What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-17 compared with 2025-03-04 · 98 added, 126 removed, 216 unchanged (51% of the section changed)

17 unchanged sentences

The Company is evolving with the industry and is in the midst of a transformation to being significantly more customer-centric across its operations, which include cultivation, manufacturing, wholesale and retail business lines.

With our core operations strategically located in three limited-license markets through our state-licensed subsidiaries, we cultivate and manufacture cannabis products and distribute these products through our growing network of Green Goods ® and other retail dispensaries we own or operate as well as to third-party dispensaries in the markets in which our subsidiaries hold operating licenses.

With our core operations strategically located in six limited-license markets through our state-licensed subsidiaries, we cultivate and manufacture cannabis products and distribute these products through our growing network of retail dispensaries we own or operate as well as to third-party dispensaries in the markets in which our subsidiaries hold operating licenses.

Operating Segment

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We cultivate, manufacture, and distribute cannabis products to third parties in wholesale markets and cultivate, manufacture, and sell cannabis products directly to approved patients and adult-use-customers in our owned or operated retail stores.

During the year ended December 31, 2024, the Company had operating revenue in three states:

Maryland, Minnesota, and New York.

Retail revenues during the year ended December 31, 2024 were derived from sales in 14 dispensaries throughout these three states.

We had eight operational dispensaries in Minnesota, four in New York, and two in Maryland.

Wholesale revenues were derived from sales of products to third parties in Maryland, Minnesota, and New York.

During the year ended December 31, 2025, the Company had licenses and operated in six states, consisting of Maryland, Minnesota, Missouri, Nevada, New York, and Utah.

As of March 17, 2026, we retail cannabis products in 36 dispensaries located across Maryland (2), Minnesota (8), Missouri (11), Nevada (10), New York (4), and Utah (1) and wholesales cannabis products, through third-party companies, in Maryland, Minnesota, Missouri, Nevada, New York, and Utah.

Merger Agreements with Deep Roots, Proper and Wholesome

1 unchanged sentence

Each Merger is an all-share transaction whereby, at the closing of each applicable transaction, (i) a new wholly-owned subsidiary of the Company would merge with and into Deep Roots, (ii) a new wholly-owned subsidiary of the Company would merge with and into Wholesome, and (ii) the Proper entities would each merge with and into new wholly-owned subsidiaries of the Company.

None of the Deep Roots Merger, the Proper Mergers or the Wholesome Merger is contingent on the completion of any of the other Mergers.

None of the Deep Roots Merger, the Proper Mergers or the Wholesome Merger was contingent on the completion of any of the other Mergers.

For a description of the Merger Agreements and details of the Merger, refer to Part I – “ Item 1.

Business — Merger Agreements with Deep Roots, Proper and Wholesome .”

During the year ended December 31, 2025, all of the Mergers closed.

More specifically, the Wholesome Merger closed on May 12, 2025, the Proper Mergers closed on June 5, 2025, and the Deep Roots Merger closed on June 6, 2025.

Accounting for these Mergers is provisional.

Year ended December 31, 2025 Compared to the Year Ended December 31, 2024

We derived our revenue from cultivating, processing, and distributing cannabis products through our 18 dispensaries in three states and our wholesale sales to third parties in three states.

We derived our revenue from cultivating, processing, and distributing cannabis products through our 36 dispensaries in six states and our wholesale sales to third parties in six states.

For the year ended December 31, 2025, 82% of the revenue was generated from retail dispensaries and 18% from wholesale business.

For the year ended December 31, 2024, 80% of the revenue was generated from retail dispensaries and 20% from wholesale business.

During the year ended December 31, 2023, we ceased all operations in New Mexico.

For the year ended December 31, 2025, Minnesota operations contributed approximately 20% of revenues, Nevada contributed 22%, New York contributed 8%, Maryland contributed 16%, Missouri contributed 21%, and Utah contributed 13%.

For the year ended December 31, 2024, Minnesota operations contributed approximately 47% of revenues, New York contributed 11%, and Maryland contributed 42%.

For the year ended December 31, 2023, Minnesota operations contributed approximately 51% of revenues, New York contributed 16%, New Mexico contributed 2%, and Maryland contributed 31%.

Total revenue for the year ended December 31, 2025, was $268,769,268, an increase of $169,385,047 or 170% compared to revenue of $99,384,221 for year ended December 31, 2024.

The increase is primarily attributable to increased revenue contributions from the Maryland business driven by the commencement of adult-use sales on July 1, 2023, partially offset by decreased New Mexico revenues, which was divested in June of 2023, and declining New York revenues.

Retail revenue for the year ended December 31, 2024, was $79,534,555, an increase of $5,913,689 or 8% compared to retail revenue of $73,620,866 for the year ended December 31, 2023, primarily due to increased revenue contributions from the Maryland business driven by the commencement of adult-use sales on July 1, 2023, partially offset by decreased New Mexico revenues, which was divested in June of 2023, and declining New York revenues.

Wholesale revenue for the year ended December 31, 2024, was $19,849,666, an increase of $5,337,369 or 37% compared to wholesale revenue of $14,512,297 for year ended December 31, 2023.

The increase was primarily due to increased revenue contributions from the Maryland business driven by the commencement of adult-use sales on July 1, 2023.

The increase was primarily attributable to the closing of the Mergers resulting in the addition of revenues from our operations in Utah, Nevada, and Missouri.

Retail revenue for the year ended December 31, 2025, was $219,933,107, an increase of $140,398,552 or 177% compared to retail revenue of $79,534,555 for the year ended December 31, 2024, primarily due to the closing of the Mergers, resulting in the addition of revenues from our operations in Utah, Nevada, and Missouri.

Wholesale revenue for the year ended December 31, 2025, was $48,836,161, an increase of $28,986,495 or 146% compared to wholesale revenue of $19,849,666 for the year ended December 31, 2024.

The increase was primarily due to increased contributions from New York, and the closing of the Mergers, resulting in the addition of revenues from our operations in Utah, Nevada, and Missouri.

Total Wholesale

Total Revenue

Total Revenue excluding NM

Cost of Goods Sold and Gross Profit

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This is compared to gross profit for the year ended December 31, 2024 of $50,771,017 or a 51% gross margin.

The slight increase in margin was driven primarily by the disposition of operations in New Mexico in June 2023, which carried a lower margin profile while operational, and the commencement of adult-use sales in Maryland on July 1, 2023.

The decrease in gross margin is primarily attributable to the amortization of the non-cash inventory fair value step initially recognized in connection with the closing of the Mergers.

Excluding this amortization of $17,805,282 from the gross profit figure of $127,095,377 would have resulted in gross profit of $144,900,659 and gross margin of approximately 54% for the year ended December 31, 2025.

Total Operating Expenses

Total operating expenses for the year ended December 31, 2025, were $128,143,860, an increase of $90,936,207 compared to total expenses of $37,207,653 for the year ended December 31, 2024.

The increase in total expenses was primarily attributable to transaction costs incurred in connection with the Mergers of $4,504,001 partially offset by a decrease in share based compensation expenses of $529,824.

The increase in total expenses was primarily attributable to an increase in transaction expenses associated with the Mergers, an increase in stock-based compensation expense, and the addition of the operating expenses of Deep Roots, Proper, and Wholesome.

Operating Income (Loss) before Income Taxes and Other Income (Expense)

Operating income (loss) before other income (expense) and provision for income taxes for the year ended December 31, 2024, was $13,536,364, an increase of $2,983,586 compared to an operating income before other income (expense) and provision for income taxes of $10,579,778 for the year ended December 31, 2023.

Total Other Income (Expense)

Operating loss before other income (expense) and provision for income taxes for the year ended December 31, 2025, was $1,048,483, compared to an operating income before other income (expense) and provision for income taxes of $13,536,364 for the year ended December 31, 2024.

Total Other Expense

Total other expense for the year ended December 31, 2025, was $38,862,425, an increase of $8,404,552 compared to other expense of $30,457,873, for the year ended December 31, 2024.

The increase in other expense is primarily attributable to a decrease in other income associated with the ERC under the CAREs Act, and a decrease in other income associated with the Grown Rogue held warrants, partially offset by decreased losses on asset disposals.

The increase in other expense is primarily attributable to the loss on the change in fair value of contingent consideration and the loss on disposal of debt partially offset by the gain associated with our legal settlement with Verano.

Provision for Income Taxes

3 unchanged sentences

Year ended December 31, 2024 Compared to the Year Ended December 31, 2023

We derived our revenue from cultivating, processing, and distributing cannabis products through our eighteen dispensaries in four states and our wholesale sales to third parties in four states.

We derived our revenue from cultivating, processing, and distributing cannabis products through our 18 dispensaries in three states and our wholesale sales to third parties in three states.

For the year ended December 31, 2024, 80% of the revenue was generated from retail dispensaries and 20% from wholesale business.

1 unchanged sentence

During the year ended December 31, 2023, we ceased all operations in New Mexico.

During the year ended December 31, 2022, we ceased all operations in Arizona.

For the year ended December 31, 2023, Minnesota operations contributed approximately 51% of revenues, New York contributed 16%, Maryland contributed 31%, and New Mexico contributed 2%.

For the year ended December 31, 2022, Minnesota operations contributed approximately 51% of revenues, New York contributed 20%, Arizona contributed 3%, New Mexico contributed 8%, and Maryland contributed 18%.

Revenue for the year ended December 31, 2023, was $88,133,163, an increase of $13,507,296 or 18% compared to revenue of $74,625,867 for year ended December 31, 2022.

The increase is primarily attributable to increased revenue contributions from the Maryland business driven by the commencement of adult-use sales on July 1, 2023, and increased in revenue contributions from Minnesota driven by increased patient count, partially offset by decreased New Mexico revenues, which was divested in June of 2023.

Retail revenue for the year ended December 31, 2023, was $73,620,867, an increase of $11,497,510 or 19% compared to retail revenue of $62,123,357 for the year ended December 31, 2022, primarily due to increased revenue contributions from the Maryland business driven by the commencement of adult-use sales on July 1, 2023, and increased in revenue contributions from Minnesota driven by increased patient count, partially offset by decreased New Mexico revenues, which was divested in June of 2023

For the year ended December 31, 2024, Minnesota operations contributed approximately 47% of revenues, New York contributed 11%, and Maryland contributed 42%.

For the year ended December 31, 2023, Minnesota operations contributed approximately 51% of revenues, New York contributed 16%, New Mexico contributed 2%, and Maryland contributed 31%.

Total revenue for the year ended December 31, 2024, was $99,384,221, an increase of $11,251,058 or 13% compared to revenue of $88,133,163 for year ended December 31, 2023.

Wholesale revenue for the year ended December 31, 2024, was $19,849,666, an increase of $5,337,369 or 37% compared to wholesale revenue of $14,512,297 for year ended December 31, 2023.

2 unchanged sentences

Total Revenue

Total Revenue excluding AZ & NM

Total Revenue excluding NM

Cost of Goods Sold and Gross Profit

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This is compared to gross profit for the year ended December 31, 2023, of $44,104,165 or a 50% gross margin.

The increase in margin was driven by increased retail revenue contributions from Minnesota, which carries a high margin profile, both overall and as a percentage of total revenue, the disposition of all Arizona wholesale operations, which carried a low margin in 2022, and the commencement of adult-use sales in Maryland on July 1, 2023.

Total Operating Expenses

Total operating expenses for the year ended December 31, 2023, were $33,524,387, a decrease of $4,323,139 compared to total expenses of $37,847,526 for the year ended December 31, 2022.

The decrease in total expenses was attributable to a decrease in selling, general, and administrative expenses of $5,605,706 partially offset by an increase in share based compensation expenses of $1,463,401.

Decreased salaries and wages driven by lower headcount and decreased professional fees account for the majority of the decrease in selling, general, and administrative expenses.

Total operating expenses for the year ended December 31, 2024, were $37,207,653, an increase of $3,683,266 compared to total expenses of $33,524,387 for the year ended December 31, 2023.

Operating Income (Loss) before Income Taxes and Other Income (Expense)

Operating income (loss) before other income (expense) and provision for income taxes for the year ended December 31, 2023, was $10,579,778, an increase of $17,519,143 compared to an operating loss before other income (expense) and provision for income taxes of $(6,939,365) for the year ended December 31, 2022.

Operating income (loss) before other income (expense) and provision for income taxes for the year ended December 31, 2024, was $13,536,364, an increase of $2,983,586 compared to operating income before other income (expense) and provision for income taxes of $10,579,778 for the year ended December 31, 2023.

Total Other Income (Expense)

Total other expense for the year ended December 31, 2023, was ($28,403,867), a decrease of $1,221,212 compared to other expense of ($29,625,079) or the year ended December 31, 2022.

The decrease in other expense is primarily attributable to increased other income attributable to the receipt of the Coronavirus Aid, Relief, and Economic Security Act Employee Retention Tax Credit in 2023 and decreased impairment losses in 2023, partially offset by increased interest expense driven by the Credit Facility and increased losses on disposal of assets related to the Red Barn Growers disposition in connection with the divestiture of our business in New Mexico during 2023.

Total other expense for the year ended December 31, 2024, was ($30,457,873), an increase of $2,054,006 compared to other expense of ($28,403,867) for the year ended December 31, 2023.

Provision for Income Taxes

15 unchanged sentences

EBITDA (non-GAAP)

Inventory adjustment

Loss on impairment of long-lived assets

Non-cash inventory adjustments

Grown Rogue termination fee included in cost of goods sold

Change in the fair value of contingent consideration

Stock-based compensation

Transaction related expenses

Loss on impairment

Debt financing costs

Severance expense

Loss on disposal of assets

1 unchanged sentence

Liquidity and Capital Resources

As of December 31, 2024 and 2023, the Company had working capital of $94,903,896 and $(30,615,109) respectively, reflecting an increase in working capital of $125,519,005for the year ended December 31, 2024 driven by the private placement equity raise resulting in the receipt of approximately $80 million in net proceeds, and various debt amendments resulting in the reclassification of debt from current to long-term.

As of December 31, 2025 and 2024, the Company had working capital of $113,582,993 and $94,903,896 respectively, reflecting an increase in working capital of $18,679,097 for the year ended December 31, 2025 driven by the closing of the Mergers.

The Company is an early-stage growth company.

1 unchanged sentence

Capital reserves are being utilized for capital expenditures and improvements in existing facilities, product development and marketing, as well as customer, supplier and investor and industry relations.

Credit Facility

During 2017 the Company signed a promissory note payable in the amount of $ 1,010,000 .

The note bears interest at a rate of 15% per annum with interest payments required on a monthly basis.

In 2019 the Company’s promissory note payable in the amount of $ 1,010,000 was modified to increase the amount payable to $ 1,110,000.

The Company paid the note off in full during the year ended December 31, 2024.

On November 19, 2021, the Company signed a promissory note payable in the amount of $2,000,000 in connection with the acquisition of Charm City Medicus, LLC.

The note bears an interest rate of 8% per annum with interest payments due on the last day of each calendar quarter.

On November 19, 2023, the Company and lender amended the note.

Per the terms of the amendment, the interest rate was modified to 15%, and the Company paid off $1,000,000 of principal.

On November 27, 2024, the Company and lender executed the second amendment to the note.

Per the terms of the amendment, the maturity date was extended, the interest rate was increased to 18%, and the Company repaid $100,000 in principal.

The remaining principal balance of $900,000 is due on February 28, 2025, and the note is secured by 25% of the membership interests in Vireo Health of Charm City, LLC.

On March 25, 2021, the Company entered into a credit agreement for a senior secured delayed draw term loan with an aggregate principal amount of up to $46,000,000 (the “ Credit Facility ”), and executed a draw of $26,000,000 in principal.

The unpaid principal amounts outstanding under the Credit Facility bear interest at a rate of (a) the U.S.

prime rate plus 10.375%, payable monthly in cash, and (b) 2.75% per annum paid in kind interest payable monthly.

In connection with the Credit Facility, the Company also pays a monthly credit monitoring fee in the amount of $130,400 which is included in interest expense in the consolidated statements of loss and comprehensive loss for the years ended December 31, 2024 and 2023.

On November 18, 2021, the Company and lenders amended the Credit Facility to provide for an additional loan of $4,200,000 with a cash interest rate of 15% per annum and PIK interest of 2% per annum.

Obligations under the Credit Facility are secured by substantially all the assets of the Company.

On January 31, 2022, Vireo and certain of its subsidiaries, as borrowers (collectively, “ Borrowers ”), entered into a Third Amendment to the Credit Facility (the “ Third Amendment ”) providing for additional delayed draw term loans of up to $55 million (the “ Delayed Draw Loans ”).

The cash interest rate on the Delayed Draw Loans under the Third Amendment is equal to the U.S.

prime rate plus 10.375%, with a minimum required rate of 13.375% per annum, in addition to paid-in-kind interest of 2.75% per annum.

On March 31, 2023, the Company executed a fifth amendment to its Credit Facility with its senior secured lender, Chicago Atlantic Admin, LLC (the " Agent "), an affiliate of Green Ivy Capital, and a group of lenders.

The amended credit facility extends the maturity date on its Delayed Draw Loans to April 30, 2024, through the issuance of 15,000,000 Subordinate Voting Shares in lieu of a cash extension fee.

These 15,000,000 shares were valued at $1,407,903 using a fair value per share of $0.094 and considered a deferred financing cost.

The fair value per share reflects a 22% discount to the market price at the time of issuance to account for the four-month trading lock-up imposed on the shares.

The amendment also provides the Company with reduced cash outlays by eliminating required amortization of the loan, and requires the Company to divest certain assets to improve its liquidity position and financial performance.

The Company has the potential to extend the maturity date on its Delayed Draw Loans up to January 31, 2026 with the satisfaction of certain financial performance-related conditions.

On April 30, 2024, the Company executed a short-term extension of the maturity date on the Credit Facility with the Agent.

The Credit Facility was extended until June 14, 2024, matching all other terms of the existing agreement.

On June 14, 2024, another short-term extension was executed which extended the maturity date on the Credit Facility to July 31, 2024, matching all other terms of the existing agreement.

On May 20, 2024 the Company executed a $1,200,000 term loan with the Agent to assist with the purchase of a site for a new dispensary location.

The loan bears an interest rate of 12.0% and is due on May 28, 2027.

Financing costs of $68,600 were incurred in connection with the closing of the loan.

On July 31, 2024, the Company executed a ninth amendment to the Company’s Credit Facility.

The ninth amendment to the Company’s Credit Facility extends the maturity date on the Credit Facility loans to January 29, 2027, and amends certain financial measure definitions and covenants within the agreement.

The Company issued 12,500,000 Subordinate Voting Shares to the lenders in consideration for the credit facility amendment.

These 12,500,000 shares were valued at $ 5,387,500 using a fair value per share of $ 0.431 and considered a deferred financing cost.

On December 27, 2024, Vireo Health of Minnesota, LLC (“Vireo Minnesota”), a wholly-owned subsidiary of the Company entered into a secured credit agreement among Vireo Minnesota as Borrower, the Company and various affiliated entities as Guarantors (as defined therein), Chicago Atlantic Lincoln, LLC, the lender party thereto and Chicago Atlantic Admin, LLC, as Administrative Agent and Collateral Agent.

The executed secured credit agreement with the Agent allows for the issuance of certain loans of up to an aggregate principal amount of $11,500,000.

These loans are intended to assist with the financing of a new indoor cultivation facility.

These loans bears an interest rate of 10.5% and are due on June 26, 2026.

As of December 31, 2024, the Company has drawn $5,500,000 in aggregate principal, and incurred financing costs of $1,549,773.

On December 31, 2024, Vireo Minnesota closed on a $15,000,000 principal amount loan with Stearns Bank National Association (the “Commercial Loan”), with the Company and Vireo Health, Inc., a wholly-owned subsidiary of the Company, as guarantors.

The Commercial Loan has a term of 24 months and carries a fixed annual interest rate of 9.25%, payable monthly with interest-only payments through the initial 12 months, followed by monthly principal and interest payments based on a 240-month amortization schedule for the remaining term of the Commercial Loan.

The Commercial Loan has no prepayment penalty and is collateralized by a leasehold construction mortgage associated with the buildout of a new cultivation facility for Vireo Minnesota in an existing industrial building in Elk River, Minnesota.

As of December 31, 2024, there was no principal amount outstanding as funding has not yet commenced.

However, the Company incurred financing costs of $412,897.

Long-Term Debt Arising from the Mergers

In connection with the closing of the Proper Mergers, the Company became obligated under $25,502,655 of notes payable due to Chicago Atlantic Admin, LLC.

The unpaid principal amounts outstanding bore interest at a rate of (a) 11%, payable monthly in cash, and (b) 3.00% per annum PIK interest, payable monthly.

In addition, 1% amortization of the original principal value of the note, or $27,100,000, was payable monthly, and the note was set to mature on November 28, 2025.

See Note 3 for additional information.

In connection with the closing of the Deep Roots Merger, the Company became obligated under $19,166,670 of notes payable due to Chicago Atlantic Admin, LLC.

The unpaid principal amounts outstanding bore interest at a rate of (a) the U.S.

prime rate, with a floor of 8.00%, plus (b) 6.50%, payable monthly in cash.

In addition, 0.83% amortization of the original principal value of the note, or $20,000,000, was payable monthly, and the note was set to mature on August 15, 2027.

See Note 3 for additional information.

In connection with the closing of the Wholesome Merger, the Company became obligated on a $8,592,555 term loan bearing an interest rate of 11.25%, payable monthly in cash.

The term loan was repaid in full on May 13, 2025.

Additionally, the Company became obligated on $1,000,000 of promissory notes bearing an interest rate of 13.00%, payable monthly in cash.

See Note 3 for additional information.

First Lien Term Loan and Chicago Atlantic Term Loan

On July 3, 2025, the Company entered into a Loan and Security Agreement (the “First Lien Term Loan”), effective July 7, 2025, with East West Bank, a California banking corporation (“East West Bank”), as Administrative Agent (the “Administrative Agent”), and Western Alliance Bank, an Arizona corporation, as co-administrative agent (the “Co-Admin Agent”).

The First Lien Term Loan provides for an aggregate principal amount of $120,000,000.

The aggregate principal amount of the First Lien Term Loan amortizes in quarterly installments of $3,000,000.

The Company will make such quarterly amortization payments commencing on December 31, 2025 and on the last business day of each quarter thereafter through and including July 3, 2028.

Upon maturity of the First Lien Term Loan on July 31, 2028, the remaining outstanding principal amount of the First Lien Term Loan, and all accrued and unpaid interest thereon, will be due and payable in full.

The First Lien Term Loan bears interest at the one-month Term Secured Overnight Financing Rate (subject to a 3% floor) plus 4% per annum.

The First Lien Term Loan shall, at the Administrative Agent’s option, convert to a Prime Rate Loan at the end of the First Lien Term Loan’s current one-month interest period if an event of default shall occur and be continuing, at which time an additional 2% of default interest will also be applicable to the First Lien Term Loan.

On July 3, 2025, the Company entered into a secured term loan (the “Chicago Atlantic Term Loan”), effective July 7, 2025, with Chicago Atlantic Opportunity Finance, LLC, as a Lender, Chicago Atlantic Admin, LLC, as Administrative Agent and Collateral Agent (“2L Agent”), and Chicago Atlantic Credit Advisers, LLC, as Lead Arranger (“Lead Arranger”).

The Chicago Atlantic Term Loan provides for a principal amount of $33,000,000 to be loaned to the Company along with a $50,000,000 accordion feature, available to support future strategic initiatives, subject to the sole discretion of the Lender

and 2L Agent.

Amortization payments are due and payable monthly on each payment date in an amount equal to 1% of the loan amount starting November 30, 2025.

All unpaid and accrued interest is due and payable on the maturity date of October 2, 2028, with an option to extend for an additional year subject to a 1% extension fee of all loans advanced by lenders under the Chicago Atlantic Term Loan.

The Chicago Atlantic Term Loan bears interest at the Prime Rate (subject to a 7.5% floor) plus 5.5% per annum.

The First Lien Term Loan is secured by a perfected first priority security interest in all assets and future assets of the Company, subject to the terms thereof.

The Chicago Atlantic Term Loan is secured by a second priority security interest in and lien on all existing assets and future assets of the Company, subject to the terms thereof.

The proceeds from the First Lien Term Loan and Chicago Atlantic Term Loan were used to retire all of the Company’s existing debt obligations, including the debt arising from acquisitions, including the Mergers.

In connection with the retirement of the existing debt, the Company recorded a loss on extinguishment of $8,563,645, of which $4,911,988 relates to the extinguishment of unamortized financing costs associated with the retired debt obligations, and $3,651,657 relates to make-whole fees paid.

The loss on extinguishment is included in other expense on the statement of loss and comprehensive loss for the year ended December 31, 2025.

Unless otherwise specified, all deferred financing costs are treated as a contra-liability, to be netted against the outstanding loan balance and amortized over the remaining life of the loan.

1 unchanged sentence

Convertible Notes

On April 28, 2023, the Company closed on a new convertible debt facility which enables the Company to access up to $10,000,000 in aggregate principal amount of convertible notes (the “Convertible Notes”).

The convertible facility has a term of three years, with an annual interest rate of 12.0%, comprised of 6.0% cash and 6.0% paid-in-kind.

The initial tranche's principal amount of Convertible Notes outstanding in the amount of $2,000,000, plus all paid-in-kind interest and all other accrued but unpaid interest thereunder, is convertible into Subordinate Voting Shares of the Company at the option of the holders at any time by written notice to the Company, at a conversion price equal to $0.145.

For each future tranche advanced, the principal amount of Convertible Notes outstanding, plus all paid-in-kind interest and all other accrued but unpaid interest thereunder, is convertible into Subordinate Voting Shares of the Company at the option of the holders at any time by written notice to the Company, at a conversion price equal to the lesser of $0.145 or a 20.0% premium over the 30-day volume weighted average price of the Company’s Subordinate Voting Shares calculated on the day prior to the date on which each tranche is advanced, if permitted by the Canadian Securities Exchange.

The lenders also have the right to advance any remaining undrawn funds on the convertible loan facility to the Company at any time.

If the notes are not converted, the outstanding principal amount and unpaid paid-in-kind interest is due on April 30, 2026.

During the year ended December 31, 2023, the Company closed eight additional tranches of Convertible Notes, which are convertible into Subordinate Voting Shares at a conversion price of $0.145.

Total proceeds received from these tranches amounted to $8,000,000.

In connection with this financing, the Company issued 6,250,000 warrants to purchase Subordinate Voting Shares of the Company to the lenders.

These warrants have a five year term, a strike price of $0.145, and were valued at $497,055 (Note 16).

The value of these warrants and other legal and administrative expenses amounting to $1,346,793 are treated as deferred financing costs.

On July 31, 2024, the holders voluntarily converted all outstanding convertible notes into 73,016,061 Subordinate Voting Shares of the Company.

On November 1, 2024, the Company entered into a Joinder and Tenth Amendment to Credit Agreement.

The Tenth Amendment provides a convertible note facility (the “New Convertible Notes”) with a maximum principal amount of

The New Convertible Notes mature November 1, 2027, have a cash interest rate of 12.0 percent per year, are convertible into that number of the Company’s subordinate voting shares determined by dividing the outstanding principal amount plus all accrued but unpaid interest on the Convertible Notes on the date of such conversion by a conversion price of $0.625.

On July 31, 2024, holders voluntarily converted convertible notes issued in 2023 into 73,016,061 Subordinate Voting Shares of the Company.

On November 1, 2024, the Company entered into the Joinder and Tenth Amendment to the Credit Agreement (the “ Tenth Amendment ”).

The Tenth Amendment provides a convertible note facility (the “ Convertible Notes ”) with a maximum principal amount of $10,000,000.

The Convertible Notes mature on November 1, 2027, have a cash interest rate of 12.0% per year, and are convertible into the Company’s SVSs at an amount determined by dividing the outstanding principal amount, plus all accrued but unpaid interest on the Convertible Notes on the date of such conversion, by a conversion price of $0.625.

The Company incurred $145,717 in financing costs in connection with the signing of the Tenth Amendment.

On July 7, 2025, the Company retired the Convertible Notes, and issued a $10,000,000 convertible note (the “ New Convertible Notes ”) to Chicago Atlantic Opportunity Finance, LLC, also with a second priority interest, that matures on October 2, 2028 with an option to extend for an additional year subject to a 1% extension fee of all Chicago Atlantic loans advanced, has a cash interest rate of Prime Rate (subject to a 7.5% floor) plus 5.0% per year, and is convertible into that number of the Company’s subordinate voting shares determined by dividing (i) the sum of (A) the result of $10,000,000 minus 50.00% of the aggregate amount of all the New Convertible Notes repaid plus (B all accrued but unpaid interest on the New Convertible Notes on the date of such conversion by (ii) a conversion price equal to $0.625.

All deferred financing costs are treated as a contra-liability, to be netted against the outstanding loan balance and amortized over the remaining life of the loan.

2 unchanged sentences

On December 17, 2024, the Company entered into definitive subscription agreements (the “Subscription Agreements”) with certain investors to sell 120,000,000 Subordinate Voting Shares of the Company at a cash price of US$0.625 per Subordinate Voting Share for total proceeds to the Company of US$75,000,000, with closing subject only to applicable Canadian Stock Exchange notice periods (the “Equity Raise”).

The securities are being sold in reliance upon the exemptions from registration under the U.S.

Securities Act of 1933, as amended (the “Securities Act”) provided by Section 4(a)(2) of the Securities Act as a transaction not involving a public offering and Rule 506(b) of Regulation D promulgated under the Securities Act.

The Subscription Agreements contain customary representations and warranties and agreements of the Company and each investor and customary indemnification rights and obligations of the parties.

The representations and warranties of each party set forth in the Subscription Agreements have been made solely for the benefit of the other parties to the subscription agreements, and such representations and warranties should not be relied on by any other person.

Additionally, the Subscription Agreement provides for a six-month lock-up period on the Subordinate Voting Shares sold to each investor starting from the Closing Date of the Equity Raise during which time the Subordinate Voting Shares will not be transferable by the investor without the prior written consent of the Company.

The securities were sold in reliance upon the exemptions from registration under the U.S.

Securities Act of 1933, as amended (the “Securities Act”) provided by Section 4(a)(2) of

the Securities Act as a transaction not involving a public offering and Rule 506(b) of Regulation D promulgated under the Securities Act.

On December 31, 2024, the Company announced the closing of the Equity Raise on December 30, 2024.

The investors participating in the Equity Raise subscribed for 129,536,874 Subordinate Voting Shares at a price of US$0.625 per Subordinate Voting Share, resulting in gross proceeds to the Company of approximately US$81,000,000.

A form of the Subscription Agreements is attached as Exhibit 10.81 hereto.

The description of the terms of the Subscription Agreements are not intended to be complete and is qualified in its entirety by reference to such exhibit, and which exhibit is incorporated herein by reference.

Cash Used in Operating Activities

Net cash used in operating activities was $10.2 million for the year ended December 31, 2024, an increase of $9.2 million as compared to cash used in operating activities of $1.0 million for the year ended December 31, 2023.

The increase is primarily due to the payment of transaction related costs amounting to $4.5 million during the year ended December 31, 2024, and approximately $5.0 million fewer cash proceeds received from the ERC credit in 2024 relative to 2023.

Net cash provided by operating activities was $3.7 million for the year ended December 31, 2025, an increase of $13.9 million as compared to cash used in operating activities of $10.2 million for the year ended December 31, 2024.

The increase is primarily due to the cash flow contributions from the closing of the Mergers, resulting in the addition of revenues from our operations in Utah, Nevada, and Missouri.

Cash Flow from Investing Activities

Net cash used in investing activities was $8.1 million for the year ended December 31, 2024, compared to net cash used of $3.5 million for the year ended December 31, 2023.

The increase in cash used is primarily attributable to a increased capital expenditures driven by the build out of the Minnesota cultivation facility.

Net cash provided by investing activities was $8.8 million for the year ended December 31, 2025, compared to net cash used of $8.1 million for the year ended December 31, 2024.

The increase was primarily attributable to the cash acquired through the closing of the Mergers during the year ended December 31, 2025, partially offset by increased purchases of property, plant, and equipment.

Cash Flow from Financing Activities

Net cash provided by financing activities was $94.0 million for the year ended December 31, 2024, an increase of $88.7 million as compared to the year ended December 31, 2023.

The increase was principally due to the closing of a private placement transaction that resulted in the receipt of approximately $80 million of proceeds.

Net cash provided by financing activities was $18.4 million for the year ended December 31, 2025, compared to net cash provided of $94.0 million for the year ended December 31, 2024.

The decrease was principally due to the closing of the Equity Raise that resulted in the receipt of approximately $80 million of proceeds during the year ended December 31, 2024.

Lease Transactions

As of December 31, 2024, we have entered into lease agreements for the use of buildings in cultivation, production and/or sales of cannabis products in Maryland, Minnesota, and New York.

The lease agreements for all of the retail space used for our dispensary operations are with third-party landlords and remaining duration ranges from 1 to 6 years.

These agreements are short-term facility leases that require us to make monthly rent payments as well as funding common area costs, utilities and maintenance.

In some cases, we have received tenant improvement funds to assist in the buildout of the space to meet our operating needs.

As of December 31, 2025, we are party to lease agreements for the use of buildings used in the cultivation, production and/or sales of cannabis products in Maryland, Minnesota, New York, Missouri, Nevada, and Utah.

The lease agreements for all of the retail spaces used for our dispensary operations are with third-party landlords and the remaining durations range from one to ten years.

These agreements are short-term facility leases that require us to make monthly rent payments and fund common area costs, utilities and maintenance.

In some cases, we have received tenant improvement funds to assist in the buildout of the spaces to meet our operating needs.

As of December 31, 2025, we operated 36 retail locations secured under these agreements.

We have also entered into sale and leaseback arrangements for our cultivation and processing facilities in Minnesota and New York with a special-purpose real estate investment trust.

These leases are long-term agreements that provide, among other things, funds to make certain improvements to the property that we believe will significantly enhance production capacity and operational efficiency of the facility.

We also entered into sale and leaseback arrangements for our cultivation and processing facilities in Minnesota and New York with a special-purpose real estate investment trust.

These leases are long-term agreements that provide, among other things, funds to make certain improvements to the properties that will significantly enhance the production capacity and operational efficiency of the facilities.

Excluding any contracts under one year in duration, the future minimum lease payments (principal and interest) on all our leases are as follows:

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(210,382,254)

Less liabilities held for sale

Present value of lease liability

Outstanding Share Data

As of Deecmber 31, 2024, we had 366,335,152 shares issued and outstanding on an as converted basis, consisting of the following:

As of December 31, 2025, we had 1,080,450,771 shares issued and outstanding on an as converted basis, consisting of the following:

(a) Subordinate Voting Shares

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The holders of Subordinate Voting Shares are entitled to receive dividends which may be declared from time to time and are entitled to one vote per share at all shareholder meetings.

All Subordinate Voting Shares are ranked equally with regards to the Company’s residual assets.

All Subordinate Voting Shares are ranked equally with regard to the Company’s residual assets.

The Company is authorized to issue an unlimited number of no-par value Subordinate Voting Shares.

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The assessment of whether an indication of impairment exists is performed at the end of each reporting period and requires the application of judgment, historical experience, and external and internal sources of information.

An impairment loss is recognized when the sum of projected undiscounted cash flows is less than the carrying value of the asset group.

A potential impairment loss is assessed when the sum of projected undiscounted cash flows is less than the carrying value of the asset group.

The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group.

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The exercise price for incentive stock options issued under the plan will be set by the Administrator (as defined under the plan) but will not be less 100% of the fair market value of the Company’s shares on the date of grant.

The Company measures and recognizes compensation expense for stock options to employees and non-employees on a straight-line basis over the vesting period based on their grant date fair values.

The Company measures and recognizes compensation expense for stock options to employees and non-employees on a straight-line basis over the vesting period based on grant date fair values.

The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option pricing model.

Estimates in our stock-based compensation valuations are highly complex and subjective.

Determining the estimated fair value of at the grant date requires judgment in determining the appropriate valuation model and assumptions, including the fair value of common shares on the grant date, risk-free rate, volatility rate, annual dividend yield and the expected term.

Determining the estimated fair value at the grant date requires judgment in determining the appropriate valuation model and assumptions,

including the fair value of common shares on the grant date, risk-free rate, volatility rate, annual dividend yield and the expected term.

The volatility rate is based on historical volatilities of public companies operating in a similar industry to the Company.

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For stock options granted, the exercise price at the date of grant was determined by the Board of Directors with assistance from third-party valuation specialists.

The Company estimates forfeitures at the time of grant and revises these estimates in subsequent periods if actual forfeitures differ from those estimates.

For performance-based stock options and RSUs, the Company records compensation expense over the estimated service period adjusted for a probability factor of achieving the performance-based milestones.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis