What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-11 · 81 added, 69 removed, 163 unchanged (48% of the section changed)

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On January 31, 2022, we entered into an Arrangement Agreement (the “ Arrangement Agreement ”) with Verano Holdings Corp.

(“Verano”), pursuant to which Verano will acquire all of the issued and outstanding shares of Goodness Growth

pursuant to a plan of arrangement (the “Plan of Arrangement”) under the Business Corporations Act (British Columbia) (the “Arrangement”).

Subject to the terms and conditions set forth in the Arrangement Agreement and the Plan of Arrangement, holders of Goodness Growth Shares will receive 0.22652 of a subordinate voting share of Verano (each a “Verano Subordinate Voting Share”), subject to adjustment as described below (the “Exchange Ratio”), 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.

The Arrangement is subject to the approvals of the Supreme Court of British Columbia;

receipt of U.S.

regulatory approvals, and other customary conditions of closing

(“ Verano ”), pursuant to which Verano was to acquire all of the issued and outstanding shares of Goodness

Growth pursuant to a plan of arrangement ( the “Plan of Arrangement ”) under the Business Corporations Act (British Columbia) (the “ Arrangement ”).

Subject to the terms and conditions set forth in the Arrangement Agreement and the Plan of Arrangement, holders of Goodness Growth Shares was to receive 0.22652 of a subordinate voting share of Verano (each 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, we 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 our public filings and communications with respect to our business and ongoing operations were misleading and that we breached our representations to Verano under the Arrangement Agreement.

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

We deny all of Verano’s allegations and have complied with our obligations under the Arrangement Agreement in all material respects at all times.

Verano has no factual or legal basis to justify or support its purported grounds for termination of the Arrangement Agreement.

On October 21, 2022, we commenced an action in the Supreme Court of British Columbia against Verano seeking damages after Verano wrongfully terminated the Arrangement Agreement.

We are seeking damages, costs and interest, based on Verano's breach of contract and of its duty of good faith and honest performance.

Due to uncertainties inherent in litigation, it is not possible to predict the timing or final outcome of the legal proceedings against Verano or to determine the amount of damages, if any, that may be awarded.

The termination of the Arrangement Agreement gives rise to substantial doubt about the Company’s ability to meet its obligations over the next twelve months.

Company management is working with the Company’s lenders, counsel, and other applicable parties to implement a plan to effectively mitigate the conditions giving rise to substantial doubt.

Elements of this plan may include, but are not limited to, asset sales, debt restructuring, and capital raises.

While the risk of substantial doubt is not effectively mitigated as of the reporting date, the Company expects to mitigate this risk before the Annual Report on Form 10-K for the fiscal year ended December 31, 2022 is issued.

Since being declared a global pandemic on March 11, 2020, the spread of COVID-19 has severely impacted many local economies around the globe.

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The duration and impact of the COVID-19 pandemic, as well as the effectiveness of government and central bank responses, remains unclear at this time.

During 2021 and thus far in 2022, the Company’s revenue, gross profit and operating income were not negatively impacted by COVID-19 and the Company generally maintained the consistency of its operations.

However, the uncertain nature of the spread of COVID-19 may impact its business operations for reasons including the potential quarantine of Goodness Growth employees or those of its supply chain partners.

Three months ended June 30, 2022, Compared to Three months ended June 30, 2021

During 2021 and thus far in 2022, our revenue, gross profit and operating income were not negatively impacted by COVID-19 and we generally maintained the consistency of our operations.

However, the uncertain nature of the spread of COVID-19 may impact its business operations for reasons including the potential quarantine of our employees or those of our supply chain partners.

Three months ended September 30, 2022, Compared to Three months ended September 30, 2021

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

For the three months ended June 30, 2022, 81% of our revenue was generated from retail dispensaries and 19% from wholesale business.

For the three months ended June 30, 2021, 79% of our revenue was generated from retail business and 21% from wholesale business.

For the three months ended June 30, 2022, Minnesota operations contributed approximately 48% of revenues, New York contributed 18%, Arizona contributed 6%, New Mexico contributed 11%, and Maryland contributed 17%.

For the three months ended June 30, 2021, Minnesota operations contributed approximately 38% of revenues, New York contributed 31%, Arizona contributed 14%, New Mexico contributed 5%, and Maryland contributed 12%.

Revenue for the three-months ended June 30, 2022 was $21,090,148, an increase of $6,859,248 or 48% compared to revenue of $14,230,900 for the three-months ended June 30, 2021.

The increase is primarily attributable to increased revenue contributions from the retail businesses in Minnesota and New Mexico of $4.6 million and $1.7 million respectively, partially offset by the lack of second quarter 2022 retail revenues in Arizona, which was divested in the fourth quarter of 2021.

For the three months ended September 30, 2022, 87% of our revenue was generated from retail dispensaries and 13% from wholesale business.

For the three months ended September 30, 2021, 86% of our revenue was generated from retail business and 14% from wholesale business.

For the three months ended September 30, 2022, Minnesota operations contributed approximately 54% of revenues, New York contributed 20%, New Mexico contributed 9%, and Maryland contributed 17%.

For the three months ended

September 30, 2021, Minnesota operations contributed approximately 41% of revenues, New York contributed 24%, Arizona contributed 12%, New Mexico contributed 6%, and Maryland contributed 17%.

Revenue for the three-months ended September 30, 2022 was $18,854,101, an increase of $5,484,669 or 41% compared to revenue of $13,369,432 for the three-months ended September 30, 2021.

The increase is primarily attributable to increased revenue contributions from the retail business in Minnesota, Maryland, and New Mexico, partially offset by the lack of third quarter 2022 retail revenues in Arizona, which was divested in the fourth quarter of 2021.

Key revenue drivers are the increased patient demand in Minnesota driven by the addition of cannabis flower to the Minnesota medical program in March of 2022, and the commencement of recreational marijuana sales in New Mexico on April 1, 2022.

Retail revenue for the three months ended June 30, 2022 was $17,041,492 an increase of $5,739,995 or 51% compared to retail revenue of $11,301,497 for the three months ended June 30, 2021 primarily due to revenue contributions from Minnesota and New Mexico.

Wholesale revenue for the three months ended June 30, 2022 was $4,048,656, an increase of $1,119,253 compared to wholesale revenue of $2,929,403 for the three months ended June 30, 2021.

The increase in revenue contributions was primarily due to increased wholesale demand in Maryland, and the sale of our remaining Arizona inventory.

Retail revenue for the three months ended September 30, 2022 was $16,389,226 an increase of $4,826,786 or 42% compared to retail revenue of $11,562,440 for the three months ended September 30, 2021 primarily due to revenue contributions from Minnesota and New Mexico.

Wholesale revenue for the three months ended September 30, 2022 was $2,464,875, an increase of $657,883 compared to wholesale revenue of $1,806,992 for the three months ended Septemer 30, 2021.

The increase in revenue contributions was primarily due to increased wholesale demand in New York.

Three Months Ended

September 30,

Total Wholesale

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Cost of goods sold are determined from costs related to the cultivation and processing of cannabis and cannabis-derived products as well as the cost of finished goods inventory purchased from third parties.

Cost of goods sold for the three months ended June 30, 2022 was $10,723,122, an increase of $3,405,111 compared to the three months ended June 30, 2021 of $7,318,011, driven by higher production volume and sales.

Gross profit for the three months ended June 30, 2022 was $10,367,026, representing a gross margin of 49%.

This is compared to gross profit for the three months ended June 30, 2021 of $6,912,889 or a 49% gross margin.

The increase in gross profit was driven by higher sales, while maintaining margins.

Cost of goods sold for the three months ended September 30, 2022 was $9,317,241, an increase of $1,062,797 compared to the three months ended September 30, 2021 of $8,254,444, driven by higher production volume and sales.

Gross profit for the three months ended September 30, 2022 was $9,536,860, representing a gross margin of 51%.

This is compared to gross profit for the three months ended September 30, 2021 of $5,114,988 or a 38% gross margin.

The increase in gross profit and margin was driven primarily by increased retail sales in Minnesota.

Our current production capacity has not been fully realized and we expect future gross profits to increase with revenue growth reflective of higher demand, increased product output and new product development.

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We expect general and administrative expenses as a percentage of sales to decrease as we realize revenue growth organically and through positive regulatory developments in our core markets.

Total expenses for the three months ended June 30, 2022 were $10,058,841 a decrease of $101,610 compared to total expenses of $10,160,451 for the three months ended June 30, 2021.

The decrease in total expenses was attributable to a decrease in stock-based compensation expenses of $310,072.

Total expenses for the three months ended September 30, 2022 were $9,726,016 an increase of $480,167 compared to total expenses of $9,245,849 for the three months ended September 30, 2021.

The increase in total expenses is primarily attributable to an increase in professional fees driven by the Arrangement Agreement.

Operating Income (Loss) before Income Taxes

Operating income (loss) before other income (expense) and provision for income taxes for the three months ended June 30, 2022 was $308,185 an increase of $3,555,747 compared to an operating loss of ($3,247,562) for the three months ended June 30, 2021.

Operating income (loss) before other income (expense) and provision for income taxes for the three months ended September 30, 2022 was $(189,156) a decrease of $3,941,705 compared to an operating loss of ($4,130,861) for the three months ended September 30, 2021.

Total Other Income (Expense)

Total other expense for the three months ended June 30, 2022 was $(5,446,261), a change of $2,591,848 compared to other expense of $(2,854,413) for the three months ended June 30, 2021.

Total other expense for the three months ended September 30, 2022 was $(7,594,633), a change of $5,415,098 compared to other expense of $(2,179,535) for the three months ended September 30, 2021.

This change is primarily attributable to increased interest expense driven by the Credit Facility.

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Income tax expense is recognized based on the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year-end.

For the three months ended June 30, 2022, tax expense totaled $1,045,000 compared to a tax expense of $910,000 for the three months ended June 30, 2021.

The increase in tax expense is primarily attributable to increased gross profit partially offset the recognition of deferred tax assets related to property, plant, and equipment impairments.

Six months ended June 30, 2022 Compared to Six months ended June 30, 2021

For the three months ended September 30, 2022, tax expense totaled $640,000 compared to a tax expense of $560,000 for the three months ended September 30, 2021.

The increase in tax expense is primarily attributable to increased gross profit partially offset the recognition of deferred tax assets related to property, plant, and equipment impairments and state net operating loss carryforwards.

Nine months ended September 30, 2022 Compared to Nine months ended September 30, 2021

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

For the six months ended June 30, 2022, 80% of the revenue was generated from retail business and 20% from wholesale business.

For the six months ended June 30, 2021, 79% of the revenue was generated from retail dispensaries and 21% from wholesale business.

For the six months ended June 30, 2022, Minnesota operations contributed approximately 47% of revenues, New York contributed 20%, Arizona contributed 6%, New Mexico contributed 9%, and Maryland contributed 18%.

For the six months ended June 30, 2021, Minnesota operations contributed approximately 39% of revenues, New York contributed 27%, Arizona contributed 21%, New Mexico contributed 5%, and Maryland contributed 8%.

Revenue for the six months ended June 30, 2022 was $36,728,720, an increase of $9,307,931 or 34% compared to revenue of $27,420,789 for the six months ended June 30, 2021.

For the nine months ended September 30, 2022, 82% of the revenue was generated from retail business and 18% from wholesale business.

For the nine months ended September 30, 2021, 82% of the revenue was generated from retail dispensaries and 18% from wholesale business.

For the nine months ended September 30, 2022, Minnesota operations contributed approximately 50% of revenues, New York contributed 19%, Arizona contributed 4%, New Mexico contributed 9%, and Maryland contributed 18%.

For the nine months ended September 30, 2021, Minnesota operations contributed approximately 40% of revenues, New York contributed 26%, Arizona contributed 18%, New Mexico contributed 5%, and Maryland contributed 11%.

Revenue for the nine months ended September 30, 2022 was $55,582,821, an increase of $14,792,600 or 36% compared to revenue of $40,790,221 for the nine months ended September 30, 2021.

The increase is primarily attributable to increased revenue contributions from the retail businesses in Minnesota, New Mexico, and Maryland, partially offset by the lack of Arizona retail revenues, which was divested in the fourth quarter of 2021.

Key revenue drivers are the acquisition of the Charm City dispensary in Maryland in the fourth quarter of 2021, increased patient demand in Minnesota, which is the result of the addition of cannabis flower to the Minnesota medical program in March of 2022, and the and the commencement of recreational marijuana sales in New Mexico on April 1, 2022.

Retail revenue for the six months ended June 30, 2022 was $29,453,715, an increase of $7,769,098 or 36% compared to retail revenue of $21,684,617 for the six months ended June 30, 2021 primarily due to revenue contributions from Minnesota, New Mexico, and Maryland, partially offset by the lack of Arizona retail revenues.

Wholesale revenue for the six months ended June 30, 2022 was $7,275,005, an increase of $1,538,833 compared to wholesale revenue of $5,736,172 for the six months ended June 30, 2021.

The increase in revenue contributions was primarily due to increased wholesale demand in Minnesota and Maryland, partially offset by declining revenues in Arizona.

Six Months Ended

Retail revenue for the nine months ended September 30, 2022 was $45,842,941, an increase of $12,595,883 or 38% compared to retail revenue of $33,247,058 for the nine months ended September 30, 2021 primarily due to revenue contributions from Minnesota, New Mexico, and Maryland, partially offset by the lack of Arizona retail revenues.

Wholesale revenue for the nine months ended September 30, 2022 was $9,739,880, an increase of $2,196,717 compared to wholesale revenue of $7,543,163 for the nine months ended September 30, 2021.

The increase in revenue contributions was primarily due to increased wholesale demand in Minnesota and Maryland, partially offset by the lack of revenues in Arizona.

Nine Months Ended

September 30,

Total Wholesale

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Cost of Goods Sold and Gross Profit

Cost of goods sold for the six months ended June 30, 2022 was $23,873,016, an increase of $8,980,957 compared to the six months ended June 30, 2021 of $14,892,059, driven by higher production volume and sales.

Gross profit for the six months ended June 30, 2022 was $12,855,704, representing a gross margin of 35%.

This is compared to gross profit for the six months ended June 30, 2021 of $12,528,730 or a 46% gross margin.

The decrease in margin was driven by an increase in inventory valuation adjustments of $3,413,788 compared to the six months ended June 30, 2021.

Cost of goods sold for the nine months ended September 30, 2022 was $33,190,257, an increase of $10,043,754 compared to the nine months ended September 30, 2021 of $23,146,503, driven by higher production volume and sales.

Gross profit for the nine months ended September 30, 2022 was $22,392,564, representing a gross margin of 40%.

This is compared to gross profit for the nine months ended September 30, 2021 of $17,643,718 or a 43% gross margin.

The decrease in margin was driven by an increase in inventory valuation adjustments of $3,193,788 compared to the nine months ended September 30, 2021.

Excluding inventory valuation adjustments, margins were relatively flat.

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Total Expenses

Total expenses for the six months ended June 30, 2022 were $20,307,678, a decrease of $313,387 compared to total expenses of $20,621,065 for the six months ended June 30, 2021.

The decrease in total expenses was attributable to a decrease in stock-based compensation expenses of approximately $1.7 million partially offset by increase general and administrative expenses of $1.6 million which was driven by an increase in professional fees related to the merger and salaries.

Total expenses for the nine months ended September 30, 2022 were $30,033,694, an increase of $166,780 compared to total expenses of $29,866,914 for the nine months ended September 30, 2021.

The small increase in total expenses was attributable to an increase in professional fees related to the Arrangement Agreement offset by a decrease in stock-based compensation expenses.

Operating Loss before Income Taxes

Operating loss before other income (expense) and provision for income taxes for the six months ended June 30, 2022 was $(7,451,974), a decrease of $640,361 compared to $(8,092,335) for the six months ended June 30, 2021.

Operating loss before other income (expense) and provision for income taxes for the nine months ended September 30, 2022 was $(7,641,130), a decrease of $4,582,066 compared to $(12,223,196) for the nine months ended September 30, 2021.

Total Other Expense

Total other expenses for the six months ended June 30, 2022 were $13,992,884, an increase of $10,606,100 compared to $3,386,784 for the six months ended June 30, 2021.

Total other expenses for the nine months ended September 30, 2022 were $21,587,516, an increase of $16,021,197 compared to $5,566,319 for the nine months ended September 30, 2021.

This increase is primarily attributable to the loss on impairment of long-lived assets of $7,476,618 and increased interest expense driven by the Credit Facility.

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Income tax expense is recognized based on the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year-end.

For the six months ended June 30, 2022, tax recoveries totaled $695,000 compared to a tax expense of $2,410,000 for the six months ended June 30, 2021.

The increase in tax recoveries is primarily attributable to the recognition of deferred tax assets related to property, plant, and equipment impairments.

For the nine months ended September 30, 2022, tax recoveries totaled $55,000 compared to a tax expense of $2,970,000 for the nine months ended September 30, 2021.

The increase in tax recoveries is primarily attributable to the recognition of deferred tax assets related to property, plant, and equipment impairments and state net operating loss carryforwards.

NON-GAAP MEASURES

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net income (loss)

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The fair value of these warrants at the time of issuance was $5,395,759 (Note 16) which is treated as a deferred financing cost.

On November 18, 2021, the Company and lender amended the Credit Facility to provide for an additional loan of $4,200,000 with a cash interest rate of 15% per annum and PIK interest of 2% and no warrants were issued in connection with this loan.

with this loan.

Cash received net of $156,900 in financing costs was $4,043,100.

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

On January 31, 2022, we entered into a Third Amendment to our Credit Facility (the “Third Amendment”) providing for additional delayed draw term loans of up to $55 million (the “Delayed Draw Loans”).

Subject to certain conditions to be satisfied prior to the initial funding thereunder, we may borrow a portion of the $55 million for working capital and other general corporate purposes and may borrow the remainder for other specific purposes, including relating to our ongoing expansion in New York.

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

Subject to certain conditions to be satisfied prior to the initial funding thereunder, Goodness Growth may borrow a portion of the $55 million for working capital and other general corporate purposes and may borrow the remainder for other specific purposes, including relating to its ongoing expansion in New York.

The Delayed Draw Loans have a maturity date of April 30, 2023 with an option to extend another 12 months for an additional fee of $1,375,000.

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

Pursuant to the Arrangement Agreement, Verano will reimburse us for all interest expenses related to the Third Amendment in excess of 10% per annum until the earlier of either the completion of the Arranagement or termination of the Arrangement Agreement.

On March 3, 2022, we drew $4,075,000 in principal debt from the Delayed Draw Loans.

Proceeds received, net of deferred financing fees of $1,075,000, were $3,000,000.

Additionally, we incurred $115,863 of third party legal fees related to the draw.

We expect to be reimbursed by Verano for the $1,075,000 in deferred financing fees netted against the proceeds received pursuant to the Arrangement Agreement, and as such these are fees are included in our receivables balance (Note 5) as of March 31, 2022.

During the three months ended June 30, 2022, the Company drew $14,000,000 in principal debt from the Delayed Draw Loans.

Pursuant to the Arrangement Agreement, Verano will reimburse Goodness Growth for all interest expenses related to the Third Amendment in excess of 10% per annum through the purported termination of the Arrangement Agreement on October 13, 2022.

During the nine months ended September 30, 2022, the Company drew $27,075,000 in principal debt from the Delayed Draw Loans.

Proceeds received, net of deferred financing fees of $2,206,857 were $24,868,143.

The Company is to be reimbursed by Verano for $1,190,863 of these deferred financing fees pursuant to the Arrangement Agreement, and still expects to collect despite the purported termination of the Arrangment Agreement (Note 1).

These fees are included as other income in the unaudited statement of loss and comprehensive loss for the nine months ended September 30, 2022, and to the extent these fees have not been reimbursed, they are included in our other receivables balance (Note 5).

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.

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Cash Used in Operating Activities

Net cash used in operating activities was $9.8 million for the six months ended June 30, 2022, a decrease of $7.6 million as compared to the six months ended June 30, 2021.

Net cash used in operating activities was $12.0 million for the nine months ended September 30, 2022, a decrease of $10.8 million as compared to the nine months ended September 30, 2021.

The decrease is primarily attributed to more favorable changes in working capital items.

Cash Used in Investing Activities

Net cash used in investing activities was $3.7 million for the six months ended June 30, 2022, compared to net cash used in investing activities of $11.5 million for the six months ended June 30, 2021.

Net cash used in investing activities was $4.8 million for the nine months ended September 30, 2022, compared to net cash used in investing activities of $15.0 million for the nine months ended September 30, 2021.

The decrease is primarily attributable to decreased property, plant, and equipment additions relative to the prior year quarter.

Cash Provided by Financing Activities

Net cash provided by financing activities was $15.4 million for the six months ended June 30, 2022, a decrease of $7.3 million as compared to the six months ended June 30, 2021.

The decrease was principally due to the receipt of approximately $23 million in net proceeds from the Credit Facility in the first six months of 2021, compared to the receipt of approximately $16 million in net proceeds in the first six months of 2022.

Net cash provided by financing activities was $23.4 million for the nine months ended September 30, 2022, an increase of $1.0 million as compared to the nine months ended September 30, 2021.

The change was principally due to increased proceeds received from the Credit Facility in 2022 compared to 2021.

Lease Transactions

As of June 30, 2022, we have entered into lease agreements for the use of buildings used in cultivation, production and/or sales of cannabis products in Arizona, Maryland, Minnesota, Nevada, New Mexico, New York, and Puerto Rico.

As of September 30, 2022, we have entered into lease agreements for the use of buildings used in cultivation, production and/or sales of cannabis products in Arizona, Maryland, Minnesota, Nevada, New Mexico, New York, and Puerto Rico.

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

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

As of June 30, 2022, we operated 18 retail locations secured under these agreements.

As of September 30, 2022, we operated 18 retail locations secured under these agreements.

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

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Finance Leases

June 30, 2022

September 30, 2022

Total minimum lease payments

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Outstanding Share Data

As of August 9, 2022, we had 85,101,227 shares issued and outstanding, consisting of the following:

As of November 11, 2022, we had 87,135,083 shares issued and outstanding, consisting of the following:

(a) Subordinate voting shares

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Options, Warrants, and Convertible Promissory Notes

As of June 30, 2022, we have 26,187,660 employee stock options outstanding, 1,094,200 RSUs, as well as 3,037,649 SVS warrants denominated in C$ and 11,888 MVS warrants related to financing activities.

As of September 30, 2022, we have 26,121,908 employee stock options outstanding, 1,094,200 RSUs, as well as 3,037,649 SVS warrants denominated in C$.

Off-Balance Sheet Arrangements

As of the date of this filing, we do not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on our results of operations or financial condition, including, and without limitation, such considerations as liquidity and capital resources.

Given the pending transaction with Verano, we withdrew our previously issued guidance and will not be issuing additional guidance at this time.

Critical Accounting Policies

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis