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Item 8. Financial Statements and Supplementary Data

2025-03-06 compared with 2024-03-07 · 352 added, 482 removed, 669 unchanged (55% of the section changed)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of MariMed Inc.

Opinion on the Consolidated Financial Statements

To the Board of Directors and

Stockholders of MariMed Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of MariMed Inc.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

As discussed in the notes to the financial statements, the Company allocates a certain percentage of overhead cost to its manufactured inventory.

Auditing management’s allocation of overhead involves significant judgements and estimates to determine the proper allocation.

To evaluate the appropriateness of the allocation of overhead to inventory, we evaluated management’s significant judgments and estimates in what parts of overhead should be included and the allocation of these costs.

As discussed in the Notes to the financial statements, the Company recognizes revenue upon the transfer of control of promised goods to the customer upon delivery in an amount that reflects the consideration the Company expects to receive in exchange for the products.

Auditing the recognition of revenue involves significant challenge due to the inherent risk of revenue recognition.

Related to retail operations, M&K tested a sample of point-of-sale transactions as well as physical cash flows from the retail operations.

Related to wholesale operations, M&K tested a sample of METRC reports and tested delivery of products to customers.

To evaluate the appropriateness and accuracy of the assessment by management, we evaluated management’s assessment relationship to the relevant agreements and management’s disclosure in the financial statements.

/s/ M&K CPAS, PLLC

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Investments, current portion — 88

Due from related parties 105 29

Other current assets 3,389 3,512

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12,432,432 shares authorized;

1,155,274 and 6,216,216 shares issued and outstanding at December 31, 2023 and 2022, respectively

1,155,274 shares issued and outstanding at December 31, 2024 and 2023

Total mezzanine equity 19,000 19,000

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381,476,581 and 375,126,352 shares issued and outstanding at December 31, 2024 and 2023, respectively

Common stock subscribed but not issued;

zero and 70,000 shares at December 31, 2022 and 2021, respectively

Additional paid-in capital 173,366 171,144

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Acquisition-related and other 951 695

Bad debt 118 3,752

Bad debt (recoveries) ( 336 ) 118

Total operating expenses 59,956 51,534

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Total interest and other expense, net ( 6,880 ) ( 20,981 )

(Loss) income before income taxes ( 6,596 ) 19,508

Loss before income taxes ( 3,968 ) ( 6,596 )

Provision for income taxes 8,159 9,411

Net (loss) income ( 16,007 ) 13,614

Net loss ( 12,127 ) ( 16,007 )

Net income attributable to noncontrolling interests 37 24

Net (loss) income attributable to common stockholders $ ( 16,031 ) $ 13,468

Net (loss) income per share attributable to common stockholders:

Net loss attributable to common stockholders $ ( 12,164 ) $ ( 16,031 )

Net loss per share attributable to common stockholders:

Basic $ ( 0.03 ) $ ( 0.04 )

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Balances at January 1, 2023 341,474,728 $ 341 70,000 $ 39 $ 142,365 $ ( 83,924 ) $ ( 1,511 ) $ 57,310

Release of shares under stock grants 402,203 — — — — — — —

Exercise of stock options 55,000 — — — 10 — — 10

Cashless exercise of stock options 200,000 — — — — — — —

Cashless exercise of warrants 317,298 — — — — — — —

Forfeiture of restricted shares ( 32,609 ) — — — — — — —

Conversion of promissory notes to common stock 1,142,858 1 — — 399 — — 400

Common stock issued to settle obligations 375,000 — — — 275 — — 275

Common stock issued under licensing agreement 218,345 — — — 121 — — 121

Common stock issued to purchase property and equipment 422,535 1 — — 299 — — 300

Common stock issued as purchase consideration - Green Growth Group Inc.

2,343,750 3 — — 1,497 — — 1,500

Common stock issued as purchase consideration - Greenhouse Naturals LLC 2,000,000 2 — — 710 — — 712

Purchase of minority interests in certain of the Company's subsidiaries — — — — ( 2,165 ) — 165 ( 2,000 )

Distributions to noncontrolling interests — — — — — — ( 259 ) ( 259 )

Stock-based compensation — — 70,000 39 6,299 — — 6,338

Net income — — — — — 13,468 146 13,614

Balances at December 31, 2022 341,474,728 $ 341 70,000 $ 39 $ 142,365 $ ( 83,924 ) $ ( 1,511 ) $ 57,310

Common stock subscribed but not issued — — 5,025 2 — — — 2

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Common stock issued to settle obligations 400,000 — — — 160 — — 160

Common stock issued under licensing agreement 13,007 — — — 5 — — 5

Common stock issued under a licensing and royalty agreement 13,007 — — — 5 — — 5

Common stock issued to purchase property and equipment 740,741 1 — — 299 — — 300

Common stock issued as purchase consideration - Ermont Inc.

6,580,390 7 — — 2,987 — — 2,994

Common stock issued as purchase consideration - business acquisition 6,580,390 7 — — 2,987 — — 2,994

Purchase of minority interest in a subsidiary of the Company 450,000 1 — — 4 — ( 5 ) —

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Stock-based compensation — — — — 1,020 — — 1,020

Net income — — — — — ( 16,031 ) 24 ( 16,007 )

Net (loss) income — — — — — ( 16,031 ) 24 ( 16,007 )

Balances at December 31, 2023 375,126,352 $ 375 — $ — $ 171,144 $ ( 99,955 ) $ ( 1,650 ) $ 69,914

Release of shares under stock grants 2,636,750 2 — — ( 2 ) — — —

Shares of newly vested common stock surrendered to the Company to satisfy tax withholding obligations ( 249,087 ) — — — ( 41 ) — — ( 41 )

Standalone warrants issued as payment for services — — — — 218 — — 218

Common stock issued under a licensing and royalty agreement 45,299 — — — 10 — — 10

Common stock issued as purchase consideration - business acquisition 3,917,267 4 — — 987 — — 991

Distributions to noncontrolling interests — — — — — — ( 139 ) ( 139 )

Stock-based compensation — — — — 1,050 — — 1,050

Net (loss) income — — — — — ( 12,164 ) 37 ( 12,127 )

Balances at December 31, 2024 381,476,581 $ 381 — $ — $ 173,366 $ ( 112,119 ) $ ( 1,752 ) $ 59,876

(1) Represents shares initially issued in connection with an acquisitive transaction that was subsequently cancelled, at which time the shares were returned to the Company and recorded at par value.

See accompanying notes to the consolidated financial statements.

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Cash flows from operating activities:

Net (loss) income attributable to common stockholders $ ( 16,031 ) $ 13,468

Net loss attributable to common stockholders $ ( 12,164 ) $ ( 16,031 )

Net income attributable to noncontrolling interests 37 24

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization of property and equipment 7,910 5,549

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Stock-based compensation 1,050 1,020

Amortization of warrants issued as payment for services received 218 —

Amortization of original debt issuance discount — 232

Amortization of debt discount 358 2,851

Amortization of debt issuance costs 73 —

Payment-in-kind interest 104 366

Present value adjustment of notes payable — —

Bad debt expense 118 3,752

Bad debt (income) expense ( 336 ) 118

Obligations settled with common stock 10 465

Write-off of disposed assets 906 —

Loss on disposal of assets 13 906

Gain on finance lease adjustment — ( 31 )

Write-down of prepaid purchase consideration 200 —

Writedown of prepaid purchase consideration — 200

Loss on extinguishment of debt — 10,431

Loss on changes in fair value of investments 145 76

Other investment income — ( 954 )

Changes in operating assets and liabilities:

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Purchases of investments — ( 261 )

Purchases of cannabis licenses ( 626 ) ( 601 )

Purchases and renewals of cannabis licenses ( 712 ) ( 626 )

Issuance of notes receivable — ( 879 )

Proceeds from notes receivable 50 99

Due from related parties ( 76 ) ( 29 )

Return on investment 44 —

Proceeds from disposal of assets 22 —

Due from third party ( 227 ) ( 76 )

Net cash used in investing activities ( 17,133 ) ( 25,985 )

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Principal payments of finance leases ( 1,557 ) ( 702 )

Redemption of minority interests — ( 2,000 )

Distributions ( 139 ) ( 158 )

Net cash provided by (used in) financing activities 22,983 ( 1,013 )

Net increase (decrease) to cash and cash equivalents 4,908 ( 19,946 )

Net cash provided by financing activities 2,985 22,983

Net (decrease) increase to cash and cash equivalents ( 7,363 ) 4,908

Cash and cash equivalents at beginning of year 14,645 9,737

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Non-cash activities:

Trade receivables converted to notes receivable $ — $ 750

Common stock issued to purchase property and equipment $ — $ 300

Conversion of promissory notes to equity $ — $ 400

Present value of promissory notes issued as purchase consideration $ 3,000 $ 4,569

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Entry into new finance leases $ 2,881 $ 3,235

Writeoff of finance leases $ 1,112 $ —

Common stock issued as purchase consideration $ 991 $ 2,994

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Warrants to issue common stock issued with debt $ — $ 5,454

Notes payable issued to purchase motor vehicles $ 158 $ —

Liability recorded for building improvements $ — $ 1,997

Notes payable issued to purchase property and equipment $ 396 $ 158

Common stock issued to settle obligations $ — $ 160

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Conversion of notes receivable to omnibus long-lived asset $ — $ 10,233

Liability recorded for building improvements $ 1,997 $ —

Return of common stock to the Company in connection with withholding taxes $ 41 $ —

Adjustment to purchase price allocation to reclassify certain acquired intangible assets to goodwill $ 3,819 $ —

See accompanying notes to the consolidated financial statements.

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(1) NATURE OF THE BUSINESS

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

MariMed develops, operates, manages and optimizes state-of-the-art, regulatory-compliant facilities for the cultivation, production and dispensing of medical and adult-use cannabis.

MariMed also licenses its proprietary brands of cannabis products along with other top brands in domestic markets.

("MariMed" or the "Company") is a multi-state cannabis operator in the United States, headquartered in Norwood, Massachusetts, dedicated to improving lives every day through its high-quality products, its actions, and its values.

The Company develops, owns, and manages seed to sale state-licensed, state-of-the-art, regulatory-compliant facilities for the cultivation, production, and dispensing of medicinal and adult-use cannabis.

MariMed has created and continues to develop its own brands of premium cannabis flower, concentrates, edibles, and other precision-dosed products utilizing its proprietary strains and formulations.

The Company also licenses its proprietary brands, along with other top cannabis products, in domestic markets.

(2) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

On March 9, 2023 (the "Ermont Acquisition Date"), the Company 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 the Company's consolidated financial statements since the Ermont Acquisition Date.

On April 27, 2022 (the “Kind Acquisition Date”), the Company acquired Kind Therapeutics USA (“Kind”), the Company's 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 the Company's consolidated financial statements for the periods subsequent to the Kind Acquisition Date.

The Company completed two acquisitions during the year ended December 31, 2022 that it recorded as asset purchases.

On May 5, 2022 (the "Green Growth Acquisition Date"), the Company 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 (the "Greenhouse Naturals Acquisition Date"), the Company completed an asset purchase under which it acquired the cannabis license and assumed a property lease for a dispensary in Beverly, Massachusetts that had never been operational (the "Greenhouse Naturals Acquisition").

Certain reclassifications, not affecting previously reported net income or cash flows, have been made to the previously issued financial statements to conform to the current period presentation.

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The accompanying consolidated financial statements include the accounts of MariMed Inc.

and its majority-owned subsidiaries.

and its wholly- and majority-owned subsidiaries.

Consolidation is effected from the date when control is obtained.

All intercompany transactions and balances have been eliminated.

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Green Growth Group Inc.

Allgreens Dispensary LLC 100.0 %

Our Community Wellness & Compasionate Care Center, Inc.

Noncontrolling Interests

Noncontrolling interests represent third-party minority ownership of the Company’s consolidated subsidiaries.

Net income attributable to noncontrolling interests is shown in the consolidated statements of operations and the value of net assets owned by noncontrolling interests are presented as a component of equity within the balance sheets.

Noncontrolling interests represent third-party minority ownership of the Company’s majority-owned consolidated subsidiaries.

Net income attributable to noncontrolling interests is reported in the consolidated statements of operations, and the value of minority-owned interests is presented as a component of equity within the consolidated balance sheets.

Use of Estimates and Judgments

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reporting amounts of revenue and expenses during the reporting periods.

Significant estimates and judgments relied upon in preparing these consolidated financial statements include accounting for business combinations, inventory valuations, assumptions used to determine the fair value of stock-based compensation, and intangible assets and goodwill.

The Company regularly assesses these estimates and records change in estimates in the period in which they become known.

Significant estimates and judgments relied upon in preparing these consolidated financial statements include accounting for business combinations and asset purchases, inventory valuations, assumptions used to determine the fair value of stock-based compensation, and intangible assets and goodwill.

The Company regularly assesses these estimates and records changes in estimates in the period in which they become known.

The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances.

Actual results could differ from those estimates or assumptions.

Business Acquisitions

Business Combinations

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The fair values of these investments approximate their carrying values.

At each of December 31, 2023 and 2022, the Company had $ 0.1 million of cash held in escrow.

The Company had $ 0.3 million and $ 0.1 million of cash held in escrow at December 31, 2024 and 2023, respectively.

The Company’s cash and cash equivalents are maintained with recognized financial institutions located in the United States.

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Fair Value of Financial Instruments

The carrying amounts of the Company's financial instruments approximate their fair values and include cash equivalents, accounts receivable, deferred rents receivable, notes receivable, investments, term loan, mortgages and notes payable, and accounts payable.

The carrying amounts of the Company's financial instruments approximate their fair values and include cash equivalents, accounts receivable, deferred rents receivable, notes receivable, investments, term loans, mortgages and notes payable, and accounts payable.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As such, fair value is a market-based measurement that should be determined based on assumptions that market participant would use in pricing an asset or a liability.

As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

The three-tier fair value hierarchy is based on the level of independent, objective evidence surrounding the inputs used to measure fair value.

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Revenue Recognition

The Company recognizes revenue in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 606, Revenue from Contract with Customers ("ASC 606") , as amended by subsequently issued Accounting Standards Updates.

ASC 606 requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to in exchange for those goods or services.

The recognition of revenue is determined by performing the following consecutive steps:

The Company’s main sources of revenue are comprised of the following:

• Product sales (retail and wholesale) .

The Company's product sales are derived from direct sales of cannabis and cannabis-infused products primarily by its retail dispensaries and wholesale operations in multiple states.

The Company recognize this revenue when products are delivered to third parties or at the Company's retail points-of-sale.

• Other revenue .

The Company's other revenue is comprised of real estate rentals to cannabis-licensed clients;

supply procurement fees from facilitating purchases of resources, supplies and equipment for cannabis-licensed clients and third parties;

management fees for providing cannabis-licensed clients with comprehensive oversight of their operations;

and licensing fees from the licensing of its branded products to wholesalers and regulated dispensaries.

The Company recognizes revenue in amounts that represent the consideration that it expects to receive in exchange for goods or services provided to customers performing the following steps:

• identify the contract(s) with a customer;

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

The Company is typically considered the principal if it controls the specified good or service before such good or service is transferred to its client.

The Company may also be deemed to be the principal even if it engages another party (an agent) to satisfy some of the performance obligations on its behalf, provided the Company (i) takes on certain responsibilities, obligations and risks, (ii) possesses certain abilities and discretion, or (iii) other relevant indicators of the sale.

If deemed an agent, the Company would not recognize revenue for the performance obligations it does not satisfy.

The Company’s main sources of revenue are comprised of the following:

• Product sales (retail and wholesale) – direct sales of cannabis and cannabis-infused products by the Company’s retail dispensaries and wholesale operations.

This revenue is recognized when products are delivered or at retail points-of-sale.

• Real estate rental income – rental income generated from leasing of the Company’s state-of-the-art, regulatory-compliant cannabis facilities to its cannabis-licensed clients.

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

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

these incremental rental fees were eliminated in connection with new contract negotiations with the Company's client.

• Supply procurement – resale of cultivation and production resources, supplies and equipment that the Company has acquired from top national vendors at discounted prices to its client and third parties within the cannabis industry.

The Company recognizes this revenue after the delivery and acceptance of goods by the purchaser.

• Management fees – fees for providing the Company’s cannabis 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 are recognized after services have been performed;

these fees were eliminated in connection with new contract negotiations with the Company's client.

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

The Company recognizes this revenue when the products are delivered.

The Company is typically considered the principal if it controls the specified goods or services before such goods or services are transferred to its client, and typically considered the agent if it does not exert such control.

If deemed an agent, the Company does not recognize revenue for the performance obligations it does not satisfy.

Research and Development Costs

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An impairment loss is measured by the excess of the asset’s carrying amount over its estimated fair value.

Impairment analyses are based on management’s current plans, asset holding periods, and currently available market information.

Impairment analysis is based on management’s current plans, asset holding periods, and currently available market information.

If these criteria change, the Company’s evaluation of impairment losses may be different and could have a material impact to the consolidated financial statements.

For the years ended December 31, 2023 and 2022, based on the results of management’s impairment analyses, there were no impairment losses.

For the years ended December 31, 2024 and 2023, based on the results of management’s impairment analysis, there were no impairment losses.

Intangible Assets and Goodwill

The Company's intangible assets are comprised of trade names and trademarks, license and customer and non-compete agreements.

The Company's intangible assets are comprised of trade names and trademarks, licenses and customer and non-compete agreements.

Intangible assets are reviewed for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable based upon the estimated undiscounted cash flows.

Recoverability of intangible assets with estimated lives and other long-lived assets is measured by a comparison of the carrying amount of an asset or asset group to future net undiscounted cash flows expected to be generated by the asset or asset group.

Recoverability of intangible assets with estimated lives and other long-lived assets is measured by a comparison of the carrying amount of an asset or

asset group to future net undiscounted cash flows expected to be generated by the asset or asset group.

If these comparisons indicate that an asset is not recoverable, the Company will recognize an impairment loss for the amount by which the carrying value of the asset or asset group exceeds the related estimated fair value.

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Non-lease components within lease agreements are accounted for separately.

Right-of-use assets and obligations are recognized at the lease commencement date based on the present value of lease payments over the lease term, utilizing the Company’s incremental borrowing rate.

Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term, utilizing the Company’s incremental borrowing rate.

The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

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Impairment of Long-Lived Assets

The Company evaluates the recoverability of its fixed assets and other assets in accordance with ASC 360-10-15, Impairment or Disposal of Long-Lived Assets .

Impairment of long-lived assets is recognized when the net book value of

such assets exceeds their expected cash flows, in which case the assets are written down to fair value, which is determined based on discounted future cash flows or appraised values.

The Company reviews the carrying amounts of its long-lived assets whenever certain events or changes in circumstances indicate that the carrying amounts may not be recoverable.

Impairment of long-lived assets is recognized when the net book value of such assets exceeds their expected cash flows, in which case the assets are written down to fair value, which is determined based on discounted future cash flows or appraised values.

Stock-Based Compensation

The Company's stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which generally corresponds with the vesting period.

The Company uses the Black-Scholes valuation model for estimating the fair value of stock options on the date of grant.

The fair value of stock option and warrant issuances is affected by the Company's stock price on the issuance date as well as valuation assumptions, including the volatility of the Company's common stock price, expected term of the option, risk-free interest rate and expected dividends.

The expected life of an instrument is calculated using the simplified method, which allows for using the mid-point between the vesting date and expiration date.

The Company uses the Black-Scholes valuation model for estimating the fair value of stock options and warrants on the date of grant.

The fair value of stock option and warrant issuances is affected by the Company's stock price on the issuance date as well as valuation assumptions, including the volatility of the Company's common stock price, expected term of the instrument, risk-free interest rate and expected dividends.

The expected life of an instrument is calculated using the simplified method, which allows for using the mid-point between the vesting date and expiration date for stock options and the contractual term for warrants.

The volatility factors are based on the historical two-year movement of the Company’s common stock prior to an instrument’s issuance date.

The risk-free interest rate is based on United States Treasury rates with maturity periods similar to the expected instruments life on the issuance date.

The Company amortizes the fair value of option, warrant issuances and restricted stock units on a straight-line basis over the requisite service period of each instrument.

Extinguishment of Liabilities

The Company accounts for extinguishment of liabilities in accordance with ASC 405-20, Extinguishments of Liabilities.

When the conditions for extinguishment are met, the liabilities are written down to zero and a gain or loss is recognized.

The Company uses the asset and liability method to account for income taxes in accordance with ASC 740, Income Taxes .

The Company amortizes the fair value of options, warrants and restricted stock units on a straight-line basis over the requisite service period of each instrument.

The Company uses the asset and liability method to account for income taxes.

Under this method, deferred income tax assets and liabilities are recorded for the future tax consequences of differences between the tax basis and financial reporting basis of assets and liabilities, measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse.

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The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return.

The Company recognizes in the financial statements the benefit of a tax position which is "more likely than not" to be sustained under examination based solely on the technical merits of the position, assuming a review by tax authorities having all relevant information.

Tax positions that meet the recognition threshold are measured using a cumulative probability approach, at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement.

The Company recognizes in the financial statements the benefit of a tax position that is "more likely than not" to be sustained under examination based solely on the technical merits of the position, assuming a review by tax authorities having all relevant information.

upon settlement.

The Company's policy is to recognize interest and penalties related to the unrecognized tax benefits, if any, as a component of income tax expense.

Certain of the Company’s subsidiaries, due to their cannabis activities, are subject to the provisions of Section 280E of the Internal Revenue Code, as amended, which prohibits businesses from deducting certain expenses associated with the trafficking of controlled substances within the meaning of Schedule I and II of the Controlled Substances Act.

Such non-deductibility of certain ordinary business expenses results in permanent differences and can cause the Company’s effective tax rate to be highly variable and not necessarily correlated with pre-tax income.

Certain subsidiaries of the Company, due to their cannabis activities, are subject to the provisions of Section 280E of the Internal Revenue Code, as amended, which prohibits businesses from deducting certain expenses associated with the trafficking of controlled substances within the meaning of Schedule I and II of the Controlled Substances Act.

Such non-deductibility of certain ordinary business expenses results in permanent differences and can cause the Company’s effective tax rate to fluctuate significantly, and no necessarily correlated with pre-tax income.

Related Party Transactions

The Company follows ASC 850, Related Party Disclosures , for the identification of related parties and disclosure of related party transactions.

In accordance with ASC 850, the Company’s financial statements include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business, as well as transactions that are eliminated in the preparation of financial statements.

The Company’s financial statements include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business, as well as transactions that are eliminated in the preparation of financial statements.

Comprehensive Income

The Company reports comprehensive income and its components following guidance set forth by ASC 220, Comprehensive Income , which establishes standards for the reporting and display of comprehensive income and its components in the consolidated financial statements.

There were no items of comprehensive income applicable to the Company during the periods covered in the financial statements.

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The Company has reviewed all recently issued, but not yet effective, accounting pronouncements, and does not believe the future adoption of any such pronouncements will have a material impact on its financial condition or the results of its operations.

(3) BUSINESS COMBINATIONS AND ASSET PURCHASES

Business Combinations

On March 9, 2023, following approval by the Massachusetts Cannabis Control Commission (the "CCC"), the Company acquired the operating assets of Ermont, a medical-licensed vertical cannabis operator located in Quincy, Massachusetts.

The Ermont Acquisition provided the Company with its third dispensary in Massachusetts, substantially completing its build-out to the maximum allowable by state regulations.

(3) BUSINESS COMBINATION AND ASSET PURCHASES

Business Combination

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

("Ermont"), a medical-licensed vertical cannabis operator located in Quincy, Massachusetts (the "Ermont Acquisition"), following approval by the Massachusetts Cannabis Control Commission (the "CCC") The Ermont Acquisition provided the Company with its third dispensary in Massachusetts, substantially completing its build-out to the maximum allowable by state regulations.

The financial results of Ermont are included in the Company's consolidated financial statements since the Ermont Acquisition Date.

As consideration for the Ermont Acquisition, which totaled $ 13.0 million, the Company paid $ 3.0 million of cash, issued 6,580,390 shares of the Company's common stock with a fair value of $ 3.0 million, and issued a $ 7.0 million promissory note (the "Ermont Note" and collectively, the "Ermont Consideration").

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The outstanding balance on the Ermont Note is subject to prepayment in the event the Company raises $ 75.0 million of equity capital.

The Company recorded the Ermont Note at the present value o $ 4.6 million as of the Ermont Acquisition date.

The difference between the resent value and face value of the Ermont Note is being amortized to interest expense through the term of such note.

The Company recorded the Ermont Note at the present value of $ 4.6 million as of the Ermont Acquisition Date.

The difference between the present value and face value of the Ermont Note is being amortized to interest expense through the term of such note.

The Company rebranded the dispensary as Panacea Wellness Dispensary and commenced medical sales immediately after the Ermont Acquisition Date.

The Ermont Acquisition also includes a Host Community Agreement with the city of Quincy to conduct adult-use cannabis sales.

The Company expects to commence adult-use sales upon approval by the CCC.

The Company also plans to expand the existing medical dispensary to accommodate expected increased traffic associated with adult-use sales and to repurpose Ermont's existing cultivation facility for its pheno-hunting activities.

The Company has moved its pheno-hunting activities out of the New Bedford facility to use the freed space to cultivate its Nature's Heritage flower.

Adult-use sales commenced on July 23, 2024.

The Company expanded the existing medical dispensary to accommodate the expected increased traffic associated with adult-use sales and repurposed Ermont's existing cultivation facility.

The Company's consolidated statement of operations for the year ended December 31, 2023 includes $ 3.8 million of revenue and $ 2.4 million of net loss attributable to Ermont for the period since the Ermont Acquisition Date.

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The Company did not assume any of Ermont's liabilities.

The Company recorded adjustments to the amounts allocated to certain identifiable intangible assets and goodwill to reflect more precise forecasts of future revenue streams.

These adjustments resulted in an increase to the tradename and trademarks intangible asset of $ 0.1 million, a decrease to the customer base intangible asset of $ 3.9 million, and an increase to goodwill of $ 3.8 million.

A summary of the allocation of the Ermont Consideration to the acquired and identifiable intangible assets is as follows (in thousands):

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Fair value of net assets acquired $ 10,550

The Company is amortizing the identifiable intangible assets arising from the Ermont Acquisition in relation to the expected cash flows from the individual intangible assets over their respective useful lives, which have a weighted average life of 10.71 years (see Note 11).

Goodwill results from assets not separately identifiable as part of the transaction and is not deductible for tax purposes.

The following unaudited pro forma information presents the condensed combined results of MariMed and Ermont for the years ended December 31, 2023 and 2022 as if the Ermont Acquisition had been completed on January 1, 2022, with adjustments to give effect to pro forma events that are directly attributable to the Ermont Acquisition.

The following unaudited pro forma information presents the condensed combined results of MariMed and Ermont for the year ended December 31, 2023 as if the Ermont Acquisition had been completed on January 1, 2023, with adjustments to give effect to pro forma events that are directly attributable to the Ermont Acquisition.

These pro forma adjustments include amortization expense for the acquired intangible assets and interest expense related to the Ermont Note.

Pro forma adjustments also include the elimination of acquisition-related and other expense directly attributable to the Ermont Acquisition from the year ended December 31, 2023 and inclusion of these expenses in the previous year.

The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings that may result from the consolidation of the operations of MariMed and Ermont.

Accordingly, these unaudited pro forma results are presented for illustrative purposes and are not intended to represent or be indicative of the actual results of operations of the combined company that would have been achieved had the Ermont Acquisition occurred on January 1, 2023, nor are they intended to represent or be indicative of future results of operations.

These unaudited pro forma results for the years ended December 31, 2023 and 2022 are as follows (in thousands):

Year ended December 31,

Revenue $ 148,948 $ 139,857

Net (loss) income $ ( 17,210 ) $ 6,292

In December 2021, the Company entered into a membership interest purchase agreement with the members of Kind (the "Kind Sellers") to acquire 100 % of the equity ownership of Kind.

Kind was the Company's client in Maryland that held licenses for the cultivation, production, and dispensing of medical cannabis.

Upon execution of the membership interest purchase agreement, the Company deposited $ 5.0 million into escrow as a contract down payment.

In April 2022, the Maryland Medical Cannabis Commission approved the Company’s acquisition of Kind, and the acquisition was completed on the Kind Acquisition Date (the “Kind Acquisition”).

As consideration for Kind, the Company paid the Kind Sellers $ 13.1 million, which amount was reduced by $ 2.3 million of cash acquired (together, the "Kind Cash Consideration"), and issued four-year 6.0 % promissory notes in the aggregate principal amount of $ 6.5 million to the Kind Sellers, secured by a first priority lien on the Company’s property in Hagerstown, MD (the "Kind Notes" and, together with the "Kind Cash Consideration, the "Kind Consideration").

The Kind Acquisition has allowed the Company to expand its operations into the Maryland cannabis industry and marketplace.

The Kind Acquisition was accounted for as a business combination and the financial results of Kind have been included in the Company’s consolidated financial statements for the period subsequent to the Kind Acquisition Date.

The Company’s financial results for the year ended December 31, 2022 include $ 8.1 million of revenue and a net loss of $ 1.5 million attributable to Kind.

A summary of the allocation of Kind Consideration to the acquired assets, identifiable intangible assets and certain assumed liabilities is as follows (in thousands):

Fair value of consideration transferred:

Cash consideration:

Cash paid at closing $ 10,128

Release of escrow 2,444

Severance paid from escrow 556

Less cash acquired ( 2,310 )

Net cash consideration 10,818

Note payable 5,634

Write-off of accounts receivable 658

Write-off of deferred accounts receivable 842

Total fair value of consideration transferred $ 17,952

Fair value of assets acquired and (liabilities assumed):

Current assets, net of cash acquired $ 5,047

Property and equipment 622

Intangible assets:

Trade name and trademarks 2,041

Licenses and customer base 4,700

Non-compete agreements 42

Goodwill 6,011

Current liabilities ( 511 )

Fair value of net assets acquired $ 17,952

The Company is amortizing the identifiable intangible assets in relation to the expected cash flows from the individual intangible assets over their respective useful lives, which have a weighted average life of 5.77 years (see Note 11).

Goodwill resulted from assets that were not separately identifiable as part of the transaction and was not deductible for tax purposes.

Concurrent with entering into the Kind membership purchase agreement, 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.

Upon the dismissal in September 2022 of the derivative claims in the DiPietro lawsuit (Note 21), the Company paid the aggregate purchase consideration of $ 2.0 million, and the transaction was completed, increasing the Company’s ownership of Mari-MD and Mia to 99.7 % and 94.3 %, respectively.

The following unaudited pro forma information presents the condensed combined results of MariMed and Kind for the year ended December 31, 2022 as if the Kind Acquisition had been completed on January 1, 2021, with adjustments to give effect to pro forma events that are directly attributable to the Kind Acquisition.

These pro forma adjustments include the reversal of MariMed revenue and related cost of sales derived from Kind prior to the Kind Acquisition Date, amortization expense for the acquired intangible assets, depreciation expense for property and equipment acquired by MariMed as part of the Kind Acquisition, and interest expense related to the Kind Notes.

Pro forma adjustments also include the elimination of acquisition-related and other expense directly attributable to the Kind Acquisition from the year ended December 31, 2022 and inclusion of these expenses in the previous year.

The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings that may result from the consolidation of the operations of MariMed and Kind.

Accordingly, these unaudited pro forma results are presented for illustrative purposes and are not intended to represent or be indicative of the actual results of operations of the combined company that would have been achieved had the Kind Acquisition occurred on January 1, 2021, nor are they intended to represent or be indicative of future results of operations.

These unaudited pro forma results for the year ended December 31, 2023 are as follows (in thousands):

Revenue $ 148,948

Net income $ 15,823

Net loss $ ( 16,716 )

Valuation of Acquired Intangible Assets

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Asset Purchases

Green Growth Group Inc.

In January 2022, the Company entered into a stock purchase agreement to acquire 100 % of the equity ownership of Green Growth Group Inc.

(“Green Growth”), an entity that holds a craft cultivation and production cannabis license issued by the Illinois Department of Agriculture, in exchange for cash consideration of $ 1.9 million and shares of the Company’s common stock valued at $ 1.5 million.

Concurrently, the Company made a good faith deposit of $ 0.1 million.

In April 2022, the Illinois Department of Agriculture approved the Company’s acquisition of Green Growth, and the purchase transaction (the “Green Growth Acquisition”) was completed on May 5, 2022 (the “Green Growth Acquisition Date”).

The Company paid the remaining $ 1.8 million in cash and issued 2,343,750 shares of MariMed common stock to the sellers on the Green Growth Acquisition Date.

With this license, the Company can cultivate up to 14,000 square feet of cannabis flowers and produce cannabis concentrates.

The acquisition of this cannabis license allows the Company to be vertically integrated in Illinois by growing cannabis and producing cannabis products that can be distributed and sold at the Company-owned Thrive dispensaries and sold into the robust Illinois wholesale cannabis marketplace.

The Company has allocated the purchase price to its licenses/customer base intangible asset.

Greenhouse Naturals LLC

In November 2021, the Company entered into an asset purchase agreement with Greenhouse Naturals LLC (the "Greenhouse Naturals Sellers") to acquire the cannabis license and assume the property lease associated with a cannabis

dispensary in Beverly, MA.

The purchase price was comprised of 2,000,000 shares of the Company’s common stock payable at closing and $ 5.1 million in cash, with $ 5.0 million of the cash amount payable post-closing on a monthly basis as a percentage of the dispensary's monthly gross sales.

The Greenhouse Naturals Acquisition was completed on December 30, 2022, upon the Company's payment of $ 0.1 million of cash and issuance of 2,000,000 shares of its common stock, with a fair value of $ 0.7 million, to the Greenhouse Naturals Sellers.

The Company issued a note to the Greenhouse Naturals Sellers for the remaining $ 5.0 million of the cash purchase price (the "Greenhouse Naturals Note"), and has recorded it at the present value of $ 4.3 million.

The difference between the face value of the Greenhouse Naturals Note and the value recorded is being amortized to interest expense over the term of such note.

The final inspection by the Commonwealth of Massachusetts was completed in April 2023, and the Company opened the dispensary on April 25, 2023.

The Company has allocated the purchase price to a licenses/customer base intangible asset, with an estimated useful life of 10 years.

Pending Acquisitions

Allgreens Dispensary, LLC ("Allgreens")

In August 2022, the Company entered into an agreement to purchase 100 % of the membership interests in Allgreens Dispensary, LLC (the "Allgreens Agreement"), a conditional adult-use cannabis dispensary license in Illinois, for $ 2.25 million of cash and $ 1.0 million of promissory notes which the Company will issue to the Allgreens members at the time of closing (the "Allgreens Notes").

Completion of the acquisition is dependent upon certain conditions, including resolution of any remaining legal challenges affecting nearly 200 social equity dispensary licenses, and regulatory approval of the acquisition.

If the closing conditions are met and the acquisition is completed, which the Company expects to occur in 2024, the Company will have five adult-use dispensaries operating in Illinois.

For the interim period until the acquisition is completed, the Company has entered into a management agreement with Allgreens, under which the management fees are calculated as a percentage of Allgreens' revenue.

In connection with this agreement, the Company recorded expenses related to Allgreens aggregating approximately $ 164,000 in the year ended December 31, 2023 as a component of Investments, net of current portion in the Company's consolidated balance sheet (see Note 9).

Pursuant to the Allgreens Agreement, as of December 31, 2023, the Company had made payments aggregating $ 1.375 million to the Allgreens members, with additional cash payments aggregating $ 0.875 million to be made as specific milestones as defined in the Allgreens Agreement are reached.

The Allgreens Notes will mature one year from the date the dispensary is permitted to commence operations.

In August 2022, the Company entered into an agreement to purchase 100 % of the membership interests in Allgreens Dispensary, LLC (the "Allgreens Agreement"), a conditional adult-use cannabis dispensary license in Illinois, for $ 3.25 million, comprised of $ 2.25 million of cash and a promissory note for $ 1.0 million, which note was issued to the Allgreens members on the Allgreens Acquisition Date (the "Allgreens Notes").

Completion of the acquisition was dependent upon certain conditions, including resolution of any remaining legal challenges affecting nearly 200 social equity dispensary licenses, and regulatory approval of the acquisition.

With the closing conditions met and the acquisition completed on April 9, 2024 (the "Allgreens Acquisition Date"), the Company now owns and operates five adult-use dispensaries in Illinois.

For the interim period until the Allgreens Acquisition Date, the Company entered into a management agreement with Allgreens, with the management fees calculated as a percentage of Allgreens' revenue.

Under this management agreement, the Company funded the build-out of the dispensary, including purchasing and retaining ownership of the related fixed assets it intended to use upon the transfer of ownership to the Company, hired and trained employees, and implemented the processes necessary to run the dispensary, all of which was completed prior to the state's approval of the license transfer to the Company.

In connection with this agreement, the Company recorded expenses related to Allgreens aggregating approximately $ 250,000 for the period from January 1, 2024 through the Allgreens

Acquisition Date, and approximately $ 164,000 in the year ended December 31, 2023 (the "Allgreens Expenses").

The Allgreens Expenses for the year ended December 1, 2023 were included as a component of Investments, net of current portion, in the consolidated balance sheet at December 31, 2023.

Pursuant to the Allgreens Agreement, as of December 31, 2023, the Company had made payments aggregating $ 1,375,000 to the Allgreens members prior to the Allgreens Acquisition Date.

On the Allgreens Acquisition Date, the Company made the final cash payment of $ 875,000 and issued the Allgreens Notes.

The Allgreens Notes bear interest at a rate of 7.5 % per annum and mature one year from the date the dispensary was permitted to commence operations.

At December 31, 2024, the principal balance of $ 1.0 million due under the Allgreens Notes was past due and in default.

The Company has allocated the purchase price, including the Allgreens Expenses, to its licenses intangible asset, with an estimated useful life of 10 years (see Note 10).

Our Community Wellness & Compassionate Care Center, Inc.

On February 1, 2024 (the "P&S Date"), the Company entered into an agreement to acquire 100 % of the membership interests of MedLeaf (the "MedLeaf Agreement"), which held a retail dispensary license in Maryland.

The MedLeaf dispensary had ceased its operations as of July 1, 2023.

On April 5, 2024, the Company acquired 100 % of the membership interests in MedLeaf (the "MedLeaf Acquisition Date").

Upon receiving regulatory approval, the Company reopened the dispensary and commenced adult-use retail sales on August 19, 2024.

The acquisition of MedLeaf provided the Company with a second dispensary in the state of Maryland.

Pursuant to the MedLeaf Agreement, total purchase consideration was $ 5.25 million, comprised of $ 2.0 million of cash with adjustments to reflect amounts owed to the Company by the sellers of MedLeaf (the "MedLeaf Sellers"), a $ 2.0 million promissory note (the "MedLeaf Note"), and shares of the Company's common stock, valued at $ 1.25 million, with such number of shares calculated using the volume weighted average price based on the ten -trading day period ending on the P&S Date.

The Company made payments aggregating $ 0.5 million through the P&S Date, which funds were deposited into escrow.

On the MedLeaf Acquisition Date, the outstanding cash balance was paid and the MedLeaf Note and 3.9 million shares of the Company's common stock were issued.

The MedLeaf Note bears interest at a rate of 8.0 % per annum and matures on October 5, 2025.

Pending Transaction at December 31, 2024

Robust Missouri Process and Manufacturing 1, LLC ("Robust")

In September 2022, the Company entered into an agreement to acquire 100 % of the membership interests in Robust Missouri Processing and Manufacturing 1, LLC (the "Robust Agreement"), a Missouri wholesaler and processor, for $ 0.7 million of cash.

Completion of the acquisition is dependent upon obtaining all requisite approvals from the Missouri Department of Health and Senior Services, which is expected to occur in 2024.

Under the Robust Agreement, the Company made an initial advance payment of $ 350,000 to the Robust members, with an additional payment of $ 350,000 to be made at closing.

Cancelled Acquisition

The Harvest Foundation LLC

In 2019, the Company entered into a purchase agreement to acquire 100 % of the ownership interests of The Harvest Foundation LLC (“Harvest”), the Company’s cannabis-licensed client in the State of Nevada.

The purchase price was comprised of the issuance of 1,000,000 restricted shares of the Company’s common stock in the aggregate, to two owners of Harvest as a good faith deposit, which were issued upon execution of the purchase agreement (the "Deposit Shares").

The Company recorded the Deposit Shares at par value at the time of issuance, since the transaction had not yet been consummated.

In addition, $ 1.2 million of the Company’s common stock would be issued at closing and warrants to purchase 400,000 shares of the Company’s common stock, at an exercise price equal to the closing price of the Company’s common stock, would be granted on the day prior to legislative approval of the transaction.

The acquisition was conditioned upon state regulatory approval of the transaction and other closing conditions.

Upon approval, and the fulfillment of other closing conditions, the ownership of Harvest would be transferred to the Company.

There was no assurance that the closing conditions to the Company’s acquisition of Harvest, including regulatory approval, would be achieved or that the acquisition would be consummated.

The regulatory approval process for license transfers in Nevada experienced significant delays as a result of multiple factors, including the impact of COVID.

Additionally, the progress of this potential acquisition had been delayed as a result of actions taken by the Nevada Cannabis Control Board (the "CCB") relating to regulatory operating violations by Harvest.

Harvest was unable to negotiate a settlement with the CCB to resolve these violations, which would have allowed it to proceed with the sale.

In October 2022, the CCB issued an order approving the placement of a receiver to oversee Harvest and its licenses.

The Company monitored the status of these regulatory matters, and ultimately determined that it should withdraw from the agreement to purchase Harvest, and submitted such request to the CCB.

The CCB accepted the request by the Company, releasing the Company from the liabilities related to this cancelled transaction.

In connection with the cancellation of this transaction, the Deposit Shares were returned to the Company in December 2023, and they were restored to the status of authorized but unissued shares of the Company's common stock.

The return of the Deposit Shares was recorded at par value and is included as a component of stockholders' equity in the consolidated balance sheet at December 31, 2023.

In September 2022, the Company entered into an agreement to acquire 100 % of the membership interests in Robust Missouri Processing and Manufacturing 1, LLC, a Missouri wholesaler and processor, for $ 700,000 of cash (the "Robust Agreement").

Completion of the acquisition is dependent upon obtaining all requisite approvals from the Missouri Department of Health and Senior Services.

In August 2024, the state of Missouri approved a facility license to conduct business, but has not yet approved the application to transfer the license from Robust to the Company (the "License Transfer").

The Company is currently conducting business under a managed service agreement until the final approval of the License Transfer.

Pursuant to the Robust Agreement, the Company made an initial advance payment of $ 350,000 to the Robust members, with the balance of $ 350,000 due at closing, which will occur upon the state of Missouri's approval of the License Transfer.

(4) (LOSS) EARNINGS PER SHARE

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For periods in which the Company reports net income, diluted earnings per share is determined by using the weighted average number of common and dilutive common equivalent shares outstanding during the period, unless the effect is antidilutive.

The calculations of shares used to compute net earnings per share were as follows (in thousands):

The shares used to compute loss per share were as follows (in thousands):

Year ended December 31,

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Accounts receivable, net 8,742 7,199

The Company maintains an allowance against trade accounts receivable (the "AR Allowance"), and had previously also reserved against cash advanced by the Company to a cannabis-licensed client or working capital purposes (the "WC Reserve"), both of which were reported as components of the allowance for doubtful accounts in the Company's consolidated balance sheets.

The Company maintains an allowance against trade accounts receivable (the "AR Allowance"), and had previously also reserved against cash advanced by the Company to a cannabis-licensed client for working capital purposes (the "WC Reserve"), both of which were reported as components of the allowance for doubtful accounts in the Company's consolidated balance sheets.

The Company's allowance for doubtful accounts activity was as follows (in thousands):

Year ended December 31, Balance at beginning of year Charges to expense Charges (credits) to other accounts Write-offs Balance at end of year

Year ended December 31, Balance at beginning of year Charges (reversals) to expense Write-offs Balance at end of year

2024 $ 764 $ ( 336 ) $ ( 173 ) $ 255

2023 $ 4,603 $ 118 $ ( 3,957 ) $ 764

The amount reported under "Charges (credits) to other accounts" for the year ended December 31, 2022 represents the elimination of the reserve for trade receivables from a former client of the Company's in connection with the purchase accounting when the Company acquired this client.

Of the amount reported under "Write-offs" for the year ended December 31, 2022, $ 29.0 million represents the write-off of a fully reserved trade receivable from a related party in connection with that party's bankruptcy declaration.

(6) INVENTORY

Inventory at December 31, 2024 and 2023 consisted of the following (in thousands):

Plants $ 10,600 $ 3,296

Ingredients and other raw materials 7,785 4,932

Work-in-process 4,759 9,663

Finished goods 10,344 7,415

Total inventory $ 33,488 $ 25,306

(7) DEFERRED RENTS RECEIVABLE

The Company is the lessor under operating leases which contain rent holidays, escalating rents over time, options to renew, requirements to pay property taxes, insurance and/or maintenance costs, and prior to the third quarter of 2022, contingent rental payments based on a percentage of monthly tenant revenue.

The Company is the lessor under operating leases which contain rent holidays, escalating rents over time, options to renew, and requirements to pay property taxes, insurance and/or maintenance costs.

The Company is not the lessor under any finance leases.

The Company recognizes fixed rental receipts from such lease agreements on a straight line basis over the expected lease term.

The Company recognizes fixed rental receipts from operating leases on a straight line basis over the expected lease term.

Differences between amounts received and amounts recognized are recorded in Deferred rents receivable in the consolidated balance sheets.

Contingent rentals are recognized only after tenants’ revenue is finalized and if such revenue exceeds certain minimum levels.

The Company currently leases a cannabis cultivation, processing and dispensary facility that it owns in Delaware to a cannabis-licensed client under a triple net lease that expires in 2035.

Prior to the Kind Acquisition Date, the Company had leased a cultivation and processing facility that it owns in Maryland to Kind.

The Company had also previously leased a portion of a third owned property in Massachusetts under a lease that expired in February 2023, after which the tenant continued to rent the space on a month-to-month basis through November 2023.

The Company does not intend to lease this space again, as it plans to use this space to expand its cultivation footprint.

The Company had also previously leased a portion of an owned property in Massachusetts under a lease that expired in February 2023, after which the tenant continued to rent

the space on a month-to-month basis through November 2023.

The Company expanded its cultivation footprint into this space and accordingly, it is currently utilizing this space for its operations.

The Company currently subleases two properties - a cannabis production facility with offices under a sublease that expires in January 2026 and contains an option to negotiate an extension of the sublease term, and a dispensary under a sublease that expires in April 2027.

The Company also subleases a portion of a third property that it developed into a cultivation facility under a sublease that expires in March 2030, with an option to extend the term for three additional five-year periods.

The Company intends to develop the remaining space of this property into a processing facility.

These properties are all subleased to a cannabis-licensed client in Delaware.

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Total $ 6,964

(7) NOTES RECEIVABLE

Notes receivable, including accrued interest, at December 31, 2023 and 2022, was comprised of the following (in thousands):

First State Compassion Center ("FSCC Initial Note") $ — $ 328

First State Compassion Center ("FSCC Secondary Notes") — 8,160

First State Compassion Center ("FSCC New Note") — 750

Healer LLC 866 866

Total notes receivable 866 10,104

Notes receivable, current portion ( 52 ) ( 2,637 )

Notes receivable, net of current $ 814 $ 7,467

First State Compassion Center

(8) NOTES RECEIVABLE AND OMNIBUS

Note Receivable

At December 31, 2024 and 2023, the Company had a note receivable from Healer LLC, an entity that provides cannabis education, dosage programs and products developed by Dr.

Dustin Sulak ("Healer"), of approximately $ 892,000 and $ 866,000 , respectively.

Of these amounts, approximately $ 52,000 was current at each of December 31, 2024 and 2023.

The balance at December 31, 2024 included approximately $ 26,000 of unpaid interest.

The note bears interest at 6 % per annum and requires quarterly interest payments through the April 2026 maturity date.

The Company has the right to offset any licensing fees payable by the Company to Healer in the event that Healer fails to make any payment when due.

Omnibus Agreement

On July 1, 2023 (the "Omnibus Agreement Date"), the Company entered into an Omnibus Agreement with First State Compassion Center ("FSCC"), the Company's cannabis-licensed client in Delaware:

(a) consolidating all amounts owed by FSCC to the Company and its affiliated entities as described below, aggregating $ 11.0 million (the "Omnibus Agreement");

On July 1, 2023 (the "Omnibus Agreement Date"), the Company entered into an Omnibus Agreement with First State Compassion Center ("FSCC"), the Company's cannabis-licensed client in Delaware (the "Omnibus Agreement"):

(a) consolidating all amounts owed by FSCC to the Company and its affiliated entities as described below, aggregating $ 11.0 million;

(b) providing for the automatic conversion of all amounts owed by FSCC to the Company, upon the approval of adult cannabis use in Delaware, into 100 % ownership of FSCC's licenses and business;

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377, for the period for which the amount of interest is being determined.

The state of Delaware recently approved the adult use of cannabis, with the implementation period expected to extend through approximately November 2024.

The Omnibus Agreement is reported as a component of Other assets in the consolidated balance sheet at December 31, 2023.

Notes Receivable From FSCC Prior to the Omnibus Agreement Date

The notes receivable from FSCC described below in the aggregate were converted into the Omnibus on the Omnibus Agreement Date:

• FSCC issued a 10 -year promissory note to the Company in May 2016 for $ 0.7 million, which bore interest at a rate of 12.5 % per annum and matured in April 2026, as amended (the “FSCC Initial Note”).

The monthly payments on the FSCC Initial Note were approximately $ 10,000 .

At December 31, 2022, the current portion of the FSCC Initial Note was approximately $ 85,000 , and is included in Notes receivable, current portion, in the consolidated balance sheet.

• In December 2021, the Company converted financed trade accounts receivable balances from FSCC aggregating $ 7.8 million into notes receivable, which was net of the $ 1.3 million debt issuance discount recorded in connection with the conversion, whereby FSCC issued promissory notes aggregating $ 7.8 million to the Company (the “FSCC Secondary Notes”).

The FSCC Secondary Notes bore interest at a rate of 6.0 % per annum and matured in December 2025.

FSCC was required to make periodic payments of principal and interest throughout the term of the FSCC Secondary Notes.

At December 31, 2022, the FSCC Secondary Notes balance included approximately $ 49,000 of unpaid accrued interest.

The Company had granted FSCC an interest holiday in 2023 from January 1, 2023 through the Omnibus Agreement Date and accordingly, no interest was accrued in 2023.

At December 31, 2022, the current portion of the FSCC Secondary Notes aggregated $ 2.5 million.

• In December 2022, the Company converted amounts due from FSCC aggregating $ 750,000 into a note receivable, whereby FSCC issued a promissory note to the Company for $ 750,000 (the "FSCC New Note").

The FSCC New Note bore interest at a rate of 6.0 % per annum and matured in December 2026.

FSCC was required to make

quarterly interest payments, with the full amount of principal due on December 31, 2026;

however, the Company had granted FSCC an interest holiday for the six months ended June 30, 2023.

At December 31, 2022, the entire balance of the FSCC New Note was long-term.

• In the second quarter of 2023, the Company converted $ 879,000 due from FSCC into a note receivable.

In March 2021, the Company was issued a promissory note in the principal amount of approximately $ 894,000 (the "Revised Healer Note") from Healer LLC, an entity that provides cannabis education, dosage programs, and products developed by Dr.

Dustin Sulak ("Healer").

The principal balance of the note represents previous loans extended to Healer by the Company totaling $ 0.8 million, plus approximately $ 94,000 of accrued interest through the Revised Healer Note issuance date.

The Revised Healer Note bears interest of 6.0 % per annum and requires quarterly payments of interest through its April 2026 maturity date.

The Company has the right to offset any licensing fees payable by the Company to Healer in the event Healer fails to make any payment when due.

In 2021, the Company offset approximately $ 28,000 of licensing fees payable to Healer against the principal balance of the Revised Healer Note, reducing the principal balance to approximately $ 866,000 .

At each of December 31, 2023 and 2022, the total amounts of principal and accrued interest due under the Revised Healer Note were approximately $ 866,000 , of which approximately $ 52,000 was current.

(8) INVENTORY

Inventory at December 31, 2023 and 2022 consisted of the following (in thousands):

Plants $ 3,296 $ 2,653

Ingredients and other raw materials 4,932 3,255

Work-in-process 9,663 7,635

Finished goods 7,415 5,934

Total inventory $ 25,306 $ 19,477

(9) INVESTMENTS

The Company's investments at December 31, 2023 and 2022 were all classified as current and were comprised of the following (in thousands):

Investment - current:

WM Technology Inc.

Investments - noncurrent:

Artis LLC (d/b/a Little Dog) $ 57 $ —

Allgreens 164 —

Total investments - noncurrent $ 221 $ —

The Company did not have any noncurrent investments at December 31, 2022.

WM Technology Inc.

In February 2022, the Company received 121,698 shares of common stock of WM Technology Inc.

MAPS) (the "WMT Shares"), a technology and software infrastructure provider to the cannabis industry, which represented the Company's pro rata share of the additional consideration pursuant to a 2021 asset purchase agreement between the

Company and Members RSVP LLC.

The Company recognized losses of approximately $ 35,000 and $ 0.8 million in the years ended December 31, 2023 and 2022, respectively, which amounts represent the changes in the fair value of the WMT Shares, and which are included as components of Other (expense) income, net, in the consolidated statements of operations.

Artis LLC (d/b/a Little Dog)

In April 2023, the Company purchased a 49 % interest in Artis LLC, d/b/a Little Dog ("Little Dog"), a cannabis delivery service (the "Little Dog Investment") for approximately $ 98,000 of cash.

The Company recognizes changes in the fair value of the Little Dog Investment based on its proportional share of Little Dog's net income (loss).

During the year ended December 31, 2023, the Company recognized a loss in the Little Dog Investment of approximately $ 41,000 , which is included as a component of Other (expense) income, net, in the consolidated statement of operations.

In connection with the pending acquisition of Allgreens and the management agreement the Company entered into with Allgreens for the interim period prior to the completion of the acquisition (see Note 3), the Company recorded expenses related to Allgreens aggregating approximately $ 164,000 for the year ended December 31, 2023 as a component of Investments, net of current portion.

In December 2021, the Company received shares of Flowr Corp.

common stock (the "Flowr Stock") arising from the sale of the Company's ownership interest in Terrace Inc., which was sold to Flowr Corp.

FLWPF).The Flowr Stock was recorded at fair value, with changes in fair value recorded as a component of Other (expense) income, net, in the consolidated statements of operations.

The Company recorded a loss of $ 0.3 million in the year ended December 31, 2022, comprised of the loss on the change in the Flowr Investment for the year, plus the $ 61,000 write-off of the remaining fair value of the Flowr Investment in December 2022 arising from Flowr's bankruptcy filing and delisting from the exchanges on which the Flowr Stock traded.

In May 2023, the state of Delaware approved the adult use of cannabis.

As of December 31, 2024, Delaware had not approved the conversion of FSCC from a non-profit to a for-profit business, nor the conversion of the existing license to adult-use.

The Omnibus Agreement is reported as a component of Other assets in the consolidated balance sheets at both December 31, 2024 and 2023.

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

(9) PROPERTY AND EQUIPMENT

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During the years ended December 31, 2024 and 2023, additions to property and equipment totaled $ 12.0 million and $ 20.1 million, respectively.

Of the additions to property and equipment, $ 0.3 million of such additions in each of the years ended December 31, 2023 and 2022, were paid for by the issuance of Company common stock.

Of the additions to property and equipment in the year ended December 31, 2024, $ 0.3 million of such additions were paid for by the issuance of Company common stock.

Depreciation expense for the years ended December 31, 2024 and 2023 was $ 7.9 million and $ 5.5 million, respectively.

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Balance at January 1, $ 11,993 $ 8,079

Ermont Acquisition 3,914 —

Kind Acquisition — 6,011

Ermont Acquisition and subsequent adjustments to the purchase price allocation 3,819 3,914

Balance at December 31, $ 15,812 $ 11,993

Goodwill is tested on an annual basis for impairment.

The Company performs its annual goodwill impairment test as of December 31.

The Company performs its annual goodwill impairment test as of November 30 of each respective year.

Based on these tests, the Company determined that there was no goodwill impairment in the years ended December 31, 2024 and 2023.

(12) TERM LOAN

Credit Agreement

Term Loan (the "CA Term Loan")

On January 24, 2023 (the "Term Loan Date"), the Company entered into a Loan and Security Agreement, by and among the Company, subsidiaries of the Company from time to time party thereto (collectively with the Company, the “CA Borrowers”), lenders from time to time party thereto (the “CA Lenders”), and Chicago Atlantic Admin, LLC (“Chicago Atlantic”), as administrative agent for the Lenders (the "CA Credit Agreement").

Proceeds from the CA Credit Agreement were designated to complete the build-out of a new cultivation and processing facility in Illinois, complete the build-out of a new processing kitchen in Missouri, expand existing cultivation and processing facilities in Massachusetts and Maryland, fund certain capital expenditures, and repay in full the Kind Notes incurred in connection with the Kind Acquisition, which repayment occurred on January 24, 2023 (see Note 13).

Proceeds from the CA Credit Agreement were designated to complete the build-out of a new cultivation and processing facility in Illinois, complete the build-out of a new processing kitchen in Missouri, expand existing cultivation and processing facilities in Massachusetts and Maryland, fund certain capital expenditures, and repay in full the Kind Notes incurred in 2022 in connection with the acquisition of Kind Therapeutics USA, which repayment occurred on January 24, 2023.

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

Principal, Security, Interest and Prepayments

The CA Credit Agreement provided for $ 35.0 million in principal borrowings at the CA Borrowers’ 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, provided that the CA Lenders elected to fund such incremental term loan.

$ 30.0 million of loan principal was funded at the initial closing (the "Term Loan"), which amount was reduced by an original issuance discount of $ 0.9 million (the "CA Original Issuance Discount").

The CA Credit Agreement allowed for $ 35.0 million in the aggregate of principal borrowings at the CA Borrowers’ 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 elected to fund such incremental term loan.

$ 30.0 million of loan principal was funded at the initial closing (the "CA Term Loan"), which amount was reduced by an original issuance discount of $ 0.9 million (the "CA Original Issuance Discount").

The Company had the option, during the six-month period following the initial closing, to draw down an additional $ 5.0 million, which it did not elect to do.

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The CA Credit Agreement provided for a floating annual interest rate equal to the prime rate then in effect plus 5.75 %, which rate could be increased by 3.00 % upon an event of default or 7.50 % upon a material event of default as provided in the CA Credit Agreement.

At any time, the Company could voluntarily prepay amounts due under the facility in $ 5.0 million increments, subject to a three -percent prepayment premium and, during the first 20 -months of the term, a “make-whole” payment.

Representations, Warranties, Events of Default and Certain Covenants

The CA Credit Agreement included customary representations and warranties and customary events of default, including, without limitation, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to material indebtedness, and events of bankruptcy and insolvency.

The CA Credit Agreement also included customary negative covenants limiting the CA Borrowers’ ability to incur additional indebtedness and grant liens that were otherwise not permitted, among others.

At any time, the Company could voluntarily prepay amounts due under the facility in minimum $ 5.0 million increments, subject to a three -percent prepayment premium and, during the first 20 -months of the term, a “make-whole” payment.

The CA Credit Agreement also included customary negative covenants limiting the CA Borrowers’ ability to incur additional indebtedness and grant certain liens, among others.

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

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

Warrant Issuance

The Company was in compliance with the CA Credit Agreement covenants and financial tests throughout the term of the CA Credit Agreement.

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, the Company issued to the CA Lenders an aggregate of 19,148,936 warrants

to purchase shares of the Company’s common stock at $ 0.47 per share, exercisable for a five-year period following issuance.

The Company recorded the warrants at present value of $ 5.5 million as a component of Additional paid-in capital on the consolidated balance sheet as of January 24, 2023, and discounted the Term Loan amount by $ 5.5 million (the "CA Warrant Discount").

The Company was amortizing the CA Warrant Discount to interest expense over the term of the CA Credit Agreement.

Prepaid Debt Issuance Costs

The Company incurred $ 1.8 million of third party costs (i.e., legal fees, referral fees, etc.) in connection with the Term Loan that were recorded as a discount to the Term Loan (the "CA Third-Party Costs Discount").

The Company was amortizing the CA Third-Party Costs Discount to interest expense over the term of the CA Credit Agreement.

Repayment and Retirement of Term Loan

On November 16, 2023 (the "Payoff Date"), the Company 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 (see Note 13).

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.

The Company recognized a loss of $ 10.2 million in connection with the Term Loan Payoff, which is the primary component of Loss on extinguishment of debt in the consolidated statement of operations for the year ended December 31, 2023.

Interest Amortization

The Company recorded $ 2.1 million of aggregate interest amortization from the Term Loan Date to the Payoff Date related to the CA Original Issuance Discount, CA Warrant Discount and CA Third Party Costs Discount.

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

The Company recorded the warrants at their present value of $ 5.5 million as of January 24, 2023 as a component of Additional paid-in capital on the consolidated balance sheet, and discounted the CA Term Loan amount by $ 5.5 million (the "CA Warrant Discount").

The Company amortized the CA Warrant Discount to interest expense over the period that the CA Credit Agreement was outstanding.

The Company incurred $ 1.8 million of third party costs (i.e., legal fees, referral fees, etc.) in connection with the CA Term Loan, which were recorded as a discount to the CA Term Loan (the "CA Third-Party Costs Discount"), which was being amortized to interest expense over the term of the CA Credit Agreement.

The Company recorded $ 2.1 million of aggregate interest amortization from the Term Loan Date to the CA Payoff Date (as described below) related to the CA Original Issuance Discount, CA Warrant Discount and CA Third Party Costs Discount.

On November 16, 2023 (the "CA Payoff Date"), the Company repaid and retired the CA Term Loan (the "CA Term Loan Payoff") using proceeds from a new $ 58.7 million loan entered into on the same date (see "CREM Loan" below).

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.

The Company recognized a loss of $ 10.2 million in connection with the CA Term Loan Payoff, which it recorded in the fourth quarter of 2023.

Mortgages and Notes Payable

The Company's mortgages and notes payable are reported in the aggregate on the consolidated balance sheets under the captions Mortgages and notes payable, current portion, and Mortgages and notes payable, net of current portion.

The Company's mortgages and notes payable balances at December 31, 2024 and 2023 were comprised of the following (in thousands):

Construction to Permanent Commercial Real Estate Mortgage Loan ("CREM Loan") $ 52,083 $ —

Bank of New England

New Bedford, MA and Middleborough, MA properties — 12,141

Construction to Permanent Commercial Real Estate Mortgage Loan ("CREM Loan"), net of debt discount of $ 1,460 and $ 1,534 at December 31, 2024 and 2023, respectively

$ 57,136 $ 52,083

Bank of New England

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DuQuoin State Bank

Vernon, IL property 2,923 2,974

South Porte Bank

Vernon, IL property — 801

Promissory note issued as purchase consideration - Ermont Acquisition 2,591 —

Promissory note issued as purchase consideration - Greenhouse Naturals Acquisition 4,190 4,348

Promissory note issued as purchase consideration - Kind Acquisition — 4,802

Vernon, IL property (retail) 1,139 —

DuQuoin State Bank

Vernon, IL property (grow and production) 2,872 2,923

Promissory note issued as purchase consideration - Ermont Acquisition, net of debt discount of $ 1,801 and $ 2,159 at December 31, 2024 and 2023, respectively

Promissory note issued as purchase consideration - Greenhouse Naturals Acquisition, net of debt discount of $ 567 and $ 627 at December 31, 2024 and 2023, respectively

Promissory notes issued as purchase consideration - MedLeaf Acquisition 1,377 —

Promissory note issued as purchase consideration - Allgreens Acquisition 1,000 —

Promissory note issued to purchase land 352 —

Promissory notes issued to purchase motor vehicles 168 178

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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").

The Company has fully guaranteed the obligations of the CREM Borrowers under the CREM Loan Transaction and pledged to the CREM Lender its equity ownership in each CREM Borrower.

The Company guaranteed the obligations of the CREM Borrowers under the CREM Loan Agreement and pledged to the CREM Lender its equity ownership in each CREM Borrower as security for the loan.

The CREM Lender has a first priority security interest in all of the CREM Borrowers' operating assets in Maryland and Massachusetts and first priority mortgages on the CREM Borrowers' properties owned in Maryland and Massachusetts.

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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 %.

The Company 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.

The CREM Borrowers 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 the Company's Hagerstown, Maryland cultivation facility (the "Hagerstown Facility").

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

The Company used $ 46.8 million of the Initial CREM Distribution to fully repay certain of its outstanding debt.

These payments were comprised of $ 32.7 million to pay off the Term Loan, $ 11.9 million to pay off the mortgage with Bank Of New England for the New Bedford, MA and Middleborough, MA properties, and $ 2.2 million to reduce the outstanding balance of the note issued by the Company in connection with the Ermont Acquisition.

The Company incurred bank closing costs and third party costs (i.e., legal fees, etc.) aggregating $ 1.5 million in connection with the CREM Loan Transaction, which have been recorded as a discount to the Loan Transaction (the "CREM Closing Costs Discount"), and which are being amortized to interest expense over the term of the CREM Loan Transaction.

The Company recorded nominal interest amortization in the year ended December 31, 2023 related to the CREM Closing Costs Discount.

The remaining proceeds of $ 5.9 million were held in escrow to complete the expansion of the Company's Hagerstown, Maryland cultivation facility (the "Hagerstown Facility"), with any unused proceeds to be released to the Company after completion of the Hagerstown Facility expansion.

The Company used $ 46.8 million of the Initial CREM Distribution to fully repay certain of its outstanding debt obligations.

These payments were comprised of $ 32.7 million for the CA Term Loan Payoff, $ 11.9 million to pay off the mortgage with Bank of New England for the New Bedford, MA and

Middleborough, MA properties, and $ 2.2 million to reduce the outstanding balance of the note issued by the Company in connection with the Ermont Acquisition.

The Company incurred bank closing costs and third party costs (i.e., legal fees, etc.) aggregating $ 1.5 million in connection with the CREM Loan Transaction, which were recorded as a discount to the Loan Transaction (the "CREM Closing Costs Discount"), and which are being amortized to interest expense over the term of the CREM Loan Transaction.

The Company recorded interest amortization of approximately $ 73,000 in the year ended December 31, 2024 and nominal interest amortization in the year ended December 31, 2023 related to the CREM Closing Costs Discount.

The CREM Loan Agreement includes customary representations and warranties and customary events of default, including, without limitation, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to material indebtedness, and events of bankruptcy and insolvency.

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

Bank of New England (New Bedford, MA and Middleborough, MA)

The Company maintained an amended and restated mortgage secured by the Company’s properties in New Bedford, MA and Middleborough, MA in the original amount of $ 13.0 million and bearing interest of 6.5 % per annum that would mature in August 2025 (the “Refinanced Mortgage”).

The outstanding principal balance of the Refinanced Mortgage was $ 12.1 million at December 31, 2022, of which approximately $ 382,000 was current.

On November 16, 2023, the Company used $ 11.9 million of the proceeds from the CREM Loan Transaction to pay the outstanding principal of the Refinanced Mortgage, and such mortgage was retired.

The Company recorded a loss of $ 0.2 million on the early repayment of the Refinanced Mortgage, which amount is included as a component of Loss on extinguishment of debt in the Company's consolidated statement of operations or the year ended December 31, 2023.

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

The Company made interest-only payments to the CREM Lender through November 30, 2024 and commenced principal payments in December 2024.

During the year ended December 31, 2024, the Company made interest-only payments aggregating $ 4.8 million and a principal payment of $ 0.1 million.

The current portion of the outstanding principal balance of the CREM Loan was $ 1.2 million and $ 0.1 million at December 31, 2024 and 2023, respectively.

Through November 16, 2023, the Company had a mortgage outstanding with Bank of New England secured by the Company’s properties in New Bedford, MA and Middleborough, MA in the original amount of $ 13.0 million, which bore interest of 6.5 % per annum and was scheduled to mature in August 2025 (the “Refinanced Mortgage”).

The Company used $ 11.9 million of the proceeds from the CREM Loan Transaction to pay the outstanding principal of the Refinanced Mortgage, and such mortgage was retired.

Concurrent with the repayment of the Refinanced Mortgage, the Company refinanced the 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 outstanding balance.

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The Company maintains a mortgage with Bank of New England for the 2016 purchase of a building in Wilmington, DE, which was developed into a cannabis seed to sale facility and is currently leased to the Company’s cannabis-licensed client in that state.

The mortgage matures in 2031, with monthly principal and interest payments at a rate of 5.25 % per annum, with the rate adjusting every five years to the then prime rate plus 1.5 % with a floor of 5.25 % per annum.

At December 31, 2023 and 2022, the outstanding principal balance on this mortgage was $ 1.2 million and $ 1.3 million, respectively, of which approximately $ 133,000 and $ 126,000 , respectively, was current.

The mortgage matures in 2031, with monthly principal and interest payments at a rate of 5.25 % per annum, and with the rate adjusting every five years to the then prime rate plus 1.5 % with a floor of 5.25 % per annum.

The next rate adjustment will occur in September 2026.

At December 31, 2024 and 2023, the current portion of the outstanding principal balance under this mortgage was approximately $ 140,000 and $ 133,000 , respectively.

DuQuoin State Bank (Anna, IL and Harrisburg, IL)

In May 2016, the Company entered into a mortgage agreement with DuQuoin State Bank (“DSB”) for the purchase of properties in Anna, IL and Harrisburg, IL, which the Company developed into two free-standing retail dispensaries.

On May 5 th of each year of the mortgage agreement, this mortgage is due to be repaid unless it is renewed for another year at a rate determined by DSB’s executive committee.

On May 5 th of each year, this mortgage is due to be repaid unless it is renewed for another year at a rate determined by DSB’s executive committee.

The mortgage was renewed in May 2024 at a rate of 9.50 % per annum.

At December 31, 2023 and 2022, the outstanding principal balance on this mortgage approximated $ 719,000 and $ 750,000 respectively, of which approximately $ 27,000 and $ 36,000 , respectively, was current.

At both December 31, 2024 and 2023, the current portion of the outstanding principal balance under this mortgage was approximately $ 27,000 .

DuQuoin State Bank (Metropolis, IL)

In July 2021, the Company purchased the land and building in which it operates its cannabis dispensary in Metropolis, IL.

The purchase price consisted of 750,000 shares of the Company’s common stock, which were valued at $ 0.7 million in the aggregate on the date of the transaction, and payoff of the seller’s remaining mortgage of $ 1.6 million.

In connection with this purchase, the Company entered into an additional mortgage agreement with DSB in the amount of $ 2.7 million that matures in July 2041 and initially bears interest at a rate of 6.25 % per annum, which rate is adjusted each year based on a certain interest rate index plus a margin.

In connection with this purchase, the Company entered into a mortgage agreement with DSB in the amount of $ 2.7 million that matures in July 2041 and which currently bears interest at a rate of 11.25 % per annum, which rate is adjusted each year based on a certain interest rate index plus a margin.

As part of this transaction, the seller was provided with a 30.0 % ownership interest in Mari Holdings Metropolis LLC (“Metro”), the Company’s subsidiary that owns the property and related mortgage obligation, reducing the Company’s ownership interest in Metro to 70.0 %.

At each of December 31, 2023 and 2022, the outstanding principal balance on this mortgage was $ 2.5 million, of which approximately $ 46,000 and $ 77,000 , respectively, was current.

At December 31, 2024 and

2023, the current portion of the outstanding principal balance of this mortgage was approximately $ 56,000 and $ 46,000 , respectively.

DuQuoin State Bank (Mt.

Vernon, IL) grow and production)

In July 2022, Mari Holdings Mt.

Vernon LLC, a wholly-owned subsidiary of the Company, entered into a $ 3.0 million loan agreement and mortgage with DSB secured by property owned in Mt.

Vernon, IL, which the Company is developing into a grow and production facility (the "DSB Mt.

Vernon Mortgage").

Vernon Mortgage has a 20 -year term and initially bears interest at the rate of 7.75 %, subject to upward adjustment on each annual anniversary date to the Wall Street Journal United States Prime Rate (with an interest rate floor of 7.75 %).

The proceeds of the loan are being utilized for the build-out of the property and other working capital purposes.

The current portion of the DSB Mt.

Vernon Mortgage was approximately $ 48,000 and $ 68,000 at December 31, 2023 and 2022, respectively.

South Porte Bank (Mt.

Vernon, IL, which the Company developed into a grow and production facility.

The mortgage has a 20 -year term and currently bears interest at the rate of 11.25 % per annum, subject to adjustment on each annual anniversary date to the Wall Street Journal United States Prime Rate (with an interest rate floor of 7.75 %).

The proceeds of the loan were utilized for the build-out of the property and other working capital purposes.

The current portion of the outstanding principal balance of this mortgage was approximately $ 61,000 and $ 48,000 at December 31, 2024 and 2023, respectively.

DuQuoin State Bank (Mt.

Vernon, IL retail)

In February 2020, the Company entered into a mortgage agreement with South Porte Bank for the purchase and development of a property in Mt.

3 unchanged sentences

In January 2024, the Company refinanced this property and entered into a $ 1.2 million mortgage with DSB.

The mortgage with DSB has a 17 -year term and bears interest at the rate of 9.50 % per annum.

The current portion of the outstanding principal balance of this mortgage was approximately $ 31,000 at December 31, 2024.

Promissory Notes

Promissory Note Conversion

In the first quarter of 2022, a noteholder converted the outstanding principal balance of $ 0.4 million into 1,142,858 shares of the Company's common stock and such note was retired.

The Company did not record any gains or losses arising from this conversion.

Promissory Notes Issued as Purchase Consideration

Ermont Acquisition

In connection with the Ermont Acquisition, the Company issued the Ermont Note (see Note 3), totaling $ 7.0 million.

In connection with the Ermont Acquisition, the Company issued the Ermont Note (see Note 3), in the principal amount of $ 7.0 million.

The Ermont Note matures in March 2029 and bears interest at 6.0 % per annum, with payments of interest-only for two years , and quarterly payments of principal and interest in arrears thereafter.

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As discussed above, on November 26, 2023, the Company used $ 2.2 million of the proceeds from the CREM Loan Transaction to reduce the outstanding balance of the Ermont Note.

The fair value of the Ermont Note was $ 2.6 million at December 31, 2023, all of which was recorded as noncurrent, as the first scheduled principal payment is not due until two years after the Ermont Acquisition Date.

Greenhouse Naturals Acquisition

In connection with the Greenhouse Naturals Acquisition, the Company issued the Greenhouse Naturals Note (see Note 3) totaling $ 5.0 million, to the Greenhouse Naturals Sellers, payable on a monthly basis as a percentage of the monthly gross sales of the Company's Beverly, Massachusetts dispensary (the "Beverly Dispensary").

The Company recorded $ 0.7 million as a debt discount, which is being accreted to interest expense through the term of the Greenhouse Naturals Note.

The difference between the face value of the Greenhouse Naturals Note and the value recorded at the time of the Greenhouse Naturals Acquisition is being amortized to interest expense over the term of such note, which matures in July 2026.

The difference between the face value of the Ermont Note and the present value recorded at the time of the Ermont Acquisition is being amortized to interest expense over the term of the Ermont Note.

The fair value of the Ermont Note was $ 2.9 million and $ 2.6 million at December 31, 2024 and 2023, respectively.

The current portion of the outstanding principal balance of the Ermont Note was $ 0.5 million at December 31, 2024.

The Ermont Note did not have a current portion recorded at December 31, 2023.

Greenhouse Naturals LLC

In December 2022, the Company completed the acquisition from Greenhouse Naturals LLC of the assets associated with a cannabis dispensary in Beverly, Massachusetts (the "Beverly Dispensary").

In connection with this transaction, the Company issued a $ 5.0 million promissory note to the Sellers, payable on a monthly basis as percentage of the monthly gross sales of the Beverly Dispensary (the "Greenhouse Naturals Note").

The Company recorded $ 0.7 million as a debt discount, which is being accreted to interest expense through the term of the Greenhouse Naturals Note, which matures in July 2026.

In the third quarter of 2023, the Company updated its forecast of revenue attributable to the Beverly Dispensary and accordingly, adjusted the schedule of estimated future payments on the Greenhouse Naturals Note.

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The Company estimated that the current portion of the Greenhouse Naturals Note was $ 0.8 million and $ 0.3 million at December 31, 2024 and 2023, respectively, which amounts are included in Mortgages and notes payable, current portion, in the Company's consolidated balance sheets.

Kind Acquisition

In connection with the Kind Acquisition, the Company issued the Kind Notes (see Note 3) to the Kind Sellers.

The Kind Notes had an aggregate outstanding balance of $ 5.5 million at December 31, 2022, of which $ 1.6 million was current.

On January 24, 2023, in connection with the CA Credit Agreement (see Note 12), the Company repaid the Kind Notes in full, aggregating $ 5.4 million, including approximately $ 420,000 of accrued interest.

In connection with the MedLeaf Acquisition, the Company issued the MedLeaf Note, totaling $ 2.0 million (see Note 3).

The MedLeaf Note bears interest at a rate of 8.0 % per annum and matures on October 5, 2025.

The MedLeaf Note calls for six equal principal payments, paid quarterly, which payments began on July 5, 2024.

At December 31, 2024, the MedLeaf Note had an outstanding balance of $ 1.4 million, all of which was recorded as current.

In connection with the Allgreens Acquisition, the Company issued promissory notes aggregating $ 1.0 million (see Note 3).

The Allgreens Notes bear interest at a rate of 7.5 % per annum and will mature one year from the date that the dispensary is permitted to commence operations.

The Allgreens Notes had an aggregate outstanding balance of $ 1.0 million at December 31, 2024, all of which was recorded as current and was in default.

Kind Therapeutics USA

In connection with the 2022 acquisition of Kind Therapeutics USA ("Kind"), the Company issued four-year promissory notes aggregating $ 6.5 million with an interest rate of 6.0 % per annum to the members of Kind (the "Kind Notes").

In connection with the CA Credit Agreement, on January 24, 2023, the Company repaid the Kind Notes in full, aggregating $ 5.4 million, including approximately $ 420,000 of accrued interest.

There was no penalty in connection with the early repayment of the Kind Notes.

Promissory Notes Issued to Purchase Commercial Vehicles

The Company entered into three note agreements to purchase commercial vehicles in the year ended December 31, 2023;

in August 2023 with Ally Financial, in April 2023 with Ford Credit, and in January 2023 with Ally Financial.

The Company had previously entered into note agreements to purchase commercial vehicles in August 2020 with First Citizens' Federal Credit Union and in June 2021 with Ally Financial.

At December 31, 2023, the five outstanding notes had an aggregate outstanding balance of approximately $ 178,000 , of which approximately $ 33,000 was current.

At December 31, 2022, there were two outstanding notes with an aggregate outstanding balance of approximately $ 48,000 , of which approximately $ 12,000 was current.

Promissory Notes Issued to Purchase Property and Equipment

At each of December 31, 2024 and 2023, the Company had five outstanding promissory notes in connection with the purchase of commercial motor vehicles.

At December 31, 2024, the outstanding notes had an aggregate outstanding balance of approximately $ 168,000 , of which approximately $ 36,000 was current.

At December 31, 2023, the outstanding notes had an aggregate outstanding balance of approximately $ 178,000 , of which approximately $ 33,000 was current.

The weighted average interest rates of the outstanding balances were 11.38 % and 11.07 % at December 31, 2024 and 2023, respectively.

The weighted average remaining terms of these notes were 4.27 years and 4.61 years at December 31, 2024 and 2023, respectively.

At December 31, 2024, the Company had an outstanding note in connection with the purchase, in the second quarter of 2024, of a parking lot adjacent to its Middleborough, MA dispensary totaling $ 352,000 .

The note bears interest at 4.0 %, with monthly interest-only payments and a balloon payment for the entire principal amount due on February 1, 2029.

Future Payments

The future principal payments due under the Company's outstanding mortgages and notes payable at December 31, 2024 were as follows (in thousands):

Year ending December 31,

Thereafter 57,799

Total future principal payments 78,187

discount ( 3,201 )

Total future principal payments, net of discount $ 74,986

(12) MEZZANINE EQUITY

Series B Convertible Preferred Stock

The Company's outstanding Series B convertible preferred stock (the "Series B Stock") is held by three institutional shareholders (the “Series B Holders”).

The Company had 4,908,333 shares of Series B Convertible Preferred Stock (the "Series B Stock") outstanding at each of December 31, 2024 and 2023, which shares are held by three institutional shareholders (the “Series B Holders”).

The original issuance date of the Series B Stock was February 27, 2020.

The Series B Holders are entitled to cast the number of votes equal to the number of shares of common stock into which the shares of Series B Stock are convertible, together with the holders of common stock as a single class, on most matters.

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In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the Series B Holders then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders before any payment shall be made to the holders of common stock by reason of their ownership thereof, an amount per share equal to $ 3.00 , plus any dividends declared but unpaid thereon, with any remaining assets distributed on a prorated basis among the holders of the shares of Series B Stock and common stock, based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted to common stock.

At any time on or prior to the six-year anniversary of the issuance date of the Series B Stock, (i) the Series B Holders have the option to convert their shares of Series B Stock into common stock at a conversion price of $ 3.00 per share, without the payment of additional consideration, and (ii) the Company has the option to convert all, but not less than all, of the shares of Series B Stock into the Company's common stock at a conversion price of $ 3.00 if the daily volume weighted average price of common stock (the “VWAP”) exceeds $ 4.00 per share for at least twenty consecutive trading days prior to the date on which the Company gives notice of such conversion to the Series B Holders.

At any time on or prior to the six-year anniversary of the original issuance date of the Series B Stock, (i) the Series B Holders have the option to convert their shares of Series B Stock into common stock at a conversion price of $ 3.00 per share, without the payment of additional consideration, and (ii) the Company has the option to convert all, but not less than all, of the shares of Series B Stock into the Company's common stock at a conversion price of $ 3.00 if the daily volume weighted average price of common stock (the “VWAP”) exceeds $ 4.00 per share for at least twenty consecutive trading days prior to the date on which the Company gives notice of such conversion to the Series B Holders.

On the day following the six-year anniversary of the 2020 issuance of the Series B Stock, all outstanding shares of Series B Stock shall automatically convert into common stock as follows:

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Series C Convertible Preferred Stock

In March 2021, the Company entered into a securities purchase agreement with Hadron Healthcare Master Fund (“Hadron”) 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 "Hadron Agreement").

In March 2021, the Company entered into a securities purchase agreement with Hadron Healthcare Master Fund (“Hadron”) 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 (the "Series C Stock") and warrants to purchase the Company’s common stock (the "Hadron Agreement").

At that time, Hadron purchased $ 23.0 million of Units at a price of $ 3.70 per Unit.

Each Unit is comprised of one share of Series C preferred stock and a four-year warrant to purchase two and one-half shares of common stock.

The Company issued to Hadron 6,216,216 shares of Series C preferred stock and warrants to purchase up to an aggregate of 15,540,540 shares of common stock.

Each share of Series C preferred stock is convertible, at the holder’s option, into five shares of MariMed common stock, and each warrant is exercisable at an exercise price of $ 1.087 per share.

Each Unit is comprised of one share of Series C Stock and a four-year warrant to purchase two and one-half shares of common stock.

The Company issued to Hadron 6,216,216 shares of Series C Stock and warrants to purchase up to an aggregate of 15,540,540 shares of common stock.

Each share of Series C Stock is convertible, at the holder’s option, into five shares of MariMed common stock, and each warrant is exercisable at an exercise price of $ 1.087 per share.

The warrants are subject to early termination if certain milestones are attained and the market value of the Company’s common stock reaches certain predetermined levels.

Provided that at least 50.0 % of the shares of Series C convertible preferred stock remained outstanding, the holders had the right to appoint one observer to the Company’s board of directors (the "Board") and to each of its Board committees, and appoint a member to the Company’s B if and when a seat became available, at which time the observer roles would terminate.

The transaction also imposed certain covenants on the Company with respect to the incurrence of new indebtedness, the issuance of additional shares of any designation of preferred stock, and the payment of distributions.

On August 4, 2022, the Company and Hadron entered into a second amendment to the Hadron Agreement pursuant to which, inter alia, (i) Hadron's obligation to provide any further funding to the Company and the Company's obligation to sell any further securities to Hadron was terminated, (ii) Hadron's right to appoint a designee to the Board was eliminated, and (iii) certain covenants restricting the Company's incurrence of new indebtedness were eliminated.

During the year ended December 31, 2023, in three separate transactions, the Company converted, at Hadron's request in accordance with the terms and conditions of the Series C stock certificate of designation, a total of 5,060,942 shares of Series C Stock into 25,304,710 shares of the Company's common stock (the "Conversions").

Provided that at least 50.0 % of the shares of Series C Stock remained outstanding, Hadron had the right to appoint one observer to the Company’s Board of Directors (the "Board") and to each of its Board committees, and appoint a member to the Board if and when a seat became available, at which time the observer roles would terminate.

The transaction also imposed certain covenants on the Company with respect to the incurrence of new indebtedness, the issuance of additional shares of preferred stock, and the payment of distributions.

On August 4, 2022, the Company and Hadron entered into a second amendment to the Hadron Agreement pursuant to which, inter alia, (i) Hadron's obligation to provide any further funding to the Company and the Company's obligation to sell any further securities to Hadron was terminated, and (ii) certain covenants restricting the Company's incurrence of new indebtedness were eliminated.

During the year ended December 31, 2023, in three separate transactions, the Company converted, at Hadron's request in accordance with the terms and conditions of the Series C Stock, a total of 5,060,942 shares of Series C Stock into 25,304,710 shares of the Company's common stock (the "Conversions").

The Conversions were effected at a conversion rate of five shares of the Company's common stock for each share of Series C Stock converted.

The Company did not recognize a gain or loss on the Conversions, as they were effected in accordance with the Series C Stock certificate of designation.

Upon the Conversions, less than 50.0 % of the shares of Series C Stock remained outstanding, and as a result, Hadron's rights to appointment a designee to the Board and an observer to the Board and each of the Board's committees terminated.

At December 31, 2024, 1,155,274 shares of Series C Stock remained outstanding.

There were no such conversions in the year ended December 31, 2024.

(13) STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Amended and Restated 2018 Stock Award and Incentive Plan

The Amended and Restated Stock Award and Incentive Plan (the "2018 Plan") provides for the award of options to purchase the Company's common stock ("stock options"), restricted stock units ("RSUs"), stock appreciation rights, restricted stock, deferred stock, dividend equivalents, performance shares or other stock-based performance awards, as well

as other stock- or cash-based awards.

At December 31, 2024, there were 25,481,098 total shares of common stock available for future issuance under the 2018 Plan.

Stock Options

A summary of the Company's stock option activity during the year ended December 31, 2023 is below:

A summary of the Company's stock option activity during the year ended December 31, 2024 was as follows:

Shares Weighted average exercise price

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Stock options granted under the 2018 Plan generally expire five years from the date of grant.

At December 31, 2023, the options outstanding had a weighted average remaining life of approximately three years .

At December 31, 2024, the options outstanding had a weighted average remaining life of approximately one and one-half years.

The grant date fair values of stock options granted in the year ended December 31, 2024 were estimated using the Black-Scholes valuation model with the following assumptions:

Estimated life (in years) 3.00 to 3.26

Estimated life (in years) 1.18

Weighted average volatility 64.81 %

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Restricted Stock Units

The Company began to grant restricted stock units ("RSUs") under the 2018 Plan in the fourth quarter of 2022.

Holders of unvested restricted stock units ("RSUs") do not have voting and dividend rights.

The grant date fair value of RSUs is recognized as expense on a straight-line basis over the requisite service periods.

The fair value of RSUs is determined based on the market value of the Company's shares on the date of grant.

The activity related to the Company's RSUs for the year ended December 31, 2023 was as follows:

The grant date fair values of RSUs are recognized as expense on a straight-line basis over the requisite service periods.

The fair value of RSUs is determined based on the market value of the Company's common stock on the date of grant.

The activity related to RSUs for the year ended December 31, 2024 was as follows:

RSUs Weighted average grant date fair value

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Outstanding at December 31, 2024 7,706,125 $ 0.27

In connection with the CA Credit Agreement (see Note 12), the Company issued to the Lenders an aggregate of 19,148,936 warrants to purchase shares of the Company's common stock at $ 0.47 per share, exercisable for a five-year period following issuance.

In addition to the 450,000 shares of restricted common stock issued to purchase the outstanding minority interest in Mari Holdings MD LLC ("Mari MD") noted below, the Company also issued 400,000 warrants to purchase the Company's common stock at an exercise price of $ 0.40 per share (the "Mari MD Warrants").

On May 2, 2024, the Company issued warrants to purchase 1,000,000 shares of the Company's common stock to an entity in consideration for introductory and other services rendered in connection with certain funding and acquisition transactions.

The warrants have an exercise price of $ 0.32 per share, were fully vested upon issuance, and expire on May 1, 2029.

The grant date fair value of the warrants was approximately $ 218,000 using the Black-Scholes valuation model.

This expense is included as a component of Acquisition-related and other in the Company's consolidated statements of operations for the year ended December 31, 2024.

In connection with the CA Credit Agreement (see Note 11), on January 24, 2023, the Company issued to the Lenders an aggregate of 19,148,936 warrants to purchase shares of the Company's common stock at $ 0.47 per share, exercisable during the five-year period following issuance.

In connection with the purchase by the Company of the outstanding minority interest in Mari Holdings MD LLC ("Mari MD") on April 13, 2023, the Company issued 400,000 warrants to purchase the Company's common stock at an exercise price of $ 0.40 per share (the "Mari MD Warrants").

The Mari MD Warrants expire on April 13, 2026.

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Other Common Stock Issuances

In addition to the activity related to stock options and RSUs described above and the Conversions (see Note 14), the Company also issued during the year ended December 31, 2023:

• 6,580,390 shares of restricted common stock with a fair value of $ 3.0 million in connection with the Ermont Acquisition (see Note 3);

• 740,741 shares of restricted common stock with a fair value of approximately $ 300,000 to purchase property and equipment;

• 400,000 shares of restricted common stock to settle certain obligations to one of the Company's service providers with a fair value of approximately $ 160,000 ;

• 450,000 shares of restricted common stock to purchase a 0.33 % minority interest in Mari Holdings MD LLC, one Company's majority-owned subsidiaries;

• 13,007 shares of restricted common stock with an aggregate fair value of approximately $ 5,000 issued under a royalty agreement;

• 75,025 shares of restricted common stock in the aggregate granted to three employees, including the 70,000 shares discussed below under "Common Stock Issuance Obligations" below, with a total fair value of approximately $ 41,000 .

In addition to the activity related to stock options and RSUs described above, the Company also issued during the year ended December 31, 2024:

• 3,917,267 shares of restricted common stock with a fair value of $ 1.0 million in connection with the MedLeaf Acquisition (see Note 3);

• 45,299 shares of restricted common stock with an aggregate fair value of approximately $ 10,000 issued under a licensing and royalty agreement.

Stock-Based Compensation

The Company recorded stock-based compensation expense of $ 1.1 million and $ 1.0 million for the years ended December 31, 2024 and 2023, respectively.

Common Stock Issuance Obligations

At December 31, 2022, the Company was obligated to issue 70,000 shares of common stock in the aggregate, with an aggregate grant date fair value of approximately $ 39,000 , to two employees, which shares were issued in the first quarter of 2023.

The Company had no such obligation at December 31, 2023.

For the years ended December 31, 2023 and 2022, the Company’s revenue was comprised of the following major categories (in thousands):

(14) SEGMENT INFORMATION

The Company operates as a single reporting segment engaged in the cultivation, processing and sale of branded cannabis products.

The Chief Operating Decision Makers are the Company's Chief Executive Officer and its Chief Financial Officer, who together (the "CODM"), evaluate company performance based on Net income (loss), determined in accordance with U.S.

GAAP, and Adjusted EBITDA, a non-GAAP measure.

The Company defines Adjusted EBITDA as income from operations, determined in accordance with GAAP, excluding the following:

• depreciation and amortization of property and equipment;

• amortization of acquired intangible assets;

• impairments or write-downs of acquired intangible assets;

• inventory revaluation;

• stock-based compensation;

• legal settlements;

• acquisition-related and other.

The CODM uses these measures to assess profitability and guide resource allocations, and believes that Adjusted EBITDA, when reviewed in conjunction with Net income (loss), is a useful measure to assess the Company's performance and liquidity, as it provides meaningful operating results by excluding the effects of expenses that are not reflective of the Company's operating business performance.

In addition, the CODM uses Adjusted EBITDA to understand and compare operating results across accounting periods, and for financial and operational decision-making and resource allocation.

The presentation of Adjusted EBITDA is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP.

The CODM conducts monthly financial reviews, focusing on revenue trends, gross margin performance and operational efficiency across the Company's vertically integrated operations.

Investment decisions, including capital expenditures for new cultivation facilities and retail expansion, are made based on expected return on investment and regulatory considerations in each state in which the Company operates.

The table below provides the Company's Net loss, Income from operations, and a reconciliation of Income from operations to Adjusted EBITDA for the years ended December 31, 2024 and 2023 (in thousands):

Year ended December 31,

Net loss $ ( 12,127 ) $ ( 16,007 )

GAAP Income from operations $ 2,912 $ 14,385

Depreciation and amortization of property and equipment 7,910 5,549

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

Adjusted EBITDA $ 19,649 $ 24,674

For the years ended December 31, 2024 and 2023, the Company’s revenue was derived from the following categories (in thousands):

Year ended December 31,

Product sales - retail $ 91,530 $ 95,517

Product sales - wholesale 62,895 48,788

Total product revenue 144,305 125,701

Other revenue 3,539 4,293

Real estate rentals 1,787 3,526

Supply procurement 1,534 3,353

Management fees 711 848

Licensing fees 261 582

Total other revenue 4,293 8,309

Total revenue $ 157,964 $ 148,598

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Lease Commitments

The Company was the lessee under eight operating leases and twenty-three finance leases at December 31, 2023.

These leases contain rent holidays and customary escalations of lease payments for the type of facilities being leased.

At December 31, 2024, the Company was the lessee under eight operating leases and thirty-one finance leases.

These leases contain rent holidays and customary escalations of lease payments for the types of facilities being leased.

The Company's operating lease agreements include its corporate headquarters, dispensaries and cannabis production and processing facilities.

The Company subleases three of these leased facilities to a cannabis-licensed client.

The Company recognizes rent expense on a straight-line basis over the expected lease term, including cancelable option periods which the Company fully expects to exercise.

The Company recognizes rent expense on a straight-line basis over the expected lease term, including option periods which the Company fully expects to exercise.

Certain leases require the payment of property taxes, insurance and/or maintenance costs in addition to the rent payments.

The Company leases machinery and office equipment under finance leases that expire in January 2026 through October 2038 with such terms comprising major part of the economic useful life of the leased property.

The Company leases machinery and office equipment under finance leases that expire in January 2026 through July 2031, with such terms comprising a major part of the economic useful life of the leased property.

The components of lease expense for the years ended December 31, 2024 and 2023 were as follows (in thousands):

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Future developed products (i.e., ice cream) have a royalty rate of 0.5 % if sold directly by the Company and between 0.125 % and 0.135 % if licensed by the Company for sale by third parties.

The aggregate royalties due to this entity for the years ended December 31, 2023 and 2022 approximated $ 722,000 and $ 219,000 , respectively.

During the year ended December 31, 2023, one of the Company’s majority-owned subsidiaries paid distributions of approximately $ 11,000 to the CEO, who owns a minority equity interest in such subsidiary.

During the year ended December 31, 2022, this subsidiary paid distributions aggregating approximately $ 27,300 to the CEO and Robert Fireman, the Company's former President and Chief Executive Officer.

In addition, the Company accrued $ 1,800 in the aggregate at December 31, 2022 for payments related to the fourth quarter of 2022.

FSCC, the cannabis-licensed client in Delaware that the Company manages, paid fees to BKR Management Inc., a company partially owned by the CEO, related to the initial formation, licensing and establishment of FSCC's cannabis operations.

The aggregate fees paid by FSCC were $ 192,000 related to each of the years ended December 31, 2023 and 2022.

The aggregate royalties earned by the entity for the years ended December 31, 2024 and 2023 approximated $ 634,000 and $ 722,000 , respectively.

During the years ended December 31, 2024 and 2023, one of the Company’s majority-owned subsidiaries paid distributions of approximately $ 5,000 and $ 11,000 , respectively, to the CEO, who owns a minority equity interest in such subsidiary.

At December 31, 2024, the Company had an outstanding accounts payable balance of approximately $ 251,000 in connection with fixed assets purchased from a third-party company in which the CEO has a controlling interest.

On June 10, 2024 (the "Membership Unit Purchase Date"), the CEO and COO purchased 5 % and 15 %, respectively, of the membership units of Mari Holdings Metropolis, LLC, one of the Company's majority-owned subsidiaries These membership units were purchased from the previous minority interest-holder, and accordingly, the percentage of the noncontrolling interests in this this majority-owned subsidiary remains unchanged.

During the year ended December 31, 2024, this majority-owned subsidiary made distribution payments of approximately $ 6,750 and $ 20,250 to the CEO and COO, respectively.

Prior to December 31, 2023, FSCC, the cannabis-licensed client in Delaware that the Company manages, paid fees to BKR Management Inc., a company partially owned by the CEO, related to the initial formation, licensing and establishment of FSCC's cannabis operations.

The aggregate fees paid by FSCC were approximately $ 192,000 for the year ended December 31, 2023.

Payment of these fees terminated effective as of December 31, 2023.

At December 31, 2023, the Company’s mortgages with Bank of New England and DuQuoin State Bank were personally guaranteed by the CEO under a limited guaranty.

At December 31, 2024, the Company’s mortgages with Bank of New England and DSB were personally guaranteed by the CEO.

Additionally, the CEO provided a limited guaranty to the CA Lenders under the CA Credit Agreement through its repayment in November 2023.

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At December 31, 2024 and 2023, the Company’s cumulative federal net operating losses were $ 64.5 million and $ 71.2 million, respectively.

The provision recorded in the year ended December 31, 2023 was due in part to the impact of Section 280E of the Internal Revenue Code ("Section 280E"), which prohibits the deduction of

certain ordinary business expenses, true-ups from changes that occurred between when the provision for the year ended December 31, 2022 as determined and when the related tax returns were filed, and reserves recorded against uncertain tax positions taken on the tax returns as filed.

The provision recorded in the year ended December 31, 2022 was due in part to the impact of Section 280E of the Internal Revenue Code, which prohibits the deduction certain ordinary business expenses, and true-ups from changes that occurred between when the provision for the year ended December 31, 2021 was determined and when the related tax return was filed.

The provision recorded in the year ended December 31, 2024 was due in part to the impact of Section 280E of the Internal Revenue Code ("Section 280E"), which prohibits the deduction of certain ordinary business expenses, the change in valuation allowance against deferred tax assets, and other nondeductible expenses.

The provision recorded in the year ended December 31, 2022 was due in part to the impact of Section 280E of the Internal Revenue Code, which prohibits the deduction of true-ups from changes that occurred between when the provision for the year ended December 31, 2022 was determined and when the related tax returns were filed, and reserves recorded against uncertain tax positions taken on the tax return as filed.

Reconciliations of the Company’s effective tax rates and the statutory tax rate for the years ended December 31, 2024 and 2023 were as follows:

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Section 280E adjustment ( 240.4 ) % ( 49.3 ) %

Other permanent non-deductible expenses ( 27.7 ) % ( 6.1 ) %

Stock-based compensation ( 3.5 ) % ( 0.7 ) %

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Allowance for doubtful accounts 68 207

Stock compensation 2,434 2,557

Stock-based compensation 2,333 2,434

Loss on equity investments 8,025 8,094

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Lease payments 2,674 2,621

Reserves 484 225

Accruals and reserves 169 484

Other 889 448

Deferred tax liabilities:

Depreciation ( 6,047 ) ( 6,925 )

Goodwill write-offs ( 303 ) —

Real estate revenue ( 2,613 ) ( 2,477 )

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Additions based on tax positions related to prior years 3 1,636

Reductions due to statute of limitations lapse ( 397 ) —

Balance at December 31, $ 5,256 $ 5,650

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The Company does not expect its unrecognized tax benefits to change significantly over the next twelve months.

During the year ended December 31, 2023, the Company's unrecognized tax benefits increased by $ 1.6 million as a result of uncertain tax positions relating to net operating losses deducted by subsidiaries that are subject to the provisions of Section 280E.

During the year ended December 31, 2024, the Company's unrecognized tax benefits decreased by approximately $ 394,000 as a result of the lapse of the statute of limitations for uncertain tax positions relating to net operating losses deducted by subsidiaries that are subject to the provisions of Section 280E.

The Company is currently undergoing an IRS audit for the tax year ended December 31, 2022 for certain of its subsidiaries.

The result of this audit could reasonably result in a change in our uncertain tax positions related to net operating losses deducted within the next 12 months.

At this time, an estimate of the amount that could change for those uncertain tax positions cannot be made.

The Company believes that its reserves for uncertain tax positions are appropriate, and that it has meritorious defenses for its tax filings and will vigorously defend them during any audit process, appellate process and through litigation in courts, as necessary.

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The Company is currently open to examination under the statute of limitations by the Internal Revenue Service and state jurisdictions for the tax years ended December 31, 2021 through December 31, 2024.

At December 31, 2023, the Company recorded a receivable for income taxes of $ 1.0 million, comprised of refunds requested from the Internal Revenue Service and state taxing authorities.

This receivable is reported as a component of Other current assets in the Company's consolidated balance sheet at December 31, 2023.

At December 31, 2022, the Company recorded a receivable for income taxes of $ 3.1 million, comprised of $ 1.3 million of overpayments that will be applied to future periods and $ 1.8 million that was requested for refund from the Internal Revenue Service.

This receivable is reported as a component of Other current assets in the Company's consolidated balance sheet at December 31, 2022.

At December 31, 2024 and 2023, the Company's consolidated balance sheets included a receivable for income taxes of $ 0.8 million and $ 0.7 million, respectively, representing requests for refunds from the Internal Revenue Service and state taxing authorities, and are reported as components of Other current assets as of the respective balance sheets.

(20) COMMITMENTS AND CONTINGENCIES

Maryland Litigation and DiPietro Lawsuit

In November 2019, Kind Therapeutics USA Inc.

("Kind") filed a complaint against the Company in the Circuit Court for Washington County, Maryland, captioned Kind Therapeutics USA, Inc.

MariMed Inc., et al.

C-21-CV-19-000670) (the "Maryland Litigation").

In August 2020, Jennifer DiPietro, directly and derivatively on behalf of Mari Holdings MD LLC ("Mari-MD") and Mia Development LLC ("Mia") commenced a suit against the Company's then-Chief Executive Officer and then-Chief Financial Officer and its wholly-owned subsidiary MariMed Advisors Inc., in Suffolk Superior Court, Massachusetts (the "DiPietro Lawsuit").

In December 2021, (i) the parties in the Maryland Litigation and the DiPietro Lawsuit entered into a global Confidential Settlement and Release Agreement (the "Settlement Agreement") in resolution of both litigation matters and (ii) the Company entered into (a) a membership interest purchase agreement with the members of Kind to acquire 100 % of the equity ownership of Kind (the "Kind Acquisition") and (b) a membership interest purchase agreement with Jennifer DiPietro to acquire her entire equity ownership interest in Mari-MD and Mia (the "DiPietro Acquisition").

In April 2022, following the consummation of the Kind Acquisition, the Maryland Litigation was dismissed in its entirety with prejudice, and the parties released each other from any and all claims between them.

In June 2022, upon the approval of the court in the DiPietro Lawsuit, the DiPietro Acquisition was consummated and the parties released each other from any and all direct and derivative claims, and a stipulation dismissing all claims and counterclaims with prejudice was filed with the court.

Bankruptcy Claim

During 2019, the Company’s subsidiary, MariMed Hemp, Inc.

("MMH") sold and delivered hemp seed inventory to GenCanna Global Inc., a Kentucky-based cultivator, producer, and distributor of hemp (“GenCanna”).

At the time of sale, the Company owned a 33.5 % ownership interest in GenCanna.

The Company recorded a related party receivable of approximately $ 29 million from the sale, which was fully reserved at December 31, 2019.

On January 24, 2020, an involuntary bankruptcy proceeding under Chapter 11 was filed against GenCanna and its wholly-owned subsidiary, OGGUSA Inc.

(f/k/a GenCanna Global US, Inc.) ("OGGUSA" and together with GenCanna, the "OGGUSA Debtors") in the United States.

Bankruptcy Court in the Eastern District of Kentucky (the "Bankruptcy Court").

In February 2020, the OGGUSA Debtors, agreed to convert the involuntary bankruptcy proceeding into a voluntary Chapter 11 proceeding.

The OGGUSA Debtors' subsidiary, Hemp Kentucky LLC, also filed voluntary petitions under Chapter 11 in the Bankruptcy Court.

In May 2020, after an abbreviated solicitation/bid/sale process, the Bankruptcy Court, over numerous objections by creditors and shareholders of the OGGUSA Debtors, which included the Company, entered an order authorizing the sale of all or substantially all of the assets of the OGGUSA Debtors to MGG Investment Group LP ("MGG"), a creditor of the OGGUSA Debtors.

After the consummation of the sale of all or substantially all of their assets and business, the OGGUSA Debtors filed their liquidating plan of reorganization (the “Liquidating Plan”) to collect various prepetition payments and commercial claims against third parties, liquidate the remaining assets of the OGGUSA Debtors, and make payments to creditors.

The Liquidating Plan was confirmed by the Bankruptcy Court on November 12, 2020.

Since the approval of the Liquidating Plan, the OGGUSA Debtors have been in the process of liquidating the remaining assets, negotiating and prosecuting objections to other creditors’ claims, and pursuing the collection of accounts receivable and Chapter 5 bankruptcy avoidance claims.

In April 2022, the Plan Administrator filed a Complaint against MMH (the "Complaint") alleging certain preferential transfers of assets, which were valued by the Plan Administrator at $ 250,000 , relating to payments on a $ 600,000 loan made to MMH by the Company prior to the filing of the OGGUSA Debtors Chapter 11 proceeding (the "Preferential Claim").

The Complaint sought to recover an amount no less than $ 200,000 and to disallow MMH’s unsecured general claim in the bankruptcy proceeding until such time as such preferential transfer had been repaid to the OGGUSA Debtors.

In July 2023, MMH entered into a Settlement and Release Agreement with the Plan Administrator pursuant to which it agreed to reduce its Bankruptcy Court approved unsecured general claim to $ 15.5 million, or by 50 %, in consideration for the settlement of the Preferential Claim and a general release of MMH and the Company.

As of the date of this report, there is insufficient information to determine how much MMH may receive upon the completion of the liquidation of the remaining assets of the OGGUSA Debtors on account of its general unsecured claim, if anything.

In 2019, MariMed Hemp, Inc.

("MMH"), a subsidiary of the Company, sold hemp seed inventory to GenCanna Global Inc., (“GenCanna”), recording a related party receivable of approximately $ 29 million, which was fully reserved at December 31, 2019.

In early 2020, GenCanna entered a Chapter 11 bankruptcy, leading to a liquidating plan that remains ongoing.

In 2022, the Plan Administrator filed a complaint against MMH for alleged preferential transfers, which was settled in 2023 by reducing MMH's general unsecured claim to $ 15.5 million.

In the three months ended September 30, 2024, MMH received a liquidation distribution of $ 116,250 .

As of the date of this filing, there is insufficient information to determine the amount of further liquidation distributions, if any, that MMH may receive on account of its general unsecured claim.

New Bedford, MA and Middleborough, MA Buildouts

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The Company repaid the two shareholders $ 300,000 each as salary between 2021 and 2023 (at the rate of $ 100,000 each per year), which payments have since been terminated.

The Company intends to negotiate an agreement with the entity that paid for the electrical work and all other interested parties to reflect the liability and agreed-upon payment terms.

As of December 31, 2024, the $ 2.0 million accrued liability remains on the Company's consolidated balance sheet.

Discussions to reach agreement with the entity that paid for the electrical work and all other interested parties to address this liability and related payment terms are ongoing.

(21) SUBSEQUENT EVENTS

Planned Business Acquisition

On February 1, 2024, the Company entered into an agreement to acquire the medical cannabis retail license and certain assets of Our Community Wellness & Compassionate Care Center, Inc.

("Medleaf") in Prince George's County, Maryland in exchange for $ 5.25 million, adjusted for certain items.

The purchase consideration is comprised of $ 2.0 million of cash in the aggregate, a $ 2.0 million note to be issued to the sellers of Medleaf (the "Medleaf Sellers") at the time of closing, and shares of the Company's common stock with a fair value of $ 1.25 million based on a formulaic calculation, to be issued at the time of closing.

As of the date of this report, the Company has made advance payments to the Medleaf Sellers totaling $ 0.5 million.

Completion of the acquisition is dependent upon certain conditions, including regulatory approval of the acquisition.

The Company expects this acquisition to be completed in 2024;

however, there is no assurance that the required regulatory approvals will be obtained.

Receipt of Certificate of Occupancy - Casey, Illinois

On February 26, 2024, MariMed received its Certificate of Occupancy from the Illinois Cannabis Control Commission to commence operations in the Company's permanent brick-and-mortar facility for its Casey, Illinois adult-use dispensary.

The Company anticipates that it will transition from its temporary facility at the same location and commence operations in the new facility during the first quarter of 2024.

Equity Transaction

Subsequent to December 31, 2023, the Company issued 3,614 shares of restricted common stock with an aggregate fair market value of approximately $ 2,000 as payment under a royalty agreement.

Subsequent to December 31, 2024, the Company issued 697,398 shares of common stock in the aggregate underlying RSUs that vested on various dates prior to the filing of this report.

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

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data