What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-03-06 compared with 2024-03-07 · 88 added, 105 removed, 193 unchanged (50% of the section changed)

16 unchanged sentences

The Company does not undertake to update its forward-looking statements or risk factors to reflect future events or circumstances, unless required by law.

We are a multi-state operator in the United States cannabis industry.

We develop, operate, manage, and optimize state-of-the-art, regulatory-compliant facilities for the cultivation, production, and dispensing of medicinal and adult-use cannabis.

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

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 OCTQX and on the Canadian Securities Exchange under the ticker symbol MRMD.

We completed two acquisitions during 2024 that were accounted for as asset purchases.

On April 9, 2024, we acquired 100% of the membership interests of Allgreens Dispensary, LLC ("Allgreens"), which held a conditional adult use cannabis dispensary license in Illinois (the "Allgreens Acquisition").

On April 5, 2024, we acquired 100% of the membership interests of Our Community Wellness & Compassionate Care Center, Inc.

("MedLeaf"), which held a retail dispensary license in Maryland (the "MedLeaf Acquisition").

The MedLeaf dispensary had ceased operations since July 1, 2023, but we reopened it on August 19, 2024, upon receiving regulatory approval to commence adult use retail sales.

On March 9, 2023 (the "Ermont Acquisition Date"), we acquired the operating assets of Ermont, Inc.

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

The financial results of Ermont are included in our consolidated financial statements for the period subsequent to the Ermont Acquisition Date.

On April 27, 2022 (the “Kind Acquisition Date”), we acquired Kind Therapeutics USA (“Kind”), our former client in Maryland that holds licenses for the cultivation, production, and dispensing of medical cannabis (the “Kind Acquisition”).

The financial results of Kind are included in our consolidated financial statements for the periods subsequent to the Kind Acquisition Date.

On May 5, 2022, we completed the acquisition of 100% of the equity ownership of Green Growth Group Inc.

(“Green Growth”), an entity that holds a craft cultivation and production cannabis license in the State of Illinois (the “Green Growth Acquisition”).

On December 30, 2022, we completed an asset purchase under which we acquired from Greenhouse Naturals LLC the cannabis license and assumed the property lease associated with a cannabis dispensary in Beverly, Massachusetts that had never been operational.

During 2023, we were focused on continuing to execute our strategic growth plan, and intend to continue this focus in 2024, with priority on the activities described below:

• 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.

• Continuing to consolidate the cannabis businesses that we have developed and managed.

• In Massachusetts, we opened two additional dispensaries and intend to significantly expand the capacity and capability of our manufacturing facility in New Bedford, Massachusetts.

• In Maryland, we opened a dispensary in Annapolis in October 2022, and we intend to expand our manufacturing facility by 40,000 square feet.

We recently received Good Manufacturing Practices ("GMP") certification of our production kitchen, as well as approval to produce and sell high-dose edibles, which we have commenced.

We also commenced adult-use wholesale and retail sales in Maryland.

Under current Maryland cannabis laws, we have the potential to add three additional medical dispensaries, for a total of four.

• In Illinois, in May 2022, we closed on the acquisition of a craft cannabis license, which enables us to be vertically integrated and add cultivation, manufacturing, and distribution to our four existing retail cannabis operations in Illinois.

Additionally, in October 2023, we announced the opening of a Thrive Dispensary in Casey.

In response to the state's request to open as soon as possible, we are currently operating the Thrive Dispensary from a temporary mobile facility while construction on a permanent building is completed on the same site.

Illinois cannabis laws, we have the potential to add five additional dispensaries, for a total of ten.

• In November 2023, we were granted a certificate of occupancy for our processing kitchen in Mt.

Vernon, Illinois, and we have begun manufacturing our branded products for sale through retail and wholesale channels.

Additionally, we continue construction of the cultivation facility in Mt.

Vernon, and expect this facility to be completed in early 2024.

• In Ohio, in June 2023, we opened our first medical dispensary in the state, and we intend to explore additional opportunities to grow our operations in Ohio to the maximum allowable by state regulations.

The financial results of Ermont are included in our consolidated financial statements since the Ermont Acquisition Date.

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

• Completing the acquisition and consolidation of our original advisory clients:

◦ FSCC in Delaware is the last of these businesses.

On February 28, 2025, we completed the acquisition of FSCC in accordance with the terms of the Omnibus Agreement.

• Increasing our product brand revenue by:

◦ strengthening our cultivation and processing capabilities to ensure a reliable, high-quality supply of raw materials that will enhance product consistency, quality, and innovation;

◦ developing and launching innovative new products that align with consumer preferences and demand;

◦ offering new effects and formulations that differentiate our existing brands;

◦ broadening our distribution network in existing markets to maximize our reach and brand visibility;

◦ expanding our distribution into new markets through new license applications, acquisitions of existing cannabis businesses, and/or identification of qualified licensing partners.

• Increasing retail store revenue by:

◦ driving additional and higher average transactions in our existing stores through an outstanding customer experience that prioritizes our product selection and the ease of the shopping experience;

◦ expanding our dispensary footprint in current markets where regulations allow and into new markets through new license applications and/or acquisitions of existing cannabis businesses.

Critical Accounting Policies and Estimates

14 unchanged sentences

We limit our credit risk by performing credit evaluations of our clients and maintaining a reserve, as applicable, for potential credit losses.

Such evaluations are judgmental in nature and include a review of the client’s outstanding balances with consideration toward such client’s historical collection experience, as well as prevailing economic and market conditions and other factors.

Such evaluations are judgmental in nature and include a review of each client’s outstanding balances with consideration toward such client’s historical collection experience, as well as prevailing economic and market conditions and other factors.

Accordingly, the actual amounts collected could differ from expected amounts and require that we record additional reserves.

12 unchanged sentences

We allocate the purchase price of acquired assets and companies to identifiable assets acquired and liabilities assumed at their acquisition date fair values.

expected future economic benefits from other assets acquired in the acquisition or business combination that are not individually identified and separately recognized.

Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net amount of the acquisition date fair values of the assets acquired and the liabilities assumed and represents the expected future economic benefits from other assets acquired in the acquisition or business combination that are not individually identified and separately recognized.

Significant judgments and assumptions are required in determining the fair value of assets acquired and liabilities assumed, particularly acquired intangible assets, which are principally based upon estimates of the future performance and cash flows expected from the acquired asset or business and applied discount rates.

25 unchanged sentences

• Product sales (retail and wholesale) - direct sales of cannabis and cannabis-infused products primarily by our retail dispensaries and wholesale operations in multiple states.

We recognize this revenue when products are delivered or at retail points-of-sale.

• Real estate rental income - rental income generated from the leasing of our state-of-the-art, regulatory compliant cannabis facilities to our cannabis-licensed clients.

Rental income is generally a fixed amount per month that escalates over the respective lease terms.

Prior to the third quarter of 2022, we charged additional rental fees based on a percentage of tenant revenue that exceeded specified amounts;

these incremental rental fees were eliminated in connection with new contract negotiations with our client.

• Supply procurement - resale of cultivation and production resources, supplies and equipment that we have acquired from top national vendors at discounted prices to our clients and third parties within the cannabis industry.

We recognize this revenue after the delivery and acceptance of goods by the purchaser.

• Management fees - fees for providing our cannabis-licensed clients with comprehensive oversight of their cannabis cultivation, production and dispensary operations.

Prior to the third quarter of 2022, these fees were based on a percentage of such clients' revenue and were recognized after services were performed;

these fees were eliminated in connection with new contract negotiations with our client.

• Licensing fees - revenue from the licensing of our branded products, including Betty's Eddies , Bubby's Baked , Vibations and Kalm Fusion , to wholesalers and regulated dispensaries throughout the United States and Puerto Rico.

We recognize this revenue when the products are sold to the end customer.

We recognize this revenue when products are delivered to unrelated parties or at our retail points-of-sale.

• Other revenue - comprised of real estate rentals to our cannabis-licensed client, supply procurement fees from facilitating purchases of resources, supplies and equipment for our cannabis-licensed client and third parties, management fees for providing our cannabis-licensed clients with comprehensive oversight of their operations, and licensing fees from the licensing of our branded products to wholesalers and regulated dispensaries.

Our revenue for the years ended December 31, 2024 and 2023 was comprised of the following (in thousands, except percentages):

Year ended December 31, Increase (decrease) from prior year

2023 2022 $ %

Product revenue:

Product sales - retail $ 91,530 $ 95,517 $ (3,987) (4.2) %

Product sales - wholesale 62,895 48,788 14,107 28.9 %

Total product revenue 144,305 125,701 18,604 14.8 %

Other revenue 3,539 4,293 (754) (17.6) %

Real estate rentals 1,787 3,526 (1,739) (49.3) %

Supply procurement 1,534 3,353 (1,819) (54.2) %

Management fees 711 848 (137) (16.2) %

Licensing fees 261 582 (321) (55.2) %

Total other revenue 4,293 8,309 (4,016) (48.3) %

Total revenue $ 157,964 $ 148,598 $ 9,366 6.3 %

Our total revenue increased $14.6 million, or 10.9%, in the year ended December 31, 2023 ("2023") compared to the year ended December 31, 2022 ("2022"), the result of higher product revenue, partially offset by lower other revenue (real estate rentals, supply procurement, management fees and licensing fees).

Our total product revenue in 2023 increased $18.6 million, or 14.8%, primarily attributable to higher wholesale revenue, coupled with net increases in retail revenue.

Our wholesale and retail revenue increased in both Maryland and Massachusetts in 2023.

The increase in Maryland revenue is attributable to both the inclusion of a full year of revenue in 2023 compared to revenue in 2022 only for the period subsequent to the Kind Acquisition Date, and organic growth in the current year.

The increase in Massachusetts revenue in 2023 was primarily attributable to higher retail revenue arising from our recent acquisitions there and, to a lesser extent, to higher wholesale revenue.

These increases were partially offset by decreases in revenue from certain of our other dispensaries.

The decrease in our other revenue was primarily attributable to rent, supply procurement and management fee reductions in connection with one of our cannabis-licensed clients.

These decreases were partially offset by higher supply procurement revenue primarily attributable to revenue generated from our cannabis-licensed client in Delaware.

Our total revenue increased $9.4 million, or 6.3%, in the year ended December 31, 2024 ("2024") compared to the year ended December 31, 2023 ("2023"), the result of higher product revenue, partially offset by lower other revenue.

Our total product revenue in 2024 increased $10.1 million, or 7.0%, comprised of $14.1 million of higher wholesale revenue that was partially offset by $4.0 million of lower retail revenue.

The increase in wholesale revenue was primarily attributable to revenue generated in Maryland and to the inclusion of wholesale revenue in Illinois in 2024.

Although wholesale revenue increased in every state, Maryland and Illinois accounted for the majority of the increase.

Our retail operations reported higher revenue in Massachusetts and Maryland;

however, these increases were offset by lower retail sales in certain of our Illinois dispensaries.

The decrease in our other revenue was primarily attributable to rent, supply procurement and licensing fee reductions in connection with one of our cannabis-licensed clients, partially offset by higher management fees.

The increase in management fees principally related to Allgreens prior to the Allgreens Acquisition.

Cost of Revenue, Gross Profit and Gross Margin

1 unchanged sentence

Our cost of revenue, gross profit and gross margin for 2024 and 2023 were as follows (in thousands, except percentages):

Year ended December 31, Increase from prior year

2023 2022 $ %

Year ended December 31, Increase (decrease) from prior year

Cost of revenue $ 95,096 $ 82,679 $ 12,417 15.0 %

1 unchanged sentence

Gross margin 39.8 % 44.4 %

Our cost of revenue increased in 2023 compared to 2022, primarily attributable to higher materials and employee-related costs.

These increases aggregated approximately $16 million, and were primarily due to our increased headcount in connection with our recent acquisitions and expanded footprint.

These increases were partially offset by lower supply procurement and certain manufacturing-related expenses.

Our cost of revenue increased in 2024 compared to 2023, primarily attributable to higher materials costs, including $3.7 million of expense related to our revaluation in 2024 of our inventory, coupled with higher employee- and facilities-related costs.

The revaluation expense related to the redefinition of our standard cost assumptions to better align with our actual production and procurement trends.

Our higher personnel costs were primarily due to our increased headcount in connection with our recent acquisitions and expanded footprint.

The increase in wholesale revenue as a percentage of our total revenue was the primary contributor to the decrease in our gross margin in 2024 compared to 2023, as wholesale sales have a historically lower gross margin than retail sales.

Operating Expenses

2 unchanged sentences

Year ended December 31, Increase (decrease) from prior year

2023 2022 $ %

Personnel $ 27,059 $ 22,612 $ 4,447 19.7 %

2 unchanged sentences

Acquisition-related and other 951 695 256 36.8 %

Bad debt 118 3,752 (3,634) (96.9 %)

Bad debt (recoveries) (336) 118 (454) (384.7 %)

Total operating expenses $ 59,956 $ 51,534 $ 8,422 16.3 %

The increase in our personnel expenses in 2023 compared to 2022 was primarily due to the hiring of additional staff to support higher levels of projected revenue from existing and expanded operations, as well as increased headcount arising from the Kind Acquisition and, to a lesser extent, our other recent acquisitions.

The increase in our personnel expenses in 2024 compared to 2023 was primarily due to the hiring of additional staff to support higher levels of projected revenue from existing and expanded operations, as well as increased headcount arising from our other recent acquisitions.

Personnel costs increased to approximately 17% of revenue in 2024, compared to approximately 15% of revenue in 2023.

The increase in our marketing and promotion expenses in 2023 compared to 2022 was primarily attributable to our focused efforts to upgrade our marketing initiatives in order to expand branding and distribution of our licensed products.

Marketing and promotion costs increased to approximately 4% of revenue in 2023, compared to approximately 3% of revenue in 2021.

The increase in our general and administrative expenses in 2023 compared to 2022 was primarily attributable to higher facility-related, travel and entertainment, and insurance-related expenses, partially offset by lower costs in connection with our equity programs and lower bad debt expense.

These decreases were partially offset by higher facilities-related and depreciation expenses.

The increase in our marketing and promotion expenses in 2024 compared to 2023 was primarily attributable to our continued focus on upgrading our marketing initiatives in order to expand branding and distribution of our licensed products.

Marketing and promotion costs were approximately 4% of revenue in both 2024 and 2023.

The increase in our general and administrative expenses in 2024 compared to 2023 was primarily attributable to increases in facility-related expenses, depreciation and amortization of fixed assets, and insurance and travel expenses.

These increases principally relate to the addition of new facilities and related fixed assets.

Acquisition-related and other expenses include those expenses related to acquisitions and other significant transactions that we would otherwise not have incurred, and include professional and services fees, such as legal, audit, consulting, paying agent and other fees.

We incurred $1.0 million of acquisition-related and other expense in 2024, primarily related to the acquisitions of MedLeaf and Allgreens, which were both consummated in April 2024, and non-cash expense for warrants to purchase our common stock issued to an entity in consideration for introductory and other services rendered in connection with certain acquisitive and financing activities.

We incurred $0.7 million of acquisition-related and other expense in 2023, primarily related to our acquisitive activities.

We incurred $1.0 million of acquisition-related and other expenses in 2022, primarily related to the Kind Acquisition in April 2022 and the July 2022 listing of our common stock on the Canadian Securities Exchange.

Overall, the increase in our operating expenses in 2023 compared to 2022 was primarily attributable to our higher personnel, marketing and general and administrative expenses, partially offset by lower bad debt and acquisition-related and other expenses.

Overall, the increase in our operating expenses in 2024 compared to 2023 was primarily attributable to our higher personnel, general and administrative, and marketing and promotion expenses, partially offset by reversal adjustments to bad debt expense.

Interest Expense, Net

Interest expense primarily relates to interest on mortgages and notes payable and, effective in 2023, the CA Credit Agreement (as described below) and, to a lesser extent, the CREM Loan (as described below).

Interest expense primarily relates to interest on mortgages and notes payable.

Interest expense in 2024 includes interest on the CREM Loan (as described below) and in 2023, the CA Credit Agreement (as described below) and, to a lesser extent, the CREM Loan.

Interest income primarily relates to our notes receivable.

Other expense, net, includes gains (losses) on changes in the fair value of our investments and other investment-related income (expense).

Our net interest expense increased by $8.2 million in 2023 compared to 2022, primarily due to interest or the CA Credit Agreement and expense related to the fair value adjustment to notes payable in connection with our early repayment of the notes payable for the Kind Acquisition.

Our net interest expense decreased by $2.2 million in 2024 compared to 2023.

This decrease was primarily due to lower non-cash interest expense in 2024, coupled with lower interest rates on our CREM Loan compared to our previous financing facility.

Loss on Extinguishment of Debt

On November 16, 2023, we repaid and retired the term loan outstanding under the CA Credit Agreement (the "CA Term Loan Payoff") using proceeds from the CREM Loan entered into on the same day.

The Term Loan payoff amount totaled $32.7 million, comprised of $28.5 million for the outstanding principal, $3.7 million for the make-whole payment, $0.2 million for accrued unpaid interest and $0.3 million for transaction-related fees.

We also repaid the mortgage with Bank of New England related to our Massachusetts facilities in New Bedford and Middleborough (the "BNE Payoff") and concurrently, we refinanced these properties under the CREM Loan.

In connection with these early repayments, we recognized losses aggregating $10.4 million, comprised of $10.2 million in connection with the CA Term Loan Payoff and $0.2 million in connection with the BNE Payoff.

On November 16, 2023, we repaid and retired the term loan outstanding under the CA Credit Agreement (the "CA Term Loan Payoff") using proceeds from the CREM Loan entered into on the same date.

The CA Term Loan Payoff amount totaled $32.7 million, comprised of $28.5 million for the outstanding principal, $3.7 million for the make-whole payment, $0.2 million for accrued unpaid interest and $0.3 million for transaction-related fees.

We also repaid the mortgage with Bank of New England related to our Massachusetts facilities in New Bedford and Middleborough (the "BNE Payoff") and

concurrently, we refinanced these properties under the CREM Loan.

In connection with these prepayments, we recognized losses aggregating $10.4 million, comprised of $10.2 million in connection with the CA Term Loan Payoff and $0.2 million in connection with the BNE Payoff.

We did not recognize any such losses or gains in 2024.

Other Expense, Net

2 unchanged sentences

We were initially advised by JPM Chase, the recipient's bank ("Chase") that we had identified the problem before the payment was delivered to the account identified by the email, and that the funds were being held by Chase pending its completion of an internal investigation.

Chase has subsequently advised us that the funds were delivered to the fraudulent recipient's account.

We continue to pursue all channels through our bank to recover these funds.

In addition, we initiated, and are pursuing, a claim under our insurance coverage to recover this amount.

There is no assurance that we will successfully recover all or any portion of this amount, including under our insurance claim.

Chase subsequently advised us that the funds were delivered to the fraudulent recipient's account.

We pursued all channels through our bank to recover these funds.

In addition, we initiated a claim under our insurance coverage to recover this amount.

However, to date, these efforts have been frustrated and it appears unlikely that we will successfully recover all or any portion of this amount.

We reduced our cash balance and included this amount as a component of Other expense, net, in our consolidated statement of operations for the year ended December 31, 2023.

4 unchanged sentences

Cybersecurity for further information

We recorded nominal net other expense for 2022, comprised of $1.0 million of non-cash income from the sale of an investment, virtually offset by a $1.1 million loss from the change in fair value of other investments.

Income Tax Provision

8 unchanged sentences

The remaining balance, if any, was expected to be used to fund acquisitions.

The CA Credit Agreement provided for $35.0 million in principal borrowings at our option in the aggregate and further provided the CA Borrowers with the right, subject to customary conditions, to request an additional incremental term loan in the aggregate principal amount of up to $30.0 million;

The CA Credit Agreement provided for $35.0 million in the aggregate of principal borrowings at our option and further provided the CA Borrowers with the right, subject to customary conditions, to request an additional incremental term loan in the aggregate principal amount of up to $30.0 million;

provided that the CA Lenders elect to fund such incremental term loan.

$30.0 million of loan principal was funded at the initial closing (the "Term Loan") and we had the option, during the six-month period following the initial closing, to draw down an additional $5.0 million, which we did not elect to do.

$30.0 million of loan principal was funded at the initial closing (the "CA Term Loan") and we had the option, during the six-month period following the initial closing, to draw down an additional $5.0 million, which we did not elect to do.

The loans required scheduled amortization payments of 1.0% of the principal amount outstanding under the CA Credit Agreement per month commencing in May 2023, and the remaining principal balance was due in full on January 24, 2026, subject to extension to January 24, 2028 under certain circumstances.

The CA Credit Agreement provided the CA Borrowers with the right, subject to specified limitations, to incur (a) seller provided debt in connection with future acquisitions, (b) additional mortgage financing from third-party lenders secured by real estate currently owned and acquired after the closing date, and (c) additional debt in connection with equipment leasing transactions.

real estate currently owned and acquired after the closing date, and (c) additional debt in connection with equipment leasing transactions.

The obligations under the CA Credit Agreement were secured by substantially all of the assets of the CA Borrowers, excluding specified parcels of real estate and other customary exclusions.

4 unchanged sentences

Additionally, the CA Credit Agreement required us to meet certain financial tests.

We were in compliance with the CA Credit Agreement covenants at all times while the Term Loan was outstanding.

We were in compliance with the CA Credit Agreement covenants at all times while the CA Term Loan was outstanding.

The CA Credit Agreement provided for 30% warrant coverage against amounts funded under the facility, priced at a 20% premium to the trailing 20-day average price on the closing date of each such funding.

At the initial closing, upon funding of the initial $30.0 million under the facility, we issued to the CA Lenders warrants to purchase an aggregate of 19,148,936 shares of our common stock at $0.47 per share, exercisable for a five-year period following issuance.

On November 16, 2023 (the "Payoff Date"), we repaid and retired the Term Loan (the "Term Loan Payoff") using proceeds from a new $58.7 million loan entered into on the same day (described below).

The Term Loan Payoff amount totaled $32.7 million, comprised of $28.5 million for the outstanding principal, $3.7 million for the make-whole payment, $0.2 million for accrued unpaid interest and $0.3 million for transaction-related fees.

We recognized a loss of $10.2 million in connection with the Term Loan Payoff.

On November 16, 2023 (the "Payoff Date"), we repaid and retired the CA Term Loan using proceeds from the CREM Loan (described below).

We recognized a loss of $10.2 million in connection with the CA Term Loan Payoff.

On November 16, 2023, Mari Holdings MD LLC, Hartwell Realty Holdings LLC, Kind Therapeutics USA, LLC, ARL Healthcare Inc., and MariMed Advisors, Inc., each a wholly-owned direct or indirect subsidiary of the Company (collectively, the "CREM Borrowers") entered into a Loan Agreement (the "CREM Loan Agreement"), by and among the CREM Borrowers, and Needham Bank, a Massachusetts co-operative bank (the "CREM Lender") pursuant to which the CREM Lender loaned to the CREM Borrowers an aggregate principal amount of $58.7 million (the "CREM Loan Transaction").

3 unchanged sentences

The interest rate will reset after five years to the FHLB Rate (the Classic Advance Rate for Fixed Rate advances for a period of five years for an amount greater than or equal to the loan amount, as such rate is defined and published by the Federal Home Loan Bank of Boston), plus 3.50%.

We will make interest-only payments for the first twelve months of the term of the loan, with payments thereafter based upon a twenty-year amortization schedule.

As required, we made interest-only payments for the first twelve months of the term of the loan, with payments thereafter based upon a twenty-year amortization schedule.

The CREM Lender initially released $52.8 million to the CREM Borrowers (the "Initial CREM Distribution").

The remaining proceeds of $5.9 million will be held in escrow to complete the expansion of our Hagerstown, Maryland cultivation facility (the "Hagerstown Facility").

The remaining proceeds of $5.9 million would be held in escrow to complete the expansion of our Hagerstown, Maryland cultivation facility (the "Hagerstown Facility").

During the year ended December 31, 2024, $5.1 million of the escrowed portion of the loan proceeds was released to us.

Any unused proceeds will be released to us after completion of the Hagerstown Facility expansion.

We used $46.8 million of the Initial CREM Distribution to fully repay certain of our outstanding debt.

These payments were comprised of $32.7 million to repay the Term Loan, $11.9 million to repay the mortgage with Bank of New England for our New Bedford, MA and Middleborough, MA properties (the "BNE Mortgage"), and $2.2 million to reduce the outstanding balance of the note we issued in connection with the Ermont Acquisition.

These payments were comprised of $32.7 million to repay the CA Term Loan, $11.9 million to repay the mortgage with Bank of New England for our New Bedford and Middleborough, Massachusetts properties (the "BNE Mortgage"), and $2.2 million to reduce the outstanding balance of the note we issued in connection with the Ermont

Concurrent with the repayment of the BNE Mortgage, we refinanced these properties through the CREM Loan and accordingly, effective November 16, 2023, the mortgage on these properties is held by Needham Bank, which mortgage matures in 2033 and which outstanding amount is included as a component of the CREM Loan amount in our consolidated balance sheet at December 31, 2023.

2 unchanged sentences

The CREM Loan Agreement also requires the CREM Borrowers to meet certain periodic financial tests.

The Company was in compliance with such periodic financial tests at December 31, 2024.

Cash Flows from Operating Activities

3 unchanged sentences

Our operating activities provided $6.8 million and $7.9 million of cash in 2024 and 2023, respectively.

The change in cash from operating activities in 2023 compared to 2022 was primarily attributable to $6.4 million of cash used to pay income taxes in the current year period, compared to $14.6 million in the same prior year period, coupled with higher expenses arising from expanding our sales activities, facilities and geographic footprint, both in the states where we currently operate and to expand into other states.

The change in cash from operating activities in 2024 compared to 2023 was primarily attributable to higher costs and operating expenses arising from expanding our sales activities, facilities and geographic footprint.

Cash Flows from Investing Activities

Our investing activities used $17.1 million and $26.0 million of cash in 2024 and 2023, respectively.

We used $20.1 million of cash for purchases of property and equipment in 2023, compared to $12.1 million in 2022.

This increase is primarily due to our expansion activities, resulting in the buildout of certain facilities to add cultivation and processing functionality and capacity.

We used $3.0 million of cash for purchase consideration in connection with the Ermont

Acquisition in March 2023, and an aggregate of $12.8 million for cash consideration in connection with the Kind Acquisition and Green Growth Acquisition in April 2022 and May 2022, respectively.

During 2024 and 2023, we used $12.0 million and $20.1 million, respectively, for capital expenditures, primarily related to the build-out of certain facilities to add cultivation, processing and sales capacity.

We used $4.3 million and $3.0 million in 2024 and 2023, respectively, for purchase consideration.

The 2024 amount was comprised of $2.3 million for the Allgreens Acquisition and $2.0 million for the MedLeaf Acquisition, and the 2023 amount related to the Ermont Acquisition.

We made advances toward future business acquisitions of $0.1 million and $1.1 million in 2024 and 2023, respectively, and spent $0.7 million and $0.6 million to purchase or renew state cannabis licenses.

Cash Flows from Financing Activities

Our financing activities provided $3.0 million of cash in 2024 and used $23.0 million of cash in 2023.

In 2023, we received proceeds of $29.1 million from the CA Credit Agreement, of which we used $5.5 million to repay in full the notes previously issued to the sellers of Kind as part of the purchase consideration for the Kind Acquisition.

We received $53.6 million from the CREM Loan, of which we used $46.8 million in the aggregate to repay and retire the CA Credit Agreement and our mortgage with Bank of New England for our Massachusetts facilities in New Bedford and Middleborough, including prepayment penalties, and reduce the balance on our notes payable in connection with the Ermont Acquisition.

In 2024, we received $5.1 million of additional proceeds from the CREM Loan and $1.2 million of proceeds from the refinancing of our retail facility in Mt.

Vernon, Illinois.

We made $3.1 million of aggregate principal payments on our outstanding mortgages, promissory notes and finance leases, and approximately $139,000 of distribution payments.

In 2023, we received proceeds of $29.1 million from the CA Term Loan, of which we used $5.5 million to repay in full the notes previously issued to the sellers of Kind as part of the purchase consideration for the Kind Acquisition.

We received $53.6 million from the CREM Loan, of which we used $46.8 million in the aggregate to repay and retire the CA Term Loan and our mortgage with Bank of New England for our Massachusetts facilities in New Bedford and Middleborough, including prepayment penalties, and reduce the balance on our notes payable in connection with the Ermont Acquisition.

Concurrent with the repayment to Bank of New England, we refinanced these properties through the CREM Loan.

In 2022, we paid $2.0 million of cash to redeem the outstanding minority interests in one of our majority-owned real estate subsidiaries, made $1.5 million of aggregate principal payments on our outstanding mortgages and notes payable, and made distribution payments and finance lease principal payments aggregating $0.5 million.

These amounts were partially offset by $3.0 million of proceeds from a new mortgage on one of our facilities in Illinois.

Based on our current expectations, we believe our current cash and future funding opportunities will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next twelve months.

8 unchanged sentences

• impairments or write-downs of acquired intangible assets;

• inventory revaluation;

• stock-based compensation;

• acquisition-related and other;

• legal settlements;

12 unchanged sentences

Amortization of acquired intangible assets 2,948 3,025

Inventory revaluation 3,667 —

Stock-based compensation 1,050 1,020

Severance 211 —

Acquisition-related and other 951 695

10 unchanged sentences

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 7. Management’s Discussion and Analysis