What changed in this filing

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Item 1. Financial Statements

2026-05-12 compared with 2025-11-12 · 359 added, 445 removed, 488 unchanged (62% of the section changed)

1 unchanged sentence

VIREO GROWTH INC.

CONSOLIDATED BALANCE SHEETS

Dollars, unaudited)

September 30,

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

(In Millions of U.S.

Dollars, except per share amounts, unaudited)

Current assets:

1 unchanged sentence

Marketable securities

Accounts receivable, net of credit losses of $ 1,027,316 and $ 244,264 , respectively

Accounts receivable, net of credit losses of $ 1.8 million and $ 1.3 million, respectively

Income tax receivable

1 unchanged sentence

Warrants held

Notes receivable

Assets held for sale

3 unchanged sentences

Intangible assets, net

Indemnified Assets

Indemnified tax assets

Current liabilities

5 unchanged sentences

Derivative liability

Liabilities held for sale

Total current liabilities

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Contingent consideration

Deferred tax liabilities

Other long-term liabilities

Total liabilities

Commitments and contingencies (refer to Note 16)

Commitments and contingencies

Stockholders’ equity

Subordinate Voting Shares ($- par value, unlimited shares authorized;

923,898,809 shares issued and outstanding at September 30, 2025 and 337,512,681 at December 31, 2024)

1,057,201,771 shares issued and outstanding at March 31, 2026, and 1,057,131,571 at December 31, 2025)

Multiple Voting Shares ($- par value, unlimited shares authorized;

259,632 shares issued and outstanding at September 30, 2025 and 285,371 at December 31, 2024)

232,490 shares issued and outstanding at March 31, 2026 and 233,192 at December 31, 2025)

Additional paid in capital

Accumulated deficit

( 279,177,241 )

( 231,435,561 )

Total stockholders' equity

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VIREO GROWTH INC.

CONSOLIDATED STATEMENTS OF NET LOSS AND COMPREHENSIVE LOSS

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF NET LOSS AND COMPREHENSIVE LOSS

(In Millions of U.S.

Dollars, except share amounts, unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

Cost of sales

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Total operating expenses

Income from operations

Income (loss) from operations

Other income (expense):

Interest expenses, net

( 6,906,226 )

( 7,363,655 )

( 22,153,565 )

( 23,604,746 )

Gain (loss) on disposal of assets and debt

( 7,837,671 )

( 7,843,515 )

Interest expense on finance lease liabilities - Minnesota & New York

Gain (loss) on change in the fair value of contingent consideration

Derivative gain (loss)

Other income (expenses)

Other income (expenses), net

( 13,760,817 )

( 6,392,805 )

( 28,631,635 )

( 19,941,142 )

Loss before income taxes

( 12,951,861 )

( 2,541,358 )

( 27,865,680 )

( 5,536,228 )

Income (loss) before income taxes

Deferred income tax recoveries (expenses)

Current income tax expenses

( 13,347,000 )

( 2,385,000 )

( 19,876,000 )

( 6,770,000 )

Net loss and comprehensive loss

( 26,298,861 )

( 4,926,358 )

( 47,741,680 )

( 12,306,228 )

Net loss per share - basic and diluted

Weighted average shares used in computation of net loss per share - basic and diluted

1,080,450,771

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

VIREO GROWTH INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In Millions of U.S.

Dollars, except share amounts, unaudited)

Super Voting Shares

Additional Paid-

Stockholders'

Equity (deficiency)

Balance, January 1, 2025

( 203,428,052 )

( 16,043,649 )

Conversion of MVS shares

Stock-based compensation

Options exercised

Warrants exercised

Shares issued

Conversion of convertible debt

( 12,306,228 )

Balance at September 30, 2024

( 215,734,280 )

( 11,003,227 )

Balance, January 1, 2025

( 231,435,561 )

Conversion of MVS shares

Stock-based compensation

Shares issued

Stock issuance

Net settlement of stock-based compensation

1 unchanged sentence

Warrants exercised

Shares issued in connection with Wholesome acquisition

Shares issued in connection with the Proper acquisition

Shares issued in connection with the Deep Roots acquisition

( 47,741,680 )

Balance at September 30, 2025

( 279,177,241 )

Super Voting Shares

Additional Paid-

Stockholders'

Equity (deficiency)

Balance, July 1, 2024

( 210,807,922 )

Balance at March 31, 2025

Balance, January 1, 2026

1,057,131,571

1 unchanged sentence

Stock-based compensation

Warrants exercised

Shares issued

Conversion of convertible debt

( 4,926,358 )

Balance at September 30, 2024

( 215,734,280 )

( 11,003,227 )

Balance, July 1, 2025

( 252,878,380 )

Stock-based compensation

Options exercised

Shares issued in connection with the Deep Roots acquisition

( 26,298,861 )

Balance at September 30, 2025

Balance at March 31, 2026

1,057,201,771

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions of U.S.

Dollars, unaudited)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

( 47,741,680 )

( 12,306,228 )

Adjustments to reconcile net loss to net cash used in operating activities:

4 unchanged sentences

Amortization of intangible assets

Amortization of intangible assets capitalized into inventory

Stock-based payments

Stock-based compensation

Warrants held

( 3,284,619 )

Derivative (gain) loss

Loss on extinguishment of debt

Interest Expense

1 unchanged sentence

Accretion of interest on right-of-use finance lease liabilities

Loss (gain) on disposal of assets

(Gain) loss on change in the fair value of contingent consideration

Change in operating assets and liabilities:

Accounts Receivable

( 4,192,453 )

Prepaid expenses

( 2,396,728 )

Deferred income tax expense (benefit)

Uncertain tax position liabilities

Accounts payable and accrued liabilities

( 18,800,446 )

Changes in operating lease liabilities

( 1,829,045 )

Change in assets and liabilities held for sale

( 5,960,720 )

( 3,693,771 )

Net cash used in operating activities

( 14,944,252 )

( 3,791,248 )

Net cash provided by (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant, and equipment

( 18,461,912 )

( 8,974,901 )

Proceeds from note receivable

Purchase of marketable securities

( 1,012,527 )

Acquisition of WholesomeCo, Inc., net of cash paid

Acquisition of Deep Roots Holdings, Inc., net of cash paid

Acquisition of Proper Holdings Management, Inc., net of cash paid

Acquisition of Schwazze, net of cash received

Capitalized software development costs

( 1,065,611 )

Net cash provided by (used in) investing activities

( 5,525,001 )

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from long-term debt, net of issuance costs

Proceeds from issuance of shares

Proceeds from warrant exercises

Proceeds from option exercises

Debt principal payments

( 124,221,605 )

( 1,098,000 )

Lease principal payments

1 unchanged sentence

Net change in cash

( 8,684,801 )

Cash, beginning of period

Cash, end of period

Cash and restricted cash, beginning of period

Cash and restricted cash, end of period

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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The Company’s mission is to provide safe access, quality products, and value to its customers.

Vireo Growth operates cultivation, production, and dispensary facilities in Maryland, Minnesota, Missouri, Nevada, New York, and Utah.

Vireo Growth operates cultivation, production, and dispensary facilities in Colorado, Maryland, Minnesota, Missouri, Nevada, New Mexico, New York, and Utah.

The Company allocates capital and talent to areas expected to generate long-term value and operates with a commitment to accountability, efficiency, and its stakeholders, including customers, employees, shareholders, and the communities it serves.

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federal law, a Schedule I drug or substance has a high potential for abuse, has no accepted medical use in the United States, and lacks accepted safety for use under medical supervision.

Recently, some federal officials have attempted to distinguish between medical cannabis and adult-use cannabis by indicating that medical cannabis is necessary while adult-use cannabis is “still a violation of federal law.” At the present time, the distinction between “medical marijuana” and “adult-use marijuana” does not exist under U.S.

Merger Agreements with Deep Roots, Proper and Wholesome

On December 18, 2024, the Company entered into merger agreements (each a “ Merger Agreement ” and collectively, the “ Merger Agreements ”) with each of (i) Deep Roots Holdings, Inc.

(“ Deep Roots ”) (the “ Deep Roots Merger ”), (ii) Proper Holdings, LLC (“ Proper ”), NGH Investments, Inc.

(“ NGH ”), and Proper Holdings Management, Inc.

(“ Proper MSA Newco ” and together with Proper and NGH, the “ Proper Companies ”) (the “ Proper Mergers ”), and (iii) WholesomeCo, Inc.

(“ Wholesome ”) (the “ Wholesome Merger ” and collectively with the Deep Roots Merger and the Proper Mergers, the “ Mergers ” and each, a “ Merger ”) .

Each Merger was an all-share transaction whereby, at the closing of each Merger, (i) a new wholly-owned subsidiary of the Company merged with and into Deep Roots, (ii) a new wholly-owned subsidiary of the Company merged with and into Wholesome, and (iii) the Proper Companies each merged with and into new wholly-owned subsidiaries of the Company.

Each of the Deep Roots Merger, the Proper Mergers and Wholesome Merger closed during the nine months ended September 30, 2025.

See Note 3 “Business Combinations and Dispositions” for additional information.

Recent federal action regarding rescheduling, however, expressly acknowledges the distinction between medical cannabis and adult-use cannabis by indicating that medical cannabis as an accepted use for treating certain conditions.

On May 16, 2024, the Drug Enforcement Administration (“ DEA ”) issued a Notice of Proposed Rulemaking (“ NPRM ”) to reschedule marijuana from Schedule I to Schedule III under the CSA.

Following the NPRM, the DEA received tens of thousands of comments, and as of this filing, an administrative hearing on the rulemaking remains pending.

On December 18, 2025, President Trump issued an executive order directing the DOJ to move forward with rescheduling marijuana to Schedule III as quickly as possible, consistent with federal law.

On April 28, 2026, the DEA issued a final rule that rescheduled to Schedule III (i) U.S.

Food and Drug Administration (“ FDA ”)-approved drug products containing marijuana and (ii) marijuana in any form covered by a state medical marijuana license.

To enable state-licensed medical marijuana entities to operate compliantly under Schedule III, the DEA also created a new pathway for state-licensed medical marijuana operators to apply for registration to operate as manufacturers, distributors, and/or dispensers.

The final rule indicates that the DEA will process registration applications from “early applicants” (i.e., applicants that submit in the first 60 days) within six months, and all such “early applicants” may continue operating during the pendency of review.

Notably, as a consequence of the partial rescheduling, state medical marijuana licensees will no longer be subject to the deduction disallowance under Section 280E of the U.S.

Internal Revenue Code.

This may allow state-licensed medical marijuana entities to deduct ordinary and necessary business expenses in the same manner currently allowed for other industries.

Thus, the recent rescheduling rule could represent a meaningful opportunity for federal tax relief.

Importantly, adult-use marijuana remains a Schedule I substance, regardless of state licensure.

Future rescheduling of adult-use marijuana to Schedule III without the current limitations could still occur, as the rulemaking process will continue with a DEA hearing scheduled for June 29, 2026.

Summary of Significant Accounting Policies

Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2 to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the United States Securities and Exchange Commission (“ SEC ”) on March 4, 2025, (the " Annual Financial Statements ").

Securities and Exchange Commission (“ SEC ”) on March 17, 2026, (the " Annual Financial Statements ").

There have been no material changes to the Company’s significant accounting policies.

2 unchanged sentences

The information included in these statements should be read in conjunction with the Annual Financial Statements.

The unaudited condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“ U.S.

GAAP ”) and pursuant to the rules and regulations of the SEC.

opinion of management, the financial data presented includes all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented.

The unaudited condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“ GAAP ”) and pursuant to the rules and regulations of the SEC.

In the opinion of management, the financial data presented includes all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented.

Results of interim periods should not be considered indicative of the results for the full year.

2 unchanged sentences

Basis of consolidation

These unaudited condensed consolidated financial statements include the accounts of the following entities that were wholly owned, or effectively controlled by the Company during the period ended September 30, 2025:

Name of entity

8 unchanged sentences

Delaware, USA

Verdant Grove, Inc.

Verdant Grove, LLC

Delaware, USA

Vireo Health de Puerto Rico, Inc.

Vireo Health de Puerto Rico, LLC

CO Acquisition Vehicle, LLC

Delaware, USA

Vireo Health of Rocky Mountain, LLC

Delaware, USA

Vireo Health of Colorado, LLC

Colorado, USA

Vireo Health of Nevada 1, LLC

Vireo Health of CO, LLC

Delaware, USA

Vireo Health of CO II, LLC

Delaware, USA

Vireo Health of Denver Metro, LLC

Delaware, USA

Vireo Health of DTC, LLC

Delaware, USA

Vireo Health of Foothills, LLC

Delaware, USA

Vireo Health of Las Cruces, LLC

Delaware, USA

Vireo Health of Mile High, LLC

Delaware, USA

Vireo Health of NM, LLC

Delaware, USA

Vireo Health of Noco, LLC

Delaware, USA

Vireo Health of Santa Fe, LLC

Delaware, USA

Vireo Health of Soco, LLC

Delaware, USA

Vireo Health of Western Slope, LLC

Delaware, USA

Retail Management Associates, LLC

Vireo Health of Nevada I, LLC

Vireo Health of New York LLC

4 unchanged sentences

Delaware, USA

Vireo Health of Arcadia, LLC

Delaware, USA

200 W 24th Holdings, LLC

Delaware, USA

Vireo of Charm City, LLC

13 unchanged sentences

New York, USA

XAAS Agro, Inc.

Vireo Marketing, LLC

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Basic net loss per share is computed by dividing reported net loss by the weighted average number of common shares outstanding for the reported period.

Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock of the Company during the reporting period.

Diluted net loss per share is computed by dividing net loss by the sum of the weighted average number of common shares and the number of potential dilutive common share equivalents outstanding during the period.

Potential dilutive common share equivalents consist of the incremental common shares issuable upon the exercise of vested share options and the incremental shares issuable upon conversion of the convertible notes.

Potential dilutive common share equivalents consist of stock options, warrants, and restricted stock units (“ RSUs ”).

In computing diluted earnings per share, common share equivalents are not considered in periods in which a net loss is reported, as the inclusion of the common share equivalents would be anti-dilutive.

The Company recorded a net loss for each of the three and nine-month periods ended September 30, 2025 and 2024, as presented in these financial statements, and as such there is no difference between the Company’s basic and diluted net loss per share for these periods.

The anti-dilutive shares outstanding for the nine-month periods ended September 30, 2025 and 2024, were as follows:

Nine Months Ended

September 30,

Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue subordinate voting shares were exercised or converted into subordinate voting shares of the Company during the reporting period.

Diluted net loss per share is computed by dividing net loss by the sum of the weighted average number of subordinate voting shares and the number of potential dilutive subordinate voting share equivalents outstanding during the period.

Potential dilutive subordinate voting share equivalents consist of the incremental subordinate voting shares issuable upon the exercise of vested stock options and the incremental shares issuable upon conversion of the convertible notes.

Potential dilutive subordinate voting share equivalents consist of stock options, warrants, and restricted stock units (“ RSUs ”).

In computing diluted earnings per share, subordinate voting share equivalents are not considered in periods in which a net loss is reported, as the inclusion of the subordinate voting share equivalents would be anti-dilutive.

The Company recorded a net loss for the three month periods ended March 31, 2026 and 2025, as presented in these financial statements, and as such there is no difference between the Company’s basic and diluted net loss per share for these periods.

The anti-dilutive shares outstanding for the three-month periods ended March 31, 2026 and 2025, were as follows:

Three Months Ended

Stock options

5 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

New accounting pronouncements not yet adopted

Business Combinations and Dispositions

On December 18, 2024, the Company, entered into Merger Agreements with respect to the Mergers.

Each Merger was an all-share transaction whereby, at the closing of each applicable Merger, (i) a new wholly-owned subsidiary of the Company

merged with and into Deep Roots, (ii) a new wholly-owned subsidiary of the Company merged with and into Wholesome, and (iii) the Proper entities each merged with and into new wholly-owned subsidiaries of the Company.

The consideration paid to acquire each of Deep Roots, Proper and Wholesome was based, in each case, in part, on an estimated multiple of a 2024 “Closing EBITDA,” which was pro forma for pending acquisitions, planned new retail openings and expansion projects, and a US $ 0.52 share reference price for the Company’s subordinate voting shares (each subordinate voting share an “ SVS ” and collectively, the “ SVSs ”).

Pursuant to the Merger Agreements, former stockholders of Proper, Wholesome, and certain former stockholders of Deep Roots may qualify for earnout payments made with the Company’s SVSs following December 31, 2026, based on each target’s adjusted earnings before interest, taxes, depreciation and amortization (“ Adjusted EBITDA ”) (as defined in the applicable Merger Agreement) growth compared to such target’s Closing EBITDA (as defined in the applicable Merger Agreement) (plus, with respect to Deep Roots, $ 1,000,000 in EBITDA attributed to a new retail location) (at a 4 x multiple), adjusted for incremental debt and certain other matters, respectively, and paid out using a share price for the Company’s SVSs of the higher of US $ 1.05 or the 20 -day volume weighted average price of the Company’s SVSs on the Canadian Securities Exchange (“ CSE ”), converted to United States Dollars based on the average exchange rate posted by the Bank of Canada as of the end of each trading day during such 20 -day period, as reported by Bloomberg Finance L.P.

As previously disclosed, in connection with the acquisition of a majority of the outstanding principal amount of 13 % Senior Secured Convertible Notes due December 7, 2026 (the “ Senior Secured Notes ”) of Medicine Man Technologies, Inc.

d/b/a Schwazze (“ Schwazze ”), Vireo Health of Colorado, LLC, a Colorado limited liability company (“ VHC ”) and wholly-owned subsidiary of the Company entered into a restructuring support agreement (the “ RSA ”) with Schwazze and certain related entities on October 9, 2025.

Prior to the closing of the Asset Sale (as defined below), a wholly owned subsidiary of the Company, CO Acquisition Vehicle, LLC, a Delaware limited liability company (“ CO Acquisition ”), acquired the remaining Senior Secured Notes, and as of the closing of the Asset Sale, the Company indirectly held all of the issued and outstanding Senior Secured Notes.

The RSA set forth a plan to restructure the operations and capital structure of Schwazze and its subsidiaries through a series of transactions, including, but not limited to (i) the purchase of certain assets representing a majority of the total assets of Schwazze and its subsidiaries (the “ Asset Sale ”) by a newly-formed entity, Vireo Health of Rocky Mountain, LLC, a Delaware limited liability company (“ Vireo Health of Rocky Mountain ”), that, as of the closing of the Asset Sale, is majority owned indirectly by the Company, and (ii) the liquidation of Schwazze’s remaining assets and winding down of Schwazze’s remaining operations after consummation of the Asset Sale.

The RSA provided for the Asset Sale to be effected by way of a public disposition of collateral pursuant to § 9-610 and 9-611 of the Uniform Commercial Code.

As previously disclosed, on November 13, 2025, a public auction of Schwazze’s collateral was completed, and the collateral agent under the indenture governing the Senior Secured Notes, acting at the direction of VHC, credit bid approximately $ 111.0 million principal amount of Senior Secured Notes on behalf of VHC and other noteholders (the “ Credit Bid ”).

The Credit Bid was determined to be the winning bid upon conclusion of the auction.

Following, the auction, Schwazze entered into an asset purchase agreement with Vireo Health of Rocky Mountain and certain other parties on November 13, 2025 (as amended, the “ Asset Purchase Agreement ”).

On February 27, 2026, CO Acquisition was acquired by VHC pursuant to a membership interest purchase agreement.

Prior to the acquisition, CO Acquisition entered into a First Amendment to Loan and Security Agreement (the “ CO Acquisition LSA Amendment ”) on February 26, 2026, which amended a Loan and Security Agreement, dated as of September 30, 2025 (as amended, the “ CO Acquisition LSA ”) by and among CO Acquisition as borrower, Chicago Atlantic Admin, LLC, as administrative agent and the lenders party thereto (the “ CO Acquisition Lenders ”).

The CO Acquisition LSA provides for a term loan facility with a total principal commitment of $ 26 million, of which $ 25.0 million was advanced on the closing date of the CO Acquisition LSA with $ 10 million disbursed to the borrower and $ 15.0 million held in reserve.

Pursuant to the CO Acquisition LSA Amendment, the CO Acquisition Lenders released the remaining $ 15.0 million held in reserve to be used by CO Acquisition to fund its commitment as a lender under the LSA.

On March 19, 2026, pursuant to the terms of the Asset Purchase Agreement, the assets subject to the Asset Sale, consisting of 45 total dispensaries in Colorado and New Mexico and two manufacturing facilities, one in each of Colorado and New Mexico, were transferred to Vireo Health of Rocky Mountain (and certain of its designated subsidiaries) in consideration for (i) the Credit Bid and (ii) the assumption of certain specified liabilities of Schwazze.

The Credit Bid resulted in the discharge of the Senior Secured Notes at Closing.

Additionally, equity interests in Vireo Health of Rocky Mountain were distributed by the collateral agent to an indirect wholly owned subsidiary of the Company, which as of the closing of the Asset Sale, held all of the issued and outstanding Senior Secured Notes.

As a result of this distribution and certain other transactions, the subsidiary of the Company became the majority owner of Vireo Health of Rocky Mountain.

The Company analyzed the acquisition under Accounting Standards Update (“ ASU ”) 2017-01, Business Combinations (Topic 805):

Clarifying the Definition of a Business and determined that the Asset Sale should be accounted for as a business combination.

Goodwill represents the premium the Company paid over the fair value of the net tangible and intangible assets acquired.

The goodwill arising from the Asset Sale primarily consists of the synergies and economies of scale expected from combining the operations of the Company and Vireo Health of Rocky Mountain, including growing the Company's customer base, acquiring assembled workforces, and expanding its presence in new and existing markets.

These benefits were not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets.

The following table summarizes the allocation of consideration exchanged for the estimated fair value of tangible and identifiable intangible assets acquired and liabilities assumed:

Vireo Health of Rocky Mountain

Cash and cash equivalents

Other current assets

Property and equipment

Operating lease, right-of-use asset

Intangible assets, license

Accounts payable and accrued liabilities

Right-of-use liability

Long-term debt, net

Total liabilities

Net assets acquired

Consideration:

Share consideration

Total Consideration

The acquired intangible assets include cannabis licenses and developed technology which are treated as definite-lived intangible assets amortized over a 15-year useful life.

Supplemental pro forma information (unaudited) for Vireo Health of Rocky Mountain

The unaudited pro forma information for the periods set forth below gives effect to the Asset Sale as if the acquisition had occurred on January 1, 2026.

This pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the transaction been consummated as of that time nor does it purport to be indicative of future financial operating results.

Proforma revenues attributable to subordinate voting shareholders for the three month period ended March 31, 2026, were $ 29.4 million .

Proforma net loss attributable to subordinate voting shareholders for the three month period ended March 31, 2026 were $ 10.2 million .

Unaudited pro forma net income reflects the adjustment of sales between the companies, and adjustments for alignment of significant differences in accounting principles and elections.

Purchase Price Allocations

The above purchase price allocations are provisional specifically for determination fair value of assets and liabilities including measurement of working capital adjustments pending the adjustment periods defined within the acquisition transaction agreements.

The Company will continue to examine the above during the measurement period and adjustments will be made based on facts and circumstances that existed at the acquisition date once subsequently finalized and within the measurement period.

On December 18, 2024, the Company entered into merger agreements (each a “ Merger Agreement ” and collectively, the “ Merger Agreements ”) with each of (i) Deep Roots Holdings, Inc.

(“ Deep Roots ”) (the “ Deep Roots Merger ”), (ii) Proper Holdings, LLC (“ Proper ”), NGH Investments, Inc.

(“ NGH ”), and Proper Holdings Management, Inc.

(“ Proper MSA Newco ” and together with NGH and Proper, the “ Proper Companies ”) (the “ Proper Mergers ”), and (iii) WholesomeCo, Inc.

(“ Wholesome ”) (the “ Wholesome Merger ” and collectively with the Deep Roots Merger and the Proper Mergers, the “ Mergers ” and each, a “ Merger ”) .

None of the Mergers were contingent upon the completion of any of the other Mergers.

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.

The consideration paid to acquire each of Deep Roots, Proper and Wholesome was based, in each case, in part, on an estimated multiple of a 2024 “Closing EBITDA,” which was pro forma for pending acquisitions, planned new retail openings and expansion projects, and a $ 0.52 share reference price for the Company’s subordinate voting shares (each subordinate voting share an “ SVS ” and collectively, the “ SVSs ”).

Pursuant to the Merger Agreements, former stockholders of Proper, Wholesome, and certain former stockholders of Deep Roots may qualify for earnout payments made with the Company’s SVSs following December 31, 2026, based on each target’s adjusted earnings before interest, taxes, depreciation and amortization (“ Adjusted EBITDA ”) (as defined in the applicable Merger Agreement) growth compared to such target’s Closing EBITDA (as defined in the applicable Merger Agreement) (plus, with respect to Deep Roots, $ 1.0 million in EBITDA attributed to a new retail location) (at a 4 x multiple), adjusted for incremental debt and certain other matters, respectively, and paid out using a share price for the Company’s SVSs of the higher of $ 1.05 or the 20 -day volume weighted average price of the Company’s SVSs on the Canadian Securities Exchange (“ CSE ”), converted to United States Dollars based on the average exchange rate posted by the Bank of Canada as of the end of each trading day during such 20 -day period, as reported by Bloomberg Finance L.P.

(the “ VWAP ”) as of December 31, 2026.

The Closing EBITDA for Deep Roots, Proper and Wholesome are US $ 30.0 million, US $ 31.0 million, and US $ 16.0 million, respectively.

The Closing EBITDA for Deep Roots, Proper and Wholesome are $ 30.0 million, $ 31.0 million, and $ 16.0 million, respectively.

EBITDA growth is defined as the increase between the Closing EBITDA and the higher of 2026 Adjusted EBITDA or the trailing nine-month annualized Adjusted EBITDA as of immediately prior to December 31, 2026.

In no event shall the number of earnout shares issued under each Merger Agreement exceed the number of shares issued as closing merger consideration under each Merger Agreement.

Each of the Merger Agreements provides for the clawback of up to 50 % of the upfront merger consideration (excluding, in the case of Proper and Wholesome, the amounts described in the next paragraph that are attributable to Arches, as defined below) on December 31, 2026, if (1) for Wholesome and Deep Roots, (a) 2026 Adjusted EBITDA underperforms 96.5 % of the Closing EBITDA, and (b) the retail revenue market share or EBITDA margin for 2026 is less (or lower) than 2024 and (c) the 20 -day VWAP as of immediately prior to December 31, 2026 is greater than US $ 1.05 per share, and (2) for Proper, 2026 Adjusted EBITDA underperforms 96.5 % of the Closing EBITDA.

The amount of shares subject to a clawback would be equal to the Acquisition Multiple (as defined in each Merger Agreement) of 4.175 for each of Deep Roots, Proper and Wholesome, respectively, multiplied by the EBITDA shortfall, and subject to certain other adjustments f or incremental debt and certain other matters, set forth in the applicable Merger Agreement, divided by US$ 0.52 per share.

In connection with the Merger Agreement with Wholesome (the “ Wholesome Merger Agreement ”) and the Merger Agreement with Proper (the “ Proper Merger Agreement ”), the Company will include in the stock merger consideration calculation an amount equal to (i) US $ 11,860,800 for Wholesome and (ii) US $ 2,139,200 for Proper for all of the outstanding equity interests in Arches IP, Inc.

Each of the Merger Agreements provides for the clawback of up to 50 % of the upfront merger consideration (excluding, in the case of Proper and Wholesome, the amounts described in the next paragraph that are attributable to Arches, as defined below) on December 31, 2026, if (1) for Wholesome and Deep Roots, (a) 2026 Adjusted EBITDA underperforms 96.5 % of the Closing EBITDA , and (b) the retail revenue market share or EBITDA margin for 2026 is less (or lower) than 2024 and (c) the 20 -day VWAP as of immediately prior to December 31, 2026 is greater than $ 1.05 per share, and (2) for Proper, 2026 Adjusted EBITDA underperforms 96.5 % of the Closing EBITDA.

In connection with the Merger Agreement with Wholesome (the “ Wholesome Merger Agreement ”) and the Merger Agreement with Proper (the “ Proper Merger Agreement ”), the Company included in the stock merger consideration calculation an amount equal to (i) $ 11,860,800 for Wholesome and (ii) $ 2,139,200 for Proper for all of the outstanding equity interests in Arches IP, Inc.

(“ Arches ”) owned by Wholesome and Proper, respectively.

Subject to the terms and conditions of the Wholesome Merger Agreement and the Proper Merger Agreement, each of Wholesome, Proper and Arches option holders are collectively entitled to earnout payments based on the performance of Arches, based on the greater of US $ 37.5 million or 5 x certain revenue percentages of Arches minus $ 4,000,000 , with such revenue percentage amounts measured at the higher of the trailing-twelve-month or nine-month annualized amounts as of December 31, 2026, paid out using a share price for the Company’s SVSs at the higher of US $ 1.05 or the 20 -day VWAP as of immediately prior to December 31, 2026.

Subject to the terms and conditions of the Wholesome Merger Agreement and the Proper Merger Agreement, each of Wholesome, Proper and Arches option holders are collectively entitled to earnout payments based on the performance of Arches, based on the greater of $ 37.5 million or 5 x certain revenue percentages of Arches minus $ 4,000,000 , with such revenue percentage amounts measured at the higher of the trailing-twelve-month or nine-month annualized amounts as of December 31, 2026,

paid out using a share price for the Company’s SVSs at the higher of $ 1.05 or the 20 -day VWAP as of immediately prior to December 31, 2026.

On May 12, 2025, the Company closed the Wholesome Merger contemplated by the Wholesome Merger Agreement.

7 unchanged sentences

Other current assets

Income tax receivable

Property and equipment

6 unchanged sentences

Long-term debt, net

Deferred tax liabilities

Uncertain tax liability

6 unchanged sentences

The acquired intangible assets include cannabis licenses and developed technology which are treated as definite-lived intangible assets amortized over a 15 -year useful life.

As of September 30, 2025, the Company has recorded a contingent consideration liability of $ 9,441,000 , which represents the estimated fair value of the potential earnout payments based on management’s current projections of Adjusted EBITDA performance relative to the Closing EBITDA thresholds.

This contingent consideration is classified as a Level 3 liability within the fair value hierarchy and will be remeasured at each reporting date with changes in fair value recognized in earnings.

As of March 31, 2026, the Company has recorded a contingent consideration liability of $ 18.2 million, which represents the estimated fair value of the potential earnout payments based on management’s current projections of Adjusted EBITDA performance relative to the Closing EBITDA thresholds.

The contingent consideration is classified as a Level 3 liability

within the fair value hierarchy and is remeasured at each reporting date, with changes in fair value recognized in earnings.

During the three months ended March 31, 2026, the Company recognized a $ 1.0 million gain related to the change in the fair value of contingent consideration in earnings related to the remeasurement of this liability.

As part of the Wholesome Merger, the sellers contractually agreed to indemnify the Company for certain pre-closing liabilities, including those related to unpaid uncertain tax liabilities.

On May 12, 2025, the Company recognized a liability of $ 8,910,000 for uncertain tax positions related to the pre-acquisition periods in accordance with Accounting Standards Codification (“ ASC ”) 740, Income Taxes.

Consistent with the provisions of ASC 805-20-25-27, the Company also recognized a corresponding indemnification asset of $ 6,910,000 , measured on the same basis as the related liability, which represents the uncertain tax liability recognized of $ 8,910,000 less $ 2,000,000 of tax specific cash contributions from Wholesome.

The indemnification asset was classified as a non-current asset in the Company’s condensed consolidated balance sheet as of September 30, 2025, and will be adjusted in future periods if the related liability is settled, released, or remeasured.

Changes in the fair value of the indemnification asset, if any, will be recorded in earnings in the same financial statement

line item as the change in the related liability.

As of September 30, 2025, there have been no changes in the estimated amount of indemnified tax exposure or the related asset.

Supplemental pro forma information (unaudited) for Wholesome Merger

The unaudited pro forma information for the periods set forth below gives effect to the Wholesome Merger as if the acquisition had occurred on January 1, 2025.

Proforma revenues attributable to subordinate voting shareholders for the three and nine-month periods ended September 30, 2025 were $ 13,333,924 and $ 40,010,028 , respectively.

Proforma net loss attributable to subordinate voting shareholders for the three and nine month periods ended September 30, 2025 were $ 588,353 and $ 3,952,075 , respectively.

Unaudited pro forma net income reflects the adjustment of sales between the companies, and adjustments for alignment of significant differences in accounting principles and elections.

On May 12, 2025, the Company recognized a liability of $ 13.3 million for uncertain tax positions related to the pre-acquisition periods in accordance with Accounting Standards Codification (“ ASC ”) 740, Income Taxes.

Consistent with the provisions of ASC 805-20-25-27, the Company also recognized a corresponding indemnification asset of $ 11.0 million , measured on the same basis as the related liability, which represents the uncertain tax liability recognized of $ 13.3 million less $ 0.3 million of income taxes receivable and $ 2.0 million of tax specific cash contributions from Wholesome .

The indemnification asset was classified as a non-current asset in the Company’s condensed consolidated balance sheet as of March 31, 2026, and will be adjusted in future periods if the related liability is settled, released, or remeasured.

Changes in the fair value of the indemnification asset, if any, will be recorded in earnings in the same financial statement line item as the change in the related liability.

As of March 31, 2026, there have been no changes in the estimated amount of indemnified tax exposure or the related asset.

On June 5, 2025, the Company closed the Proper Mergers contemplated by the Proper Merger Agreement.

15 unchanged sentences

Long-term debt, net

Deferred tax liabilities

Uncertain tax liability

7 unchanged sentences

The acquired intangible assets include cannabis licenses and developed technology which are treated as definite-lived intangible assets amortized over a 15 -year useful life.

As of September 30, 2025, the Company recorded a contingent consideration liability of $ 3,053,000 , which represents the estimated fair value of the potential earnout payments based on management’s current projections of Adjusted EBITDA performance relative to the Closing EBITDA thresholds.

This contingent consideration was classified as a Level 3 liability within the fair value hierarchy and will be remeasured at each reporting date with changes in fair value recognized in earnings.

As of March 31, 2026, the Company recorded a contingent consideration liability of $ 7.2 million, which represents the estimated fair value of the potential earnout payments based on management’s current projections of Adjusted EBITDA performance relative to the Closing EBITDA thresholds.

The contingent consideration is classified as a Level 3 liability within the fair value hierarchy and is remeasured at each reporting date, with changes in fair value recognized in earnings.

During the three months ended March 31, 2026, the Company recognized a $ 3.3 million loss related to the change in the fair value of contingent consideration in earnings related to the remeasurement of this liability.

As part of the Proper Mergers, the sellers contractually agreed to indemnify the Company for certain pre-closing liabilities, including those related to unpaid uncertain tax liabilities.

On June 5, 2025, the Company recognized a liability of $ 12,570,000 for uncertain tax positions related to the pre-acquisition periods in accordance with ASC 740, Income Taxes.

Consistent with the provisions of ASC 805-20-25-27, the Company also recognized a corresponding indemnification asset of $ 5,311,551 , measured on the same basis as the related liability, which represents the uncertain tax liability recognized of $ 12,570,000 less $ 4,258,449 of income taxes receivable and $ 3,000,000 of tax specific cash contributions from Proper.

Changes in the fair value of the indemnification asset, if any, will be recorded in earnings in the same financial statement line item as the change in the related liability.

As of September 30, 2025, there were no changes in the estimated amount of indemnified tax exposure or the related asset.

Supplemental pro forma information (unaudited) for Proper Mergers

The unaudited pro forma information for the periods set forth below gives effect to the Proper Mergers as if the acquisition had occurred on January 1, 2025.

Proforma revenues attributable to subordinate voting shareholders for the three and nine-month periods ended September 30, 2025 were $ 24,856,947 and $ 71,162,748 , respectively.

Proforma net loss attributable to subordinate voting shareholders for the three and nine-month periods ended September 30, 2025 were $ 2,238,477 and $ 2,499,499 , respectively.

Unaudited pro forma net income reflects the adjustment of sales between the companies, and adjustments for alignment of significant differences in accounting principles and elections.

On June 5, 2025, the Company recognized a liability of $ 14.9 million for uncertain tax positions related to the pre-acquisition periods in accordance with ASC 740, Income Taxes.

Consistent with the provisions of ASC 805-20-25-27, the Company also recognized a corresponding indemnification asset of $ 6.2 million , measured on the same basis as the related liability, which represents the uncertain tax liability recognized of $ 14.9 million less $ 5.7 million of income taxes receivable and $ 3.0 million of tax specific cash contributions from Proper .

Changes in the fair value of the indemnification asset, if any, will be recorded in earnings in the same financial statement line item

as the change in the related liability.

As of March 31, 2026, there were no changes in the estimated amount of indemnified tax exposure or the related asset.

On June 6, 2025, the Company closed the Deep Roots Merger contemplated by the Merger Agreement with Deep Roots (the “ Deep Roots Merger Agreement ”).

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Long-term debt, net

Deferred tax liabilities

Uncertain tax liability

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As part of the Deep Roots Merger, the sellers contractually agreed to indemnify the Company for certain pre-closing liabilities, including those related to unpaid uncertain tax liabilities.

On June 6, 2025, the Company recognized a liability of $ 15,603,307 for uncertain tax positions related to the pre-acquisition periods in accordance with ASC 740, Income Taxes.

Consistent with the provisions of ASC 805-20-25-27, the Company also recognized a corresponding indemnification asset of $ 5,307,586 , measured on the same basis as the related liability, which represents the uncertain tax liability recognized of $ 15,603,307 less $ 8,295,721 of income taxes receivable and $ 2,000,000 of tax specific cash contributions from Deep Roots.

As of September 30, 2025, the Company recorded a contingent consideration liability of $ 2,425,000 , which represents the estimated fair value of the potential earnout payments based on management’s current projections of Adjusted EBITDA performance relative to the Closing EBITDA thresholds.

This contingent consideration was classified as a Level 3 liability within the fair value hierarchy and will be remeasured at each reporting date with changes in fair value recognized in earnings.

On June 6, 2025, the Company recognized a liability of $ 24.9 million for uncertain tax positions related to the pre-acquisition periods in accordance with ASC 740, Income Taxes.

Consistent with the provisions of ASC 805-20-25-27, the Company also recognized a corresponding

indemnification asset of $ 8.5 million, measured on the same basis as the related liability, which represents the uncertain tax liability recognized of $ 24.9 million less $ 14.4 million of income taxes receivable and $ 2.0 million of tax specific cash contributions from Deep Roots.

As of March 31, 2026, the Company recorded a contingent consideration liability of $ 4.6 million , which represents the estimated fair value of the potential earnout payments based on management’s current projections of Adjusted EBITDA performance relative to the Closing EBITDA thresholds.

The contingent consideration is classified as a Level 3 liability within the fair value hierarchy and is remeasured at each reporting date, with changes in fair value recognized in earnings.

Changes in the fair value of the indemnification asset, if any, will be recorded in earnings in the same financial statement line item as the change in the related liability.

As of September 30, 2025, there were no changes in the estimated amount of the indemnified tax exposure or the related asset.

Supplemental pro forma information (unaudited) for Deep Roots Merger

The unaudited pro forma information for the periods set forth below gives effect to the Deep Roots Merger as if the acquisition had occurred on January 1, 2025.

Proforma revenues attributable to subordinate voting shareholders for the three and nine-month periods ended September 30, 2025 were $ 24,971,054 and $ 73,766,886 , respectively.

Proforma net loss attributable to subordinate voting shareholders for the three and nine-month periods ended September 30, 2025 were $ 4,052,736 and $ 4,752,918 , respectively.

Unaudited pro forma net income reflects the adjustment of sales between the companies, and adjustments for alignment of significant differences in accounting principles and elections.

Purchase Price Allocations

The above purchase price allocations are provisional specifically for determination of any deferred tax impact, valuation of contingent consideration, fair value of assets and liabilities including measurement of working capital adjustments pending the adjustment periods defined within the acquisition transaction agreements.

Assets Held for Sale

As of September 30, 2025, the Company identified property and equipment, deposits, and lease assets and liabilities associated with the businesses in New York, Nevada, and Massachusetts with carrying amounts that are expected to be recovered principally through sale or disposal rather than through continuing use.

The Company believes the sale of these assets and liabilities is highly probable, they can be sold in their immediate condition, and the sales are expected to occur within the next twelve months.

As such, these assets and liabilities have been classified as “held for sale.” Management does not believe these divestitures represent a strategic shift that has or will have a material effect on the Company’s consolidated operations and financial results, and as such, none of these divestitures are considered a discontinued operation.

The carrying value of these net assets did not exceed fair value less expected cost to sell, and as such, the Company recorded no impairment loss.

Assets and liabilities held for sale as of September 30, 2025 and December 31, 2024 were as follows:

Assets held for sale

September 30,

Property and equipment

Intangible assets

Operating lease, right-of-use asset

Total assets held for sale

Liabilities held for sale

Right of Use Liability

Total liabilities held for sale

Current assets and liabilities held by our New York business have not been classified as held for sale.

Pre-tax operating losses attributable to the New York business were $ 11,292,936 and $ 12,152,587 for the nine months ended September 30, 2025 and 2024, respectively.

As of March 31, 2026, there were no changes in the estimated amount of the indemnified tax exposure or the related asset.

Management Services Agreement with PharmaCann

As previously disclosed, on December 16, 2025, the Company entered into an Asset Purchase Agreement (the “ APA ”) with PharmaCann Inc.

(“ PharmaCann ”) and certain of its subsidiaries.

In connection with the APA, the Company entered into a Management Services Agreement (the “ MSA ”), dated December 16, 2025, pursuant to which the Company agreed to provide certain management services to the seller parties related to the dispensaries to be acquired.

The MSA became effective on March 22, 2026.

For the three months ended March 31, 2026, the Company recognized management services income of $ 0.3 million, which is included in the consolidated statement of loss and comprehensive loss.

In connection with the effectiveness of the MSA, on March 24, 2026, the Company delivered 90,740,741 subordinate voting shares from treasury into escrow with Odyssey Trust Company, as escrow agent.

These shares are being held in escrow pending their potential release as consideration under the APA upon closing of the acquisition of the PharmaCann assets.

Although the Company is providing management services under the MSA and is entitled to certain economic benefits, the Company has not consolidated the results of the PharmaCann assets, as the acquisition contemplated by the APA has not yet closed and the Company does not have control, as defined by GAAP, over the PharmaCann assets.

On March 31, 2026, the Company, and Ace Venture of NY LLC (“ Ace ”) entered into a Second Amended and Restated Limited Liability Company Operating Agreement (the “ Operating Agreement ”) of Vireo Health of New York LLC (“ VHNY ”), an indirect subsidiary of the Company.

Under the Operating Agreement, Ace holds 51 % of the membership interests in VHNY, and the Company holds 49 % of the membership interests.

Under the Operating Agreement, distributions of available cash from VHNY are to be made first to the Company until it has recovered specified amounts, including its initial contribution deemed to be $ 35 million, certain transaction expenses, any additional capital contributions, and $ 16 million of intercompany notes bearing an interest rate of 7 %.

VHNY is managed by a two -person board of managers, with one manager designated by the Company and one manager designated by Ace, and certain major actions require unanimous board and/or member approval.

In the event of a deadlock between the managers, the Company’s Chief Financial Officer shall cast the deciding vote.

The Operating Agreement also

includes customary transfer restrictions, rights of first refusal and drag-along provisions, as well as dispute resolution and limitation of liability provisions.

Based on the terms of the Operating Agreement and related arrangements, management has concluded that the Company maintains control over VHNY as defined under GAAP and, accordingly, continues to consolidate the results of VHNY in its condensed consolidated financial statements.

Fair Value Measurements

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The Company’s non-financial assets, such as prepayments and other current assets, long lived assets, including property and equipment and intangible assets, are measured at fair value when there is an indicator of impairment and are recorded at fair value only when an impairment charge is recognized.

No indicators of impairment existed as of September 30, 2025, and therefore no impairment charges were recorded.

The carrying value of the Company’s marketable securities, accounts receivable, accounts payable, and accrued liabilities approximate their fair value due to their short-term nature, and the carrying value of notes receivable, long-term debt, and convertible debt approximates fair value as they bear a market rate of interest.

The carrying value of the Company’s derivative liabilities utilize Level 2 inputs given the inputs are indirectly observable but not quoted for identical contracts.

The carrying value of the Company’s warrants held and contingent consideration utilize Level 3 inputs given there is no market activity for the asset.

The inputs used are further described in Note 18.

No indicators of impairment existed as of March 31, 2026, and therefore no impairment charges were recorded.

The carrying value of the Company’s marketable securities, accounts receivable, notes receivable, accounts payable, and accrued liabilities approximate their fair value due to their short-term nature, and the carrying value of long-term debt, and convertible debt approximates fair value as they bear a market rate of interest.

Restricted cash consists of cash balances that are legally or contractually restricted as to withdrawal or use.

The carrying amount approximates fair value due to the short-term nature of the deposits.

The carrying value of the Company’s derivative liability, warrants held, contingent consideration, and investments utilize Level 3 inputs given there is no market activity for the asset.

Accounts Receivable

Trade receivables as of September 30, 2025 and December 31, 2024 were comprised of the following items:

September 30,

Trade receivables as of March 31, 2026 and December 31, 2025 were comprised of the following items:

Trade receivables, net

Tax withholding receivables, net

Included in the trade receivables, net balance at September 30, 2025, and December 31, 2024, was an allowance for doubtful accounts of $ 1,027,316 and $ 84,989 , respectively.

Included in the tax withholding receivable, net balance at December 31, 2024, was an allowance for doubtful accounts of $ 159,275 .

Inventory as of September 30, 2025 and December 31, 2024 was comprised of the following items:

September 30,

Included in the trade receivables, net balance at March 31, 2026, and December 31, 2025, was an allowance for doubtful accounts of $ 1.8 million and $ 1.3 million, respectively.

Inventory as of March 31, 2026 and December 31, 2025 was comprised of the following items:

Work-in-progress

Finished goods

In connection with the closing of the Mergers, the Company recorded the acquired inventories at their estimated fair values in accordance with ASC 805, Business Combinations .

Non-cash fair value step up

In connection with the closing of the Vireo Health of Rocky Mountain acquisition, the Company recorded the acquired inventories at their estimated fair values in accordance with ASC 805, Business Combinations .

Fair value represents the estimated selling price of the acquired inventory, less the expected costs to sell the inventory.

The estimated fair value of the inventory exceeded cost, resulting in a fair value step-up adjustment to acquired inventories totaling $ 16,549,749 .

During the three and nine-months ended September 30, 2025, $ 12,397,641 and $ 16,549,749 , respectively, of amortization associated with this fair value step-up was recorded.

This amortization was recorded to cost of sales in the consolidated statement of loss and comprehensive loss for the three and nine month periods ended September 30, 2025.

Inventory is written down for any obsolescence, spoilage and excess inventory or when the net realizable value of inventory is less than the carrying value.

Inventory valuation adjustments included in cost of sales on the statements of net loss and comprehensive loss for the three and nine months ended September 30, 2025 and 2024 were comprised of the following:

Three Months Ended September 30,

Nine Months Ended September 30,

Work-in-progress

Finished goods

Derivative Liability

During the nine months ended September 30, 2025 , the Company entered into an interest rate swap contract with each of East West Bank and Western Alliance Bank for a notional amount of $ 15,000,000 per swap contract and an effective date of August 4, 2025 , to hedge a portion of the interest rate exposure on its First Lien Term Loan (as defined in Note 12) that bears interest at a floating rate based on the Secured Overnight Financing Rate (“SOFR”).

Under the terms of the swaps, the Company pays a fixed interest rate of 3.70 % and receives a variable rate equal to SOFR on the same notional amount.

The swap matures on July 31, 2027.

See Note 12 "Long-Term Debt" for additional information.

The swaps are designated as a cash flow hedge of forecasted variable interest payments under ASC 815-30.

Hedge effectiveness is assessed prospectively and retrospectively using the hypothetical derivative method, and the hedge has been deemed highly effective since inception.

These derivative instruments are recorded at fair value in the consolidated balance sheet with the changes in fair value of the derivative instruments that qualify as effective hedges being recorded as other income on the statement of loss and comprehensive loss for the three and nine month periods ended September 30, 2025.

During the three and nine months ended September 30, 2025, the Company recorded other expense of $ 160,778 related to the changes and fair value of these derivative instruments.

The estimated fair value of the inventory exceeded cost, resulting in a fair value step-up adjustment to acquired inventories totaling $ 1.7 million.

During the three months ended March 31, 2026 and 2025, $ 0.2 million and $ 0 , respectively, of amortization associated with this fair value step-up was recorded.

This amortization was recorded to cost of sales in the consolidated statement of loss and comprehensive loss for the three month period ended March 31, 2026.

Property and Equipment, Net

As of September 30, 2025 and December 31, 2024, the Company’s property and equipment, net consisted of the following:

September 30,

As of March 31, 2026 and December 31, 2025, the Company’s property and equipment, net consisted of the following:

Buildings and leasehold improvements

3 unchanged sentences

accumulated depreciation

( 14,533,452 )

( 10,319,975 )

For the nine months ended September 30, 2025 and 2024, total depreciation on property and equipment was $ 4,194,595 and $ 1,901,198 , respectively.

For the nine months ended September 30, 2025 and 2024, accumulated amortization of the right of use asset (the “ ROU ”) under finance lease amounted to $ 2,759,356 and $ 2,408,998 , respectively.

The right of use asset under finance lease of $ 7,572,566 consists of leased processing and cultivation premises.

The Company capitalized $ 3,177,308 and $ 1,678,435 into inventory relating to depreciation associated with manufacturing equipment and production facilities for the nine months ended September 30, 2025 and 2024, respectively.

For the three months ended March 31, 2026 and 2025, total depreciation on property and equipment was $ 4.0 million and $ 0.6 million, respectively.

For the three months ended March 31, 2026 and 2025, accumulated amortization of the right of use asset (the “ ROU ”) under finance lease amounted to $ 9.4 million and $ 2.6 million, respectively.

The right of use asset under finance lease of $ 84.8 million consists of leased processing and cultivation premises.

The Company capitalized $ 2.9 million and $ 0.5 million into inventory relating to depreciation associated with manufacturing equipment and production facilities for the three months ended March 31, 2026 and 2025, respectively.

The associated capitalized depreciation costs are added to inventory and expensed as cost of sales when the product is sold.

As of each of September 30, 2025 and 2024, in conjunction with the Company’s held for sale assessment and disposal of certain long-lived assets, the Company evaluated whether property and equipment showed any indicators of impairment, and it was determined that the recoverable amount of certain net assets was above book value.

As of each of March 31, 2026 and 2025, in conjunction with the Company’s held for sale assessment and disposal of certain long-lived assets, the Company evaluated whether property and equipment showed any indicators of impairment, and it was determined that the recoverable amount of certain net assets was above book value.

As a result, the Company recorded no impairment charge on property and equipment, net.

Components of the Company’s lease expenses as of September 30, 2025 and 2024 are listed below:

September 30,

Components of the Company’s lease expenses as of March 31, 2026 and 2025 are listed below:

Finance lease cost

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Finance Leases

September 30, 2025

March 31, 2026

Total minimum lease payments

Less discount to net present value

( 16,901,174 )

( 171,368,934 )

( 188,270,108 )

Less liabilities held for sale

( 2,481,882 )

( 86,897,778 )

( 89,379,660 )

Present value of lease liability

The Company has entered into various lease agreements for the use of buildings used in the production and retail sales of cannabis products.

Supplemental cash flow information related to the Company’s leases for the nine months ended September 30, 2025 and 2024 is detailed below:

Nine Months Ended

September 30,

Supplemental cash flow information related to the Company’s leases for the three months ended March 31, 2026 and 2025 is detailed below:

Three Months Ended

Cash paid for amounts included in the measurement of lease liabilities:

3 unchanged sentences

Amortization of operating leases

Other information about the Company’s lease amounts as of September 30, 2025 and 2024 is recognized in the financial statements and outlined below:

September 30,

Other information about the Company’s lease amounts as of March 31, 2026 and 2025 is recognized in the financial statements and outlined below:

Weighted-average remaining lease term (years) – operating leases

2 unchanged sentences

Weighted-average discount rate – finance leases

Intangible assets as of September 30, 2025 and December 31, 2024 were comprised of the following items:

Goodwill and Intangibles

Intangible assets as of March 31, 2026 and December 31, 2025 were comprised of the following items:

Licenses & Trademarks

1 unchanged sentence

Balance, December 31, 2024

Acquisitions (Note 3)

Assets moved out of held for sale

Capitalization of internally generated software costs

Balance, December 31, 2025

1 unchanged sentence

Capitalization of internally generated software costs

( 2,357,811 )

( 2,489,408 )

Balance, September 30, 2025

Amortization expense for the Company’s intangibles was $ 1,554,917 and $ 2,489,408 during the three and nine months ended September 30, 2025, respectively, and $ 204,813 and $ 614,437 during the three and nine months ended September 30, 2024, respectively.

The Company capitalized into inventory $ 24,687 and $ 64,823 of amortization for the three and nine months ended September 30, 2025, respectively, and $ 24,778 and $ 74,336 for the three and nine months ended September 30, 2024, respectively.

Balance, March 31, 2026

Amortization expense for the Company’s intangibles was $ 2.7 million and $ 0.2 million during the three months ended March 31, 2026 and 2025, respectively.

Amortization expense is recorded in operating expenses on the unaudited condensed consolidated statements of net loss and comprehensive loss.

The Company estimates that amortization expenses will be $ 6,364,721 per year for the next five fiscal years.

The Company estimates that amortization expenses will be $ 14.8 million per year for the next five fiscal years.

The following table shows the change in the carrying amount of goodwill:

Goodwill - December 31, 2024

Acquisitions (Note 3)

Goodwill - December 31, 2025

Acquisitions (Note 3)

Goodwill - March 31, 2026

During the three months ended March 31, 2026, the Company recorded goodwill in connection with acquisitions completed during the period.

Goodwill represents the excess of the purchase price over the estimated fair value of the identifiable net assets acquired and primarily reflects expected synergies, assembled workforce, and other intangible benefits that do not qualify for separate recognition.

The Company evaluates goodwill for impairment at least annually, or more frequently if events or changes in circumstances indicate that goodwill may be impaired.

For the year ended December 31, 2025, the Company performed a qualitative assessment and concluded that it was more likely than not that the fair value of its reporting units exceeded their respective carrying amounts.

Accordingly, the Company determined that it was not necessary to perform a quantitative goodwill impairment test, and no impairment was recognized during the period.

Accounts Payable, Accrued Liabilities, and Restricted Cash

Accounts payable and accrued liabilities as of September 30, 2025 and December 31, 2024 were comprised of the following items:

September 30,

Accounts payable and accrued liabilities as of March 31, 2026 and December 31, 2025 were comprised of the following items:

Accounts payable – trade

Accrued Expenses

Taxes payable

Contract liability

Total accounts payable and accrued liabilities

In connection with the closing of the Mergers and the related Merger Agreements, the Company is required to distribute cash to the former stockholders of Deep Roots and Proper.

At September 30, 2025, $ 250,000 had yet to be distributed to the former stockholders of such entities.

As such, the Company reclassified this cash as restricted cash, and recorded an associated liability, on the unaudited condensed consolidated balance sheet at September 30, 2025.

As of September 30, 2025, the Company maintained a restricted cash account pursuant to the terms of the First Lien Term Loan (Note 12).

Under the First Lien Term Loan, the Company is required to hold certain cash balances in a fully blocked deposit account (the “ Restricted Cash Account ”).

The Restricted Cash Account is pledged as collateral to pay down the debt and may not be withdrawn or otherwise used by the Company without the consent of the Administrative Agent.

Accordingly, the balance of $ 20,137,632 in this account is classified as restricted cash on the consolidated balance sheet.

Long-Term Debt

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.

In connection with the closing of the Proper Mergers, the Company became obligated under $ 25.5 million 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.

In addition, 1 % amortization of the original principal value of the note, or $ 27.1 million, was payable monthly, and the note was set to mature on November 28, 2025.

See Note 3 “Business Combinations and Dispositions” 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.

In connection with the closing of the Deep Roots Merger, the Company became obligated under $ 19.2 million 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.

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

See Note 3 “Business Combinations and Dispositions” for additional information.

In connection with the closing of the Wholesome Merger, the Company became obligated on a $ 8,766,340 term loan bearing an interest rate of 11.25 %, payable monthly in cash.

In connection with the closing of the Wholesome Merger, the Company became obligated on a $ 8.6 million 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 cash.

Additionally, the Company became obligated on $ 1.0 million of promissory notes bearing an interest rate of 13.00 %, payable monthly cash.

See Note 3 “Business Combinations and Dispositions” for additional information.

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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 June 30, 2028.

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

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

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.

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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 7, 2025, the Company entered into a secured term loan (the “Chicago Atlantic Term Loan”), effective July 3, 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.

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 (the “ 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 million to be loaned to the Company along with a $ 50 million 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.

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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 $ 8,627,647 , of which $ 4,911,988 relates to the extinguishment of unamortized financing costs associated with the retired debt obligations, and $ 3,715,659 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 three and nine months ended September 30, 2025.

Long-Term Debt Arising from Vireo Health of Rocky Mountain

On February 27, 2026, CO Acquisition was acquired by the Company pursuant to a membership interest purchase agreement.

In connection with the closing of this acquisition, the Company became obligated under $ 28.2 million of notes payable due to Chicago Atlantic Admin, LLC.

The outstanding principal balance bears interest at a fixed rate of 20.0 % per annum and matures on December 31, 2029.

The default rate of interest is equal to the interest rate plus 10.0 % per annum.

All interest accrued until June 3, 2026 is payable in kind.

Thereafter, interest will be paid monthly.

If the loans are prepaid in an amount equal to $ 16 million or more or accelerated on or before March 30, 2027, the borrowers must pay a make-whole amount equal to all interest that would have accrued through March 30, 2027.

In connection with the closing of the Asset Sale, the Company became obligated under $ 44.3 million of notes payable due to Chicago Atlantic Financial Services, LLC.

The unpaid principal amounts outstanding bear interest at a rate of 12 %, payable monthly in cash and mature on December 31, 2031.

If the loans are prepaid or accelerated on or before June 19, 2026, the Company must pay a make-whole amount equal to all interest that would have accrued through June 19, 2026.

See Note 3 “Business Combinations and Dispositions” for additional information.

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.

As of September 30, 2025, and December 31, 2024, $ 5,704,695 and $ 6,576,985 of deferred financing costs remained unamortized, respectively.

The following table shows a summary of the Company’s long-term debt as of September 30, 2025, and December 31, 2024:

September 30,

As of March 31, 2026 and December 31, 2025, $ 5.3 million and $ 5.8 million of deferred financing costs remained unamortized, respectively.

The following table shows a summary of the Company’s long-term debt as of March 31, 2026 and December 31, 2025:

Beginning of period

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Principal repayments

( 10,002,221 )

( 1,234,000 )

Debt extinguishment

( 109,071,396 )

Deferred financing costs

( 6,210,486 )

( 7,418,770 )

Amortization of deferred financing costs

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Total long-term debt

As of September 30, 2025, stated maturities of long-term debt were as follows:

As of March 31, 2026, stated maturities of long-term debt were as follows:

Convertible Notes

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.

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 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 the 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.

As of September 30, 2025 and December 31, 2024, $ 103,891 and $ 137,622 of deferred financing costs remained unamortized, respectively.

The following table shows a summary of the Company’s convertible debt as of September 30, 2025 and December 31, 2024:

September 30,

As of each of March 31, 2026 and December 31, 2025, $ 0 deferred financing costs remained unamortized, respectively.

The following table shows a summary of the Company’s convertible debt as of March 31, 2026 and December 31, 2025:

Beginning of period

Principal repayments

( 10,000,000 )

Deferred financing costs

Amortization of deferred financing costs

( 9,774,557 )

End of period

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Stockholders’ Equity

The Company’s certificate of incorporation authorized the Company to issue the following classes of shares with the following par value and voting rights as of September 30, 2025.

The Company’s certificate of incorporation authorized the Company to issue the following classes of shares with the following par value and voting rights as of March 31, 2026.

The liquidation and dividend rights are identical among shares equally in the Company’s earnings and losses on an as converted basis.

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Shares Issued

During the nine months ended September 30, 2025, 134,229,986 Subordinate Voting Shares were issued in connection with the Wholesome Merger.

See Note 3 “Business Combinations and Dispositions” for additional information.

During the nine months ended September 30, 2025, 196,212,265 Subordinate Voting Shares were issued in connection with the Proper Mergers.

See Note 3 “Business Combinations and Dispositions” for additional information.

During the nine months ended September 30, 2025, 251,210,053 Subordinate Voting Shares were issued in connection with the Deep Roots Merger.

See Note 3 “Business Combinations and Dispositions” for additional information.

During the nine months ended September 30, 2025, 25,739 Multiple Voting Shares were converted into 2,573,900 Subordinate Voting Shares for no additional consideration.

During the nine months ended September 30, 2025, employee stock options were exercised for 508,165 Subordinate Voting Shares.

Proceeds from this transaction were $ 90,890 .

During the nine months ended September 30, 2025, 2025, stock warrants were exercised for 265,626 Subordinate Voting Shares.

Proceeds from these transactions were $ 38,516 .

During the nine months ended September 30, 2025 , 2025, 1,752,003 shares were issued in connection with the settlement of RSUs.

During the three months ended March 31, 2026, 702 Multiple Voting Shares were converted into 70,200 Subordinate Voting Shares for no additional consideration.

During the three months ended March 31, 2025, 7,201 Multiple Voting Shares were converted into 720,100 Subordinate Voting Shares for no additional consideration.

During the three months ended March 31, 2025, employee stock options were exercised for 138,655 Subordinate Voting Shares.

During the three months ended March 31, 2025, stock warrants were exercised for 265,626 Subordinate Voting Shares.

During the three months ended March 31, 2025, 1,077,859 shares were issued in connection with the settlement of restricted stock units.

239,633 shares were net settled to pay payroll taxes associated with the issuance, resulting in the final issuance of 838,226 shares.

During the nine months ended September 30, 2024, 32,879 Multiple Voting Shares were converted into 3,287,900 Subordinate Voting Shares for no additional consideration.

During the nine months ended September 30, 2024, 12,500,000 Subordinate Voting Shares were issued to the Company’s senior secured lender in connection with an amendment to the Company’s credit agreement.

During the nine months ended September 30, 2024, 1,300,078 Subordinate Voting Shares were issued to the Company’s senior secured lender, Chicago Atlantic Opportunity Portfolio, LP, for $ 700,000 of proceeds.

During the nine months ended September 30, 2024, the holders of the Company’s Convertible Notes voluntarily converted all outstanding convertible notes into 73,016,061 Subordinate Voting Shares of the Company.

During the nine months ended September 30, 2024, employee stock options were exercised for 50,000 Subordinate Voting Shares.

Proceeds from this transaction were $ 16,500 .

During the nine months ended September 30, 2024, stock warrants were exercised for 303,127 Subordinate Voting Shares.

Proceeds from these transactions were $ 43,953 .

Stock-Based Compensation

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Under the terms of the EIP, a total of ten percent of the number of shares outstanding from time to time, assuming conversion of all super voting shares and MVSs to SVSs are permitted to be issued.

The exercise price for incentive stock options issued under the EIP will be set by the compensation committee of the Company’s board of directors but will not be less than 100 % of the fair market value of the Company’s shares on the date of grant.

The exercise price for incentive stock options issued under the EIP is set by the compensation committee of the Company’s board of directors but may not be less than 100 % of the fair market value of the Company’s shares on the date of grant.

Incentive stock options have a maximum term of 10 years from the date of grant.

The incentive stock options vest at the discretion of the Company’s board of directors.

Options granted under the EIP as of September 30, 2025 and 2024 were valued using the Black-Scholes option pricing model with the following weighted average assumptions:

September 30,

Options granted under the EIP as of March 31, 2026 and 2025 were valued using the Black-Scholes option pricing model with the following weighted average assumptions:

Risk-Free Interest Rate

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Expected Dividend Yield

Stock option activity for the nine months ended September 30, 2025, and for the year ended December 31, 2024, is presented below:

Stock option activity for the three months ended March 31, 2026, and for the year ended December 31, 2025, is presented below:

Weighted Average

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Options Outstanding at December 31, 2025

( 2,949,726 )

Options Outstanding at September 30, 2025

Options Exercisable at September 30, 2025

During the three and nine-month periods ended September 30, 2025, the Company recognized $ 121,976 and $ 480,042 , respectively, in stock-based compensation related to stock options.

During the three and nine-month periods ended September 30, 2024, the Company recognized $ 615,215 and $ 641,196 respectively, in stock-based compensation related to stock options.

As of September 30, 2025, the total unrecognized compensation costs related to unvested stock options awards granted was $ 245,576 .

Options Outstanding at March 31, 2026

Options Exercisable at March 31, 2026

During the three month periods ended March 31, 2026 and 2025, the Company recognized $ 0.7 million and $ 0.2 million, respectively, in stock-based compensation related to stock options.

As of March 31, 2026, the total unrecognized compensation costs related to unvested stock options awards granted was $ 2.7 million.

In addition, the weighted average period over which the unrecognized compensation expense is expected to be recognized is approximately 1.7 years.

The total intrinsic value of stock options outstanding and exercisable as of September 30, 2025, was $ 8,042,047 and $ 7,638,552 , respectively.

The total intrinsic value of stock options outstanding and exercisable as of March 31, 2026, was $ 2.0 million and $ 1.9 million, respectively.

The Company does not estimate forfeiture rates when calculating compensation expense.

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Warrants outstanding at December 31, 2024

Warrants outstanding at September 30, 2025

Warrants exercisable at September 30, 2025

Warrants outstanding at December 31, 2025, and March 31, 2026

Warrants exercisable at March 31, 2026

Weighted Average

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Warrants outstanding at December 31, 2024 and 2025

Warrants outstanding at September 30, 2025

Warrants exercisable at September 30, 2025

The expense associated with RSUs is based on the closing share price of the Company’s subordinate voting shares on the business day immediately preceding the grant date, adjusted for the absence of future dividends and is amortized on a straight-line basis over the periods during which the restrictions lapse.

The Company currently has RSUs that vest over a three year period.

The awards are generally subject to forfeiture in the event of termination of employment.

During the three and nine-months ended September 30, 2025, the Company recognized $ 3,884,736 and $ 9,138,150 , respectively, in stock-based compensation expense related to RSUs.

During the three and nine months periods ended September 30, 2024, the Company recognized $ 689,704 and $ 782,944 , respectively, in stock-based compensation expense related to RSUs.

( 3,037,649 )

Warrants outstanding at March 31, 2026

During the three months ended March 31, 2026, the Company entered into a consulting arrangement pursuant to which a consultant was granted equity interests in Vireo Health of Rocky Mountain, LLC, a consolidated subsidiary, in exchange for strategic advisory and consulting services to be provided over the contractual service period.

The arrangement was accounted for as share-based compensation under ASC 718, Compensation—Stock Compensation.

The agreement also includes certain repurchase and exchange features that may be settled in securities of Vireo Growth Inc.

Based on the terms of these provisions, the Company determined that liability classification was appropriate for certain

settlement features and recorded a derivative liability, which is remeasured to fair value each reporting period with changes in fair value recognized in earnings.

For the three months ended March 31, 2026, the Company recognized share-based compensation expense of $ 3.5 million related to this arrangement.

The expense associated with RSUs is generally based on the closing price of the Company’s Subordinate Voting Shares on the business day immediately preceding the grant date, adjusted for the absence of future dividends, and is amortized on a straight-line basis over the period during which the awards are expected to vest.

During the year ended December 31, 2025, the Company granted 21,825,000 RSUs to senior management that vest upon the achievement of specified stock price thresholds of $ 0.85 and $ 1.05 per share, for which the value was estimated at the grant date using a Monte Carlo simulation model using a volatility of approximately 100 %.

The expense is recognized over the derived service period of approximately three years .

The Company also granted 28,500,000 RSUs to senior management that vest upon the achievement of specified Adjusted EBITDA performance thresholds of $ 150 million, $ 165 million, and $ 205 million during the year ended December 31, 2025.

Compensation expense for these awards is recognized when achievement of the performance conditions is considered probable and is recognized over the implied service period of approximately 2 - 3 years.

During the three months ended March 31, 2026 and 2025, the Company recognized $ 2.8 million and $ 1.3 million, respectively, in stock-based compensation expense related to RSUs.

A summary of RSUs is as follows:

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Balance, December 31, 2024

( 22,805,897 )

Balance, September 30, 2025

Vested at September 30, 2025

Balance, December 31, 2025, and March 31, 2026

Vested at March 31, 2026

Commitments and Contingencies

Legal proceedings

On January 31, 2022, the Company entered into the Arrangement Agreement with Verano, pursuant to which Verano was to acquire all of the issued and outstanding shares of Vireo Growth pursuant to a Plan of Arrangement.

Subject to the terms and conditions set forth in the Arrangement Agreement and the Plan of Arrangement, holders of Vireo Growth Shares

would receive 0.22652 of a Verano Subordinate Voting Share, subject to adjustment as described below, for each Subordinate Voting Share held, and 22.652 Verano Subordinate Voting Shares for each Multiple Voting Share and Super Voting Share held, immediately prior to the effective time of the Arrangement.

On October 13, 2022, Vireo Growth received a notice of purported termination of the Arrangement Agreement (the “ Notice ”) from Verano.

The Notice asserted certain breaches of the Arrangement Agreement, including claims the Company’s public filings and communications with respect to its business and ongoing operations were misleading and that the Company breached its representations to Verano under the Arrangement Agreement.

Verano also claimed, as a result of such breaches, it is entitled to payment of a $ 14,875,000 termination fee and its transaction expenses.

Vireo Growth denied all of Verano’s allegations and affirmatively asserted that it complied with its obligations under the Arrangement Agreement, and with its disclosure obligations under US and Canadian law, in all material respects at all times.

The Company believes that Verano has no factual or legal basis to justify or support its purported termination of the Arrangement Agreement, which the Company determined to treat as a repudiation of the Arrangement Agreement.

On October 21, 2022, Vireo Growth commenced an action in the Supreme Court of British Columbia against Verano after Verano wrongfully repudiated the Arrangement Agreement.

The Company sought damages, costs and interest, based on Verano's breach of contract and of its duty of good faith and honest performance.

On November 14, 2022, Verano filed counterclaims against the Company for the termination fee and transaction expenses described above.

On July 31, 2023, the Company filed a requisition for adjournment of its application filed July 14, 2023, and set for hearing on July 31, 2023, to compel Verano’s compliance with document production based upon the Company’s belief that Verano was engaging in tactics to delay the litigation.

Throughout 2023, the Company served 4 lists of documents, reviewed document production from Verano, and prepared for examinations for discovery.

On May 2, 2024, the Company filed the Summary Trial Application the Supreme Court of British Columbia for summary determination.

The Company sought substantial damages, specifically US $ 860.9 million, as well as other costs and legal fees, based on Verano’s breach of contract and of its duty of good faith and honest performance.

On June 19, 2024, Verano filed the Preliminary Suitability Application seeking orders dismissing the Summary Trial Application on the basis that certain issues in the action are not suitable for summary determination.

The Preliminary Suitability Application is in the process of being scheduled

On October 29, 2025, the Company reached a comprehensive settlement (the “Settlement Agreement”) dismissing all outstanding litigation matters between the Company and Verano that are pending before the Supreme Court of British Columbia, Canada.

The terms of the Settlement Agreement were approved by the respective Boards of Directors of both Companies.

The value of the settlement to Vireo is approximately $ 10,000,000 consisting of the acquisition of real property and $ 1,000,000 in cash.

The value of the settlement to the Company is $ 9.2 million consisting of the acquisition of $ 8.2 million of real property and $ 1.0 million in cash.

Lease commitments

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Selling, General and Administrative Expenses

Selling, general and administrative expenses were comprised of the following items for the three and nine months ended September 30, 2025 and 2024:

Selling, general and administrative expenses were comprised of the following items for the three months ended March 31, 2026 and 2025:

Three Months Ended

September 30,

Nine Months Ended

September 30,

Salaries and benefits

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Insurance expenses

Occupancy costs

Other expenses

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Based on these additional provisions, the CARES Employee Retention Credit is now equal to 70% of qualified wages paid to employees during a quarter, and the limit on qualified wages per employee has been increased to $10,000 of qualified wages per quarter.

The Company applied for and received a CARES Employee Retention Credit equal to $ 0 and $ 972,888 , respectively, for the three and nine months ended September 30, 2025 and $ 815,422 for each of the three and nine months ended September 30, 2024.

These amounts were recorded in other income on the unaudited condensed consolidated statement of loss and comprehensive loss for the three and nine months ended September 30, 2025 and 2024.

The Company applied for and received a CARES Employee Retention Credit equal to $ 0 and $ 1.0 million, respectively, for the three months ended March 31, 2026 and 2025.

These amounts were recorded in other income on the unaudited condensed consolidated statement of loss and comprehensive loss for the three months ended March 31, 2026 and 2025.

On May 25, 2023, the Company and Grown Rogue International, Inc.

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As part of the termination agreement, the Company forfeited 4,500,000 of the previously granted 8,500,000 warrants.

The Company’s remaining 4,000,000 warrants were revalued at a fair value of $ 1,333,103 and $ 2,270,964 at September 30, 2025 and December 31, 2024, respectively.

The Company’s remaining 4,000,000 warrants were revalued at a fair value of $ 0.9 million and $ 1.7 million at March 31, 2026 and December 31, 2025, respectively.

The fair value was derived from a Black-Scholes valuation using a stock price of $ 0.30 , an exercise price of $ 0.162 , an expected life of 2.52 years, an annual risk free rate of 3.92 % , and volatility of 100 % .

The three and nine-months ended September 30, 2025 saw a change in fair value of ($ 60,663 ) and $ 937,861 , respectively, which was recorded as other expense in the statement of net loss and comprehensive loss for the three and nine month periods ended September 30, 2025.

The three months ended March 31, 2026 saw a change in fair value of ($ 0.8 ) million , which was recorded as other expense in the statement of net loss and comprehensive loss for the three month period ended March 31, 2026.

Segment Reporting

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The Company’s Chief Operating Decision Maker uses net income to evaluate income generated from segment assets in deciding the appropriate capital allocation strategy.

A comparison of budgeted results to actual results is also used by the Company’s Chief Operating Decision Maker (as defined under U.S.

GAAP) to assess business performance.

A comparison of budgeted results to actual results is also used by the Company’s Chief Operating Decision Maker (as defined under GAAP) to assess business performance.

The Company’s cannabis segment cultivates, processes and distributes medical and adult-use cannabis products in a variety of formats, as well as related accessories, in the United States.

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Supplemental Cash Flow Information (1)

September 30,

Cash paid for interest

1 unchanged sentence

Change in construction accrued expenses

Stock issued in connection with financing activities

(1) For supplemental cash flow information related to leases, refer to Note 9 “Leases.”

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The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due.

As of September 30, 2025, the Company’s financial liabilities consist of accounts payable and accrued liabilities, debt and convertible debt.

As of March 31, 2026, the Company’s financial liabilities consist of accounts payable and accrued liabilities, debt and convertible debt.

The Company manages liquidity risk by reviewing its capital requirements on an ongoing basis.

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federal government regulates drugs through the CSA, which places controlled substances, including cannabis, in a schedule.

Cannabis is classified as a Schedule I drug.

Recent federal action, however, resulted in the rescheduling to Schedule III of (i) FDA-approved drug products containing marijuana and (ii) marijuana in any form covered by a state medical marijuana license.

Regarding state-legal medical marijuana, the DEA also created a pathway for state medical marijuana licensees to register and continue operating compliantly under Schedule III.

As a general matter, however, cannabis remains a Schedule I drug outside of the specific conditions outlined above.

federal law, a Schedule I drug or substance has a high potential for abuse, has no accepted medical use in the U.S., and lacks accepted safety for use under medical supervision.

Food and Drug Administration has not approved marijuana as a safe and effective drug for any indication.

Although the FDA has approved certain drugs containing marijuana, it has not approved marijuana itself as a safe and effective drug.

In the U.S., marijuana is largely regulated at the state level.

State laws regulating cannabis are in direct conflict with the federal CSA, which makes cannabis use and possession federally illegal.

Despite recent federal action to align state medical licensing requirements with Schedule III registration requirements, state laws regulating adult-use cannabis are still in direct conflict with the federal CSA, which makes adult-use cannabis use and possession federally illegal.

Foreign currency risk

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The Company currently carries variable interest-bearing debt subject to fluctuations in the United States Prime rate and Secured Overnight Financing Rate.

A change of 100 basis points in interest rates during the three months ended September 30, 2025, would have resulted in a corresponding change in the statement of loss and comprehensive loss of $ 361,250 .

However, management believes that the impact of reasonably possible changes in interest rates on the Company’s consolidated results of operations and cash flows would not be material.

Related Party Transactions

As of each of September 30, 2025 and December 31, 2024, the Company owed $ 0 to related parties outside of its debt obligations to Chicago Atlantic disclosed in Notes 12 and 13.

In connection with the Proper Mergers and related Proper Merger Agreement, the Company assumed a lease of property in Missouri that is owned by employees of Proper, who are now employees of the Company.

During the three and nine months ended September 30, 2025, the Company made lease payments of $ 45,501 and $ 60,668 , respectively.

Monthly rent is $ 15,167 .

In connection with the Wholesome Merger and related Wholesome Merger Agreement, the Company assumed a lease of property in Grantsville, Utah that is owned by Wholesome employees, who are now employees of the Company.

During the three and nine-month periods ended September 30, 2025, the Company made lease payments totaling $ 214,191 and $ 356,985 , respectively.

Monthly rent is approximately $ 71,397 .

In connection with the Deep Roots Merger and related Deep Roots Merger Agreement, the Company assumed an investment in Bluebird Uplifted Development, LLC of $ 1,000,000 .

The executive management team of Bluebird Uplifted Development, LLC are employees of Deep Roots and now the Company post-closing of the Deep Roots Merger Agreement.

In connection with the closing of the Wholesome Merger and the related Wholesome Merger Agreement, the Company acquired $ 1,000,000 of promissory notes that bore a 13 % interest rate due to current employees.

The notes were repaid in full on July 7, 2025 in connection with the First Lien Term Loan and Chicago Atlantic Term Loan.

Details surrounding the lending relationships between the Company and Chicago Atlantic Admin, are described in Note 12 “Long-Term Debt” and Note 13 “Convertible Debt.”

As of each of March 31, 2026 and December 31, 2025, the Company owed $ 4.4 million and $ 2.0 million, due to related parties.

Details surrounding the lending relationships between the Company and Chicago Atlantic, are described in Note 11 “Long-Term Debt” and Note 12 “Convertible Notes.”

During the three months ended March 31, 2026 and 2025, the Company paid Chicago Atlantic $ 1.5 million and $ 0 , respectively, for certain underwriting services, legal services, accounting services, data analytics services, and real estate services .

John Mazarakis, Vireo Growth’s Chief Executive Officer, is a partner of Chicago Atlantic Group, LP, an affiliate of Chicago Atlantic Admin.

2 unchanged sentences

Subsequent Events

On October 10, 2025, Vireo Health of Colorado, LLC, a Colorado limited liability company and wholly-owned subsidiary of Vireo Growth entered into a restructuring support agreement (the “ RSA ”) with Medicine Man Technologies, Inc.

d/b/a Schwazze, a Nevada corporation (“ Schwazze ”), certain of Schwazze’s subsidiaries, the beneficial holders (the “ Star Bud Holders ”) of certain seller notes (the “ Star Bud Notes ”) secured by a first priority security interest in substantially all the assets owned by SBUD LLC, a wholly owned subsidiary of Schwazze, and certain other parties.

As of October 10, 2025, the Company holds a majority of the outstanding principal amount of Schwazze’s 13 % Senior Secured Convertible Notes due December 7, 2026 (the “ Senior Secured Notes ”).

The RSA sets forth a plan to restructure the operations and capital structure of Schwazze and its subsidiaries through a series of transactions, including, but not limited to (i) the purchase of certain assets representing a majority of the total assets of Schwazze and its subsidiaries (the “ Asset Sale ”) by a newly-formed entity (“ NewCo ”) to be majority owned by the Company, and (ii) the liquidation of Schwazze’s remaining assets and winding down of Schwazze’s remaining operations (the “ Liquidation ”).

The RSA provides that the Asset Sale will be effected by way of public disposition of collateral pursuant to §§ 9-610 and 9-611 of the Uniform Commercial Code to be conducted by the collateral agent for the Senior Secured Notes.

The collateral agent under the indenture (the “ Indenture ”) governing the Senior Secured Notes, acting at the direction of the Company, will credit bid at the Asset Sale a principal amount of Senior Secured Notes to be determined by the Company (the “ Credit Bid ”).

However, the Asset Sale will be open to other bidders and is therefore subject to competing bids which may be higher than the Credit Bid.

If the Credit Bid is the winning bid at the Asset Sale, Schwazze will enter into an asset purchase agreement with NewCo pursuant to which, subject to receipt of regulatory approvals and other closing conditions, the assets subject to the Asset Sale will be transferred to NewCo in consideration for an assumption by NewCo of certain specified liabilities of Schwazze and a discharge of the Senior Secured Notes included in the Credit Bid.

In connection with the Liquidation, which will follow the Asset Sale, any available net cash proceeds in excess of amounts needed to cover costs of the Asset Sale and Liquidation will be distributed to holders of claims and equity interests in Schwazze in accordance with their relative priority under applicable law, whereby excess proceeds (if any) would be paid, first , to secured claims (including any portion of the Senior Secured Notes not included in the Credit Bid), second to unsecured claims, third , to preferred stockholders of Schwazze, and, fourth , to common stockholders of Schwazze.

Pursuant to the RSA, certain parties have agreed to provide NewCo with up to approximately $ 62 million in financing, a portion of which will be used to refinance the Star Bud Holders in full and final satisfaction of their claims with respect to the Star Bud Notes.

As a result of the Asset Sale and the Liquidation, (i) all obligations represented by the Senior Secured Notes and the Star Bud Notes will be extinguished and (ii) NewCo will become an indirect majority owned subsidiary of the Company.

Vireo Growth has been involved in an action pending in the Supreme Court of British Columbia against Verano following Verano’s repudiation of the Arrangement Agreement with the Company dated January 31, 2022.

In the litigation, the Company sought damages, costs and interest, based on Verano's breach of contract and breach of its duty of good faith and honest performance.

On October 29, 2025, the parties reached the Settlement Agreement dismissing all outstanding litigation matters between the two companies that were pending before the Supreme Court of British Columbia.

The terms of the Settlement Agreement were approved by the respective Boards of Directors of both companies.

The value of the settlement to Vireo Growth is approximately $ 10,000,000 consisting of the acquisition of certain real estate assets and $ 1,000,000 in cash.

Commitments and Contingencies for more information.

As previously disclosed, on December 22, 2025, the Company entered into a merger agreement pursuant to which a wholly owned subsidiary of the Company would merge with and into Eaze, Inc.

(“ Eaze ”), with Eaze surviving as a wholly owned subsidiary (the “ Eaze Merger ”).

The Eaze Merger was completed on April 1, 2026.

In connection with the closing of the Eaze Merger, the Company issued an aggregate of 90,379,591 subordinate voting shares as estimated closing consideration, of which a portion was delivered to a payment agent for distribution to former Eaze stockholders and a portion was placed into escrow.

The estimated closing consideration is subject to customary post-closing adjustments, including adjustments for cash, indebtedness, transaction expenses, working capital and certain tax items.

Former Eaze stockholders may also be entitled to receive additional subordinate voting shares in the form of earnout consideration based on the achievement of certain financial targets following December 31, 2026, subject to specified limitations.

In addition, the Company will issue RSUs to certain Eaze employees in connection with the Eaze Merger, including (i) fully vested RSUs issued at closing and (ii) additional RSUs that vest based on continued employment and are tied to the achievement of earnout-related performance conditions.

On April 8, 2026, the Company entered into and concurrently closed a securities purchase agreement pursuant to which it acquired all of the issued and outstanding equity interests of The Hawthorne Gardening Company LLC and its subsidiaries from The Scotts Miracle-Gro Company.

In connection with the transaction, the Company issued 213,000,000 subordinate voting shares at a deemed value of $ 0.60 per share, subject to customary post-closing adjustments, with a portion of such shares placed in escrow.

The Company also issued warrants to purchase 80,000,000 subordinate voting shares at an exercise price of $ 0.85 per share, which are immediately exercisable and expire five years from the date of issuance.

The shares issued as consideration and any shares issuable upon exercise of the warrants are subject to a lock-up arrangement with staged releases over a 24-month period.

In addition, the parties entered into an investor rights agreement that provides the seller’s designee with certain registration rights, board designation rights, and participation rights in future equity offerings, subject to specified ownership thresholds.

On April 13, 2026, the Company and Glass House Brands Inc.

(“ Glass House ”) announced the execution of a definitive agreement to form a joint venture to combine each party’s California dispensary operations, subject to the satisfaction of regulatory approvals and other customary closing conditions.

Upon closing, each party is expected to contribute its respective California retail operations to the joint venture in exchange for a 50 % ownership interest.

The proposed joint venture would combine the Company’s twelve dispensaries and home delivery operations located in California and acquired from Eaze, Inc.

with Glass House’s eleven California retail locations.

The combined retail platform is expected to be supported by a preferential supply agreement with Glass House.

Under the terms of the agreement, beginning five years after closing, the Company will have an option to acquire Glass House’s ownership interest in the joint venture, and Glass House will have a reciprocal put right.

On April 23, 2026, the U.S.

Department of Justice announced an order reclassifying certain FDA-approved marijuana products and cannabis products subject to qualifying state medical marijuana licenses from Schedule I to Schedule III under the Controlled Substances Act.

The Department of Justice also announced an administrative hearing process to consider broader rescheduling of marijuana.

The Company is currently evaluating the potential impact of these developments on its operations, tax position, and financial statements.

On April 30, 2026, Vireo entered into a definitive arrangement agreement to acquire all outstanding shares of FLUENT Corp.

(“FLUENT”) in an all-stock transaction, pursuant to which FLUENT shareholders will receive 0.0705359 of a subordinate voting share of Vireo for each FLUENT share.

The transaction has been unanimously approved by the boards of both companies (with interested directors abstaining from voting) following a review by an independent special committee of FLUENT and is subject to customary conditions, including Fluent shareholder approval, court and regulatory approvals, as well as the completion of a debt equitization of approximately $ 30 million of FLUENT indebtedness.

agreement also contains certain covenants and agreements regarding the conduct of FLUENT’s business until the closing, including covenants requiring FLUENT and its subsidiaries to manage and operate their respective businesses in accordance with an operating budget that was approved by FLUENT’s board of directors and adopted by FLUENT in connection with the transaction.

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-Q

Item 1. Financial Statements