+Added: Summary of Risk Factors
Investing in our securities involves risks.
−Removed: You should carefully consider the risks described in this section before deciding to invest in our securities.
−Removed: If any of these risks occurs, our business, financial condition, and results of operations could be materially, adversely affected.
+Added: In addition to the other information set forth in this Annual Report on Form 10-K, including the information addressed under “Cautionary Statement Regarding Forward Looking Statements,” investors in the Company’s securities should carefully consider the risks described in this section before deciding to invest in our securities.
+Added: The following discussion highlights the risks that we believe are material to the Company, but the following discussion does not necessarily include all risks that we may face, and an investor in the Company’s securities should not interpret the disclosure of a risk in the following discussion to state or imply that the risk has not already materialized.
+Added: If any of these risks occur, our business, financial condition, and results of operations could be materially and adversely affected.
In such case, the trading price of our securities would likely decline, and you may lose all or part of your investment.
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● Marijuana remains illegal under U.S.
−Removed: federal law, and enforcement of U.S.
−Removed: cannabis laws could change.
−Removed: ● There is a substantial risk of regulatory or political change.
−Removed: ● We may be subject to action by the U.S.
+Added: There is a substantial risk of regulatory or political change which could alter the enforcement approach at the federal level and thereby subject us to action by the U.S.
federal government through various government agencies for participation in the cannabis industry.
state and local regulation of cannabis is uncertain and changing.
−Removed: ● State regulatory agencies may require us to post bonds or pay significant fees.
−Removed: ● We may be subject to heightened scrutiny by U.S.
−Removed: and Canadian authorities, which could ultimately lead to the market for Subordinate Voting Shares becoming highly illiquid and our shareholders having no ability effect trades in Subordinate Voting Shares in Canada.
+Added: New state or local laws may be enacted which affect our product offerings or manufacturing processes.
● We are involved in litigation with Verano, the outcome of which is uncertain.
−Removed: ● We may face state limitations on ownership of cannabis licenses.
−Removed: ● We may become subject to FDA or ATF regulation.
−Removed: ● Cannabis businesses are subject to applicable anti-money laundering laws and regulations and have restricted access to banking and other financial services.
+Added: ● Cannabis businesses are subject to applicable anti-money laundering laws and regulations and have restricted access to banking and other financial services including obtaining traditional bank financing.
● We operate in a highly regulated sector and may not always succeed in complying fully with applicable regulatory requirements in all jurisdictions where we carry on business.
−Removed: ● Because marijuana is illegal under U.S.
−Removed: federal law, we may be unable to access to U.S.
−Removed: bankruptcy protections in the event of our bankruptcy or a bankruptcy in an entity in which we invest.
−Removed: ● Because our contracts involve marijuana and related activities, which are not legal under U.S.
−Removed: federal law, we may face difficulties in enforcing our contracts.
−Removed: ● We may not be able to secure our payment and other contractual rights with liens on the inventory or licenses of our clients and contracting parties under applicable state laws.
−Removed: ● Because marijuana is illegal under U.S.
−Removed: federal law, marijuana businesses may be subject to civil asset forfeiture.
−Removed: ● We may be subject to constraints on and differences in marketing our products under varying state laws.
−Removed: ● The results of future clinical research may be unfavorable to cannabis, which may have a material, adverse effect on the demand for our products.
−Removed: ● Inconsistent public opinion and perception of the medical recreational use marijuana industry hinders market growth and state adoption.
● Investors in the Company who are not U.S.
citizens may be denied entry into the United States.
−Removed: ● As a cannabis business, we are subject to unfavorable tax treatment under the Code.
● We have a history of operating losses and our management has concluded that factors raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to its ability to continue as a going concern in their audit report for the years ended December 31, 2022.
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● We anticipate requiring additional financing to operate our business and we may face difficulties acquiring additional financing on terms acceptable to us, or at all.
−Removed: ● We are a holding company, and our earnings are dependent on the earnings and distributions of our subsidiaries.
−Removed: ● Disparate state-by-state regulatory landscapes and the constraints related to holding cannabis licenses in various states results in operational and legal structures for realizing the benefit from cannabis licenses that could result in materially detrimental consequences to us.
−Removed: ● The success of our business depends, in part, on our ability to retain key employees.
● Our senior secured credit facility contains covenant restrictions that may limit our ability to operate our business.
● Servicing our debt will require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.
−Removed: ● The nature of the medical and recreational cannabis industry may result in unconventional due diligence processes and acquisition terms that could have unknown and materially detrimental consequences to us.
−Removed: ● Our assets may be purchased with limited representations and warranties from the sellers of those assets.
−Removed: ● Lending by us to third parties may be unsecured, subordinate in interest or backed by unrealizable license assets.
−Removed: ● Competition for the acquisition and leasing of properties suitable for the cultivation, production and sale of medical and recreational cannabis may impede our ability to make acquisitions or increase the cost of these acquisitions, which could materially, adversely affect our operating results and financial condition.
−Removed: ● We face security risks related to our physical facilities and cash transfers.
−Removed: ● We face exposure to fraudulent or illegal activity by employees, contractors, consultants, and agents, which may subject us to investigations and actions.
−Removed: ● We face risks related to the novelty of the cannabis industry, and the resulting lack of information regarding comparable companies, unanticipated expenses, difficulties and delays, and the offering of new products and services in an untested market.
−Removed: ● We are dependent on the popularity and acceptance of our brand portfolio.
+Added: ● We face security risks related to our physical facilities and cash transfers due to the mostly cash nature of the cannabis industry.
● Our business is subject to the risks inherent in agricultural operations.
−Removed: ● We may encounter increasingly strict environmental regulation in connection with our operations and the associated permitting, which may increase the expenses for cannabis production or subject us to enforcement actions by regulatory authorities.
−Removed: ● We may face potential enforcement actions if we fail to comply with applicable laws.
● We face risks related to our information technology systems, including potential cyber-attacks and security and privacy breaches.
−Removed: ● We may be required to disclose personal information to government or regulatory entities.
−Removed: ● We face risks related to our insurance coverage and uninsurable risks.
● Our reputation and ability to do business may be negatively impacted by our suppliers’ inability to produce and ship products.
● We are dependent on key inputs, suppliers and skilled labor for the cultivation, extraction, and production of cannabis products.
−Removed: ● Our cannabis growing operations consume considerable energy, which makes us vulnerable to rising energy costs.
−Removed: Accordingly, rising or volatile energy costs may adversely affect our business and our ability operate profitably.
● We may be unable to attract and retain key personnel.
−Removed: ● Our sales are difficult to forecast due to limited and unreliable market data.
−Removed: ● We may be subject to growth-related risks.
−Removed: ● We are currently involved in litigation, and there may be additional litigation in which we will be involved in the future.
● We face an inherent risk of product liability claims as a manufacturer, processor and producer of products that are intended to be ingested by people.
● Our intellectual property may be difficult to protect.
−Removed: ● We may be exposed to infringement or misappropriation claims by third parties, which, if determined adversely to us, could subject us to significant liabilities and other costs.
−Removed: ● Our products may be subject to product recalls, which may result in expense, legal proceedings, regulatory action, loss of sales and reputation, and diversion of management attention.
−Removed: ● We face unfavorable publicity or consumer perception of the safety, efficacy, and quality of our cannabis products as a result of research, investigations, litigation, and publicity.
● We face intense competition in a new and rapidly growing industry by other licensed companies with more experience and financial resources than we have and by unlicensed, unregulated participants.
● There are risks associated with consolidation of the industry by well-capitalized entrants developing large-scale operations.
−Removed: ● Synthetic products from the pharmaceutical industry may compete with cannabis use and products.
● Our internal controls over financial reporting may not be effective, and our independent auditors may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business.
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subsidiaries, assets, and experts.
−Removed: ● Our past performance may not be indicative of our future results.
−Removed: ● Our business, financial condition, results of operations, and cash flow may be negatively impacted by challenging global economic conditions.
−Removed: ● Epidemics and pandemics, including the recent COVID-19 pandemic, may have a significant negative impact on our business and financial results.
−Removed: ● A return on our securities is not guaranteed.
−Removed: ● Our voting control is concentrated;
−Removed: approximately 35.0% of our voting power is held by our Executive Chairman.
−Removed: ● Our capital structure and voting control may cause unpredictability.
● Additional issuances of Subordinate Voting Shares, or securities convertible into Subordinate Voting Shares, may result in dilution and have an adverse effect on the market price of Subordinate Voting Shares.
● The market price for the Subordinate Voting Shares has been and may be volatile.
−Removed: ● A decline in the price or trading volume of the Subordinate Voting Shares could affect our ability to raise further capital and adversely impact our ability to continue operations.
−Removed: ● If securities or industry analysts do not publish or cease publishing research or reports or publish misleading, inaccurate, or unfavorable research about us, our business or our market, our stock price and trading volume could decline.
● An investor may face liquidity risks with an investment in the Subordinate Voting Shares.
−Removed: ● We are subject to increased costs as a result of being a public company in Canada and the United States.
● We do not intend to pay dividends on our Shares and, consequently, the ability of investors to achieve a return on their investment will depend entirely on appreciation in the price of our Subordinate Voting Shares.
−Removed: ● We are an “emerging growth company” as defined in the JOBS Act and our election to delay adoption of new or revised accounting standards applicable to public companies may result in our financial statements not being comparable to those of some other public companies.
−Removed: As a result of this and other reduced disclosure requirements applicable to emerging growth companies, the Subordinate Voting Shares may be less attractive to investors.
−Removed: ● Our shareholders are subject to extensive governmental regulation and, if a shareholder is found unsuitable by one of our licensing authorities, that shareholder would not be able to beneficially own our securities.
−Removed: Our shareholders may also be required to provide information that is requested by licensing authorities and we have the right, under certain circumstances, to redeem a shareholder’s securities;
−Removed: we may be forced to use our cash or incur debt to fund such redemption of our securities.
● We are subject to Canadian and United States tax on our worldwide income.
−Removed: ● Dispositions of Subordinate Voting Shares will be subject to Canadian and/or United States tax.
−Removed: ● Although we do not intend to pay dividends on any of our Subordinate Voting Shares, any such dividends would be subject to Canadian and/or United States withholding tax.
−Removed: ● Taxation of Non-U.S.
−Removed: Holders upon a disposition of Subordinate Voting Shares depends on whether we are classified as a United States real property holding corporation.
● Changes in tax laws may affect the Company and holders of Subordinate Voting Shares.
−Removed: ● ERISA imposes additional obligations on certain investors.
−Removed: The following are certain factors relating to our business.
+Added: The following are certain risk factors relating to our business.
These risks and uncertainties are not the only ones facing the Company.
Additional risks and uncertainties not presently known to us, or currently deemed immaterial by us, may also impair our operations.
−Removed: If any such risks occur, our shareholders could lose all or part of their investment and our business, financial condition, liquidity, results of operations, and prospects could be materially, adversely affected and our ability to implement our growth plans could be adversely affected.
+Added: If any such risks occur, our shareholders could lose all or part of their investment and our business, financial condition, liquidity, results of operations, and prospects could be materially, adversely affected and our
+Added: ability to implement our growth plans could be adversely affected.
Our shareholders should carefully evaluate the following risk factors associated with the Subordinate Voting Shares.
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We have a history of operating losses and our management has concluded that factors raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to its ability to continue as a going concern in their audit report for the year ended December 31, 2023.
−Removed: We are focused on cultivating, processing and supplying cannabis and cannabis-derived products in our four core markets.
−Removed: We have negative operating cash flow.
−Removed: In addition, for the year ended December 31, 2022, we had a loss of $42,457,444, and an accumulated deficit of $177,880,963.
−Removed: The costs for cultivating and manufacturing cannabis and cannabis products,
−Removed: purchasing cannabis products on the wholesale marketplace, marketing and selling expenses, and general and administrative expenses, are the principal causes of our losses.
−Removed: Our financing costs, which include both debt service and rent payments on the leases of our New York and Minnesota cultivation and processing facilities, are also important contributors to our losses.
+Added: We have recurring losses from operations and negative cash flows from operations.
+Added: For the year ended December 31, 2023, we had negative operating cash flow, net losses and accumulated deficits.
We may never become profitable and if we do not become profitable your investment could be lost completely.
−Removed: We anticipate that we will continue to report losses and negative cash flow for the foreseeable future.
+Added: We anticipate that we will continue to report losses and negative cash flow until we can divest our New York assets (if at all).
We have concluded that our historical recurring losses from operations and negative cash flows from operations as well as our dependence on debt and other financings raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit report for the year ended December 31, 2023.
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These adjustments would likely include substantial impairment of the carrying amount of our assets and potential contingent liabilities that may arise if we are unable to fulfill various operational commitments.
−Removed: In addition, the value of our securities, including common stock issued in this offering, would be greatly impaired.
+Added: In addition, the value of our securities would be greatly impaired.
Our ability to continue as a going concern is dependent upon generating sufficient cash flow from operations and obtaining additional capital and financing.
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Marijuana remains illegal under U.S.
−Removed: federal law, and enforcement of U.S.
−Removed: cannabis laws could change.
−Removed: United States federal law now bifurcates the legality of “hemp” from “marihuana” (also commonly known as marijuana).
−Removed: For purposes of this Annual Report on Form 10-K, the term “cannabis” means “marihuana” as set forth in the Controlled Substances Act and is used interchangeably with the term “marijuana.”
−Removed: There are significant legal restrictions and regulations that govern the cannabis industry in the United States.
+Added: Our activities are, and will continue to be, subject to evolving regulation by governmental authorities.
+Added: The legality of the production, cultivation, extraction, distribution, transportation and use of cannabis differs among states in the United States.
Marijuana remains a Schedule I drug under the Controlled Substances Act, making it illegal under federal law in the United States to, among other things, cultivate, distribute, use or possess cannabis in the United States.
In those states in which the cultivation, production, extraction, distribution, transportation, possession or use of marijuana has been legalized, these actions continue to be a violation of federal law pursuant to the Controlled Substances Act.
−Removed: The Controlled Substances Act classifies marijuana as a Schedule I controlled substance and, as such, medical and adult-use cannabis use are illegal under U.S.
−Removed: Unless and until the U.S.
−Removed: Congress amends the Controlled Substances Act with respect to marijuana (and the President approves such amendment), there is a risk that federal authorities may enforce current federal law.
−Removed: Financial transactions involving proceeds generated by, or intended to promote, cannabis-related business activities in the United States may form the basis for prosecution under applicable U.S.
−Removed: federal money-laundering laws.
−Removed: While the approach to enforcement of such laws by the federal government in the United States has trended toward non-enforcement against individuals and businesses that comply with medical or adult-use cannabis regulatory programs in states where such programs are legal, strict compliance with state laws with respect to cannabis will neither absolve Goodness Growth of liability under U.S.
−Removed: federal law, nor will it provide a defense to any federal proceeding that may be brought against Goodness Growth.
−Removed: Since federal law criminalizing the cultivation, production, extraction, distribution, transportation, possession or use of marijuana pre-empts state laws that legalize such actions, enforcement of federal law regarding marijuana is a significant risk and would greatly harm our business, prospects, revenue, results of operation and financial condition.
−Removed: Any proceedings brought against Goodness Growth under federal law may materially, adversely affect our operations and financial performance.
−Removed: Our activities are, and will continue to be, subject to evolving regulation by governmental authorities.
−Removed: We are directly and indirectly engaged in the medical and adult-use cannabis industry in the United States, where state law permits such activities.
−Removed: The legality of the production, cultivation, extraction, distribution, transportation and use of cannabis differs
−Removed: among states in the United States.
Due to the current regulatory environment in the United States, new risks may emerge;
management may not be able to predict all such risks.
−Removed: As of the date of this filing, there are 39 states, plus the District of Columbia (and the territories of Guam, Puerto Rico, the U.S.
−Removed: Virgin Islands and the Northern Mariana Islands), that have laws and/or regulations that recognize, in one form or another, legitimate medical uses for cannabis and consumer use of cannabis in connection with medical treatment.
−Removed: Similarly, 21 states and the District of Columbia have legalized cannabis for adult use.
−Removed: Because our current and anticipated future activities in the medical and adult-use cannabis industry may be illegal under the applicable federal laws of the United States, there can be no assurance that the U.S.
−Removed: federal government will not seek to enforce the applicable laws against us.
−Removed: The consequences of such enforcement would likely be materially adverse to the Company and our business, including our reputation, profitability and the market price of our publicly traded Subordinate Voting Shares, and could result in the forfeiture or seizure of all or substantially all of our assets.
+Added: Since federal law criminalizing the cultivation, production, extraction, distribution, transportation, possession or use of marijuana pre-empts state laws that legalize such actions, enforcement of federal law regarding marijuana is a significant risk and would greatly harm our business, prospects, revenue, results of operation and financial condition.
+Added: Any proceedings brought against Goodness Growth under federal law may materially, adversely affect our operations and financial performance.
Due to the conflicting views between state legislatures and the federal government regarding cannabis, cannabis businesses are subject to inconsistent laws and regulations.
There can be no assurance that the federal government will not enforce federal laws relating to marijuana and seek to prosecute cases involving marijuana businesses that are otherwise compliant with state laws in the future.
−Removed: In 2013, the DOJ attempted to address the inconsistent treatment of cannabis under state and federal law.
−Removed: Deputy Attorney General James Cole sent all U.S.
−Removed: Attorneys the Cole Memorandum in August 2013, which outlined certain priorities for the DOJ relating to the prosecution of cannabis offenses.
−Removed: The Cole Memorandum noted that, in jurisdictions that have enacted laws legalizing cannabis in some form and that have also implemented strong and effective regulatory and enforcement systems to control the cultivation, production, distribution, sale and possession of cannabis, conduct in compliance with such laws and regulations was not a priority for the DOJ.
−Removed: However, the DOJ did not provide (and has not provided since) specific guidelines for what regulatory and enforcement systems would be deemed sufficient under the Cole Memorandum.
−Removed: On January 4, 2018, former U.S.
−Removed: Attorney General Jeff Sessions formally issued the Sessions Memorandum, which rescinded the Cole Memorandum effective upon its issuance.
−Removed: The Sessions Memorandum stated, in part, that current law reflects “Congress’ determination that cannabis is a dangerous drug and cannabis activity is a serious crime,” and Mr.
−Removed: Sessions directed all U.S.
−Removed: Attorneys to enforce the laws enacted by Congress and to follow well-established principles when pursuing prosecutions related to cannabis activities.
−Removed: As a result of the Sessions Memorandum, federal prosecutors are now free to utilize their prosecutorial discretion to decide whether to prosecute cannabis activities, despite the existence of state-level laws that may be inconsistent with federal prohibitions.
−Removed: No direction was given to federal prosecutors in the Sessions Memorandum as to the priority they should ascribe to such cannabis activities, and thus it is uncertain how active U.S.
−Removed: federal prosecutors will be in the future in relation to such activities.
−Removed: There can be no assurance that the federal government will not enforce federal laws relating to cannabis and seek to prosecute cases involving cannabis businesses that are otherwise compliant with state laws in the future.
−Removed: On March 11, 2021, Merrick Garland was sworn in as the 86 th Attorney General of the United States.
−Removed: Garland has not yet taken a public position on the appropriate prosecutorial posture regarding cannabis.
−Removed: Most states that have legalized cannabis continue to craft their regulations pursuant to the Cole Memorandum.
−Removed: Federal enforcement agencies have taken little or no action against state-compliant cannabis businesses.
−Removed: However, the DOJ may change its enforcement policies at any time, with or without advance notice.
−Removed: There is a substantial risk of regulatory or political change.
−Removed: The success of our business strategy depends on the legality of the cannabis industry in the U.S.
−Removed: The political environment surrounding the cannabis industry in the U.S.
−Removed: in general can be volatile and the regulatory framework in the U.S.
−Removed: remains in flux.
−Removed: Despite the currently implemented laws and regulations in the U.S.
−Removed: and its territories to legalize and regulate the cultivation, production, processing, sale, possession and use of cannabis, and additional states that have pending legislation regarding the same, the risk remains that a shift in the regulatory or political realm could occur and have a drastic impact
−Removed: on the industry as a whole, adversely impacting our ability to successfully invest and/or participate in the selected business opportunities.
−Removed: Further, there is no guarantee that at some future date, voters and/or the applicable legislative bodies will not repeal, overturn or limit any such legislation legalizing the sale, disbursement and consumption of medical or adult-use cannabis.
−Removed: It is also important to note that local and city ordinances may strictly limit and/or restrict disbursement of cannabis in a manner that will make it extremely difficult or impossible to transact business that is necessary for the continued operation of the cannabis industry.
−Removed: Cannabis remains illegal under U.S.
−Removed: federal law, and the U.S.
−Removed: federal government could bring criminal and civil charges against us or our subsidiaries or our investments at any time.
−Removed: Federal actions against any individual or entity engaged in the cannabis industry or a substantial repeal of cannabis-related legislation could have a material, adverse effect on our business, financial condition, or results of operations.
+Added: For discussion on the differences between federal- and state-level law, treatment, enforcement and other matters, See " Item 1.
+Added: Business – Regulation of Cannabis in the United States ", generally, See " Item 1.
+Added: Business – Regulation on Cannabis in the United States – U.S.
+Added: Department of Justice and Attorney General Memorandums " for discussion on guidance for enforcement agencies and the DOJ with respect to cannabis.
We may be subject to action by the U.S.
federal government through various government agencies for participation in the cannabis industry.
−Removed: Because the cultivation, processing, production, distribution, possession and sale of cannabis for any purpose, medical, adult use or otherwise, remain illegal under U.S.
−Removed: federal law, it is possible that we may be forced to cease any such activities.
+Added: Cultivation, processing, production, distribution, possession and sale of cannabis for any purpose, medical, adult use or otherwise, remains illegal under U.S.
federal government, through, among others, the DOJ, its sub-agency the Drug Enforcement Administration (“ DEA ”) and the U.S.
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Any action taken by the DOJ, the DEA and/or the IRS to interfere with, seize or shut down our operations will have an adverse effect on our business, prospects, revenue, results of operation and financial condition.
−Removed: Since federal law criminalizing the use of cannabis pre-empts state laws that legalize its use, the federal government can assert criminal violations of federal law despite state laws permitting the use of cannabis.
−Removed: It does not appear that federal law enforcement and regulatory agencies are focusing resources on licensed marijuana-related businesses that are operating in compliance with state law.
−Removed: As the rescission of the Cole Memorandum and the implementation of the Sessions Memorandum demonstrate, the DOJ may at any time issue additional guidance that directs federal prosecutors to devote more resources to prosecuting marijuana related businesses.
−Removed: In the event that the DOJ aggressively pursues financiers or equity owners of cannabis-related businesses, and U.S.
−Removed: Attorneys follow the DOJ policies through pursuing prosecutions, then we could face:
+Added: We could face:
(i) seizure of our cash and other assets used to support or derived from our cannabis subsidiaries;
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(iii) ancillary criminal violations of the Controlled Substances Act for aiding and abetting, and conspiracy to violate the Controlled Substances Act by providing financial support to cannabis companies that service or provide goods to state-licensed or permitted cultivators, processors, distributors and/or retailers of cannabis.
−Removed: Because the Cole Memorandum was rescinded, the DOJ or an aggressive federal prosecutor could allege that the Company and our Board and, potentially, our shareholders, “aided and abetted” violations of federal law by providing finances and services to our portfolio cannabis companies.
−Removed: Under these circumstances, federal prosecutors could seek to seize our assets, and to recover the “illicit profits” previously distributed to shareholders resulting from any of our financing or services.
−Removed: In these circumstances, our operations would cease, shareholders may lose their entire investments and directors, officers and/or shareholders may be left to defend any criminal charges against them at their own expense and, if convicted, be sent to federal prison.
+Added: If aggressive prosecutorial measures and laid against the Company, our operations would cease, shareholders may lose their entire investments and directors, officers and/or shareholders may be left to defend any criminal charges against them at their own expense and, if convicted, be sent to federal prison.
Additionally, there can be no assurance as to the position the current or any new federal administration may take on marijuana.
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and (ii) such time or resources could be substantial.
+Added: See " Item 1.
+Added: Business – Regulation on Cannabis in the United States – U.S.
+Added: Department of Justice and Attorney General Memorandums " for discussion on guidance for enforcement agencies and the DOJ with respect to cannabis.
state and local regulation of cannabis is uncertain and changing.
−Removed: There is no assurance that state laws legalizing and regulating the sale and use of cannabis will not be repealed or overturned, or that local governmental authorities will not limit the applicability of state laws within their respective jurisdictions.
+Added: New state or local laws may be enacted which affect our product offerings or manufacturing processes.
+Added: There is no assurance that state laws legalizing and regulating the sale and use of cannabis will not be repealed or overturned, or that local governmental authorities will not limit the applicability of state laws within their respective
+Added: jurisdictions where permitted.
federal government begins to enforce U.S.
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Federal actions against any individual or entity engaged in the cannabis industry, or a substantial repeal of cannabis related legislation, could materially, adversely affect the Company, our business and our assets or investments.
−Removed: State and local laws permitting the cultivation, production, extraction, distribution, transportation, possession or use of cannabis may also be modified in a manner that is contrary to our interests.
−Removed: For example, states could authorize the issuance of licenses to cultivate, produce, transport or distribute cannabis to additional parties;
−Removed: the maximum number of such licenses could be unlimited, as is the case under the current adult-use legislation in New Mexico.
+Added: State and local laws permitting the cultivation, production, extraction, distribution, transportation, possession and/or use of cannabis may also be modified in a manner that is contrary to our interests.
+Added: For example, states could authorize the issuance of licenses to cultivate, produce, transport or distribute cannabis to additional parties, or the maximum number of such licenses could be unlimited.
+Added: Certain ownership structures, such as the ability to be vertically integrated, could be restricted, thereby affecting our ability to own and control multiple stages of the supply chain.
States currently permitting only medical-use cannabis could implement adult-use cannabis laws that give preferences to applicants and/or participants that compete with us, or even prohibit us to participate in portions or the entirety of the adult-use marketplace.
−Removed: Any such change in New York or Minnesota would have a material, adverse effect on our business, financial position or results of operations.
+Added: Any such changes would have a material, adverse effect on our business, financial position and/or results of operations.
The rulemaking process at the state level that applies to cannabis operators in any state will be ongoing and result in frequent changes.
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The implementation of special taxes or fees could have a material, adverse effect upon our business, prospects, revenue, results of operation and financial condition.
−Removed: We currently operate cannabis businesses in Maryland, Minnesota, New Mexico, and New York.
+Added: We currently operate cannabis businesses in Maryland, Minnesota, and New York.
State regulatory agencies may require us to post bonds or significant fees.
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Our business, operations, and investments in the United States, and any such future business, operations, or investments, may become the subject of heightened scrutiny by regulators, stock exchanges and other authorities in Canada and the United States.
−Removed: As a result, we may be subject to significant direct and indirect interaction with public officials.
+Added: As a result, we may be subject to significant direct and indirect
+Added: interaction with public officials.
There can be no assurance that this heightened scrutiny will not in turn lead to the imposition of certain restrictions on our ability to operate or invest in the United States or any other jurisdiction, in addition to those described herein.
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We are involved in litigation with Verano, the outcome of which is uncertain.
−Removed: On October 13, 2022, the Company received a notice of purported termination of the Arrangement Agreement, which asserted certain breaches of the Arrangement Agreement, including claims the Company’s public filings and
−Removed: communications with respect to its business and ongoing operations were misleading and that the Company breached its representations to Verano under the Arrangement Agreement.
+Added: On October 13, 2022, the Company received a notice of purported termination of the Arrangement Agreement, which 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 the $14,875,000 termination fee and its transaction expenses.
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In addition, the costs of prosecuting the Company’s claims and defending against the claims made by Verano could be material.
−Removed: We may face state limitations on ownership of cannabis licenses.
+Added: We may face state limitations on ownership of cannabis licenses and may be required to divest certain licenses or entities that hold such license in order to comply with applicable regulations.
Certain jurisdictions in which we operate limit the number of cannabis licenses and certain economic or commercial interests in the entity that holds the license that can be held by one entity within that state.
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The divestiture of certain licenses or entities that hold such licenses may result in a material, adverse effect on our business, financial condition, or results of operations.
−Removed: We may become subject to FDA or ATF regulation.
+Added: We may become subject to FDA and/or ATF regulation.
Marijuana remains a Schedule I controlled substance under U.S.
−Removed: If the federal government reclassifies marijuana to a Schedule II, Schedule III, Schedule IV, or Schedule V controlled substance or declassifies it as a controlled substance, it is possible that the U.S.
−Removed: Food and Drug Administration (the “ FDA ”) would seek to regulate cannabis under the Food, Drug and Cosmetics Act of 1938, as amended (the “ FDCA ”).
+Added: If the federal government reclassifies marijuana to a Schedule II, Schedule III, Schedule IV, or Schedule V controlled substance or declassifies it as a controlled substance, it is possible that the FDA would seek to regulate cannabis under the Food, Drug and Cosmetics Act of 1938, as amended (the “ FDCA ”).
The FDA is responsible for ensuring public health and safety through regulation of food, drugs, supplements, and cosmetics, among other products, through its enforcement authority pursuant to the FDCA.
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If we are unable to comply with the potential regulations or registration requirements prescribed by the FDA, it may have a material, adverse effect on our business, prospects, revenue, results of operation and financial condition.
−Removed: It is also possible that the federal government could seek to regulate cannabis under the U.S.
−Removed: Bureau of Alcohol, Tobacco, Firearms and Explosives (“ ATF ”).
+Added: It is also possible that the federal government could seek to regulate cannabis under the ATF.
The ATF may issue rules and regulations related to the use, transport, sale and advertising of cannabis or cannabis products.
Cannabis businesses are subject to applicable anti-money laundering laws and regulations and have restricted access to banking and other financial services.
−Removed: Recent events in the banking industry may further restrict our ability to access financial services.
+Added: Recent events in the banking industry may further restrict our ability to access financial services including obtaining traditional bank financing.
+Added: Financial transactions involving proceeds generated by, or intended to promote, cannabis-related business activities in the United States may form the basis for prosecution under applicable U.S.
+Added: federal money-laundering laws.
Banks and other depository institutions are currently hindered by federal law from providing financial services to marijuana businesses, even in states where those businesses are regulated.
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Further, under U.S.
−Removed: federal law, banks or other financial institutions that provide a cannabis business with a checking account, debit or credit card, small business loan, or any other service could be found guilty of money laundering, aiding and abetting, or conspiracy.
+Added: federal law, banks or other financial institutions that
+Added: provide a cannabis business with a checking account, debit or credit card, small business loan, or any other service could be found guilty of money laundering, aiding and abetting, or conspiracy.
The Financial Crimes Enforcement Network (“ FinCEN ”) of the U.S.
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Thus, most banks and other financial institutions in the United States do not appear willing to provide banking services to cannabis-related businesses or to rely on this guidance.
−Removed: In addition to the foregoing, banks may refuse to process debit card payments and credit card companies generally refuse to process credit card payments for cannabis-related businesses.
+Added: In addition to the foregoing, banks may refuse to process debit card payments and credit card companies generally refuse to process credit card payments for cannabis-related businesses in the United States.
As a result, we may have limited or no access to banking or other financial services in the United States.
In addition, federal money laundering statutes and Bank Secrecy Act regulations discourage financial institutions from working with any organization that sells a controlled substance, regardless of whether the state it operates in permits cannabis sales.
−Removed: The inability or limitation of our ability to open or maintain bank accounts, obtain other banking services and/or accept credit card and debit card payments may make it difficult for us to operate and conduct our business as planned or to operate efficiently and could subject our
−Removed: businesses to robbery, embezzlement or other crimes related to our possession or transport of cash, sometimes in substantial quantities.
+Added: The inability or limitation of our ability to open or maintain bank accounts, obtain other banking services and/or accept credit card and debit card payments may make it difficult for us to operate and conduct our business as planned or to operate efficiently and could subject our businesses to robbery, embezzlement or other crimes related to our possession or transport of cash, sometimes in substantial quantities.
In March 2023, Federal banking regulators closed Silicon Valley Bank and Signature Bank to prevent the banks from failing.
The closures have prompted broader inquiries into the financial health of banks and other financial institutions in the United States and other countries.
−Removed: While none of the banks with which the Company maintains financial relationships has been identified as a target of such an inquiry or as at risk of closure by regulators, there remains the possibility that one or more of the banks could fail, which would further limit the Company’s access to financial services, which could lead to the need to maintain more cash at some or all of the Company’s locations, increasing the risk of theft or other loss.
+Added: While none of the banks with which the Company maintains financial relationships have been identified as a target of such an inquiry or as at risk of closure by regulators, there remains the possibility that one or more of the banks could fail, which would further limit the Company’s access to financial services, which could lead to the need to maintain more cash at some or all of the Company’s locations, increasing the risk of theft or other loss.
Such events could lead to the smaller number of banks that continue to provide financial services to the Company imposing further restrictions, higher fees, or both on the Company’s accounts.
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Our business and activities are heavily regulated in all jurisdictions where we carry on business.
−Removed: Our operations are subject to various laws, regulations and guidelines by state and local governmental authorities relating to the manufacture, marketing, management, transportation, storage, sale, pricing and disposal of cannabis, cannabis oil and consumable cannabis products, and also including laws and regulations relating to health and safety, insurance coverage, the conduct of operations and the protection of the environment.
+Added: Our operations are subject to various laws, regulations and guidelines by state and local governmental authorities relating to the manufacture, marketing, management, transportation, storage, sale, pricing and disposal of cannabis, cannabis oil and consumable
+Added: cannabis products, and also including laws and regulations relating to health and safety, insurance coverage, the conduct of operations and the protection of the environment.
Laws and regulations, applied generally, grant government agencies and self-regulatory bodies broad administrative discretion over our activities, including the power to limit or restrict business activities as well as impose additional disclosure requirements on our products and services.
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federal law, we may be unable to access to U.S.
−Removed: bankruptcy protections in the event of our bankruptcy or a bankruptcy in an entity in which we invest.
+Added: bankruptcy protections in the event of our bankruptcy or a bankruptcy of an entity in which we invest.
Many courts have denied cannabis businesses federal bankruptcy protections because the use of cannabis is illegal under federal law.
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The cannabis industry is highly dependent upon consumer perception regarding the safety, efficacy and quality of the cannabis produced.
−Removed: Consumer perception can be significantly influenced by scientific research or findings regarding the
−Removed: consumption of cannabis products.
+Added: Consumer perception can be significantly influenced by scientific research or findings regarding the consumption of cannabis products.
There can be no assurance that future scientific research or findings will be favorable to the cannabis market or any particular product, or consistent with earlier research or findings.
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Future research studies and clinical trials may draw opposing conclusions to those stated in this document or reach negative conclusions regarding the medical benefits, viability, safety, efficacy, dosing, or other facts related to cannabis, which could have a material, adverse effect on the demand for our products, and therefore on our business, prospects, revenue, results of operation and financial condition.
−Removed: Inconsistent public opinion and perception of the medical and adult-use use cannabis industry hinders market growth and state adoption.
+Added: Inconsistent public opinion and perception of the medical and adult-use marijuana industry hinders market growth and state adoption.
Public opinion and support for medical and adult-use cannabis has traditionally been inconsistent and varies from jurisdiction to jurisdiction.
−Removed: While public opinion and support appears to be rising generally for legalizing medical and adult-use cannabis, it remains a controversial issue subject to differing opinions surrounding the level of legalization (for example, medical cannabis as opposed to legalization in general).
−Removed: Inconsistent public opinion and perception of the medical and adult-use cannabis may hinder growth and state adoption, which could have a material, adverse effect on our business, financial condition, or results of operations.
−Removed: Our ability to generate revenue and be successful in the implementation of our business plan is dependent on consumer acceptance and demand of our product lines.
+Added: While public opinion and support appears to be rising generally for legalizing medical and
+Added: adult-use cannabis, it remains a controversial issue subject to differing opinions surrounding the level of legalization (for example, medical cannabis as opposed to adult-use legalization).
+Added: Inconsistent public opinion and perception of the medical and adult-use cannabis industry may hinder growth and state adoption, which could have a material, adverse effect on our business, financial condition, or results of operations.
+Added: Our ability to generate revenue and be successful in the implementation of our business plan is dependent on consumer acceptance of and demand for our product lines.
Our management believes the medical and adult-use cannabis industry is highly dependent upon consumer perception regarding the safety, efficacy and quality of the cannabis produced.
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border guards to deny entry.
−Removed: On September 21, 2018, CBP released a statement outlining its current
−Removed: position with respect to enforcement of the laws of the United States.
+Added: On September 21, 2018, CBP released a statement outlining its current position with respect to enforcement of the laws of the United States.
It stated that Canada’s legalization of cannabis will not change CBP enforcement of U.S.
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however, if such person is found to be coming into the United States for reasons related to the cannabis industry, such person may be deemed inadmissible.
−Removed: As a cannabis business, we are subject to unfavorable tax treatment under the Internal Revenue Code.
+Added: We may incur significant tax liabilities and a reduction to our tax attributes due to limitations on tax deductions and credits under Section 280E of the Internal Revenue Code.
Under Section 280E of the U.S.
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income tax expenses.
+Added: The Company is filing amended tax returns for periods ending December 31, 2020 through December 31, 2022 to reflect the position that cannabis activities are not subject to Code Section 280E.
+Added: Additionally, the Company’s reporting of its United States federal net operating loss carryforward amount and state net operating loss carryforward amount on its Consolidated Financial Statements as of December 31, 2023 assumes that such position will be respected by the IRS.
+Added: Please see Note 21, “Income Taxes” of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for a discussion of such position and the Company’s net operating losses.
+Added: There can be no assurance that the IRS will not challenge such position or that a U.S.
+Added: court would not sustain such a challenge.
+Added: If the IRS successfully challenged such position, certain of the Company’s tax deductions and credits may be disallowed, thereby reducing the Company’s reporting United States federal net operating loss carryforward amount and state net operating loss carryforward amount.
+Added: Any audit by the IRS with respect to our receipt of an employee retention credit (“ERC”) under The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act could result in additional taxes or costs to the Company.
+Added: The Company applied for and received an ERC under the CARES Act.
+Added: Please see Note 21, “Income Taxes” of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for a description of the Company’s receipt of the ERC.
+Added: In July 2023, the IRS stated its intention to shift its focus to review ERC claims for compliance concerns, including intensifying audit work.
+Added: The Company’s eligibility to receive the ERC remains subject to audit by the IRS.
+Added: If the IRS audits the Company during the applicable statute of limitations period and finds that the Company was not eligible to receive some or all of the ERC, the Company would be required to return some or all of the ERC to the IRS, with any applicable interest and penalties.
If our operations are found to be in violation of applicable money laundering legislation and our revenues are viewed as proceeds of crime, we may be unable to effect distributions or repatriate funds to Canada.
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Risks Related to our Business and Operations
−Removed: We incurred net losses in fiscal years 2022 and 2021 with net cash used in operating activities and cannot provide assurance as to when or if we will become profitable and generate cash in our operating activities.
+Added: We incurred net losses in fiscal years 2023 and 2022 and cannot provide assurance as to when or if we will become profitable and generate cash in our operating activities.
We incurred net losses, under U.S.
−Removed: generally accepted accounting principles, of $42,457,444 and $33,690,475 and net cash used in operating activities of $18,073,265 and $30,517,197 for the fiscal years ended December 31, 2022 and 2021, respectively.
+Added: generally accepted accounting principles, of $25,547,089 and $42,457,444 for the fiscal years ended December 31, 2023 and 2022, respectively.
As of December 31, 2023, we had an aggregate accumulated deficit of $203,428,052.
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In addition, we have historically experienced and may prospectively experience fluctuations in our quarterly earnings due to the nature of our business.
−Removed: Our long-term success is dependent upon among other things, achieving positive cash flows from operations and
−Removed: augmenting such cash flows using external resources to satisfy our cash needs, and there is no assurance that we will be able to achieve such cash flows.
+Added: Our long-term success is dependent upon among other things, achieving positive cash flows from operations and augmenting such cash flows using external resources to satisfy our cash needs, and there is no assurance that we will be able to achieve such cash flows.
We anticipate requiring additional financing to operate our business and we may face difficulties acquiring additional financing on terms acceptable to us or at all.
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We are a holding company, and our earnings are dependent on the earnings and distributions of our subsidiaries.
−Removed: We are a holding company and essentially all our assets are the capital stock or membership interests of our subsidiaries or management services agreements with entities in each of the markets in which we operate, including in our core markets of Maryland, Minnesota, New Mexico, and New York.
+Added: We are a holding company and essentially all our assets are the capital stock or membership interests of our subsidiaries or management services agreements with entities in each of the markets in which we operate, including in our core markets of Maryland, Minnesota and New York.
As a result, our shareholders are subject to the risks attributable to our subsidiaries.
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In any or all of the above situations, it may be difficult and expensive for us to protect our rights through litigation, arbitration, or similar proceedings.
−Removed: The success of our business depends, in part, on our ability to successfully integrate acquired businesses and to retain key employees of acquired businesses.
−Removed: Since the Company’s inception, we have acquired and integrated complementary businesses, which have contributed to a significant portion of our growth.
−Removed: We continue to evaluate strategic acquisition opportunities that have the potential to support and strengthen our business, including acquisitions in the United States, as part of our ongoing growth strategy.
−Removed: We cannot predict the timing or size of any future acquisitions.
−Removed: To successfully acquire a significant target, we may need to raise additional equity and/or indebtedness, which could increase our debt.
−Removed: There can be no assurance that we will enter into definitive agreements with respect to any contemplated transaction or that any contemplated transaction will be completed.
−Removed: The investigation of acquisition candidates and the negotiation, drafting and execution of relevant agreements,
−Removed: disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys, and others.
−Removed: If we fail to complete any acquisition for any reason, including events beyond our control, the costs incurred up to that point for the proposed acquisition would not be recoverable.
−Removed: Acquisitions typically require integration of the acquired company’s estimation, project management, finance, information technology, risk management, purchasing and fleet management functions.
−Removed: We may be unable to successfully integrate an acquired business into our existing business, and an acquired business may not be as beneficial or profitable as and when expected or at all.
−Removed: Our inability to successfully integrate new businesses in a timely and orderly manner could increase costs, reduce profits, or generate losses.
−Removed: Factors affecting the successful integration of an acquired business include, but are not limited to, the following:
−Removed: ● we may become liable for certain liabilities of an acquired business, whether or not known to us, which could include, among others, tax liabilities, product liabilities, environmental liabilities and liabilities for employment practices, and these liabilities could be significant;
−Removed: ● we may not be able to retain local managers and key employees who are important to the operations of an acquired business;
−Removed: ● substantial attention from our senior management and the management of an acquired business may be required, which could decrease the time that they have to service and attract customers;
−Removed: ● we may not effectively utilize new equipment that we acquire through acquisitions;
−Removed: ● the complete integration of an acquired company depends, to a certain extent, on the full implementation of our financial and management information systems, business practices and policies;
−Removed: ● we may actively pursue a number of opportunities simultaneously and may encounter unforeseen expenses, complications and delays, including difficulties in employing sufficient staff and maintaining operational and management oversight.
−Removed: Acquisitions involve risks that the acquired business will not perform as expected and that business judgments concerning the value, strengths and weaknesses of the acquired business will prove incorrect.
−Removed: In addition, potential acquisition targets may be in states in which we do not currently operate, which could result in unforeseen operating difficulties and difficulties in coordinating geographically dispersed operations, personnel, and facilities.
−Removed: In addition, if we enter new geographic markets, we may be subject to additional and unfamiliar legal and regulatory requirements.
−Removed: We cannot guarantee that we will achieve synergies and cost savings in connection with completed or future acquisitions within the timing anticipated or at all.
−Removed: Many of the businesses that we have acquired and may acquire in the future have unaudited financial statements that have been prepared by management and have not been independently reviewed or audited.
−Removed: We cannot guarantee that such financial statements would not be materially different if such statements were independently reviewed or audited.
−Removed: We cannot guarantee that we will continue to acquire businesses at valuations consistent with prior acquisitions or that we will complete future acquisitions at all.
−Removed: We cannot guarantee that there will be attractive acquisition opportunities at reasonable prices, that financing will be available or that we can successfully integrate acquired businesses into existing operations.
−Removed: In addition, the results of operations from these acquisitions could, in the future, result in impairment charges for any of our intangible assets, including goodwill or other long-lived assets, particularly if economic conditions worsen unexpectedly.
−Removed: Our inability to effectively manage the integration of our completed and future acquisitions could prevent us from realizing expected rates of return on an acquired business and could have a material and adverse effect on our financial condition, results of operations or liquidity.
Our senior secured credit facility contains covenant restrictions that may limit our ability to operate our business.
On March 25, 2021, we entered into the Credit Facility.
−Removed: The Credit Facility contains, and any of our other future debt agreements may contain, covenant restrictions that limit our ability to operate our business, including restrictions on our
−Removed: ability to, among other things, incur additional debt or issue guarantees, create additional liens, pay cash dividends, repurchase stock or make other restricted payments, make certain voluntary prepayments of specified debt, engage in sale-leasebacks involving certain assets, and enter into mergers or acquisitions or dispose of certain assets.
+Added: The Credit Facility contains, and any of our other future debt agreements may contain, covenant restrictions that limit our ability to operate our business, including restrictions on our ability to, among other things, incur additional debt or issue guarantees, create additional liens, pay cash dividends, repurchase stock or make other restricted payments, make certain voluntary prepayments of specified debt, engage in sale-leasebacks involving certain assets, and enter into mergers or acquisitions or dispose of certain assets.
The Credit Facility also contains, and any of our other future debt agreements may contain, financial covenants regarding our liquidity, minimum consolidated adjusted EBITDA, and consolidated fixed charge coverage ratio.
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Servicing our debt will require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.
−Removed: As of December 31, 2021, we had $61,250,000 in aggregate principal indebtedness (refer to Note 14) to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K).
+Added: As of December 31, 2023, we had $70,444,488 in aggregate principal indebtedness (refer to Notes 14 & 15) to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K).
Our substantial consolidated indebtedness may increase our vulnerability to any generally adverse economic and industry conditions.
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We will generally acquire assets and businesses, after conducting our due diligence, with only limited representations and warranties from the seller regarding the quality of the assets and the likelihood of payment.
−Removed: As a result, if defects in the assets or business are subsequently discovered, we may not be able to pursue a claim for all or any of our damages against the owners of such seller, and may be limited to asserting our claims against the seller.
+Added: As a result, if defects in the
+Added: assets or business are subsequently discovered, we may not be able to pursue a claim for all or any of our damages against the owners of such seller, and may be limited to asserting our claims against the seller.
The extent of damages that we may incur as a result of such matters cannot be predicted, but potentially could have a material, adverse effect on the value of our assets and revenue stream and, as a result, on our ability to pay dividends.
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Increased competition for properties may also preclude us from acquiring those properties that would generate attractive returns.
−Removed: We face security risks related to our physical facilities and cash transfers.
+Added: We face security risks related to our physical facilities and cash transfers due to the mostly cash nature of the cannabis industry.
The business premises of our operating locations are targets for theft.
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(iii) federal or state privacy laws and regulations;
−Removed: (iv) laws that require the true, complete,
−Removed: and accurate reporting of financial information or data;
+Added: (iv) laws that require the true, complete, and accurate reporting of financial information or data;
or (v) other laws or regulations.
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Promotion and enhancement of brands will depend largely on success in providing high-quality products.
−Removed: If customers and end users do not perceive our products to be of high quality, or if we introduce new products or enter into new business ventures that are not favorably received by customers and consumers, we will risk diluting brand identities and decreasing their attractiveness to existing and potential customers.
+Added: If customers and end users do not perceive our products to be of high quality, or if we introduce new products
+Added: or enter into new business ventures that are not favorably received by customers and consumers, we will risk diluting brand identities and decreasing their attractiveness to existing and potential customers.
Moreover, in order to attract and retain customers and to promote and maintain brand equity in response to competitive pressures, we may have to increase substantially financial commitment to creating and maintaining a distinct brand loyalty among customers.
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However, there can be no assurance that we will not incur such losses in the future.
−Removed: As cybersecurity threats continue to evolve, we may be required to use additional resources to continue to modify or enhance protective measures or to investigate and redress security vulnerabilities.
+Added: cybersecurity threats continue to evolve, we may be required to use additional resources to continue to modify or enhance protective measures or to investigate and redress security vulnerabilities.
We are subject to laws, rules and regulations in the United States and other jurisdictions relating to the collection, production, storage, transfer and use of personal data.
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It is our responsibility to protect that information from privacy breaches that may occur through procedural or process failure, information technology malfunction or deliberate, unauthorized intrusions.
−Removed: Any such theft or privacy
−Removed: breach could have a material, adverse effect on our business, prospects, revenue, results of operation and financial condition.
+Added: Any such theft or privacy breach could have a material, adverse effect on our business, prospects, revenue, results of operation and financial condition.
Additionally, our ability to execute transactions and to possess and use personal information and data in conducting our business subjects us to legislative and regulatory burdens that may require us to notify regulators and customers, employees, and other individuals of a data security breach.
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Any significant interruption or negative change in the availability or economics of the supply chain for key inputs, such as the raw material cost of cannabis, could materially impact our business, financial condition, results of operations or prospects.
−Removed: Some of these inputs may only be available from a single supplier or a limited group of
−Removed: If a sole source supplier were to go out of business, we might be unable to find a replacement for such source in a timely manner, or at all.
+Added: Some of these inputs may only be available from a single supplier or a limited group of suppliers.
+Added: If a sole source supplier were to go out of business, we might be unable to find a replacement for such source in a timely manner, on substantially similar terms, or at all.
If a sole-source supplier were to be acquired by a competitor of ours, that competitor may elect not to sell to the Company in the future.
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Our cannabis growing operations consume considerable energy, which makes us vulnerable to rising energy costs.
−Removed: Accordingly, rising or volatile energy costs may adversely affect our business and our ability operate profitably.
+Added: Accordingly, rising or volatile energy costs may adversely affect our business and our ability to operate profitably.
The ability to compete and grow our business will be dependent on our continued access, at a reasonable cost and in a timely manner, to skilled labor, equipment, parts, and components.
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Our sales are difficult to forecast due to limited and unreliable market data.
−Removed: As a result of recent and ongoing regulatory and policy changes in the medical and adult use cannabis industries and the effects of the COVID-19 pandemic, the market data that is available is limited and unreliable.
+Added: As a result of recent and ongoing regulatory and policy changes in the medical and adult use cannabis industries, the market data that is available is limited and unreliable.
We must rely largely on our own market research to forecast sales, as detailed forecasts are not generally obtainable from other sources in the states in which our business operates.
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We are currently involved in litigation and may become party to litigation from time to time in the future with various counterparties, including, but not limited to, joint venture partners and other affiliates.
−Removed: An adverse decision in any litigation could have a material, adverse effect on our business, financial condition or results of operations and could result in negative publicity and reputational harm.
+Added: An adverse decision in any litigation could have a material, adverse effect on our business, financial condition or results of operations and could result in
+Added: negative publicity and reputational harm.
Furthermore, even if we are successful in the litigation, we may incur substantial legal fees, which could have a material, adverse effect on our business, financial condition, or results of operations.
We face an inherent risk of product liability claims as a manufacturer, processor and producer of products that are intended to be ingested by people.
−Removed: As a cultivator, manufacturer, processor, and distributor of products designed to be ingested by humans, we face an inherent risk of exposure to product liability claims, regulatory action, and litigation if our products are alleged to have
−Removed: caused significant loss or injury.
+Added: As a cultivator, manufacturer, processor, and distributor of products designed to be ingested by humans, we face an inherent risk of exposure to product liability claims, regulatory action, and litigation if our products are alleged to have caused significant loss or injury.
In addition, the manufacture and sale of our products involves the risk of injury to consumers due to tampering by unauthorized third parties or product contamination.
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In addition, effective future patent, trademark, copyright, and trade secret protection may be unavailable or limited in certain countries and may be unenforceable under the laws of certain jurisdictions.
−Removed: As long as cannabis remains illegal under U.S.
−Removed: federal law as a Schedule I controlled substance pursuant to the Controlled Substances Act, the benefit of certain federal laws and protections which may be available to most businesses, such as federal trademark and patent protection regarding the intellectual property of a business, may not be available to us.
+Added: As long as cannabis remains a Schedule I controlled substance pursuant to the Controlled Substances Act, the benefit of certain federal laws and protections which may be available to most businesses, such as federal trademark and patent protection regarding the intellectual property of a business, may not be available to us.
While many states do offer the ability to protect trademarks independent of the federal government, patent protection is wholly unavailable on a state level, and state-registered trademarks provide a lower degree of protection than would federally registered marks.
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We are subject to additional risks if entities licensing intellectual property to us do not have adequate rights to the licensed materials.
−Removed: If third parties assert copyright or patent infringement or violation
−Removed: of other intellectual property rights against Goodness Growth, we will be required to defend ourselves in litigation or administrative proceedings, which can be both costly and time consuming and may significantly divert the efforts and resources of management personnel.
+Added: If third parties assert copyright or patent infringement or violation of other intellectual property rights against Goodness Growth, we will be required to defend ourselves in litigation or administrative proceedings, which can be both costly and time consuming and may significantly divert the efforts and resources of management personnel.
An adverse determination in any such litigation or proceedings to which we may become a party could subject us to significant liability to third parties, require us to seek licenses from third parties, require us to pay ongoing royalties or subject us to injunctions that may prohibit the development and operation of our applications, any of which could have a material, adverse effect on our business, results of operations and financial condition.
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In addition, the use of vape products and vaping may pose health risks.
−Removed: According to the Centers for Disease Control, vape products may contain ingredients that are known to be toxic to humans and may contain other ingredients that may not be safe.
+Added: According to the Centers for Disease Control, vape products may contain ingredients that are known to be toxic to humans and may contain other ingredients that may not be
Because clinical studies about the safety and efficacy of vape products have not been submitted to the FDA, consumers currently have no way of knowing whether they are safe for their intended uses or what types or concentrations of potentially harmful substances are found in these products.
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We also face competition from illegal dispensaries and black market sources of cannabis and cannabis products, which are unlicensed and unregulated, and which may sell products that are deemed more desirable than ours by certain consumers, including products with higher concentrations of active ingredients, and using delivery methods, including edibles and extract vaporizers, that we are prohibited from offering to individuals in certain of the states in which we operate as they are not currently permitted by the laws of such states.
+Added: Such unlicensed and unregulated products can often be sold at a significantly lower price than our competing products due to substantially lower manufacturing costs.
Any inability or unwillingness of law enforcement authorities to enforce existing laws prohibiting the unlicensed cultivation and sale of cannabis and cannabis-based products could result in the perpetuation of the black market for cannabis and/or have a material, adverse effect on the perception of cannabis use.
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While the trend in most state laws and regulations seemingly deters this type of takeover, this industry remains quite nascent, so what the landscape will be in the future remains largely unknown.
−Removed: Synthetic products from the pharmaceutical industry may compete with cannabis use and products.
+Added: Synthetic products from the pharmaceutical industry may compete with cannabis products.
The pharmaceutical industry may attempt to dominate the cannabis industry, and in particular, legal cannabis, through the development and distribution of synthetic products that emulate the effects and treatment of organic cannabis.
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Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations.
−Removed: In addition, any testing by us
−Removed: conducted in connection with Section 404 of the Sarbanes-Oxley Act and applicable Canadian securities laws, or the subsequent testing by our independent registered public accounting firm if required, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retrospective changes to our consolidated financial statements or identify other areas for further attention or improvement.
+Added: In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley Act and applicable Canadian securities laws, or the subsequent testing by our independent registered public accounting firm if required, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retrospective changes to our consolidated financial statements or identify other areas for further attention or improvement.
Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our Subordinate Voting Shares.
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The existence of any material weakness in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting obligations, and cause shareholders to lose confidence in our reported financial information, all of which could materially and adversely affect our business and share price.
−Removed: We identified a material weakness in our internal control over financial reporting as of December 31, 2021, which has been remediated as of December 31, 2022 ( see Item 9A to this Form 10-K for more information ).
+Added: We identified a material weakness in our internal control over financial reporting as of December 31, 2021, which was remediated as of December 31, 2022 ( see Item 9A to this Form 10-K for more information ).
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.
The material weakness was primarily attributable to the misapplication of GAAP accounting guidance surrounding the treatment of warrants issued with a Canadian dollar denominated exercise price.
−Removed: Management updated it’s control procedures over the accounting for infrequent and unusual transactions during the year ended December 31, 2022.
+Added: Management updated its control procedures over the accounting for infrequent and unusual transactions during the year ended December 31, 2022.
More specifically, management added a process step to consult with external GAAP accounting experts when a new significant, infrequent, or unusual transaction occurs.
8 unchanged sentences
The foregoing indemnification obligations could result in the Company incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup.
−Removed: These provisions and the resulting costs may also discourage the Company from bringing a lawsuit against directors and officers for breaches of their fiduciary duties and may similarly discourage the filing of derivative litigation by our shareholders against our directors and officers even though such actions, if successful, might otherwise benefit the Company and our shareholders.
+Added: These provisions and the resulting costs may also discourage the Company from bringing a lawsuit against directors and officers
+Added: for breaches of their fiduciary duties and may similarly discourage the filing of derivative litigation by our shareholders against our directors and officers even though such actions, if successful, might otherwise benefit the Company and our shareholders.
There is doubt as to the ability to enforce judgments in Canada or under Canadian law against U.S.
22 unchanged sentences
There can be no assurance that the historical operating results achieved by us or our affiliates will be achieved by us, and our performance may be materially different.
−Removed: Our business, financial condition, results of operations, and cash flow may be negatively impacted by challenging global economic conditions.
−Removed: Disruptions and volatility in global financial markets and declining consumer and business confidence, including as a result of the COVID-19 pandemic, could lead to decreased levels of consumer spending.
+Added: Our business, financial condition, results of operations, and cash flow may be negatively impacted by challenging global economic conditions and events.
+Added: Disruptions and volatility in global financial markets and declining consumer and business confidence could lead to decreased levels of consumer spending.
Our operations could be affected by the economic context should the unemployment level, interest rates or inflation reach levels that influence consumer spending and, consequently, impact our sales and profitability.
+Added: Moreover, in the event of war (such as the military conflict between Russia and Ukraine and in the Middle East), acts of terrorism or the threat of terrorist attacks, public health crises (such as the COVID-19 pandemic), climate risks and weather catastrophes or other events outside of our control, consumer spending could significantly decrease for a sustained period.
These macroeconomic developments could negatively impact our business, which depends on the general economic environment and levels of consumer spending.
2 unchanged sentences
Any general or market-specific economic downturn could have a material, adverse effect on our business, financial condition, results of operations, and cashflow.
−Removed: Diseases and epidemics (such as COVID-19) may adversely impact our business.
−Removed: Emerging infectious diseases or the threat of outbreaks of viruses or other contagions or epidemic diseases, including the COVID-19 outbreak, could have a material adverse effect on the Company by causing operational and supply chain delays and disruptions (including as a result of government regulation and prevention measures), labor shortages and shutdowns, social unrest, breach of material contracts and customer agreements, government or regulatory actions or inactions, increased insurance premiums, decreased demand or the inability to sell and deliver the Company’s products, delays in permitting or approvals, governmental disruptions, capital markets volatility, or other unknown but potentially significant impacts.
+Added: Diseases and epidemics may adversely impact our business.
+Added: Emerging infectious diseases or the threat of outbreaks of viruses or other contagions or epidemic diseases (such as the COVID-19 pandemic) could have a material adverse effect on the Company by causing operational and supply chain delays and disruptions (including as a result of government regulation and prevention measures), labor shortages and shutdowns, social unrest, breach of material contracts and customer agreements, government or regulatory actions or inactions, increased insurance premiums, decreased demand or the inability to sell and deliver the Company’s products, delays in permitting or approvals, governmental disruptions, capital markets volatility, or other unknown but potentially significant impacts.
In addition, governments may impose strict emergencies measures in response to the threat or existence of an infectious disease.
−Removed: The full extent and impact of the COVID-19 pandemic is unknown and to date has included extreme volatility in financial markets, a slowdown in economic activity and has raised the prospect of a global recession.
−Removed: The international response to COVID-19 led to significant restrictions on travel, temporary business closures, quarantines, global stock market volatility and a general reduction in global consumer activity.
−Removed: In addition, a significant outbreak of contagious diseases in the human population, such as COVID-19, could result in a widespread health crisis that could
−Removed: adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could result in a material adverse effect on input prices, demand for our products, investor confidence, and general financial market liquidity, all of which may materially, adversely affect the Company's business and the market price of the Subordinate Voting Shares.
−Removed: Accordingly, any outbreak or threat of an outbreak of an epidemic disease or similar public health emergency, including COVID-19, could have a material adverse effect on the Company's business, financial condition and results of operations.
−Removed: It is unknown whether and how the Company may be affected if a pandemic, such as the COVID-19 outbreak, continues to persist for an extended period of time.
+Added: In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could result in a material adverse effect on input prices, demand for our products, investor confidence, and general financial market liquidity, all of which may materially, adversely affect the Company's business and the market price of the Subordinate Voting Shares.
+Added: Accordingly, any outbreak or threat of an outbreak of an epidemic disease or similar public health emergency could have a material adverse effect on the Company's business, financial condition and results of operations.
Risks Related to Our Securities
3 unchanged sentences
A holding of our securities is appropriate only for holders who have the capacity to absorb a loss of some or all of their investment.
−Removed: Our voting control is concentrated given approximately 35.0% of our voting power is held by our Chief Executive Officer.
−Removed: As of March 1, 2023, the holder of our Super Voting Shares, Dr.
−Removed: Kingsley, exercises in the aggregate approximately 35.0% of the voting power in respect of our outstanding shares.
−Removed: As a result, Dr.
−Removed: Kingsley has substantial ability to control the outcome of matters submitted to our shareholders for approval, including the election and removal of directors and any arrangement or sale of all or substantially all our assets.
−Removed: Kingsley does not retain any employment with us, he will continue to have the ability to exercise the same significant voting power.
−Removed: The concentrated control through the Super Voting Shares could delay, defer, or prevent a change of control of the Company, an arrangement involving us or a sale of all or substantially all our assets that our other shareholders support.
−Removed: Conversely, this concentrated control could allow the holder of the Super Voting Shares to consummate such a transaction that our other shareholders do not support.
−Removed: In addition, the holder of Super Voting Shares may make long-term strategic investment decisions and take risks that may not be successful and may seriously harm our business.
−Removed: As a director and Executive Chairman of the Company, Dr.
−Removed: Kingsley has significant influence on major strategic decisions of the Company, subject to authorization and oversight by the Board.
−Removed: As a Board member, Dr.
−Removed: Kingsley owes a fiduciary duty to our shareholders and is obligated to act honestly and in good faith with a view to the best interests of the Company.
−Removed: As a shareholder, Dr.
−Removed: Kingsley is entitled to vote his shares, and shares over which he has voting control, in his own interests, which may not always be in the interests of the Company or our other shareholders.
−Removed: Our capital structure and voting control may cause unpredictability.
−Removed: Although other Canadian companies have dual class or multiple voting share structures, given the concentration of voting control that is held by Dr.
−Removed: Kingsley, the sole holder of the Super Voting Shares, this structure and control could result in a lower trading price for, or greater fluctuations in, the trading price of the Subordinate Voting Shares, adverse publicity to us or other adverse consequences.
Additional issuances of Subordinate Voting Shares, or securities convertible into Subordinate Voting Shares, may result in dilution.
We may issue additional equity or convertible debt securities in the future, which may dilute an existing shareholder’s holdings in the Company.
−Removed: Our Articles permit the issuance of an unlimited number of Super Voting Shares, Multiple Voting Shares and Subordinate Voting Shares, and existing shareholders will have no pre-emptive rights in connection with such further issuances.
+Added: Our Articles permit the issuance of an unlimited number of Multiple Voting Shares and Subordinate Voting Shares, and existing shareholders will have no pre-emptive rights in connection with such further issuances.
Our Board of Directors has discretion to determine the price and the terms of further issuances, and such terms could include rights, preferences, and privileges superior to those existing holders of our securities.
−Removed: Moreover, additional Subordinate Voting Shares will be issued by the Company on the conversion of the Multiple Voting Shares and Super Voting Shares in accordance with their terms.
+Added: Moreover, additional Subordinate Voting Shares will be issued by the Company on the conversion of the Multiple Voting Shares in accordance with their terms.
To the extent holders of our options or other convertible securities convert or exercise their securities and sell Subordinate Voting Shares they receive, the trading price of the Subordinate Voting Shares may decrease due to the additional amount of Subordinate Voting Shares available in the market.
48 unchanged sentences
There is a significant liquidity risk associated with an investment in our Subordinate Voting Shares.
−Removed: The Subordinate Voting Shares currently trade on the Canadian Securities Exchange and are quoted on the OTCQX tier of the OTC Markets
−Removed: in the United States.
+Added: The Subordinate Voting Shares currently trade on the Canadian Securities Exchange and are quoted on the OTCQX tier of the OTC Markets in the United States.
We cannot predict at what prices the Subordinate Voting Shares will continue to trade, and there is no assurance that an active trading market will be sustained.
11 unchanged sentences
As a public company both in Canada and the United States, we are subject to the reporting requirements, rules and regulations under the applicable Canadian and United States securities laws and rules of stock exchange(s) on which our securities may be listed.
−Removed: We incur increased costs associated with legal, accounting, and other expenses related to such regulatory compliance.
+Added: We incur increased costs associated with legal, accounting, and other expenses related to such
+Added: regulatory compliance.
Securities legislation and the rules and policies of the Canadian Securities Exchange require listed companies to, among other things, adopt corporate governance and related practices, and to continuously prepare and disclose material information, all of which add to our legal and financial compliance costs.
11 unchanged sentences
We could be an emerging growth company for up to five years, although circumstances could cause the Company to lose that status earlier, including if we are deemed to be a large accelerated filer under the rules of the SEC of any fiscal year, if we have total annual gross revenue of $1.235 billion as of the end of a fiscal year, or if we issue more than $1.0 billion in non-convertible debt during any three-year period.
−Removed: We cannot predict if investors will find the Subordinate Voting Shares less attractive because we
−Removed: may rely on these exemptions.
+Added: We cannot predict if investors will find the Subordinate Voting Shares less attractive because we may rely on these exemptions.
If some investors find the Subordinate Voting Shares less attractive as a result, there may be a less active trading market for the Subordinate Voting Shares, and the share price may be more volatile.
11 unchanged sentences
Certain Tax Risks
−Removed: THE FOLLOWING IS A DISCUSSION OF CERTAIN MATERIAL TAX RISKS ASSOCIATED WITH THE ACQUISITION AND OWNERSHIP OF SHARES.
−Removed: THIS REPORT DOES NOT DISCUSS RISKS ASSOCIATED WITH ANY APPLICABLE STATE, PROVINCIAL, LOCAL OR FOREIGN TAX LAWS.
−Removed: THE TAX RELATED INFORMATION IN THIS REPORT DOES NOT CONSTITUTE TAX ADVICE AND IS FOR INFORMATIONAL PURPOSES ONLY.
−Removed: FOR ADVICE ON TAX LAWS APPLICABLE TO A SHAREHOLDER’S INDIVIDUAL TAX SITUATIONS, SHAREHOLDERS SHOULD SEEK THE ADVICE OF THEIR TAX ADVISORS.
−Removed: NO REPRESENTATION OR WARRANTY OF ANY KIND IS MADE BY US OR ANY OF THE BOARD OF DIRECTORS, OFFICERS, LEGAL COUNSEL, OTHER AGENTS OR AFFILIATES WITH RESPECT TO THE TAX TREATMENT APPLICABLE TO ANY PERSON WHO ACQUIRES SHARES.
−Removed: EACH INVESTOR IS URGED TO REVIEW THE REPORT IN ITS ENTIRETY AND TO CONSULT HIS OR HER OWN TAX ADVISOR WITH RESPECT TO THE FEDERAL, STATE, PROVINCIAL, LOCAL AND FOREIGN TAX CONSEQUENCES ARISING IN CONNECTION WITH THE ACQUISITION AND OWNERSHIP OF SHARES.
We are subject to Canadian and United States tax on our worldwide income.
3 unchanged sentences
As a result, we are subject to taxation both in Canada and the United States, which could have a material, adverse effect on our business, financial condition, or results of operations.
−Removed: Dispositions of Shares are subject to Canadian and/or United States tax.
−Removed: Dispositions of Shares are subject to Canadian tax.
−Removed: In addition, dispositions of Shares by U.S.
+Added: Dispositions of the Subordinate Voting Shares are subject to Canadian and/or United States tax.
+Added: Dispositions of the Subordinate Voting Shares are subject to Canadian tax.
+Added: In addition, dispositions of the Subordinate Voting Shares by U.S.
Holders are subject to U.S.
−Removed: tax, and certain dispositions of Shares by Non-U.S.
+Added: tax, and certain dispositions of the Subordinate Voting Shares by Non-U.S.
Holders (including, if we are treated as a USRPHC, as defined below) are subject to U.S.
1 unchanged sentence
Holder ” is a holder who, for U.S.
−Removed: federal income tax purposes, is a beneficial owner of the shares and is (i) an individual who is a citizen or resident of the United States;
+Added: federal income tax purposes, is a beneficial owner of the Subordinate Voting Shares and is (i) an individual who is a citizen or resident of the United States;
(ii) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia;
6 unchanged sentences
For purposes of this discussion, a “Non-U.S.
−Removed: holder” is a beneficial owner of the shares other than a U.S.
+Added: holder” is a beneficial owner of the Subordinate Voting Shares other than a U.S.
Holder or partnership.
−Removed: Although we do not intend to pay dividends on our Shares, any such dividends would be subject to Canadian and/or United States withholding tax.
−Removed: It is currently not anticipated that we will pay any dividends on any of our Shares in the foreseeable future.
−Removed: To the extent dividends are paid on our Shares, dividends received by shareholders who are residents of Canada for purposes of the Tax Act (and Non-U.S.
+Added: Although we do not intend to pay dividends on our Subordinate Voting Shares, any such dividends would be subject to Canadian and/or United States withholding tax.
+Added: It is currently not anticipated that we will pay any dividends on any of our Subordinate Voting Shares in the foreseeable future.
+Added: To the extent dividends are paid on our Subordinate Voting Shares, dividends received by shareholders who are residents of Canada for purposes of the Tax Act (and Non-U.S.
Holders for purposes of the Code) will be subject to U.S.
16 unchanged sentences
These dividends may, however, qualify for a reduced rate of Canadian withholding tax under any income tax treaty otherwise applicable to a shareholder of the Company, subject to examination of the relevant tax treaty.
−Removed: Transfers of Shares may be subject to United States estate and generation-skipping transfer taxes.
−Removed: Because the Shares are treated as shares of a U.S.
−Removed: domestic corporation, the U.S.
−Removed: estate and generation-skipping transfer tax rules generally may apply to a Non-U.S.
−Removed: Holder of Shares.
Taxation of Non-U.S.
−Removed: Holders upon a disposition of Shares depends on whether we are classified as a United States real property holding corporation.
+Added: Holders upon a disposition of the Subordinate Voting Shares depends on whether we are classified as a United States real property holding corporation.
We are treated as a U.S.
3 unchanged sentences
federal income tax purposes, the taxation of our Non-U.S.
−Removed: Holders upon a disposition of Shares generally depends on whether we are classified as a “United States real property holding corporation” for U.S.
+Added: Holders upon a disposition of the Subordinate Voting Shares generally depends on whether we are classified as a “United States real property holding corporation” for U.S.
federal income tax purposes (a “ USRPHC ”).
We have not performed any analysis to determine whether we are currently, or have ever been, a USRPHC.
−Removed: In addition, we have not sought and do not intend to seek formal confirmation of our status
−Removed: as a Non-USRPHC from the IRS.
+Added: In addition, we have not sought and do not intend to seek formal confirmation of our status as a Non-USRPHC from the IRS.
If we ultimately are determined by the IRS to constitute a USRPHC, our non-U.S.
Holders may be subject to U.S.
−Removed: federal income tax on any gain associated with the disposition of the Shares.
−Removed: Changes in tax laws may affect the Company and holders of Shares.
+Added: federal income tax on any gain associated with the disposition of the Subordinate Voting Shares.
+Added: Changes in tax laws may affect the Company and holders of Subordinate Voting Shares.
There can be no assurance that the Canadian and U.S.
9 unchanged sentences
The responsible fiduciary must take into account all of the facts and circumstances of the plan and of the investment when determining if a particular investment is prudent.
−Removed: Unresolved Staff Comments
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.