What changed in this filing

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Item 1. Business

2023-03-03 compared with 2022-03-16 · 162 added, 354 removed, 1 unchanged (100% of the section changed)

(the “Company”) is a multi-state operator in the United States cannabis industry.

The Company develops, operates, manages,

and optimizes over 300,000 square feet of state-of-the-art, regulatory-compliant facilities for the cultivation, production and dispensing

of medicinal and recreational cannabis.

The Company also licenses its proprietary brands of cannabis and hemp-infused products, along

with other top brands, in several domestic markets and overseas.

its entry into the cannabis industry in 2014, the Company was an advisory firm that procured state-issued cannabis licenses on behalf

of its clients, developed cannabis facilities which it leased to these newly-licensed companies, and provided industry-leading expertise

and oversight in all aspects of their cannabis operations.

The Company also provided its clients with ongoing regulatory, accounting,

real estate, human resources, and administrative services.

the last few years, the Company made the strategic

decision to transition from a consulting business to a direct owner and operator of cannabis licenses in high-growth states.

this transition is the acquisition and consolidation of the Company’s clients (the “Consolidation Plan”).

Among several

benefits, the Consolidation Plan would present a simpler, more transparent financial picture of the full breadth of the Company’s

efforts, with a clearer representation of the revenues, earnings, and other financial metrics the Company has generated for its clients.

The Company has played a key role in the successes of these entities, from the securing of their cannabis licenses, to the development

of facilities that are models of excellence, to funding their operations, and to providing operational and corporate guidance.

the Company believes it is well suited to own these businesses and manage the continuing growth of their operations.

To date, the acquisition and consolidation of the

Company’s client businesses in Massachusetts and Illinois have been completed.

The acquisition of a client business in Maryland

has been contracted, and the Company is awaiting approval by the Maryland Cannabis Control Commission, which is pending.

approval, this entity will be consolidated.

The acquisitions of the remaining businesses located in Nevada and Delaware are

at various stages of completion and subject to each state’s laws governing the ownership transfer of cannabis licenses and other

closing conditions.

Delaware will require a modification of current cannabis ownership laws to permit for-profit ownership,

which is expected to occur when the state legalizes recreational adult-use cannabis.

Until the law changes and the acquisition

is approved, the Company continues to generate revenue from rental income, management fees, and licensing royalties.

The transition to a fully integrated muti-state cannabis

operator (“MSO”) is part of a strategic growth plan (the “Strategic Growth Plan”) the Company is implementing

to drive its revenues and profitability.

The Strategic Growth Plan has four components:

(i) complete the Consolidation Plan, (ii) increase

revenues in existing states, by spending capital to increase the Company’s cultivation and production capacity, and develop additional

assets within those states, (iii) expand the Company’s footprint in additional legal cannabis states through new applications and

acquisitions of existing cannabis businesses, and (iv) optimize the Company’s brand portfolio and licensing revenue by expanding

into additional states with legal cannabis programs.

The Company has created its own

brands of cannabis flower, concentrates, and precision-dosed products utilizing proprietary strains and formulations.

These products

are developed by the Company in cooperation with state-licensed operators who meet the Company’s strict quality standards,

including all natural—not artificial or synthetic—ingredients.

The Company licenses its brands and product formulations only

to certified manufacturing professionals who follow state cannabis laws and adhere to the Company’s precise scientific formulations

and product recipes.

The Company markets its high-quality cannabis

flowers and concentrates under the award-winning 1 Nature’s Heritage brand;

cannabis-infused chewable tables and

powder drink mixes under the brand names Kalm Fusion and K Fusion;

all natural fruit chews under the award-winning 1 Betty’s

Eddies brand;

and brownies, cookies, and other social sweets under the Bubby’s Baked brand.

The Company’s cannabis-infused

brands have been top-selling products in Maryland and Massachusetts.

2 The Company intends to introduce additional product lines under these brands in the foreseeable future.

The Company also has strategic alliances with

prominent brands.

The Company has partnered with renowned ice cream maker Emack & Bolio’s® to create a line-up of

cannabis-infused vegan and dairy ice cream.

Additionally, the Company has secured distribution rights for the Binske® line of cannabis

products crafted from premium artisan ingredients, the Healer line of medical full-spectrum cannabis tinctures, and the clinically-tested

medicinal cannabis strains developed in Israel by global medical cannabis research pioneer Tikun Olam.

Company’s operations have improved significantly over the past year as reflected in the following financial highlights:

increased 139% to approximately $121.5 million in 2021 from $50.9 million in 2020;

EBITDA 3 increased 144% to approximately $43.1 million in 2021 compared to $17.7 million in 2020;

assets increased to approximately $123.2 million in 2021 from $76.4 million in 2020;

and cash equivalents increased to approximately $29.7 million in 2021 from $3.0 million in 2020.

won by the Company’s Betty’s Eddies brand include LeafLink 2021 Best Selling Medical Product, Reddit Sparkie 2021 Best

Edible, Respect My Region 2021 Hottest Edible, LeafLink 2020 Industry Innovator, and Explore Maryland Cannabis 2020 Edible

Awards won by the Company’s Nature’s Heritage brand include the Cultivators Cup 2021 Silver Medal and the

High Times Cannabis Cup 2021 Bronze Medal.

LeafLink Insights 2020.

Adjusted EBITDA is a non-GAAP financial measurement that is defined in Item 7.

Management’s Discussion And Analysis Of

Financial Condition And Results Of Operations.

Company’s strengths can be summarized as follows:

The Company’s management is one of the most

experienced and long-tenured in the cannabis industry.

It has had considerable success creating and growing business in the industry

by successfully applying for cannabis licenses on behalf of its clients, overseeing the development of such clients’ cannabis operations

and security plans, sourcing real estate for cannabis facilities in receptive municipalities, raising capital to purchase

and develop facilities, and adhering operations to regulations established by individual state governments, including all environmental

and social governance requirements.

The knowledge and experience of the Company’s management provides a solid platform for the

Company’s direct ownership through consolidation of the organic businesses it developed and for expansion to other opportunities

in other cannabis-legal states.

of State-of-the-Art Cannabis Facilities and Operations

Company has developed state-of-the-art cannabis cultivation, production, and dispensary facilities in multiple states utilizing the Company’s

proprietary practices and implementing industry best practices.

Its facilities are examples of operational excellence under the Company’s

proven management policies and processes.

Brand Creation

Company has developed unique brands of precision-dosed cannabis-infused products which are currently licensed and distributed in cannabis-legal

The Company intends to continue expanding both its brand portfolio and the licensing of its branded products into additional

cannabis-legal states and overseas.

Technological

and Scientific Innovation

Company is diligent in identifying and reviewing the latest sciences and processes applicable to the cultivation, distillation, production,

packaging, securing, and distribution of cannabis and cannabis-infused products.

The Company has obtained the highest quality cannabis

strains and genetics.

It is at the leading edge of patient education and physician outreach for cannabis, and it seeks strategic relationships

with companies that are at the forefront of extraction and distillation.

and Knowledge Sharing

rapid growth of the legal cannabis market presents a global paradigm shift and challenges to medical professionals and consumers who

seek scientific knowledge and research regarding the medical benefits of cannabis.

The Company provides educational research and studies

on its brands and products to its growing community of healthcare professionals and consumers.

As cannabis becomes more mainstream, medical

providers will need to be educated on how to prescribe or make recommendations to their patients, and consumers will need to learn how

to gain the most benefit from certain strains, genetics, or formulations.

part of its education initiative, the Company intends to assemble a Scientific Advisory Board (the “SAB”) that will

include knowledgeable medical practitioners and researchers focused on the scientific application of cannabis for health

and wellness.

The SAB’s goals will include the development of strategies to address the most widespread and debilitating medical

and dietary conditions through the utilization of cannabis- and hemp-based therapies.

Consolidation

The Company’s Consolidation Plan

consists of the strategic decision to acquire and consolidate client cannabis businesses it developed, and in some instances managed

and advised, in Massachusetts, Illinois, Maryland, Nevada, and Delaware.

When completed, the businesses that are acquired and

consolidated will be reported in the Company’s financial statements.

The following is a summary of the Company’s progress

towards its Consolidation Plan.

Company Overview

We are a multi-state cannabis operator in the United States, headquartered in Norwood, Massachusetts, dedicated to improving lives every day through our high-quality products, our actions and our values.

We develop, own, and manage seed to sale state-licensed, state-of-the-art, regulatory-compliant facilities for the cultivation, production, and dispensing of medicinal and adult-use cannabis.

We have created and continue to develop our own brands of premium cannabis flower, concentrates, edibles, and other precision-dosed products utilizing our proprietary strains and formulations.

We also license our proprietary brands, along with other top cannabis products, in domestic markets.

Our common stock trades on both the OTCQX and the Canadian Securities Exchange under the ticker symbol MRMD.

Company History

In 2014, we entered the cannabis industry as an advisory and real estate management firm that procured state-issued cannabis licenses on behalf of our clients, developed cannabis facilities that we leased to these newly licensed companies, and provided industry-leading expertise and oversight in all aspects of their cannabis operations.

In 2018, we made the strategic decision to transition from an advisory business to a direct owner and operator of cannabis licenses in high-growth states.

Key to this transition was the acquisition and consolidation of our clients for whom we had played a key role in the success of such clients, including securing their cannabis licenses, developing facilities that are models of excellence, funding their operations and providing operational and corporate guidance.

We have successfully acquired and integrated certain client businesses in several states and believe that our prior experience in managing these businesses has provided us with the skills and expertise required to manage the continuing growth of these operations.

Throughout our history, we have created our own brands of craft-quality cannabis flower, concentrates, edibles, and other precision-dosed products, which have been award winners and top sellers in multiple states.

Applying proprietary cultivation and processing procedures and following the strictest quality standards, our portfolio of brands was developed to fill gaps in the marketplace and meet specific effects desired by today’s cannabis consumer.

We invest in ongoing research and development and intend to continue to introduce new and innovative products in the future.

Today, we operate state-of-art, regulatory compliant cannabis cultivation and processing facilities that grow and manufacture our proprietary, high-quality, branded cannabis consumer products.

We distribute our products via the wholesale market to hundreds of dispensaries operated by other cannabis license holders.

We also operate our own dispensaries, which are recognized for their excellent customer service and product selection.

Revenue is generated at these dispensaries through the sales of our own products and those marketed by other cannabis license holders.

We utilize dedicated sales teams to sell our products to wholesale buyers representing the dispensaries operated by other cannabis license holders.

Customers at our own dispensaries purchase cannabis for, among other reasons, the relief of pain and stress, promote better sleep and to address other health and wellness needs.

We deploy a variety of marketing strategies to drive the sales of our products, including customer loyalty programs, digital advertising, in-store displays, public relations, and more.

We generate additional revenue from licensing, management fees, and real-estate income.

For the years ended December 31, 2022 and 2021, these revenues comprised approximately 6% and 11% of our total revenue, respectively.

This revenue has declined as we have acquired and consolidated the client businesses that had been paying us licensing, management, and facility rental fees.

Our Strategic Growth Plan

We continue to focus on executing our strategic growth plan, with priority on activities that include the following:

• increasing revenue organically in states where we currently do business by growing our product offerings, bolstering awareness via marketing campaigns, and developing additional assets within those states;

• expanding our footprint into high-growth legal cannabis states through new license applications and/or acquisitions of existing cannabis businesses;

• increasing revenue by producing and distributing our award-winning brands to qualified strategic partners or by acquiring production and distribution licenses.

Our Competitive Strengths

We believe that our strengths in the following areas provide us with certain competitive advantages and the tools necessary to successfully implement our strategic plans:

Experienced Management

Our management is one of the most experienced and longest tenured in the cannabis industry.

Several of our executive team members, including our President and Chief Executive Officer, Chief Operating Officer, and Chief Revenue Officer, have worked in the industry for nearly a decade or more.

Our leadership team has achieved considerable success creating and growing businesses in the industry by successfully applying for cannabis licenses, overseeing the development of cannabis operations and facilities, raising capital to purchase and develop facilities, and conducting operations in adherence to regulations established by individual state governments, including all environmental and social governance requirements.

Additionally, we have substantially increased the depth and breadth of our executive team with the addition of a new Chief Financial Officer, a new Vice President of Retail Sales, and a new Vice President of Marketing and Research & Development.

These new executives have significant experience and expertise and increase the strength of our executive team and the overall company.

Craft Cannabis at Scale

We own an expansive library of world-class genetics and utilize a hands-on “craft cultivation” approach, blended with the latest technologies, to grow high-quality cannabis flower and create premium infused cannabis products.

Every one of our plants is individually cared for by our trained staff and grown in dedicated rooms featuring customized HVAC, lighting, and nutrients that are designed for growing particular flower strains consistently.

Our proprietary approach to cultivation, curing, and processing has enabled us to sell our products at higher price points than most wholesale competitors.

Exceptional Retail Customer Service

We believe today’s cannabis consumer seeks a shopping experience that is comfortable, educational, and easy.

Our dispensaries are models of excellence in this regard.

We carefully curate a menu of the highest quality brands and products, and merchandise them in beautifully designed, upscale environments.

We invest in budtender and retail personnel training, as well as product programming displayed on in-store monitors to help deliver exceptional customer service throughout the shopping experience.

In Massachusetts, we complement our in-store operations with a home delivery option.

We intend to do the same in other markets once permitted by state regulations.

Technological and Scientific Innovation

We are diligent in identifying and reviewing the latest science and processes applicable to the cultivation, distillation, production, packaging, securing, and distribution of cannabis and cannabis-infused products.

We have obtained the highest quality cannabis strains and genetics.

We utilize proven consumer products goods (“CPG”) research and development methodologies and proprietary processing techniques to create innovative products that fill gaps in the marketplace and ensure consistency from market to market.

Portfolio of Proprietary, Premium Brands

We have developed unique, premium brands of precision-dosed, cannabis-infused products, which are currently distributed in cannabis-legal states.

Our products are available in the most popular consumption formats, including whole flower, pre-rolled flower, vape cartridges, concentrates, and edibles.

We intend to continue expanding our brand portfolio to meet the effects that today’s cannabis consumers seek.

Our portfolio includes several award-winning brands that are among the top sellers in markets where they are available.

They include:

• Nature’s Heritage , a premium brand of cannabis flower and concentrates;

• Betty’s Eddies , cannabis-, supplement-, and nutrient-infused fruit chews that deliver better sleep, pain relief, stress relief, and more.

The Betty’s Eddies line also includes a limited collection of cannabis infused ice creams created in partnership with ice cream brand Emack & Bolio’s®;

• Bubby’s Baked , soft and chewy baked goods and a hot chocolate mix;

High + Energy , a cannabis-infused energy powder drink mix for discrete, on-the-go consumption;

• Kalm Fusion and K Fusion , chewable cannabis-infused mint tablets;

• InHouse , a value-priced brand of flower, vapes, and edibles.

Current and Pending Operations

During the past several years, we have invested in our own operating facilities, applied for and secured new licenses, and acquired new assets to strengthen and expand our brand portfolio and our retail and wholesale networks.

We currently hold a total of 20 cannabis licenses in six states.

We believe our investment and expansion initiatives will enable us to capture additional market share and provide us with a stronger presence in the states where we conduct business.

We believe that operating as a fully vertical, seed-to-sale cannabis company provides us the greatest opportunity to maximize revenue and profits in each state where we operate.

To date, we are fully vertical through businesses either owned or managed by us in Maryland, Massachusetts, and Delaware.

We plan to be fully vertical in Illinois with the opening of a new cultivation and processing facility in 2023.

Our current and pending operations are as follows:

Massachusetts

December 2018, the Massachusetts Cannabis Control Commission (the “MCCC”) approved the conversion of ARL Healthcare Inc.

(“ARL”), the Company’s cannabis-licensed client, from a non-profit entity to a for-profit corporation and the transfer

of ownership to the Company.

ARL holds cannabis licenses for cultivation, production and dispensing.

Company operates (i) a 10,000 square foot dispensary, developed within its 22,700 square foot property in Middleboro that

received approval from the MCCC to commence operations in December 2019, and (ii) a 70,000 square foot cultivation and production

facility, developed within its 138,000 square foot property in New Bedford that received approval from the MCCC to commence operations

in January 2020.

The Company intends to expand the cultivation and production facility throughout the balance of the property in 2023.

The Company entered

into an agreement to acquire a second dispensary in Beverly in early 2022, and expects to complete the buildout and commence operations,

subject to approval by the MCCC, by the summer of 2022.

In October 2019, the Illinois Department of Financial

& Professional Regulation approved the Company’s acquisition of KPG of Anna LLC and KPG of Harrisburg LLC, the Company’s

two cannabis-licensed clients that operate Company-built and -owned medical cannabis dispensaries in the state of Illinois (both

entities collectively, the “KPGs”).

As part of this transaction, the Company also acquired the selling parties’ interests

in Mari Holdings IL LLC (“Mari-IL”), the Company’s subsidiary which owns the real estate in which the KPGs’ dispensaries

Effective October 1, 2019, 100% of the operations

of these entities have been consolidated into the Company’s financial statements.

Additionally, on January 1, 2020, the state of

Illinois legalized recreational adult-use cannabis, allowing the Company to operate both medical and recreational adult-use programs

in the Anna and Harrisburg dispensaries.

A third recreational dispensary was opened in this state in Mt.

Vernon in September

2020, and a fourth recreational dispensary was opened in Metropolis in May 2021.

In 2016, the Company and the members of Kind Therapeutics USA Inc., the Company’s client in Maryland that holds licenses

for the cultivation, production, and dispensing of medical cannabis (“Kind”), agreed to a partnership/joint venture whereby

Kind would be owned 70% by the Company and 30% by the members of Kind, subject to approval by the Maryland Medical Cannabis Commission

In reliance thereon, the Company purchased, designed, and developed a 180,000 square foot cultivation and production

facility in Hagerstown, MD for occupancy and use by Kind, which became operational in late 2017, and the Company further agreed to manage

and finance all aspects of Kind’s cannabis business, as Kind had no background or experience in the industry.

In 2018, prior to finalizing the documents

confirming the partnership/joint venture, the Company and the members of Kind negotiated and entered into a memorandum of understanding

(“MOU”) for the Company to acquire 100% of the membership interests of Kind.

Also at that time, the parties entered

into a management services agreement for the Company to provide Kind with comprehensive management services in connection with

the business and operations of Kind, and a 20-year lease agreement for Kind’s utilization of the Company’s

Hagerstown facility.

Additionally, in 2019, the Company purchased a 9,000 square foot building in Anne Arundel County which

is to be developed into a dispensary to be leased to Kind.

2019, the members of Kind sought to renegotiate the terms of the MOU and subsequently sought to renege on both the original partnership/joint

venture and the MOU.

The Company engaged with the members of Kind in good faith in an attempt to reach updated terms acceptable to both

parties, however the members of Kind failed to reciprocate in good faith, resulting in an impasse.

Incrementally, both parties through

counsel further sought to resolve the impasse, however such initiative resulted in both parties commencing legal proceedings.

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 $13,500,000 payable in cash (subject to adjustment) and $6,500,000 payable by the issuance of four-year

6.0% promissory notes to the members of Kind.

The notes shall be secured by a first priority lien on the Company’s property in

Hagerstown, MD.

Upon execution of the membership interest purchase agreement, the Company deposited, in escrow, the sum of $5,000,000

as a contract down-payment.

Simultaneously,

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, MD and Annapolis, MD, and (ii) Mia Development LLC

(“Mia”), the Company’s majority owned subsidiary that owns production and retail cannabis facilities in

Wilmington, DE.

The purchase price for the interests in Mari-MD and Mia is $2,000,000 in the aggregate, payable in cash.

effect to the purchase of these interests, the Company will own approximately 99.7% and 94.3%, respectively, of Mari-MD and

closings under the foregoing agreements are subject to the fulfilment of closing conditions including, but not limited to, approval by

the MMCC, which is pending.

There is no assurance that the approval of the MMCC will be obtained or that the further closing conditions will be met.

with the closing of the transactions contemplated by the foregoing agreements, the aforementioned litigation between the parties will

be dismissed.

For further information, see Part I, Item 3.

Legal Proceedings in this report.

2019, the Company entered into a purchase agreement to acquire 100% of the ownership interests of The Harvest Foundation LLC

(“Harvest”), its cannabis-licensed client.

Harvest holds both medical and adult-use cannabis cultivation licenses, and

operates in a 10,000 square foot cannabis cultivation facility developed with the Company.

Upon the approval of the transaction by

the state authority, and the fulfillment of other closing conditions, the ownership of Harvest will be transferred to the Company,

and the operations of Harvest will begin to be consolidated into the Company’s financial statements.

is no assurance that the closing conditions to the Company’s acquisition of

Harvest, including approval by the state authority, will be achieved or that the acquisition will be

current cannabis program is for medical use only, and requires license holders to be not-for-profit entities.

The Company provides comprehensive

management and real estate services to First State Compassion Center (“FSCC”), its cannabis-licensed client in this state.

The Company’s validated cannabis experience was instrumental in FSCC being granted Delaware’s first ever seed-to-sale medical

cannabis license, and two of the four statewide licenses.

leases the Company-developed 47,000 square foot seed-to-sale facility in Wilmington and the Company’s 4,000 square foot leased

retail location in Lewes which the Company developed into a cannabis dispensary.

In 2019, the Company signed a lease with an option to

purchase a 100,000 square foot building in Milford, which it is currently developing into a second cultivation and production facility

Delaware medical program has grown to over 10,000 licensed medical patients.

FSCC, under the Company’s management, is currently

operating two of the six cannabis licenses in the state.

The additional cultivation and production facility in Milford will bring

a much-needed supply of product to a state where demand continues to outpace supply.

state is expected to allow “for-profit” ownership of cannabis licenses when the state legalizes recreational adult-use

cannabis, at which time the Company will seek to acquire FSCC and obtain ownership of the licenses and operations, subject to state

Island currently has a medical cannabis program where license holders must be not-for-profit entities.

Previous discussions held by

the Company to potentially acquire a licensed cannabis asset are currently suspended.

Company was incorporated in the state of Delaware in January 2011 as a wholly-owned subsidiary of Worlds Inc.

under the name Worlds Online

Inc., which was later spun-off to its stockholders.

At its inception, Worlds Online Inc.

operated online virtual environments.

the Company transitioned its operational focus to the emerging cannabis industry and led the effort to win the cannabis license in Delaware

on behalf of its client.

To date, the Company has won a total of 17 cannabis licenses on behalf of itself and its cannabis clients.

following is a summary of the Company’s history over the past three calendar years:

June 2019, the Company acquired a 70% ownership interest of MediTaurus LLC, a company established by Jokubas Ziburkas PhD, a neuroscientist

and leading authority on hemp-based CBD and the endocannabinoid system.

MediTaurus operates in the United States and Europe and has developed

proprietary CBD formulations sold under its Florance™ brand.

In September 2021, the Company acquired the remaining 30% ownership

interest of MediTaurus.

October 2019, the Company closed on the purchase of a 9,000 square foot building in Annapolis, MD which it is developing into a medical

cannabis dispensary that the Company expects to be completed by June 2022.

October 2019, the Illinois Department of Financial

and Professional Regulation approved the Company’s acquisition of the KPGs and Mari-IL, and as of such date, the KPGs and Mari-IL

became wholly-owned subsidiaries of the Company.

January 2020, the Illinois legalized adult-use cannabis, which was added to the Company’s two existing cannabis licenses, thereby

increasing the Company’s operations in Illinois to service both medical and recreational cannabis consumers.

February 2020, the Company purchased a 4,800 square foot stand-alone retail building in Mt Vernon, IL which it developed into a

state-approved adult-use cannabis dispensary that opened in September 2020.

July 2020, the Company refinanced a mortgage secured by its properties in Massachusetts generating proceeds of $13.0 million that were

used to pay down the initial mortgage and short-term promissory notes.

February 2021, the Company entered into a five-year lease agreement for a 12,000 square foot premises located in Wilmington, DE which

the Company developed into a cannabis production facility with offices, and subleases to its cannabis-licensed client in

March 2021, the Company entered into a securities purchase agreement with Hadron Healthcare Master Fund with respect to a financing facility

of up to $46.0 million in exchange for newly-designated Series C convertible preferred stock of the Company and warrants to purchase

the Company’s common stock.

The initial proceeds of $23.0 million from the facility were used to pay down debt, and is being

used to upgrade certain of the Company’s owned and managed facilities.

A portion of the balance of the facility is available

to fund the Kind acquisition, provided such acquisition is consummated, including obtaining the necessary regulatory approvals, no later

than the end of 2022.

In May 2021, the Company opened its fourth adult-use

dispensary in Illinois in the city of Metropolis.

The Company had been renting this 14,000 square foot premises since January 2021, which

it developed into a state-approved cannabis dispensary in early 2021.

In July 2021 the Company purchased the premises.

In August 2021, the Company entered into a manufacturing

and royalty agreement with renown ice cream brand Emack & Bolio’s® whereby the companies will collaborate to create a line-up

of cannabis-infused vegan and dairy ice cream containing the Company’s full spectrum of natural cannabinoids and terpenes.

new category of cannabis products is expected to debut in Massachusetts during 2022, followed by launches in other cannabis-legal markets.

In November 2021, in order to quality for

applying to a cannabis dispensary license lottery in Ohio, the Company entered into short-term lease agreements for six retail

properties in this state, each property between 4,000 and 6,000 square feet and with a lease term of eleven months.

Company be awarded one or more cannabis licenses, it can extend the term of one or more of the lease agreements to ten years (with

options to further extend), and develop the premises of such extended leases into cannabis dispensaries.

In early 2022, the Company

was notified that it was awarded a license, and is awaiting the final verification process to be completed by the

November 2021, the Company entered into an asset purchase agreement to acquire the cannabis license, property lease, and other assets

and rights of, and to assume the liabilities and operating obligations associated with a cannabis dispensary that is currently operating

in Beverly, MA.

The purchase is contingent upon the approval of the Massachusetts Cannabis Control Commission, which is expected by the

summer of 2022.

Concurrent with the execution of this agreement, the parties entered into a consulting agreement pursuant to which the

Company shall provide certain oversight services related to the development, staffing, and operation of the business in exchange for

a monthly fee.

December 2021, the Company entered into a membership interest purchase agreement to acquire 100% of the equity ownership of Kind, the

Company’s cannabis-licensed client that holds licenses for the cultivation, production and dispensing of medical cannabis in Maryland.

The Company is currently waiting for approval of this acquisition from the MMCC, which is pending.

Upon approval, the acquisition of

Kind will be consummated, Kind’s financial results will begin to be consolidated into the Company’s financial statements,

and the pending litigation between the parties will be dismissed.

Simultaneous with the Kind membership

interest purchase agreement, the Company entered into an agreement to acquire a former owner of Kind’s equity ownership

interests in (i) Mari Holdings MD LLC (“Mari-MD”), the Company’s majority owned subsidiary that owns production

and retail cannabis facilities in Hagerstown, MD and Annapolis, MD, and (ii) Mia Development LLC (“Mia”), the

Company’s majority owned subsidiary that owns production and retail cannabis facilities in Wilmington, DE.

The acquisition of these interests will be consummated simultaneous with

the closing of the Kind acquisition.

Giving effect to

the purchase of these interests, the Company will own approximately 99.7% and 94.3%, respectively, of Mari-MD and Mia.

In January 2022, the Company entered into a

stock purchase agreement to acquire 100% of the ownership interests of Green Growth Group Inc., an entity that has been awarded a

craft grow cannabis license issued by the Illinois Department of Agriculture (“IDA”) for cultivation, production, and

transporting of cannabis and cannabis-infused products in Illinois.

The purchase price of $3,400,000 shall be comprised of

$1,900,000 in cash and shares of the Company’s common stock valued at $1,500,000.

The acquisition is conditioned upon the

approval by the IDA, among other closing conditions, which is expected to occur by July 2022.

Also in January

2022, the Company entered into an agreement to purchase a 30-acre parcel of land located in Mt.

Vernon, IL containing a 33,000

square foot manufacturing facility and a 13,000 square foot storage warehouse, in exchange for $1,495,000 in cash.

Upon execution of

the agreement, the Company provided a deposit of $100,000 to the seller.

The transaction is expected to close in the second quarter

of 2022, after the Company has performed a complete inspection and feasibility review.

If such review determines that the premises

will not satisfy the Company’s requirements, the Company shall have the right to terminate the agreement with no other

obligation other than the loss of the deposit.

February 2022, the Company was notified that it was awarded a cannabis dispensary license from the state of Ohio, and is awaiting the final verification process to be completed by the state.

Company’s goal is to become a fully integrated MSO of seed-to-sale cannabis operations.

The Company is different than some of the

other MSOs in that it has organically developed its client businesses from the bottom up, built its own brands and branded products,

and has retained its core management team from inception.

Other MSOs have raised significantly more capital, including on the Canadian

Securities Exchange, and acquired assets in more states than the Company has to date.

Additionally,

while the Company has a comprehensive suite of products and services for the cannabis industry, it faces competition from companies

of varying sizes and geographic reach, who produce and sell similar products.

Some of these companies provide a subset of the Company’s

product and service offerings, while others are able to provide an equivalent level of the products and services offered by the Company.

The Company, using its best practices and operational expertise, is able to produce cannabis products at one of the lowest cost structures

in the industry which enables the Company to remain competitive in its markets.

That said, the Company’s sales could be reduced

significantly if its competitors develop and market products that are more effective, more convenient, or are less expensive than its

forward, as cannabis products become more mainstream and have greater acceptance, it is likely that larger and more established companies,

with greater available resources including name recognition and national distribution networks, will enter the field.

However, the Company

believes that there are many barriers to entry and that to duplicate its licenses, know how, and facilities would take years at a great

At the same time, the Company believes the emerging cannabis industry is growing at such a pace that there are more opportunities

available than current cannabis businesses can support.

The Company is upgrading its marketing efforts to expand branding

and distribution, as well as database marketing, home delivery, and business tactics developed by more conventional industries that will

be important to the cannabis industry as it becomes more mainstream.

The Company owns registered trademarks for Betty’s

Eddies, Kalm Fusion, and Nature’s Heritage, and has filed to register the Bubby’s Baked and Vibations trademarks.

Company’s proprietary processing, and manufacturing techniques and technologies, while not patented, are kept strictly confidential.

The Company enters into and enforces confidentiality agreements with key employees and consultants to protect its IP and general know-how.

of December 31, 2021, the Company had a total of 326 employees, of which 260 were full-time.

Access to Company Reports

Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those

reports are available free of charge on the Company’s website at www.marimedinc.com as soon as reasonably practicable after

such material is electronically filed with, or furnished to, the Securities and Exchange Commission.

addition, copies of the Company’s annual report will be made available, free of charge, on written request.

Massachusetts operates both adult-use and medical cannabis programs.

According to the Massachusetts Cannabis Control Commission (the "CCC"), the state’s cannabis market was expected to total over $1.8 billion in sales in 2022, a number that is expected to increase to $2.6 billion by 2025 (source:

MJ Biz Factbook).

We operate a 10,000 square foot Panacea Wellness -branded dispensary in Middleborough and a 70,000 square foot cultivation and production facility in New Bedford.

We intend to expand our New Bedford facility to increase our production capacity to meet the high demand for our products.

Our Nature’s Heritage flower and concentrates brand, for example, is the #1-selling brand in the state, and we regularly sell all of our available inventory.

We hope to commence adult-use operations of our new dispensary in Beverly, on Boston’s north shore, during the first half of 2023.

This dispensary was the result of a 2022 asset purchase.

In February 2023, we announced our intention to acquire the operating assets of Ermont, Inc.

("Ermont"), a medical-licensed vertical cannabis operator, located in Quincy, MA.

This acquisition, which is subject to approval by the CCC, will provide us with our third dispensary in Massachusetts, substantially completing our buildout to the maximum allowable by state regulations.

We also intend to apply for an adult-use license for this dispensary.

Once fully operational, we expect our retail stores will be easily accessible to all cannabis consumers in eastern Massachusetts.

Additionally, we intend to offer home delivery as the result of an early 2023 acquisition (see Recent Developments below).

Illinois operates both adult-use and medical cannabis programs.

According to the Illinois Department of Financial and Professional Regulation, the state reported $1.8 billion in total legal cannabis sales in 2021, which was up more than 100% compared to 2020, when adult-use cannabis was first legalized in the state.

With a population of nearly 13 million, Illinois is one of the largest, fastest-growing cannabis markets in the U.S.

We operate four Thrive -branded dispensaries in the state, including an adult-use dispensary in Metropolis, near the Kentucky border;

an adult-use dispensary in Mt.

and dispensaries in Anna and Harrisburg that each serve both medical and adult-use customers.

These four locations provide easy access for most residents in Southern Illinois and surrounding states, including Missouri, Kentucky, Indiana and Tennessee.

Our fifth dispensary, located in Casey near the Indiana border, is projected to open in 2023, the result of an August 2022 acquisition.

In May 2022, we took an important step toward becoming fully vertical in Illinois when we completed the acquisition of a craft cultivation” wholesale license.

We subsequently acquired a 40,000-square foot building in Mt.

Vernon that will house a cultivation and processing facility.

We intend to sell our award-winning branded products throughout the state when the facility commences operations, which we expect to occur in 2023, and grow, produce, and wholesale our branded products throughout the state beginning in 2024.

We became fully vertical in Maryland in 2022.

First, we completed the acquisition and consolidation of our client, Kind Therapeutics USA Inc.

(“Kind”), in April 2022.

The acquired cultivation, production, and wholesale business sells our premium branded cannabis flower, concentrates, vapes, and edibles from a 180,000-square foot facility in Hagerstown.

That business was subsequently augmented by the opening of our Panacea Wellness -branded medical dispensary in Annapolis, which commenced operations in October 2022.

Maryland operates a successful medical cannabis program, which will expand to include adult-use sales in 2023 following a November 2022 ballot referendum.

According to the Maryland Medical Cannabis Commission, the state generated more than $511 million in medical cannabis sales in 2022, with nearly 150,000 registered medical cannabis patients.

With a population of 6.2 million, Maryland’s cannabis program has some of the highest rates of registered medical consumers, incidence use and spending, on a per capita basis, among all legal medical cannabis programs in the U.S.

Delaware’s medical cannabis program has grown to over 20,000 licensed patients, according to the Delaware Department of Health and Social Services.

The program generated approximately $37 million in sales in 2022, according to third-party industry data.

We provide comprehensive management and real estate services to First State Compassion Center (“FSCC”), our longstanding client in Delaware.

We were instrumental in helping FSCC obtain Delaware’s first ever seed to sale medical cannabis license.2014.

Today, FSCC operates under two of only eleven cannabis licenses in the state.

We developed and currently lease to FSCC a number of facilities in the state, including:

• a 47,000-square foot cultivation facility and dispensary in Wilmington;

• an 8,000-square foot production kitchen, also located in Wilmington, that opened in 2022;

• a 100,000-square foot cultivation facility in Milford that commenced operations in 2022;

• a 4,000-square foot dispensary in Lewes.

FSCC began licensing and distributing a selection of our top-selling edibles brands in the state in 2022.

Missouri operates a successful medical cannabis program, which expanded to include adult-use sales in February 2023 following a November 2022 ballot referendum.

According to the Missouri Department of Health and Senior Services (“DHSS”), $210 million in cannabis sales were generated during 2021, the first full year of the state’s medical cannabis program.

With a population of more than six million, Missouri’s medical cannabis program has more than 160,000 registered medical cannabis patients.

First-year adult-use sales are expected to reach $550 million, according to MJBizDaily estimates.

As the result of a management contract we announced in September 2022, we expect to distribute our award-winning portfolio of cannabis-infused edibles in Missouri beginning mid-2023, which we plan to produce at a new production kitchen near Kansas City that we are developing and intend to manage.

In addition, we have entered into an agreement to obtain the license of a Missouri wholesaler and cultivator, contingent upon obtaining all requisite approvals from the State of Missouri, which we expect to occur in 2023.

Ohio operates a successful medical cannabis program, with more than 159,000 actively registered patients in a state with a population of nearly 12 million.

According to the Ohio Department of Commerce, 2022 medical cannabis sales were approximately $479 million.

As the result of being awarded a provisional dispensary license by the Ohio Board of Pharmacy in May 2022, we expect to commence operations of a new dispensary in Tiffin, located south of Toledo and home to Tiffin University, in 2023.

Recent Developments

We have had several recent developments that we believe are critical to the implementation of our strategic growth plan:

• On January 17, 2023, we announced that two executives had joined the Company to help drive retail and wholesale revenue and product innovations:

Matt Truppo joined us as Vice President of Retail Sales and Jay O’Malley joined us as Vice President of Marketing and Research & Development.

• On January 24, 2023, we entered into a Loan and Security Agreement (the “Credit Agreement”) with Chicago Atlantic Admin, LLC as administrative agent for the lenders.

Proceeds from the Credit Agreement are designated to complete the build-out of a new cultivation and processing facility in Illinois, complete the buildout of a new processing kitchen in Missouri, expand existing cultivation and processing facilities in Massachusetts and Maryland, fund certain capital expenditures, and to repay in full the Kind Therapeutics seller notes incurred in connection with the Kind acquisition in April 2022.

The remaining balance, if any, is expected to be used to fund acquisitions, including, among others, the acquisitions in Quincy, MA;, Casey, IL;

and Tiffin, OH.

• On February 21, 2023, we announced our intention to acquire the operating assets of Ermont in Quincy, MA, as previously described.

In the markets where we currently operate, we compete against other fully vertical multi-state operators (“MSOs”).

We believe that our experience in building our business organically from the ground up is a key factor that differentiates us from the majority of other MSOs.

We successfully developed and managed our clients' businesses, which we subsequently acquired and consolidated, created our own brands and branded products, and have retained the core management team since inception.

While other MSOs have raised significantly more capital, they have generally acquired licensed businesses from sellers with whom they had no prior direct operating relationship.

We believe our approach is significantly more cost-efficient, carries less risks, and results in a more seamless integration of processes, personnel, operating philosophies, and culture.

In addition to MSOs, we face competition from companies of varying sizes and geographic reach.

Some, called Single State Operators, are fully vertical in just one state, others focus solely on producing and selling similar products and others solely operate dispensaries and sell the goods of other businesses.

Some of our competitors that create and sell their own products are able to produce products that are on par with those we offer.

We believe that by utilizing our own best practices and operational expertise, we are able to produce premium cannabis products at one of the lowest cost structures in the industry, which enables us to remain competitive in our markets.

However, our sales could decline significantly if our competitors develop and market products that are more effective, more convenient, or less expensive than our products.

As cannabis products become more mainstream and gain greater acceptance, it is likely that larger and more established companies with greater available resources, including name recognition and national distribution networks, will enter the market.

However, we believe that there are many barriers to entry, and to duplicate our licenses, knowledge, and facilities would be costly and time-consuming.

We have upgraded our marketing efforts to expand branding and distribution, as well as implemented home delivery, where permissible, and other business strategies developed by more conventional industries.

As a result, we have had success in increasing both the number of retail transactions and the average amount of sales underlying those transactions.

We have also developed a loyal customer base at our retail locations and improved product visibility and sales of our proprietary portfolio of cannabis products.

Intellectual Property

We own registered trademarks for Betty’s Eddies, Kalm Fusion, Mari Melts and Nature’s Heritage , and have filed to register the Bubby’s Baked and Vibations:

High + Energy trademarks with the U.S.

Patent and Trademark Office.

Our proprietary processing and manufacturing techniques and technologies, while not patented, are kept strictly confidential.

We enter into and enforce confidentiality agreements with key employees and consultants to protect our intellectual property, trade secrets, and general know-how.

Our Employees

As of December 31, 2022, we had a total of 681 employees, of which 592 were full-time.

Website Access to Company Reports

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are available free of charge on the Company’s website at www.marimedinc.com as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission, or as filed with the Canadian securities regulatory authorities on the SEDAR website.

In addition, copies of our annual report will be made available, free of charge, on written request.

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 1. Business