inc., as well as the White House Historical Association and the Transportation Commission of Colorado.

Adams is a graduate of Morris Brown College with a Bachelor of Science degree in accounting, has a Master of Business Administration from Harvard Business School, and is a Certified Public Accountant.

Stephen Aiello has been a Director of the Company since 2014.

Aiello has been a private investor focusing on cannabis and real estate since 2008.

Aiello was a partner at Jones and Company from 2004 to 2008.

From 2001 to 2003, he worked at 033 Asset Management, a long/short equity fund where he was responsible for day-to-day trading of the portfolio.

From 1986 to 2001, he was a partner at Montgomery Securities, where he managed the sales and trading institutional desk.

Aiello received a Bachelor of Arts in Psychology from Ithaca College and a Master of Business Administration from Fordham University.

Paul Ciasullo has been a Director of the Company since 2020.

He has also been a board member of Leafline Labs, LLC since 2018.

Ciasullo founded Wallstreet Research Solutions, LLC, which provided sales, marketing and customer account services primarily in partnership with a fixed income research firm specializing in bond and loan covenants called Covenant Review, LLC (with which he had been working to build the business since 2007).

Covenant Review and Wallstreet Research Solutions merged and later re-branded as Fulcrum Financial Data LLC, where Mr.

Ciasullo acted as President of Global Marketing and Sales and was a board member from 2014 to 2018 when the company was sold to Fitch Ratings Services.

While working with Covenant Review, Mr.

Ciasullo built a sales force in the U.S.

and London including assimilation of the purchase of a UK company Capital Structure Ltd where he was also on the Board.

From 2005 to 2006, Mr.

Ciasullo was a Managing Director at Soleil Securities Group Inc., responsible for developing a strategy for bringing alternative research such as industry knowledge into a stock research environment.

Ciasullo was a founder of and acted as President of CreditSights, Inc., an institutional investment research firm specializing in fixed income research for institutional investors where, until 2004, he built a global salesforce after overseeing the design and build of the original website which was amongst the first in the industry to deliver research over the internet.

Prior to that, Mr Ciasullo held a number of Managing Director positions as head of trading at large brokerage firms.

From 2000 to 2004, Mr.

Ciasullo was a founder of and acted as President of CreditSights, Inc., an institutional investment research firm specializing in fixed income research for institutional investors.

Prior to that, Mr.

Ciasullo held a number of Managing Director positions as head of trading at large brokerage firms.

Ciasullo graduated from Brown University in 1981 with a Bachelor of Arts in Economics and International Relations.

Sean Stiefel has been a Director of the Company since January 2018.

Stiefel founded Navy Capital LLC in 2014, where he is currently a Portfolio Manager and is responsible for all aspects of stock selection, investment due diligence and portfolio construction.

Stiefel launched the Navy Capital Green Fund, LP in 2017 as a global public equity focused cannabis dedicated fund.

Navy Capital has been involved in cannabis related investing since early 2016.

Prior to founding Navy Capital, Mr.

Stiefel was a research analyst and trader for Northwoods Capital Management Partners, a global equity fund with a fundamental value and special situations investment strategy.

Stiefel had previously served as an associate within an equity long/short fund at Millennium Partners, and he began his career as an equities trading analyst for Barclays Capital.

He is a graduate of the University of Southern California’s Marshall school of Business.

EXECUTIVE COMPENSATION

19 unchanged sentences

Stock Option Agreement in connection with the Amended and Restated 2018 Equity Incentive Plan (Incorporated by reference to Exhibit 10.4 to the Annual Report on Form 10-K for fiscal year ended December 31, 2019 as filed on March 27, 2020)

10.5 Form of Indemnification Agreement (Incorporated by reference to Exhibit 10.10 to the Registration Statement on Form S-1 as filed on November 9, 2015)

10.6 Form of Asset Purchase Agreement, dated November 28, 2018, by and among GrowGeneration Corp., GrowGeneration Pueblo Corp.

and Chlorophyll, Inc.

(Incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K as filed on January 22, 2019)

10.7 Form of Asset Purchase Agreement, dated January 26, 2019, by and among GrowGeneration Corp., GrowGeneration California Corp.

and Palm Springs Hydroponics, Inc.

(Incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K as filed on February 12, 2019)

10.8 Form of Asset Purchase Agreement, dated January 26, 2019, by and among GrowGeneration Corp., GrowGeneration Nevada Corp.

and Reno Hydroponics, Inc.

(Incorporated by reference to Exhibit 99.4 to the Current Report on Form 8-K as filed on February 12, 2019)

10.9 Form of Asset Purchase Agreement, dated April 23, 2019, by and among GrowGeneration Corp., GrowGeneration Rhode Island Corp.

and GreenLife Garden Supply Corp (Incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K as filed on May 14, 2019)

10.10 Form of Subscription Agreement for 2019 private placement (Incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K as filed on June 26, 2019)

10.11 Form of Subscription Warrant to Purchase Common Stock (Incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K as filed on June 26, 2019)

10.12 Asset Purchase Agreement, dated as of October 29, 2020, by and among GrowGeneration Corp.

and GrowGeneration California Corp.

and Yeleko, LLC, Yeleko GUI, LLC, Healthy Harvest Hydro-Organics LLC, and Oregon Hydro-Organics LLC.

(Incorporated by reference to Exhibit 2.01 to the Current Report on Form 8-K as filed on November 2, 2020)

10.13 Underwriting Agreement, dated June 29, 2020, by and between GrowGeneration Corp.

and Oppenheimer & Co.

as representative of the several underwriters named therein (Incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K as filed on July 6, 2020)

10.14 Underwriting Agreement, dated December 8, 2020, by and between GrowGeneration Corp.

and Oppenheimer & Co.

(Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed on December 9, 2020)

10.15 Form of Employment Agreement dated March 23, 2020 between GrowGeneration Corp and Darren Lampert (Incorporated by reference to Exhibit 10.27 to the Annual Report on Form 10-K as filed on March 27, 2020)

10.16 Form of Employment Agreement dated March 23, 2020 between GrowGeneration Corp and Michael Salaman (Incorporated by reference to Exhibit 10.28 to the Annual Report on Form 10-K as filed on March 27, 2020)

10.17 Form of Employment Agreement dated March 21, 2021 between GrowGeneration Corp.

and Jeffrey Lasher (Incorporated by reference to Exhibit 10.27 to the Amendment No.

1 to Annual Report on Form 10-K/A as filed on April 14, 2021)

10.6 Form of Employment Agreement dated September 1, 2022 between GrowGeneration Corp and Darren Lampert (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on September 1, 2022

10.7 Form of Employment Agreement dated September 1, 2022 between GrowGeneration Corp and Michael Salaman (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on September 1,2022.

10.8 Employment Agreement, dated August 12, 2022, between GrowGeneration Corp.

and Gregory Sanders (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K as filed on August 12, 2022)

21.1 List of Subsidiaries of GrowGeneration Corp.

(Filed herewith.)

23.1 Consent of Connolly Grady & Cha, P.C.

23.1 Consent of Plante Moran, PLLC.

(Filed herewith)

23.2 Consent of Plante Moran, PLLC (Filed herewith)

23.2 Consent of Grant Thornton, LLP (Filed herewith)

31.1 Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer (Filed herewith.)

15 unchanged sentences

(Principal Executive Officer)

/s/ Jeff Lasher

/s/ Gregory Sanders

Gregory Sanders

Chief Financial Officer

(Principal Accounting Officer and Principal Financial Officer)

KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors GrowGeneration Corp., a Colorado corporation (the “Registrant”), do hereby constitute and appoint Darren Lampert and Jeff Lasher, and each of them, as his or her true and lawful attorney-in-fact and agents, with full power of substitution and re-substitution, for him and in his name, place, and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and directors GrowGeneration Corp., a Colorado corporation (the “Registrant”), do hereby constitute and appoint Darren Lampert and Gregory Sanders, and each of them, as his or her true and lawful attorney-in-fact and agents, with full power of substitution and re-substitution, for him and in his name, place, and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

4 unchanged sentences

Darren Lampert

/s/ Jeff Lasher Chief Financial Officer

/s/ Gregory Sanders Chief Financial Officer

(Principal Financial and Accounting Officer)

March 15, 2023

Gregory Sanders

/s/ Michael Salaman President and Director March 15, 2023

4 unchanged sentences

Paul Ciasullo

/s/ Sean Stiefel Director March 9, 2022

/s/ Eula Adams Director March 15, 2023

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures