Vireo Growth Inc. 10-K

Item 8. Financial Statements and Supplementary Data ​ ​ ​ 82 Table of Contents Report of Independent Registered Public Accounting Firm (PCAOB ID 731 ) REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Directors of Vireo Growth Inc. (formerly “Goodness Growth Holdings, Inc.”) Opinion on the Consolidated Financial Statements ​ We have audited the accompanying consolidated balance sheets of Vireo Growth Inc. (formerly “Goodness Growth Holdings, Inc.”) (the “Company”), as of December 31, 2024 and 2023, and the related consolidated statements of net loss and comprehensive loss, stockholders’ equity (deficiency), and cash flows for the years ended December 31, 2024 and 2023, and the related notes and schedules (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Vireo Growth Inc. as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years ended December 31, 2024 and 2023 in conformity with accounting principles generally accepted in the United States of America. ​ Basis for Opinion ​ These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. ​ Our audits included performing procedures to assess the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ We have served as the Company’s auditor since 2018 ​ ​ ​ /s/ Davidson & Company LLP ​ ​ ​ Vancouver, Canada Chartered Professional Accountants March 4, 2025 ​ ​ 83 Table of Contents VIREO GROWTH INC. Consolidated Balance Sheets (In U.S Dollars) ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2024 ​ 2023 Assets ​ ​ Current assets: ​ ​ Cash ​ $ 91,604,970 ​ $ 15,964,665 Accounts receivable, net of credit losses of $ 244,264 and $ 254,961 , respectively ​ 4,590,351 ​ 3,086,640 Income tax receivable ​ ​ 12,027,472 ​ 12,278,119 Inventory ​ 21,666,364 ​ 19,285,870 Prepayments and other current assets ​ 1,650,977 ​ 1,336,234 Notes receivable, current ​ — ​ 3,750,000 Warrants held ​ 2,270,964 ​ 1,937,352 Assets held for sale ​ 96,560,052 ​ 91,213,271 Total current assets ​ 230,371,150 ​ 148,852,151 Property and equipment, net ​ 32,311,762 ​ 23,291,183 Operating lease, right-of-use asset ​ 7,859,434 ​ 2,018,163 Intangible assets, net ​ 7,899,328 ​ 8,718,577 Deposits ​ 421,244 ​ 383,645 Total assets ​ $ 278,862,918 ​ $ 183,263,719 Liabilities ​ ​ Current liabilities ​ ​ Accounts payable and accrued liabilities ​ $ 10,456,036 ​ $ 7,674,389 Long-term debt, current portion ​ ​ 900,000 ​ ​ 60,220,535 Right of use liability ​ 1,400,015 ​ 890,013 Uncertain tax liability ​ ​ 33,324,000 ​ 22,356,000 Liabilities held for sale ​ 89,387,203 ​ 88,326,323 Total current liabilities ​ 135,467,254 ​ 179,467,260 Right-of-use liability ​ 16,494,439 ​ 10,543,934 Other long-term liabilities ​ ​ 37,278 ​ ​ 155,917 Convertible debt, net ​ ​ 9,862,378 ​ ​ 9,140,257 Long-term debt, net ​ 61,438,046 ​ — Total liabilities ​ ​ 223,299,395 ​ ​ 199,307,368 ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies (refer to Note 18) ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity (deficiency) ​ ​ Subordinate Voting Shares ($- par value, unlimited shares authorized; 337,512,681 shares issued and outstanding at December 31, 2024 and 110,007,030 at December 31, 2023) ​ — ​ — Multiple Voting Shares ($- par value, unlimited shares authorized; 285,371 shares issued and outstanding at December 31, 2024 and 331,193 at December 31, 2023) ​ — ​ — Additional paid in capital ​ 286,999,084 ​ 187,384,403 Accumulated deficit ​ ( 231,435,561 ) ​ ( 203,428,052 ) Total stockholders' equity (deficiency) ​ $ 55,563,523 ​ $ ( 16,043,649 ) Total liabilities and stockholders' equity (deficiency) ​ $ 278,862,918 ​ $ 183,263,719 ​ The accompanying notes are an integral part of these consolidated financial statements ​ 84 Table of Contents VIREO GROWTH INC. Consolidated Statements of Net Loss and Comprehensive Loss (In U.S. Dollars, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2024 2023 Revenue ​ ​ $ 99,384,221 ​ $ 88,133,163 Cost of sales ​ ​ ​ Product costs ​ ​ 48,319,204 ​ 42,739,653 Inventory valuation adjustments ​ ​ 294,000 ​ 1,289,345 Gross profit ​ ​ 50,771,017 ​ 44,104,165 Operating expenses: ​ ​ ​ Selling, general and administrative expenses ​ ​ 28,063,050 ​ 28,217,980 Transaction related expenses ​ ​ ​ 4,504,001 ​ ​ — Stock-based compensation expenses ​ ​ 3,627,774 ​ 4,157,598 Depreciation ​ ​ 292,694 ​ 469,948 Amortization ​ ​ 720,134 ​ 678,861 Total operating expenses ​ ​ 37,207,653 ​ 33,524,387 ​ ​ ​ ​ ​ ​ ​ ​ Income from operations ​ ​ 13,563,364 ​ 10,579,778 ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​ ​ ​ Interest expenses, net ​ ​ ( 31,188,845 ) ​ ( 31,260,798 ) Impairment of long-lived assets ​ ​ — ​ ( 411,629 ) Gain (loss) on disposal of assets ​ ​ ( 218,327 ) ​ ( 4,477,738 ) Other income (expenses) ​ ​ 949,299 ​ 7,746,298 Other income (expenses), net ​ ​ ( 30,457,873 ) ​ ( 28,403,867 ) ​ ​ ​ ​ ​ ​ ​ ​ Loss before income taxes ​ ​ ( 16,894,509 ) ​ ( 17,824,089 ) ​ ​ ​ ​ ​ ​ ​ ​ Current income tax expenses ​ ​ ( 11,113,000 ) ​ ( 6,036,000 ) Deferred income tax recoveries ​ ​ — ​ ( 1,687,000 ) Net loss and comprehensive loss ​ ​ ( 28,007,509 ) ​ ( 25,547,089 ) Net loss per share - basic and diluted ​ ​ $ ( 0.16 ) ​ $ ( 0.19 ) Weighted average shares used in computation of net loss per share - basic and diluted ​ ​ 180,391,815 ​ 135,235,919 ​ The accompanying notes are an integral part of these consolidated financial statements ​ ​ 85 Table of Contents ​ VIREO GROWTH INC. Consolidated Statements of Stockholders’ Equity (Deficiency) (In U.S. Dollars, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ SVS ​ MVS ​ Super Voting Shares ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional Paid- ​ Accumulated ​ Stockholders' ​ Shares Amount Shares Amount Shares Amount in Capital Deficit Equity (deficiency) Balance, January 1, 2023 ​ 86,721,030 ​ $ — 348,642 ​ $ — 65,411 ​ $ — ​ $ 181,321,847 ​ $ ( 177,880,963 ) ​ $ 3,440,884 Conversion of MVS shares 1,744,900 ​ — ( 17,449 ) ​ — — ​ — ​ — ​ — ​ — Conversion of Super Voting Shares ​ 6,541,100 ​ ​ — ​ — ​ ​ — ​ ( 65,411 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock-based compensation — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 4,157,598 ​ ​ — ​ 4,157,598 Warrants issued in financing activities — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 497,055 ​ ​ — ​ 497,055 Shares issued in financing activities 15,000,000 ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 1,407,903 ​ ​ — ​ 1,407,903 Net Loss — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 25,547,089 ) ​ ( 25,547,089 ) Balance at December 31, 2023 110,007,030 ​ $ — 331,193 ​ $ — — ​ $ — ​ $ 187,384,403 ​ $ ( 203,428,052 ) ​ $ ( 16,043,649 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, January 1, 2024 ​ 110,007,030 ​ ​ — — ​ ​ — — ​ ​ — ​ ​ 187,384,403 ​ ​ ( 203,428,052 ) ​ ​ ( 16,043,649 ) Conversion of MVS shares ​ 4,582,200 ​ ​ — ​ ( 45,822 ) ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock-based compensation ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 2,027,774 ​ ​ — ​ ​ 2,027,774 Stock issuance 6,400,000 ​ — — ​ — — ​ — ​ 1,600,000 ​ — ​ 1,600,000 Net settlement of stock-based compensation ​ ( 360,000 ) ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ ( 90,000 ) ​ ​ — ​ ​ ( 90,000 ) Options exercised ​ 50,000 ​ — — ​ — — ​ — ​ ​ 16,500 ​ ​ — ​ ​ 16,500 Warrants exercised ​ 480,437 ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ 69,663 ​ ​ — ​ ​ 69,663 Shares issued in financing activities ​ 12,500,000 ​ — — ​ — — ​ — ​ ​ 5,387,500 ​ ​ — ​ ​ 5,387,500 Shares issued in private placement ​ 130,836,953 ​ — — ​ — — ​ — ​ ​ 80,828,687 ​ ​ — ​ ​ 80,828,687 Conversion of convertible debt ​ 73,016,061 ​ ​ — — ​ — — ​ — ​ ​ 9,774,557 ​ ​ — ​ ​ 9,774,557 Net Loss — ​ — — ​ — — ​ — ​ — ​ ( 28,007,509 ) ​ ( 28,007,509 ) Balance at December 31, 2024 337,512,681 ​ $ — 285,371 ​ $ — — ​ $ — ​ $ 286,999,084 ​ $ ( 231,435,561 ) ​ $ 55,563,523 ​ The accompanying notes are an integral part of these consolidated financial statements ​ ​ 86 Table of Contents ​ VIREO GROWTH INC. Consolidated Statements of Cash Flows (In U.S. Dollars) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES ​ ​ ​ Net loss ​ $ ( 28,007,509 ) ​ $ ( 25,547,089 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ Inventory valuation adjustments ​ 294,000 ​ 1,289,345 Depreciation ​ 292,694 ​ 469,948 Depreciation capitalized into inventory ​ 2,244,087 ​ 2,404,095 Non-cash operating lease expense ​ 439,664 ​ 523,662 Amortization of intangible assets ​ 720,134 ​ 678,861 Amortization of intangible assets capitalized into inventory ​ ​ 99,116 ​ ​ 49,558 Stock-based payments ​ 3,537,774 ​ 4,157,598 Warrants held ​ ​ ( 333,612 ) ​ ​ ( 1,937,352 ) Interest Expense ​ 4,794,018 ​ 7,070,026 Bad debt expense ​ 237,873 ​ — Impairment of long-lived assets ​ ​ — ​ 411,629 Deferred income tax ​ — ​ 1,687,000 Accretion of interest on right-of-use finance lease liabilities ​ 221,010 ​ 994,654 Loss on disposal of Red Barn Growers ​ ​ — ​ ​ 2,909,757 Loss (gain) on disposal of assets ​ ​ 121,756 ​ ​ 1,567,981 Change in operating assets and liabilities: ​ ​ ​ ​ Accounts Receivable ​ ( 1,030,224 ) ​ 1,449,432 Prepaid expenses ​ ( 164,564 ) ​ 1,182,766 Inventory ​ ( 2,391,818 ) ​ ( 1,823,391 ) Income taxes ​ ​ 250,646 ​ ​ ( 18,330,899 ) Uncertain tax position liabilities ​ ​ 10,968,000 ​ ​ 22,356,000 Accounts payable and accrued liabilities ​ 2,403,710 ​ ( 1,256,913 ) Changes in operating lease liabilities ​ ​ ( 277,851 ) ​ ( 1,151,011 ) Change in assets and liabilities held for sale ​ ( 4,653,454 ) ​ ( 121,563 ) Net cash provided by (used in) operating activities ​ ​ ( 10,234,550 ) ​ ​ ( 965,906 ) ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM INVESTING ACTIVITIES: ​ ​ PP&E Additions ​ ​ ( 11,694,966 ) ​ ​ ( 4,963,107 ) Proceeds from note receivable ​ ​ 3,600,000 ​ ​ — Intangible license additions ​ ​ — ​ ​ ( 1,090,919 ) Proceeds from sale of Red Barn Growers net of cash ​ ​ — ​ ​ 689,186 Proceeds from sale of property, plant, and equipment ​ ​ — ​ ​ 253,288 Deposits ​ ​ ( 37,600 ) ​ ​ 1,636,455 Net cash provided by (used in) investing activities ​ ​ ( 8,132,566 ) ​ ​ ( 3,475,097 ) ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM FINANCING ACTIVITIES ​ ​ ​ ​ Proceeds from long-term debt, net of issuance costs ​ ​ 4,668,730 ​ ​ — Proceeds from convertible debt, net of issuance costs ​ ​ 9,854,283 ​ ​ 9,150,262 Proceeds from issuance of shares ​ ​ 80,828,687 ​ ​ — Proceeds from warrant exercises ​ ​ 69,663 ​ ​ — Proceeds from option exercises ​ ​ 16,500 ​ ​ — Debt principal payments ​ ​ ( 1,234,000 ) ​ ​ ( 2,976,362 ) Lease principal payments ​ ​ ( 196,442 ) ​ ​ ( 917,565 ) Net cash provided by (used in) financing activities ​ ​ 94,007,421 ​ ​ 5,256,335 ​ ​ ​ ​ ​ ​ ​ Net change in cash ​ ​ 75,640,305 ​ ​ 815,332 ​ ​ ​ ​ ​ ​ ​ Cash, beginning of year ​ ​ 15,964,665 ​ ​ 15,149,333 ​ ​ ​ ​ ​ ​ ​ Cash, end of year ​ $ 91,604,970 ​ $ 15,964,665 ​ The accompanying notes are an integral part of these consolidated financial statements. Refer to Note 23 for supplemental cash flow information. ​ 87 Table of Contents VIREO GROWTH INC. Notes to Consolidated Financial Statements For the years ended December 31, 2024 and 2023 1. Description of Business and Summary Vireo Growth Inc. (“ Vireo Growth ” or the “ Company ”) (formerly, Goodness Growth Holdings, Inc. ) was incorporated under the Alberta Business Corporations Act on November 23, 2004. The Company was previously listed on the Canadian Securities Exchange (the “ CSE ”) under ticker symbol “GDNS”. On July 8, 2024, the Company changed its name to Vireo Growth Inc., its ticker symbol on the CSE to “VREO” and its ticker symbol on the OTCQX to “VREOF.” Vireo Growth is a cannabis company whose mission is to provide safe access, quality products and value to its customers while supporting its local communities through active participation and restorative justice programs. Vireo Growth operates cannabis cultivation, production, and dispensary facilities in Maryland, Minnesota, and New York, and formerly in New Mexico. While marijuana and CBD-infused products are legal under the laws of several U.S. states (with vastly differing restrictions), the United States Federal Controlled Substances Act classifies all “marijuana” as a Schedule I drug. Under U.S. federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of safety for the use of the drug under medical supervision. Recently some federal officials have attempted to distinguish between medical cannabis use as necessary, but adult-use as “still a violation of federal law.” At the present time, the distinction between “medical marijuana” and “adult-use marijuana” does not exist under U.S. federal law. ​ Update on Verano Litigation (Note 18) ​ On October 21, 2022, Vireo Growth commenced an action in the Supreme Court of British Columbia against Verano Holdings Corp. (" Verano ") after Verano repudiated the Arrangement Agreement with the Company dated January 31, 2022. The Company is seeking damages, costs and interest, based on Verano's breach of contract and of its duty of good faith and honest performance. ​ On May 2, 2024, the Company filed an application with the Supreme Court of British Columbia for summary determination. The Company is seeking substantial damages, specifically $ 860.9 million, as well as other costs and legal fees, based on Verano’s breach of contract and of its duty of good faith and honest performance. ​ Due to uncertainties inherent in litigation, it is not possible for Vireo Growth to predict the timing or final outcome of the legal proceedings against Verano or to determine the amount of damages, if any, that may be awarded. ​ Merger Agreements with Deep Roots, Proper and Wholesome ​ On December 18, 2024, we entered into the Merger Agreements with respect the Mergers. Each Merger is an all-share transaction whereby, at the closing of each applicable transaction, (i) a new wholly-owned subsidiary of the Company would merge with and into Deep Roots, (ii) a new wholly-owned subsidiary of the Company would merge with and into Wholesome, and (ii) the Proper entities would each merge with and into new wholly-owned subsidiaries of the Company. None of the Deep Roots Merger, the Proper Mergers or the Wholesome Merger is contingent on the completion of any of the other Mergers (Note 3). ​ ​ ​ 88 Table of Contents 2. Summary of Significant Accounting Policies Basis of presentation and going concern The accompanying consolidated financial statements reflect the accounts of the Company. The consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States (“ GAAP ”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“ SEC ”). These consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. These consolidated financial statements reflect all adjustments, which, in the opinion of management, are necessary for a fair presentation of the Company’s financial position and results of operations. Basis of consolidation These consolidated financial statements include the accounts of the following entities wholly owned, or effectively controlled by the Company for the year ended December 31, 2024: ​ ​ ​ Name of entity Place of incorporation HiColor, LLC Minnesota, USA MaryMed, LLC Maryland, USA Mayflower Botanicals, Inc. Massachusetts, USA Vireo Health of Minnesota, LLC Minnesota, USA MJ Distributing C201, LLC Nevada, USA MJ Distributing P132, LLC Nevada, USA Resurgent Biosciences, Inc. Delaware, USA Verdant Grove, Inc. Massachusetts, USA Vireo Health de Puerto Rico, Inc. Puerto Rico Vireo Health of Nevada 1, LLC Nevada, USA Vireo Health of New York, LLC New York, USA Vireo Health of Puerto Rico, LLC Delaware, USA Vireo Health, Inc. Delaware, USA Vireo of Charm City, LLC Maryland, USA Vireo DR Merger Sub Inc. Delaware, USA Vireo WH Merger Sub Inc. Delaware, USA Vireo PR Merger Sub Inc. Delaware, USA Vireo PR Merger Sub II Inc. Delaware, USA XAAS Agro, Inc. Puerto Rico ​ ​ The entities listed above are wholly owned, or effectively controlled by the Company and have been formed or acquired to support the intended operations of the Company and all intercompany transactions and balances have been eliminated in the consolidated financial statements of the Company. During the year ended December 31, 2023, Red Barn Growers, Inc. was removed as a result of a business disposition. Refer to Note 3 for further details on business dispositions. 89 Table of Contents Recently adopted accounting pronouncements ASU 2023-07 In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2023-07, Improvements to Reportable Segment Disclosures (Topic 280) . This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted the standard on January 1, 2024. This ASU resulted in additional required disclosures (Note 21). Use of estimates and significant judgments The preparation of the Company’s consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of revenue, expenses, assets, liabilities, accompanying disclosures and the disclosure of contingent liabilities. These estimates and judgments are subject to change based on experience and new information which could result in outcomes that require a material adjustment to the carrying amounts of assets or liabilities affecting future periods. Estimates and judgments are assessed on an ongoing basis. Revisions to estimates are recognized prospectively. Examples of key estimates in these consolidated financial statements include credit losses, inventory valuation adjustments that contemplate the market value of, and demand for inventory, estimated useful lives of property and equipment and intangible assets, valuation allowance on deferred income tax assets, determining the fair value of financial instruments, fair value of stock-based compensation, estimated variable consideration on contracts with customers, estimated redemption rates on loyalty sales programs, estimated paid time off redemption rates, sales return estimates, the fair value of the convertible notes and equity component and the classification, incremental borrowing rates, uncertain tax positions, and lease terms applicable to lease contracts. Financial statement areas that require significant judgments are as follows: Assets held for sale and discontinued operations - The Company classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally through a sale rather than through continuing use. Such non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and their fair value less cost to sell. Costs to sell are the incremental costs directly attributable to the sale, excluding finance costs and income tax expense. The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or the disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the sale will be withdrawn. Management must be committed to the sale expected within one year from the date of the classification. A discontinued operation is a component of the Company that either has been abandoned, disposed of, or is classified as held for sale, and: (i) disposal group is a component of an entity (or group of components); (ii) component of an entity (or group of components) meets the held for sale criteria, is disposed of by sale, or is disposed of other than by sale; (iii) component of an entity (or group of components) represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. A component of the Company comprises an operation and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the Company. During the years ended December 31, 2024 and 2023, the Company completed various divestitures, further described in Note 3. Management considered the quantitative results of the divested entities as well as qualitative strategic considerations to judge whether the divestitures constitute a discontinued operation. Management does not believe these divestitures represent a strategic shift that has or will have a major effect on an entity’s operations and financial results, and as such, none of these divestitures are considered a discontinued operation. 90 Table of Contents Stock-based compensation - Valuation of stock-based compensation and warrants requires management to make estimates regarding the inputs for option pricing models, such as the expected life of the option, the volatility of the Company’s stock price, the vesting period of the option and the risk-free interest rate are used. Actual results could differ from those estimates. The estimates are considered for each new grant of stock options or warrants. Uncertain tax positions - The Company records uncertain tax positions in accordance with Accounting Standards Codification (“ASC”) 740 on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than- not recognition threshold, the Company would recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. Asset impairment – Asset impairment tests require the allocation of assets to asset groups, where appropriate, which requires significant judgment and interpretation with respect to the integration between the assets and shared resources. Asset impairment tests require the determination of whether there is an indication of impairment. The assessment of whether an indication of impairment exists is performed at the end of each reporting period and requires the application of judgment, historical experience, and external and internal sources of information. Leases – The Company applies judgment in determining whether a contract contains a lease and if a lease is classified as an operating lease or a finance lease. The Company determines the lease term as the non-cancellable term of the lease, which may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company has several lease contracts that include extension and termination options. The Company applies judgment in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customization to the leased asset). The Company also applies judgment in allocating the consideration in a contract between lease and non-lease components. It considers whether the Company can benefit from the right-of-use asset either on its own or together with other resources and whether the asset is highly dependent on or highly interrelated with another right-of-use asset. Foreign currency These consolidated financial statements are presented in the United States dollar (“ USD ”), which is the Company’s reporting currency. The functional currency of the Company and its subsidiaries, as determined by management, is the United States (“ US ”) dollar. Net loss per share Basic net loss per share is computed by dividing reported net loss by the weighted average number of subordinate voting shares outstanding for the reported period. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock of the Company during the reporting period. Diluted net loss per share is computed by dividing net loss by the sum of the weighted average number of subordinate voting shares and the number of potential dilutive common share equivalents outstanding during the period. Potential dilutive common share equivalents consist of the incremental common shares issuable upon the exercise of vested share options and the incremental shares issuable upon conversion of the convertible notes. Potential dilutive common share equivalents consist of stock options, warrants, and convertible debt. In computing diluted earnings per share, common share equivalents are not considered in periods in which a net loss is reported, as the inclusion of the common share equivalents would be anti-dilutive. Since the Company is in a net loss for all periods presented in these financial statements, there is no difference between the Company’s basic and diluted net loss per share for the periods presented. 91 Table of Contents The anti-dilutive shares outstanding for years ending December 31, 2024 and 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2024 2023 Stock options ​ 31,232,633 29,969,324 Warrants ​ 18,957,212 19,437,649 RSUs ​ 11,327,530 ​ 2,543,011 Convertible debt ​ 16,000,000 ​ 70,510,028 Total ​ 77,517,375 122,460,012 ​ Segment Information Accounting Standards Codification (" ASC ") 280, Segment Reporting, establishes disclosure requirements relating to operating segments in annual and interim financial statements. Operating segments are defined as components of an enterprise about which separate financial information is available that is regularly evaluated by the chief operating decision maker in deciding how to allocate resources to the segment and assess its performance. The Company operates in one business segment, namely as the Cannabis segment that cultivates, processes and distributes medical and adult-use cannabis products in a variety of formats, as well as related accessories. The Company’s Chief Executive Officer is the Company’s chief operating decision maker. Cash Cash is comprised of cash. The Company has no cash equivalents for the years presented. Business combinations and goodwill The Company accounts for business combinations using the acquisition method in accordance with ASC 805, Business Combinations, which requires recognition of assets acquired and liabilities assumed, including contingent assets and liabilities, at their respective fair values on the date of acquisition. Any excess of the purchase consideration over the net fair value of tangible and identified intangible assets acquired less liabilities assumed is recorded as goodwill. The costs of business acquisitions, including fees for accounting, legal, professional consulting and valuation specialists, are expensed as incurred within acquisition-related (income) expenses, net. Purchase price allocations may be preliminary and, during the measurement period not to exceed one year from the date of acquisition, changes in assumptions and estimates that result in adjustments to the fair value of assets acquired and liabilities assumed are recorded in the period the adjustments are determined. The estimated fair value of acquired assets and assumed liabilities are determined primarily using a discounted cash flow approach, with estimated cash flows discounted at a rate that the Company believes a market participant would determine to be commensurate with the inherent risks associated with the asset and related estimated cash flow streams. Fair value measurements The carrying value of the Company’s accounts receivable, deposits, accounts payable, and accrued liabilities approximate their fair value due to their short-term nature, and the carrying value of notes receivable, convertible debt, and long-term debt approximates fair value as they bear a market rate of interest. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. 92 Table of Contents Inventory Inventory is comprised of cannabis work-in-process, cannabis finished goods and other inventory. Work-in-process inventory includes cannabis plants, bulk harvested material, and various bulk oils and extracts. Finished goods include packaged flower and extracts. Other inventory includes product packaging, hemp derived CBD, apparel, and paraphernalia. Inventory cost includes pre-harvest, post-harvest and shipment and fulfillment, as well as related accessories. Pre-harvest costs include labor and direct materials to grow cannabis, which includes water, electricity, nutrients, integrated pest management, growing supplies and allocated overhead. Post-harvest costs include costs associated with drying, trimming, blending, extraction, purification, quality testing and allocated overhead. Shipment and fulfillment costs include the costs of packaging, labelling, courier services and allocated overhead. Inventory is stated at the lower of cost or net realizable value, determined using weighted average cost. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. At the end of each reporting period, the Company performs an assessment of inventory and record write-downs for excess and obsolete inventories based on the Company’s estimated forecast of product demand, production requirements, market conditions, regulatory environment, and spoilage. Actual inventory losses may differ from management’s estimates and such differences could be material to the Company’s balance sheets, statements of net loss and comprehensive loss and statements of cash flows. Property and equipment Property and equipment are recorded at cost net of accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful life of buildings and improvements ranges from five to thirty-nine years , the estimated useful life of property and equipment, other than buildings, ranges from three to ten years . Land is not depreciated. Leasehold improvements, included in buildings and improvements, are depreciated over the lesser of the asset’s estimated useful life or the remaining lease term. The estimated useful life of right of use assets relating to operating and finance leases ranges from one to twenty years . When assets are retired or disposed of, the cost and accumulated depreciation are removed from the respective accounts and any related gain or loss is recognized. Maintenance and repairs are charged to expenses as incurred. Significant expenditures, which extend the useful lives of assets or increase productivity, are capitalized. When significant parts of an item of property and equipment have different useful lives, they are accounted for as separate items or components of property and equipment. Construction-in-process includes construction progress payments, deposits, engineering costs, interest expense on long-term construction projects and other costs directly related to the construction of the facilities. Expenditures are capitalized during the construction period and construction in progress is transferred to the relevant class of property and equipment when the assets are available for use, at which point the depreciation of the asset commences. The estimated useful lives are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Capitalization of interest Interest incurred relating to the construction or expansion of facilities is capitalized to the construction in progress. The Company ceases the capitalization of interest when construction activities are substantially completed and the facility is available for commercial use. During the years ended December 31, 2024 and 2023, the Company capitalized $ 1,387,750 and $ 320,937 , respectively, of interest expense to construction in progress. 93 Table of Contents Intangible assets Intangible assets include intangible assets acquired as part of business combinations, asset acquisitions and other business transactions. The Company records intangible assets at cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible assets acquired in a business combination are measured at fair value on the acquisition date. Amortization of definite life intangible assets is calculated on a straight-line basis over the estimated useful lives of the assets as follows: ​ ​ ​ ​ Licenses 2 - 18 years ​ When there is no foreseeable limit on the period of time over which an intangible asset is expected to contribute to the cash flows of the Company, an intangible asset is determined to have an indefinite life. Indefinite life intangible assets are not amortized but tested for impairment annually or more frequently when indicators of impairment exist. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, such individual indefinite-life intangible asset is impaired by the amount of the excess. The estimated useful lives are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Impairment of long-lived assets The Company reviews long-lived assets, including property and equipment, definite life intangible assets, and other long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In order to determine if assets have been impaired, assets are grouped and tested at the lowest level for which identifiable independent cash flows are available (“ asset group ”). An impairment loss is recognized when the sum of projected undiscounted cash flows is less than the carrying value of the asset group. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group. Fair value can be determined using a market approach, income approach or cost approach. The reversal of impairment losses is prohibited. Financial assets Initial recognition and measurement The Company aggregates its financial assets into classes at the time of initial recognition based on the Company's business model and the contractual terms of the cash flows. Non-derivative financial assets are classified and measured as “financial assets at fair value”, as either fair value through profit or loss (“FVPL”), or “financial assets at amortized cost”, as appropriate. All financial assets are recognized initially at fair value plus, in the case of financial assets not at FVPL, directly attributable transaction costs on the trade date at which the Company becomes a party to the contractual provisions of the instrument. Financial assets with embedded derivatives are considered in their entirety when determining their classification. Subsequent measurement - Financial assets at amortized cost After initial recognition, financial assets measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost using the Effective Interest Rate (“EIR”) method. Amortized cost is calculated by considering any discount or premium on acquisition and any fees or costs that are an integral part of the EIR. In these consolidated financial statements, cash, trade and other receivables, indemnification receivables, and loans receivable are classified in this category. ​ 94 Table of Contents Subsequent measurement - Financial assets at FVPL Financial assets measured at FVPL include financial assets such as the Company's equity investments in other entities, and any derivative financial instrument that is not designated as a hedging instrument in a hedge relationship. Financial assets measured at FVPL are carried at fair value in the consolidated balance sheet with changes in fair value recognized in a separate caption in the consolidated statements of net loss and comprehensive loss. Derecognition A financial asset is derecognized when the contractual rights to the cash flows from the asset expire, or the Company no longer retains substantially all the risks and rewards of ownership. Impairment of financial assets Financial assets classified subsequently as amortized cost are subject to impairment based on the expected credit losses (“ECL's”). The Company's financial assets subject to impairment are cash, accounts receivable and notes receivable. Accounts receivable and notes receivable are recognized initially at fair value and subsequently measured at amortized cost, less any provisions for impairment. Impairment provisions are estimated using the ECL impairment model where any expected future credit losses are provided for, irrespective of whether a loss event has occurred at the reporting date. Estimates of expected credit losses consider the Company's collection history by country and customer, deterioration of collection rates during the average credit period, as well as observable changes in and forecasts of future economic conditions that affect default risk. The Company utilizes a provision matrix to estimate lifetime ECL's for accounts receivable, supplemented by specific allowance based on customer-specific data. Changes in the allowance are recognized as bad debt expense in the consolidated statements of net loss and comprehensive loss. When the Company determines that no recovery of the amount owed is possible, the amount is deemed irrecoverable, and the financial asset is written off. Impairment of goodwill and indefinite life intangible assets Goodwill and indefinite life intangible assets are tested for impairment annually, or more frequently when events or circumstances indicate that impairment may have occurred. As part of the impairment evaluation, the Company may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of the indefinite-lived intangible asset or the reporting unit (for goodwill) is less than its carrying value, a quantitative impairment test to compare the fair value to the carrying value is performed. An impairment charge is recorded if the carrying value exceeds the fair value. Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ ROU ”) assets and right-of-use liabilities (current and non-current) in the balance sheets. Finance lease ROU assets are included in property and equipment, net and ROU liabilities (current and non-current) in the balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets are classified as a finance lease or an operating lease. A finance lease is a lease in which 1) ownership of the property transfers to the lessee by the end of the lease term; 2) the lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise; 3) the lease is for a major part of the remaining economic life of the underlying asset; 4) The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already included in the lease payments equals or exceeds substantially all of the fair value; or 5) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. The Company classifies a lease as an operating lease when it does not meet any one of these criteria. ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the incremental borrowing rate is used based 95 Table of Contents on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The ROU assets also include any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. For finance leases, lease expenses are the sum of interest on the lease obligations and amortization of the ROU assets, resulting in a front-loaded expense pattern. ROU assets are amortized based on the lesser of the lease term and the useful life of the leased asset according to the property and equipment accounting policy. If ownership of the ROU assets transfers to the Company at the end of the lease term or if the Company is reasonably certain to exercise a purchase option, amortization is calculated using the estimated useful life of the leased asset, according to the property and equipment accounting policy. For operating leases, the lease expenses are generally recognized on a straight-line basis over the lease term and recorded to general and administrative expenses in the statements of net loss and comprehensive loss. The Company has elected to apply the practical expedient, for each class of underlying asset, except real estate leases, to not separate non-lease components from the associated lease components of the lessee’s contract and account for both components as a single lease component. The Company has elected not to recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less that do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. Short-term leases include real estate and vehicles and are not significant in comparison to the Company’s overall lease portfolio. The Company continues to recognize the lease payments associated with these leases as expenses on a straight-line basis over the lease term. Convertible debt The Company first analyzes convertible debt with a conversion feature in accordance with ASC 470-20, Debt with Conversion and Other Options (“ ASC 470-20 ”), to determine whether the fair value option should be applied. ASC 470-20 requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion, including partial cash settlement, to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. The initial proceeds from the sale of convertible debt are allocated between a liability component and an equity component in a manner that reflects interest expense at the rate of similar nonconvertible debt that could have been issued at such time. The equity component represents the excess initial proceeds received over the fair value of the liability component of the notes as of the date of issuance. The resulting debt discount is amortized over the period during which the convertible debt are expected to be outstanding as additional non-cash interest expenses. If the Company does not elect the fair value option, any conversion feature is then evaluated in accordance with ASC 815 to determine if the conversion option is required to be bifurcated. ASC 815 does not require a conversion option to be bifurcated if the conversion option is indexed to the Company’s own stock and classified in stockholders’ equity in the statement of financial position. Upon repurchase of convertible debt instruments, ASC 470-20 requires the issuer to allocate total settlement consideration, inclusive of transaction costs, amongst the liability and equity components of the instrument based on the fair value of the liability component immediately prior to repurchase. The difference between the settlement consideration allocated to the liability component and the net carrying value of the liability component, including unamortized debt issuance costs, would be recognized as gain (loss) on extinguishment of debt in the statements of net loss and comprehensive loss. The remaining settlement consideration allocated to the equity component would be recognized as a reduction of additional paid-in capital in the balance sheets. During the year ended December 31, 2024, the Company issued convertible debt (Note 15). It was determined that the debt should be accounted for as a liability in its entirety. 96 Table of Contents Warrants held The Company accounts for warrants held under ASC 321, Investments – Equity Securities (“ ASC 321 ”). The scope of ASC 321 includes investments in equity securities and other ownership interests in an entity, including investments in partnerships, unincorporated joint ventures and limited liability companies. Under ASC 321 an equity security is any security representing an ownership interest in an entity (e.g., common, preferred, other capital stock) or the right to acquire (e.g., warrants, rights, forward purchase contracts, call options) or dispose of (e.g., put options, forward sale contracts) an ownership interest in an entity at fixed or determinable prices. ASC 321 calls for equity interests to be carried at fair value with changes in value recorded in earnings. The Company has elected to use a black scholes valuation model to arrive at a fair value of the warrants held (Note 19), which will be remeasured at each period end with any changes in valuation being recorded in other income. Revenue recognition The Company’s primary source of revenue is from wholesale of cannabis products to dispensary locations and direct retail sales to eligible customers at the Company-owned dispensaries. Substantially all of the Company’s retail revenue is from the direct sale of cannabis products to adult-use and medical customers. The following table represents the Company’s disaggregated revenue by source: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Retail ​ $ 79,534,555 ​ $ 73,620,866 Wholesale ​ 19,849,666 ​ 14,512,297 Total ​ $ 99,384,221 ​ $ 88,133,163 ​ Revenue is recognized when control of the promised goods or services, through performance obligations by the Company, is transferred to the customer in an amount that reflects the consideration it expects to be entitled to in exchange for the performance obligations. More specifically, wholesale revenues are recognized upon delivery and acceptance by wholesale customers. Retail revenues are recognized at the point of sale. Service revenues are recognized when the service is performed. Discounts are recorded at the time of revenue recognition. Returns were not material during the years ended December 31, 2024 and 2023, but are recognized when the customer is refunded. Revenues are presented net of discounts and returns. Sales taxes collected from customers are remitted to the appropriate taxing jurisdictions and are excluded from sales revenue as the Company considers itself a pass-through conduit for collecting and remitting sales taxes. Excise duties that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer are included in revenue. Freight revenues on all product sales, when applicable, are also recognized, on a consistent manner, at a point in time. The term between invoicing and when payment is due is not significant and the period between when the entity transfers the promised good or service to the customer and when the customer pays for that good or service is one year or less. Contract liabilities A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration from the customer. If a customer pays consideration before the Company transfers goods or services, a contract liability is recognized when the payment is made. Contract liabilities are recognized as revenue when the Company performs under the contract. 97 Table of Contents The Company considers whether there are other promises in the contracts that are separate performance obligations to which a portion of the transaction price needs to be allocated. In determining the transaction price for the sale of goods, the Company considers the effects of variable consideration and the existence of significant financing components (if any). Accounts receivable A receivable represents the Company’s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration). Cost of sales Cost of sales represents costs directly related to manufacturing and distribution of the Company’s products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and handling and the depreciation of manufacturing equipment and production facilities. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance and property taxes. Cost of sales also includes inventory valuation adjustments. The Company recognizes the cost of sales as the associated revenues are recognized. Advertising Costs Advertising costs are expensed as incurred and are included in selling, general, and administrative expenses on the accompanying consolidated statements of loss and comprehensive loss and totaled $ 859,535 and $ 791,980 for the years ended December 31, 2024 and 2023, respectively. Stock-based compensation The Company measures and recognizes compensation expense for stock options and restricted stock units (RSUs) to employees and non-employees on a straight-line basis over the vesting period based on their grant date fair values. The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option pricing model. Determining the estimated fair value at the grant date requires judgment in determining the appropriate valuation model and assumptions, including the fair value of subordinated voting shares on the grant date, risk-free rate, volatility rate, annual dividend yield and the expected term. The volatility rate is based on historical volatilities of public companies operating in a similar industry to the Company, as well as the Company’s historical volatility. The Company estimates the fair value of RSUs to be the closing market price of the Company’s stock on the business day immediately preceding the grant date. For stock options granted, the exercise price at the date of grant was determined by the Board of Directors with assistance from management. The Company does not estimate forfeiture rates when calculating compensation expense for stock options or RSUs. The Company records forfeitures as they occur. Fully vested, non-forfeitable equity instruments issued to parties other than employees are measured on the date they are issued where there is no specific performance required by the grantee to retain those equity instruments. Stock-based payment transactions with non-employees are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Income taxes The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Management assesses the likelihood that the resulting deferred tax assets will be realized. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company recognizes uncertain income tax positions at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 98 Table of Contents 50% likelihood of being sustained. Changes in recognition or measurement are reflected in the period in which judgment occurs. New accounting pronouncements not yet adopted ASU 2023-09 In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740) . The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. Once adopted, this ASU will result in additional disclosures. ​ 3. Acquisitions, Assets Held for Sale, and Dispositions Acquisitions On December 18, 2024, Vireo Growth Inc. (the “Company”), entered into Merger Agreements (as defined herein) with respect to a business combination with each of (i) Deep Roots Holdings, Inc., a Nevada corporation (“Deep Roots”) (the “Deep Roots Merger”); (ii) Proper Holdings Management, Inc. and NGH Investments, Inc., both Missouri corporations (together, “Proper”) (the “Proper Mergers”); and (iii) WholesomeCo, Inc., a Delaware corporation (“Wholesome”) (the “Wholesome Merger” and, collectively with the Deep Roots Merger and the Proper Mergers, the “Mergers”). Each Merger is an all-share transaction whereby, at the closing of each applicable transaction, (i) a new wholly-owned subsidiary of the Company would merge with and into Deep Roots, (ii) a new wholly-owned subsidiary of the Company would merge with and into Wholesome, and (ii) the Proper entities would each merge with and into new wholly-owned subsidiaries of the Company. None of the Deep Roots Merger, the Proper Mergers or the Wholesome Merger is contingent on the completion of any of the other Mergers. As of December 31, 2024, none of the Merger Transactions have closed, and as such, no financial results of the single-state operators have been presented or consolidated herein. The consideration to be paid to acquire each of Deep Roots, Proper and Wholesome is based, in each case, in part on an estimated multiple of a 2024 “Reference EBITDA”, which is pro-forma for pending acquisitions as well as planned new retail openings and expansion projects, and a US $ 0.52 share reference price for the Company’s subordinate voting shares. Pursuant to the Merger Agreements, former stockholders of each of Deep Roots, Proper and Wholesome may qualify for earnout payments made with the Company’s subordinate voting shares following December 31, 2026, based on each target’s Adjusted EBITDA (as defined in the applicable Merger Agreement) growth compared to such target’s Reference EBITDA (at a 4 x multiple), adjusted for incremental debt and certain other matters, respectively, and paid out using a share price for the Company’s subordinate voting shares of the higher of US $ 1.05 or the 20 -day volume weighted average price of the Company’s subordinate voting shares on the Canadian Securities Exchange, converted to United States Dollars based on the average exchange rate posted by the Bank of Canada as of the end of each trading day during such 20 -day period, as reported by Bloomberg Finance L.P. (“VWAP”) as of December 31, 2026. Reference EBITDA for Deep Roots, Proper and Wholesome are US $ 31.0 million, US $ 31.0 million, and US $ 16.0 million, respectively. EBITDA growth is defined as the increase between Reference EBITDA and the higher of 2026 Adjusted EBITDA or trailing nine-month annualized Adjusted EBITDA as of December 31, 2026. In no event shall the number of earnout shares issued under each Merger Agreement exceed the number of shares issued as closing merger consideration in each Merger Agreement. Each of the Merger Agreements provides for the clawback of up to 50 % of the upfront merger consideration (excluding, in the case of Proper and Wholesome, the amounts attributable to Arches, as defined below) on December 31, 2026, if, in each case, (a) 2026 Adjusted EBITDA underperforms 96.5 % of the Reference EBITDA, and (b) retail revenue market share or EBITDA margin for 2026 is less (or lower) than 2024 and (c) the 20 -day VWAP as of December 31, 2026 is greater than US $ 1.05 per share. The amount of shares subject to a clawback would be equal to the Acquisition Multiple (as defined in each Merger Agreement) for each of Deep Roots, Proper and Wholesome, respectively, multiplied by the EBITDA shortfall, and subject to certain other adjustments set forth in the applicable Merger Agreement, divided by US $ 0.52 per share, not to exceed 50 % of the upfront consideration. 99 Table of Contents In connection with the Wholesome Merger Agreement (as defined herein) and Proper Merger Agreement (as defined herein), the Company will include in the stock merger consideration calculation an amount equal to (i) US $ 11,860,800 for the stockholders of Wholesome and (ii) US $ 2,139,200 for the stockholders of Proper for all of the outstanding equity interests in Arches IP, Inc. (“Arches”) owned by Wholesome and Proper, respectively. Subject to the terms and conditions of the Wholesome Merger Agreement and the Proper Merger Agreement, each of Wholesome, Proper and Arches option holders are collectively entitled to earnout payments based on performance of Arches, based on the greater of US $ 37.5 million or 5 x certain revenue percentages of Arches, with such revenue percentage amounts measured at the higher of trailing-twelve-month or nine-month annualized amounts as of December 31, 2026, paid out using a share price for the Company’s subordinate voting shares at the higher of US $ 1.05 or 20 -day VWAP as of December 31, 2026. ​ In connection with each of the Merger Agreements, the Company will enter into an Investor Rights Agreement with the persons receiving the Company’s subordinate voting shares in the Mergers. Each Investor Rights Agreement will require the Company in certain circumstances to prepare and file with the Securities and Exchange Commission (the “SEC”) a registration statement covering the resale of the Company’s subordinate voting shares issued pursuant to the Merger Agreements, in each case following the expiration of the initial 12 month lock-up period following the closing of the transactions under each Merger Agreement. Each Investor Rights Agreement will also provide such persons with certain piggyback registration rights in certain circumstances. The closing of each of the Mergers is subject to closing conditions and contained in the Merger Agreements. Pursuant to rules adopted by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), a Schedule 14C information statement will be prepared by the Company and filed with the SEC and mailed to the stockholders of the Company relating to stockholder approval of the issuance of the Company’s subordinate voting shares in the Mergers and any other approvals required under the rules of the Canadian Stock Exchange, which is expected to be obtained by written consent of the stockholders. ​ Dispositions On June 23, 2023, the Company divested all the assets and liabilities of Red Barn Growers, Inc., a New Mexico nonprofit organization effectively controlled by the Company’s subsidiary company, Vireo Health of New Mexico, LLC, to 37 Management Group, Inc., a New Mexico corporation (“ 37 Management ”). As part of this transaction, the Company is to be paid $ 1,000,000 , less cash on hand of $ 60,814 , of which $ 439,186 was paid at closing, and $ 500,000 is to be paid within one year of the close date. The Company received $ 250,000 in December of 2023. Consideration received was less than the net book value of the transferred assets and liabilities of $ 3,909,757 , resulting in a loss of $ 2,909,757 which was recorded in the consolidated statement of net loss and comprehensive loss for the year ended December 31, 2023. Assets Held for Sale ​ As of December 31, 2024, the Company has identified property and equipment, deposits, and lease assets and liabilities associated with the businesses in New York, Nevada and Massachusetts with carrying amounts that are expected to be recovered principally through sale or disposal rather than through continuing use. The sale of these assets and liabilities is highly probable, they can be sold in their immediate condition, and the sales are expected to occur within the next twelve months. As such, these assets and liabilities have been classified as “held for sale.” Management does not believe these divestitures represent a strategic shift that has or will have a major effect on an entity’s operations and financial results, and as such, none of these divestitures are considered a discontinued operation. The fair value less expected cost to sell of net assets exceededthe carrying value, and as such, the Company recorded no impairment loss. For the year ended December 31, 2023, the Company recorded an impairment loss of $ 399,999 and disposed of certain held for sale property, equipment, and leased assets for which proceeds received of $ 253,288 were less than carrying value resulting in a loss on disposal of $ 1,567,981 in the statement of net loss and comprehensive loss. ​ 100 Table of Contents Assets and liabilities held for sale are as follows: ​ ​ ​ ​ ​ ​ ​ ​ Assets held for sale December 31, December 31, ​ ​ 2024 ​ 2023 Property and equipment ​ $ 90,177,872 ​ $ 86,864,965 Intangible assets ​ ​ 972,000 ​ ​ 662,500 Operating lease, right-of-use asset ​ ​ 3,381,613 ​ ​ 3,381,612 Deposits ​ ​ 2,028,567 ​ ​ 304,194 Total assets held for sale ​ $ 96,560,052 ​ $ 91,213,271 ​ ​ ​ ​ ​ ​ ​ Liabilities held for sale ​ ​ ​ Right of Use Liability ​ $ 89,387,203 ​ $ 88,326,323 Total liabilities held for sale ​ $ 89,387,203 ​ $ 88,326,323 ​ Current assets and liabilities held by our New York business have not been classified as held for sale. Pre-tax operating losses attributable to the New York business were $ 16,358,796 and $ 13,670,439 for the years ended December 31, 2024 and 2023, respectively. ​ ​ 4. Fair Value Measurements The Company complies with ASC 820, Fair Value Measurements, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability. Items measured at fair value on a non-recurring basis The Company’s non-financial assets, such as prepayments and other current assets, long lived assets, including property and equipment, and intangible assets, are measured at fair value when there is an indicator of impairment and are recorded at fair value only when an impairment charge is recognized. In connection with an evaluation of such non-financial assets during the year ended December 31, 2024, the carrying values of property and equipment included in assets held for sale and an intangible license no longer in use were concluded to exceed their fair values. As a result, the Company recorded impairment charges that incorporates fair value measurements. The Company used Level 2 fair value inputs when a buyer quote was received, or similar assets had been sold recently in the market. The carrying value of the Company’s accounts receivable, accounts payable, and accrued liabilities approximate their fair value due to their short-term nature, and the carrying value of convertible debt, and long-term debt approximates fair value as they bear a market rate of interest. ​ The carrying value of the Company’s warrants held utilize Level 3 inputs given there is no market activity for the asset. The inputs used are further described in Note 19. ​ 101 Table of Contents 5. Accounts Receivable Accounts receivables are comprised of the following items: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Trade receivable ​ $ 2,870,181 ​ $ 2,256,763 Tax withholding receivable ​ ​ 174,660 ​ ​ 174,660 Other ​ 1,545,510 ​ 655,217 Total ​ $ 4,590,351 ​ $ 3,086,640 ​ Included in the trade receivables balance at December 31, 2024, and 2023, are credit losses of $ 84,989 and $ 95,686 , respectively. Included in the tax withholding receivable, net balance at December 31, 2024 and 2023, are credit losses of $ 159,275 . ​ 6. Notes Receivable As of December 31, 2024, and 2023, the Company had a total of $ 0 and $ 3,750,000 in notes receivable, respectively. During the year ended December 31, 2024, the Company received $ 3,600,000 in proceeds related to the repayment of the $ 3,750,000 note receivable, which was consideration received in connection with the divestiture of the Company’s Pennsylvania operations in 2020. The Company considers the note receivable to be fully paid. The $ 150,000 difference between the face value of the note and proceeds received is included in other expense on the consolidated statements of net loss and comprehensive loss as a result of the Company writing off interest receivable. ​ 7. Inventory Inventory is comprised of the following items: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31 ​ December 31, ​ 2024 2023 Work-in-progress ​ $ 13,859,238 ​ $ 13,058,348 Finished goods ​ 5,933,200 ​ 5,278,331 Other ​ 1,873,926 ​ 949,191 Total ​ $ 21,666,364 ​ $ 19,285,870 ​ Inventory is written down for any obsolescence, spoilage and excess inventory or when the net realizable value of inventory is less than the carrying value. Inventory valuation adjustments included in cost of sales on the statements of net loss and comprehensive loss is comprised of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 2023 Work-in-progress ​ $ 368,444 ​ $ 1,099,037 Finished goods ​ ( 74,444 ) ​ 190,308 Total ​ $ 294,000 ​ $ 1,289,345 ​ During the years ended December 31, 2024 and 2023, the Company assessed inventory for write downs to net realizable value in its New York, Maryland, and Minnesota subsidiaries. Based on the market sales price relative to the cost to produce certain inventories it was determined that net realizable value exceeded the carrying value of inventory, and therefore no write downs were recorded for the years ended December 31, 2024 and 2023. However, the Company recorded inventory reserves related to expected future spoilage of inventory. Accordingly, inventory valuation adjustments amounting to $ 294,000 and $ 1,289,345 were recorded in 2024 and 2023 respectively. ​ 102 Table of Contents 8. Prepayments and Other Current Assets Prepayments and other current assets are comprised of the following items: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Prepaid Insurance ​ $ 753,579 ​ $ 806,610 Other Prepaid Expenses ​ 897,398 ​ 529,624 Total ​ $ 1,650,977 ​ $ 1,336,234 ​ ​ ​ ​ 9. Property and Equipment, Net Property and equipment, net consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Land ​ $ 863,105 ​ $ 863,105 Buildings and leasehold improvements ​ 16,355,616 ​ 15,124,915 Furniture and equipment ​ 7,451,920 ​ 7,807,250 Software ​ 39,388 ​ 242,204 Vehicles ​ 491,022 ​ 284,000 Construction-in-progress ​ 9,858,120 ​ 128,220 Right of use asset under finance lease ​ 7,572,566 ​ 7,938,138 ​ ​ 42,631,737 ​ 32,387,832 Less: accumulated depreciation ​ ( 10,319,975 ) ​ ( 9,096,649 ) Total ​ $ 32,311,762 ​ $ 23,291,183 ​ For the years ended December 31, 2024 and 2023, total depreciation on property and equipment was $ 2,536,781 and $ 2,874,043 , respectively. For the years ended December 31, 2024 and 2023, accumulated amortization of the right of use asset amounted to $ 2,511,820 and $ 2,364,557 , respectively. For the years ended December 31, 2024 and 2023, the right of use asset under finance lease of $ 7,572,566 and $ 7,938,138 , respectively, consists of leased processing and cultivation premises, and leased equipment. During the years ended December 31, 2024 and 2023, total interest expense capitalized to property plant and equipment was $ 1,387,750 and $ 320,937 , respectively. The Company capitalized into inventory $ 2,244,087 and $ 2,404,095 relating to depreciation associated with manufacturing equipment and production facilities as of December 31, 2024 and 2023, respectively. The capitalized depreciation costs associated are added to inventory and expensed through Cost of Sales Product Cost on the consolidated statements of net loss and comprehensive loss. ​ As of December 31, 2024, the Company evaluated whether property and equipment showed any indicators of impairment, and it was determined that the recoverable amount of certain net assets was above book value. As a result, the Company recorded an impairment charge of $ 0 (2023 - $ 0 ) on property and equipment, net. ​ ​ 103 Table of Contents 10. Leases Components of lease expenses are listed below: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 ​ 2023 Finance lease cost ​ ​ ​ ​ ​ Depreciation of ROU assets ​ $ 512,834 ​ $ 701,258 Interest on lease liabilities ​ 14,222,167 ​ 11,717,705 Operating lease costs ​ 2,163,275 ​ 1,879,433 Total lease costs ​ $ 16,898,276 ​ $ 14,298,396 ​ Future minimum lease payments (principal and interest) on the leases are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Leases Finance Leases ​ ​ ​ December 31, 2024 December 31, 2024 Total 2025 ​ $ 3,047,603 ​ $ 13,773,155 ​ $ 16,820,758 2026 ​ 2,727,346 ​ 14,183,661 ​ 16,911,007 2027 ​ 2,474,144 ​ 14,606,527 ​ 17,080,671 2028 ​ 2,254,049 ​ 15,042,128 ​ 17,296,177 2029 ​ 1,300,615 ​ 15,490,852 ​ 16,791,467 Thereafter ​ 6,523,900 ​ 203,082,066 ​ 209,605,966 Total minimum lease payments ​ $ 18,327,657 ​ $ 276,178,389 ​ $ 294,506,046 Less discount to net present value ​ ​ ( 6,289,019 ) ​ ( 180,935,370 ) ​ ( 187,224,389 ) Less liabilities held for sale ​ ​ ( 2,699,014 ) ​ ​ ( 86,688,189 ) ​ ​ ( 89,387,203 ) Present value of lease liability ​ $ 9,339,624 ​ $ 8,554,830 ​ $ 17,894,454 ​ The Company has entered into various lease agreements for the use of buildings used in production and retail and wholesale sales of cannabis products. On February 22, 2024, the Company executed a lease for cannabis cultivation and manufacturing facilities. Rent commences on January 1, 2025, at which time monthly base rent will be $ 82,500 . Base rent escalates at a rate of 4 % per annum. Per the terms of the lease the Company has the option to draw up to $ 2,000,000 of tenant improvement allowances. As of December 31, 2024, no draws have been taken. Starting January 1, 2025, the Company has the option to purchase the property. The initial purchase price is $ 13,000,000 increasing by 3 % at the start of each calendar year until the option expires on December 31, 2028. The lease expires on December 31, 2034, with an option to renew for two additional five-year terms. On November 1, 2023, the Company notified its landlord in Puerto Rico that it was surrendering the premises. As such, the Company disposed of the held for sale assets affiliated with the Puerto Rico lease and recorded a loss on disposal of assets of $ 1,632,372 in the statement of net loss and comprehensive loss for the year ended December 31, 2023. On October 27, 2023, the Company executed a fifth amendment to its lease with its landlord on its cannabis cultivation and manufacturing facilities located in Johnstown, New York. As part of the fifth amendment to the lease in Johnstown, the Company and its landlord have agreed to increase the tenant improvement allowance on the lease by an additional $ 14.0 million. The increase in tenant improvement funds will be utilized to support the completion of the construction of the indoor expansion project that was announced in September 2021. The parties have also agreed to a monthly base rental increase of $ 210,000 beginning November 2023. On February 24, 2023, the Company signed the fourth amendment to the existing lease agreements for the cultivation and processing facilities in New York. The amendment provides for additional tenant improvements of $ 4,000,000 and increases base rent by $ 50,000 a month. 104 Table of Contents Supplemental cash flow information related to leases ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ December 31, ​ 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ Lease principal payments - finance ​ $ 196,442 ​ $ 917,565 Lease principal payments - operating ​ ​ 781,567 ​ ​ 1,151,011 Non-cash additions to ROU assets ​ 6,563,610 ​ 18,867,764 Amortization of operating leases ​ 722,618 ​ 834,793 ​ Other information about lease amounts recognized in the financial statements ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2024 2023 ​ Weighted-average remaining lease term (years) – operating leases ​ 7.18 4.22 ​ ​ Weighted-average remaining lease term (years) – finance leases ​ 16.09 17.19 ​ ​ Weighted-average discount rate – operating leases ​ 12.09 % 15.00 % ​ Weighted-average discount rate – finance leases ​ 16.19 % 16.21 % ​ ​ ​ ​ 11. Goodwill The following table shows the change in carrying amount of goodwill: ​ ​ ​ ​ ​ Goodwill - December 31, 2022 $ 183,836 Divestitures (Note 3) ​ ( 183,836 ) Goodwill - December 31, 2023 and December 31, 2024 ​ $ — ​ Goodwill is tested for impairment annually or more frequently if indicators of impairment exist or if a decision is made to dispose of the business. The valuation date for the Company’s annual impairment testing is December 31. On this date, the Company performed a qualitative test to determine whether it is necessary to perform a two-step goodwill impairment test. The Company divested Vireo Health of New Mexico, LLC, and the associated goodwill on June 23, 2023 (Note 3). The Company has no goodwill as of December 31, 2024. As such, no further impairment testing procedures were performed. ​ 12. Intangibles Intangible assets are comprised of the following items: ​ ​ ​ ​ ​ ​ ​ ​ ​ Licenses & Trademarks Total Balance, December 31, 2022 ​ $ 8,776,947 ​ $ 8,776,947 Divestitures ​ ( 409,239 ) ​ ( 409,239 ) Additions ​ ​ 1,090,919 ​ ​ 1,090,919 Amortization ​ ​ ( 728,419 ) ​ ​ ( 728,419 ) Write off ​ ​ ( 11,630 ) ​ ( 11,630 ) Balance, December 31, 2023 ​ $ 8,718,578 ​ $ 8,718,578 Amortization ​ ( 819,250 ) ​ ( 819,250 ) Balance, December 31, 2024 ​ $ 7,899,328 ​ $ 7,899,328 ​ Amortization expense for intangibles was $ 819,250 and $ 728,419 during the years ending December 31, 2024 and 2023, respectively and is recorded in operating expenses on the consolidated statements of net loss and comprehensive loss. During the year ended December 31, 2023, the Company wrote off $ 11,630 relating to a trademark no longer in use. No 105 Table of Contents further indicators of impairment existed, and no additional impairment of intangible assets was recorded for the year ended December 31, 2024. The Company estimates that amortization expense will be $ 819,655 per year , for the next five years. ​ 13. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities are comprised of the following items: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Accounts payable – trade ​ $ 2,298,060 ​ $ 1,769,346 Accrued Expenses ​ 6,839,822 ​ 4,852,648 Taxes payable ​ 264,518 ​ 218,563 Contract liability ​ 1,053,636 ​ 833,832 Total accounts payable and accrued liabilities ​ $ 10,456,036 ​ $ 7,674,389 ​ ​ 14. Long-Term Debt During 2017 the Company signed a promissory note payable in the amount of $ 1,010,000 . The note bears interest at a rate of 15 % per annum with interest payments required on a monthly basis. In 2019 the Company’s promissory note payable in the amount of $ 1,010,000 was modified to increase the amount payable to $ 1,110,000 . The Company paid the note off in full during the year ended December 31, 2024. ​ On November 19, 2021, the Company signed a promissory note payable in the amount of $ 2,000,000 in connection with the acquisition of Charm City Medicus, LLC. The note bears an interest rate of 8 % per annum with interest payments due on the last day of each calendar quarter. On November 19, 2023, the Company and lender amended the note. Per the terms of the amendment, the interest rate was modified to 15 %, and the Company paid off $ 1,000,000 of principal. On November 27, 2024, the Company and lender executed the second amendment to the note. Per the terms of the amendment, the maturity date was extended, the interest rate was increased to 18 %, and the Company repaid $ 100,000 in principal. The remaining principal balance of $ 900,000 is due on February 28, 2025 , and the note is secured by 25 % of the membership interests in Vireo Health of Charm City, LLC. On February 28, 2025 the note was repaid in full. ​ On March 25, 2021, the Company entered into a credit agreement for a senior secured delayed draw term loan with an aggregate principal amount of up to $ 46,000,000 (the “ Credit Facility ”), and executed a draw of $ 26,000,000 in principal. The unpaid principal amounts outstanding under the Credit Facility bear interest at a rate of (a) the U.S. prime rate plus 10.375 %, payable monthly in cash, and (b) 2.75 % per annum paid in kind interest payable monthly. In connection with the Credit Facility, the Company also pays a monthly credit monitoring fee in the amount of $ 130,400 which is included in interest expense in the consolidated statements of net loss and comprehensive loss for the years ended December 31, 2024 and 2023. ​ On November 18, 2021, the Company and lenders amended the Credit Facility to provide for an additional loan of $ 4,200,000 with a cash interest rate of 15 % per annum and PIK interest of 2 % per annum. Obligations under the Credit Facility are secured by substantially all the assets of the Company. ​ On January 31, 2022, Vireo and certain of its subsidiaries, as borrowers (collectively, “ Borrowers ”), entered into a Third Amendment to the Credit Facility (the “ Third Amendment ”) providing for additional delayed draw term loans of up to $ 55 million (the “ Delayed Draw Loans ”). The cash interest rate on the Delayed Draw Loans under the Third Amendment is equal to the U.S. prime rate plus 10.375 %, with a minimum required rate of 13.375 % per annum, in addition to paid-in-kind interest of 2.75 % per annum. ​ On March 31, 2023, the Company executed a fifth amendment to its Credit Facility with its senior secured lender, Chicago Atlantic Admin, LLC (the " Agent "), an affiliate of Green Ivy Capital, and a group of lenders. The amended credit facility extends the maturity date on its Delayed Draw Loans to April 30, 2024, through the issuance of 15,000,000 Subordinate 106 Table of Contents Voting Shares in lieu of a cash extension fee. These 15,000,000 shares were valued at $ 1,407,903 using a fair value per share of $ 0.094 and considered a deferred financing cost. The fair value per share reflects a 22 % discount to the market price at the time of issuance to account for the four-month trading lock-up imposed on the shares. The amendment also provides the Company with reduced cash outlays by eliminating required amortization of the loan, and requires the Company to divest certain assets to improve its liquidity position and financial performance. The Company has the potential to extend the maturity date on its Delayed Draw Loans up to January 31, 2026 with the satisfaction of certain financial performance-related conditions. ​ On April 30, 2024, the Company executed a short-term extension of the maturity date on the Credit Facility with the Agent. The Credit Facility was extended until June 14, 2024, matching all other terms of the existing agreement. On June 14, 2024, another short-term extension was executed which extended the maturity date on the Credit Facility to July 31, 2024, matching all other terms of the existing agreement. ​ On May 20, 2024 the Company executed a $ 1,200,000 term loan with the Agent to assist with the purchase of a site for a new dispensary location. The loan bears an interest rate of 12.0 % and is due on May 28, 2027. Financing costs of $ 68,600 were incurred in connection with the closing of the loan. ​ On July 31, 2024, the Company executed a ninth amendment to the Company’s Credit Facility. The ninth amendment to the Company’s Credit Facility extends the maturity date on the Credit Facility loans to January 29, 2027, and amends certain financial measure definitions and covenants within the agreement. The Company issued 12,500,000 Subordinate Voting Shares to the lenders in consideration for the credit facility amendment. These 12,500,000 shares were valued at $ 5,387,500 using a fair value per share of $ 0.431 and considered a deferred financing cost. ​ On December 27, 2024, Vireo Health of Minnesota, LLC (“Vireo Minnesota”), a wholly-owned subsidiary of the Company entered into a secured credit agreement among Vireo Minnesota as Borrower, the Company and various affiliated entities as Guarantors (as defined therein), Chicago Atlantic Lincoln, LLC, the lender party thereto and Chicago Atlantic Admin, LLC, as Administrative Agent and Collateral Agent. The executed secured credit agreement with the Agent allows for the issuance of certain loans of up to an aggregate principal amount of $ 11,500,000 . These loans are intended to assist with the financing of a new indoor cultivation facility. These loans bears an interest rate of 10.5 % and are due on June 26, 2026. As of December 31, 2024, the Company has drawn $ 5,500,000 in aggregate principal, and incurred financing costs of $ 1,549,773 . ​ On December 31, 2024, Vireo Minnesota closed on a $ 15,000,000 principal amount loan with Stearns Bank National Association (the “Commercial Loan”), with the Company and Vireo Health, Inc., a wholly-owned subsidiary of the Company, as guarantors. The Commercial Loan has a term of 24 months and carries a fixed annual interest rate of 9.25 %, payable monthly with interest-only payments through the initial 12 months , followed by monthly principal and interest payments based on a 240-month amortization schedule for the remaining term of the Commercial Loan. The Commercial Loan has no prepayment penalty and is collateralized by a leasehold construction mortgage associated with the buildout of a new cultivation facility for Vireo Minnesota in an existing industrial building in Elk River, Minnesota. As of December 31, 2024, there was no principal amount outstanding as funding has not yet commenced. However, the Company incurred financing costs of $ 412,897 . ​ Unless otherwise specified, all deferred financing costs are treated as a contra-liability, to be netted against the outstanding loan balance and amortized over the remaining life of the loan. As of December 31, 2024, $ 6,576,985 (2023 - $ 1,524,531 ) of deferred financing costs remain unamortized. ​ ​ ​ 107 Table of Contents The following table shows a summary of the Company’s long-term debt: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Beginning of year ​ $ 60,220,535 ​ $ 58,028,604 Proceeds ​ 6,700,000 ​ — Principal repayments ​ ​ ( 1,234,000 ) ​ ​ ( 2,976,362 ) Deferred financing costs ​ ​ ( 7,418,770 ) ​ ​ ( 1,407,903 ) PIK interest ​ ​ 1,634,494 ​ ​ 1,607,032 Amortization of deferred financing costs ​ ​ 2,435,787 ​ ​ 4,969,164 End of year ​ 62,338,046 ​ 60,220,535 Less: current portion ​ 900,000 ​ 60,220,535 Total long-term debt ​ $ 61,438,046 ​ $ — ​ ​ ​ ​ ​ As of December 31, 2024, stated maturities of long-term debt were as follows: ​ ​ ​ ​ ​ 2025 ​ $ 900,000 2026 ​ ​ 3,537,300 2027 ​ ​ 57,900,746 Total ​ $ 62,338,046 ​ ​ ​ 15. Convertible Debt ​ On April 28, 2023, the Company closed on a new convertible debt facility which enables the Company to access up to $ 10,000,000 in aggregate principal amount of convertible notes (the “Convertible Notes”). The convertible facility has a term of three years , with an annual interest rate of 12.0 %, comprised of 6.0 % cash and 6.0 % paid-in-kind. The initial tranche's principal amount of Convertible Notes outstanding in the amount of $ 2,000,000 , plus all paid-in-kind interest and all other accrued but unpaid interest thereunder, is convertible into Subordinate Voting Shares of the Company at the option of the holders at any time by written notice to the Company, at a conversion price equal to $ 0.145 . For each future tranche advanced, the principal amount of Convertible Notes outstanding, plus all paid-in-kind interest and all other accrued but unpaid interest thereunder, is convertible into Subordinate Voting Shares of the Company at the option of the holders at any time by written notice to the Company, at a conversion price equal to the lesser of $ 0.145 or a 20.0 % premium over the 30-day volume weighted average price of the Company’s Subordinate Voting Shares calculated on the day prior to the date on which each tranche is advanced, if permitted by the Canadian Securities Exchange. The lenders also have the right to advance any remaining undrawn funds on the convertible loan facility to the Company at any time. If the notes are not converted, the outstanding principal amount and unpaid paid-in-kind interest is due on April 30, 2026. ​ During the year ended December 31, 2023, the Company closed eight additional tranches of Convertible Notes, which are convertible into Subordinate Voting Shares at a conversion price of $ 0.145 . Total proceeds received from these tranches amounted to $ 8,000,000 . ​ In connection with this financing, the Company issued 6,250,000 warrants to purchase Subordinate Voting Shares of the Company to the lenders. These warrants have a five year term, a strike price of $ 0.145 , and were valued at $ 497,055 (Note 16). The value of these warrants and other legal and administrative expenses amounting to $ 1,346,793 are treated as deferred financing costs. ​ On July 31, 2024, the holders voluntarily converted all outstanding convertible notes into 73,016,061 Subordinate Voting Shares of the Company. ​ On November 1, 2024, the Company entered into a Joinder and Tenth Amendment to Credit Agreement. The Tenth Amendment provides a convertible note facility (the “New Convertible Notes”) with a maximum principal amount of $ 10,000,000 . The New Convertible Notes mature November 1, 2027, have a cash interest rate of 12.0 percent per year, are convertible into that number of the Company’s subordinate voting shares determined by dividing the outstanding principal 108 Table of Contents amount plus all accrued but unpaid interest on the Convertible Notes on the date of such conversion by a conversion price of $ 0.625 . The Company incurred $ 145,717 in financing costs in connection with the signing of the Tenth Amendment. ​ All deferred financing costs are treated as a contra-liability, to be netted against the outstanding loan balance and amortized over the remaining life of the loan. As of December 31, 2024, $ 137,622 (2023 - $ 1,083,697 ) of deferred financing costs remain unamortized. ​ The following table shows a summary of the Company’s convertible debt: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Beginning of year ​ $ 9,140,257 ​ $ — Proceeds ​ 10,000,000 ​ 10,000,000 Deferred financing costs ​ ​ ( 145,717 ) ​ ​ ( 1,346,793 ) PIK interest ​ ​ 363,376 ​ ​ 223,954 Amortization of deferred financing costs ​ ​ 279,019 ​ ​ 263,096 Conversion ​ ​ ( 9,774,557 ) ​ ​ — End of year ​ $ 9,862,378 ​ 9,140,257 Less: current portion ​ — ​ — Total convertible debt ​ $ 9,862,378 ​ $ 9,140,257 ​ ​ ​ ​ ​ ​ ​ ​ 16. Stockholders’ Equity Shares The Company’s certificate of incorporation authorized the Company to issue the following classes of shares with the following par value and voting rights as of December 31, 2024. The liquidation and dividend rights are identical among Shares equally in our earnings and losses on an as converted basis. ​ ​ ​ ​ ​ ​ ​ ​ ​ Par Value Authorized Voting Rights Subordinate Voting Share (“SVS”) — Unlimited 1 vote for each share Multiple Voting Share (“MVS”) — Unlimited 100 votes for each share ​ Subordinate Voting Shares Holders of Subordinate Voting Shares are entitled to one vote in respect of each Subordinate Voting Share held. Multiple Voting Shares Holders of Multiple Voting Shares will be entitled to one hundred votes for each Multiple Voting Share held. Multiple Voting Shares each have the restricted right to convert to one hundred Subordinate Voting Shares subject to adjustments for certain customary corporate changes. Shares Issued During the year ended December 31, 2024, 45,822 Multiple Voting Shares were converted into 4,582,200 Subordinate Voting Shares for no additional consideration. ​ During the year ended December 31, 2024, 129,536,875 Subordinate Voting Shares were issued in connection with the execution of definitive subscription agreements with certain investors. Net of financing costs the Company received proceeds of $ 80,128,687 . ​ 109 Table of Contents During the year ended December 31, 2024, 12,500,000 Subordinate Voting Shares with a fair value of $ 5,387,500 were issued to the Company’s senior secured lender in connection with the ninth amendment to the Company’s credit agreement (Note 14). ​ During the year ended December 31, 2024, 6,400,000 shares were issued to executives as compensation. The fair value of these awards, $ 1,600,000 , calculated using the closing price from December 17, 2024 of $ 0.25 , is included in stock-based compensation expense in the statement of net loss and comprehensive loss for the year ended December 31, 2024. Of these 6,400,000 shares, 360,000 shares were net settled to pay payroll taxes associated with the issuance, resulting in the final issuance of 6,040,000 shares. ​ During the year ended December 31, 2024, 1,300,078 Subordinate Voting Shares were issued to the Company’s senior secured lender, Chicago Atlantic Opportunity Portfolio, LP, for $ 700,000 of proceeds. ​ During the year ended December 31, 2024, the holders of the Company’s Convertible Notes voluntarily converted all outstanding Convertible Notes into 73,016,061 Subordinate Voting Shares of the Company. ​ During the year ended December 31, 2024, employee stock options were exercised for 50,000 Subordinate Voting Shares. Proceeds from this transaction were $ 16,500 . ​ During the year ended December 31, 2024, stock warrants were exercised for 480,437 Subordinate Voting Shares. Proceeds from these transactions were $ 69,663 . ​ During the year ended December 31, 2023, the Company issued the 15,000,000 Subordinate Voting Shares to its senior secured lender, Chicago Atlantic Admin, LLC, an affiliate of Green Ivy Capital, and a group of lenders in connection with the fifth amendment to its Credit Facility signed on March 31, 2023 (Note 14). ​ During the year ended December 31, 2023, 65,411 Super Voting Shares were redeemed for 6,541,100 Subordinate Voting Shares. ​ During the year ended December 31, 2023, 17,449 Multiple Voting Shares were redeemed for 1,744,900 Subordinate Voting Shares. ​ ​ 17. Stock-Based Compensation Stock Options In January 2019, the Company adopted the 2019 Equity Incentive Plan under which the Company may grant incentive stock option, restricted shares, restricted share units (“RSUs”), or other awards. Under the terms of the plan, a total of ten percent of the number of shares outstanding assuming conversion of all super voting and multiple voting shares to subordinate voting shares are permitted to be issued. The exercise price for incentive stock options issued under the plan will be set by the committee but will not be less than 100 % of the fair market value of the Company’s shares on the date of grant. Incentive stock options have a maximum term of 10 years from the date of grant. The incentive stock options vest at the discretion of the Board. 110 Table of Contents Options granted under the equity incentive plan were valued using the Black-Scholes option pricing model with the following weighted average assumptions: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Risk-Free Interest Rate ​ 3.89 % 3.82 % Weighted Average Exercise Price $ 0.48 $ 0.25 ​ Weighted Average Stock Price $ 0.48 $ 0.25 ​ Expected Life of Options (years) ​ 7.00 ​ 6.19 ​ Expected Annualized Volatility ​ 100.00 % 100.00 % Grant Fair Value $ 0.39 $ 0.14 ​ Expected Forfeiture Rate ​ N/A N/A ​ Expected Dividend Yield ​ N/A N/A ​ ​ Stock option activity for the Company for the years ended December 31, 2024 and 2023 is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average Weighted Avg. ​ ​ Number of Options ​ Exercise Price ​ Remaining Life Balance, December 31, 2022 23,547,558 ​ $ 0.66 7.30 Forfeitures ( 4,137,079 ) ​ 0.82 — Granted 10,558,845 ​ 0.25 6.42 Balance, December 31, 2023 29,969,324 ​ $ 0.50 6.18 Forfeitures ( 2,760,530 ) ​ 1.29 — Exercised ( 50,000 ) ​ 0.33 — Granted 4,073,839 ​ 0.48 — Options Outstanding at December 31, 2024 31,232,633 ​ $ 0.43 5.45 ​ ​ ​ ​ ​ ​ ​ ​ Options Exercisable at December 31, 2024 27,323,396 ​ $ 0.42 5.05 ​ During the years ended December 31, 2024 and 2023, the Company recognized $ 996,844 and $ 2,365,775 in stock-based compensation relating to stock options, respectively. As of December 31, 2024, the total unrecognized compensation costs related to unvested stock options awards granted was $ 790,130 . In addition, the weighted average period over which the unrecognized compensation expense is expected to be recognized is approximately 2.1 years. The total intrinsic value of stock options outstanding and exercisable as of December 31, 2024, was $ 7,240,087 and $ 6,572,692 , respectively. The Company does not estimate forfeiture rates when calculating compensation expense. The Company records forfeitures as they occur. Warrants Subordinate Voting Share (SVS) warrants entitle the holder to purchase one subordinate voting share of the Company. Multiple Voting Share (MVS) warrants entitle the holder to purchase one multiple voting share of the Company. 111 Table of Contents Warrants issued were valued using the Black-Scholes option pricing model with the following assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, SVS Warrants 2024 2023 Risk-Free Interest Rate ​ N/A ​ 4.23 % Expected Life (years) ​ N/A ​ 5.00 ​ Expected Annualized Volatility ​ N/A ​ 100 % Stock Price ​ N/A $ 0.15 ​ Exercise Price ​ N/A $ 0.200 ​ Grant Date Fair Value ​ N/A $ 0.106 ​ Expected Forfeiture Rate ​ N/A ​ N/A ​ Expected Dividend Yield ​ N/A ​ N/A ​ ​ A summary of the warrants outstanding is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Weighted Average Weighted Average SVS Warrants ​ Warrants ​ Exercise Price ​ Remaining Life Warrants outstanding at December 31, 2022 150,000 ​ $ 1.49 ​ 2.00 Granted 16,250,000 ​ ​ 0.20 ​ 5.00 Warrants outstanding at December 31, 2023 ​ 16,400,000 ​ $ 0.21 4.57 Granted ​ — ​ ​ — ​ — Exercised ​ ( 480,437 ) ​ ​ 0.145 ​ — Warrants outstanding at December 31, 2024 15,919,563 ​ $ 0.22 3.56 ​ ​ ​ ​ ​ ​ ​ ​ Warrants exercisable at December 31, 2024 15,919,563 ​ $ 0.22 3.56 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Weighted Average Weighted Average SVS Warrants Denominated in C$ ​ Warrants ​ Exercise Price ​ Remaining Life Warrants outstanding at December 31, 2022 3,037,649 ​ $ 3.50 3.23 Granted — ​ — — Warrants outstanding at December 31, 2023 3,037,649 ​ $ 3.50 2.23 Granted ​ — ​ ​ — ​ — Warrants outstanding at December 31, 2024 ​ 3,037,649 ​ $ 3.50 ​ 1.48 ​ ​ ​ ​ ​ ​ ​ ​ Warrants exercisable at December 31, 2024 3,037,649 ​ $ 3.50 1.23 ​ During the year ended December 31, 2023, in connection with the closing of the convertible debt facility (Note 15), the Company issued 6,250,000 warrants to purchase Subordinate Voting Shares of the Company to the lenders. These warrants have a five-year term, a strike price of $ 0.145 , and were valued at $ 497,055 . The value of these warrants were treated as deferred financing costs. All deferred financing costs are treated as a contra-liability, to be netted against the outstanding loan balance and amortized over the remaining life of the loan. ​ On May 25, 2023, the Company and Grown Rogue International, Inc. (“Grown Rogue”) entered into a strategic agreement whereby Grown Rogue will support Vireo in the optimization of its cannabis flower products, with a particular focus on improving the quality and yield of top-grade “A” cannabis flower across its various operating markets, starting with Maryland and Minnesota. As part of this strategic agreement the Company issued 10,000,000 warrants to purchase subordinate voting shares of Vireo to Grown Rogue, with a strike price equal to $ 0.233 . During the year ended December 31, 2024, $ 0 (2023 - $ 1,233,560 ) in stock-based compensation was recorded in connection with the issuance of these SVS warrants. ​ 112 Table of Contents RSUs ​ The expense associated with RSUs is based on the closing price of the Company’s Subordinate Voting Shares on the business day immediately preceding the grant date, adjusted for the absence of future dividends and is amortized on a straight-line basis over the periods during which the restrictions lapse. The Company currently has RSUs that vest over a three year period. The awards are generally subject to forfeiture in the event of termination of employment. During the years ended December 31, 2024 and 2023, the Company recognized $ 1,030,930 and $ 558,263 , respectively, in stock-based compensation expense related to RSUs. ​ A summary of RSUs is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Avg. ​ ​ Number of Shares ​ Fair Value Balance, December 31, 2022 3,221,677 ​ $ 0.81 Forfeitures ​ ( 678,666 ) ​ ​ 0.54 Balance, December 31, 2023 ​ 2,543,011 ​ ​ 0.88 Granted ​ 9,228,462 ​ ​ 0.31 Forfeitures ​ ( 443,943 ) ​ ​ 1.34 Balance, December 31, 2024 ​ 11,327,530 ​ ​ 0.40 ​ ​ ​ ​ ​ ​ Vested at December 31, 2024 ​ 2,705,236 ​ $ 0.64 ​ ​ 18. Commitments and Contingencies Legal proceedings Verano On January 31, 2022, the Company entered into the Arrangement Agreement with Verano, pursuant to which Verano was to acquire all of the issued and outstanding shares of Vireo Growth pursuant to a Plan of Arrangement. Subject to the terms and conditions set forth in the Arrangement Agreement and the Plan of Arrangement, holders of Vireo Growth Shares would receive 0.22652 of a Verano Subordinate Voting Share, subject to adjustment as described below, for each Subordinate Voting Share held, and 22.652 Verano Subordinate Voting Shares for each Multiple Voting Share and Super Voting Share held, immediately prior to the effective time of the Arrangement. On October 13, 2022, Vireo Growth received a notice of purported termination of the Arrangement Agreement (the “ Notice ”) from Verano. The Notice asserted certain breaches of the Arrangement Agreement, including claims the Company’s public filings and communications with respect to its business and ongoing operations were misleading and that the Company breached its representations to Verano under the Arrangement Agreement. Verano also claimed, as a result of such breaches, it is entitled to payment of a $ 14,875,000 termination fee and its transaction expenses. Vireo Growth denies all of Verano’s allegations and affirmatively asserts that it has complied with its obligations under the Arrangement Agreement, and with its disclosure obligations under US and Canadian law, in all material respects at all times. The Company believes that Verano has no factual or legal basis to justify or support its purported termination of the Arrangement Agreement, which the Company determined to treat as a repudiation of the Arrangement Agreement. On October 21, 2022, Vireo Growth commenced an action in the Supreme Court of British Columbia against Verano after Verano wrongfully repudiated the Arrangement Agreement. The Company is seeking damages, costs and interest, based on Verano's breach of contract and of its duty of good faith and honest performance. On November 14, 2022, Verano filed counterclaims against the Company for the termination fee and transaction expenses described above. 113 Table of Contents On July 31, 2023, the Company filed a requisition for adjournment of its application filed July 14, 2023, and set for hearing on July 31, 2023 to compel Verano’s compliance with document production based upon the Company’s belief that Verano was engaging in tactics to delay the litigation. Throughout 2023, the Company served 4 lists of documents, reviewed document production from Verano, and prepared for examinations for discovery. ​ On May 2, 2024, the Company filed an application with the Supreme Court of British Columbia for summary determination. The Company is seeking substantial damages, specifically US $ 860.9 million, as well as other costs and legal fees, based on Verano’s breach of contract and of its duty of good faith and honest performance. ​ On June 19, 2024, Verano filed a Notice of Application (the “ Preliminary Suitability Application ”) seeking orders dismissing the Summary Trial Application on the basis that certain issues in the action are not suitable for summary determination. The Preliminary Suitability Application is currently set for hearing on June 15 and 16, 2025. ​ Due to uncertainties inherent in litigation, it is not possible for Vireo Growth to predict the timing or final outcome of the legal proceedings against Verano or to determine the amount of damages, if any, that may be awarded. The damages sought will be significant and material given that Verano’s breach left the Company in a vulnerable position resulting in the Company being constrained in its ability to fund growth initiatives that were desirable and that its competitors were able to undertake, most notably in Minnesota and New York markets. ​ Lease commitments The Company leases various facilities, under non-cancelable finance and operating leases, which expire at various dates through September 2041. ​ 19. Other Income (Expense) ​ The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) provides an employee retention credit (“CARES Employee Retention credit”), which is a refundable tax credit against certain employment taxes of up to $5,000 per employee for eligible employers. The tax credit is equal to 50% of qualified wages paid to employees during a quarter, capped at $10,000 of qualified wages per employee through December 31, 2020. Additional relief provisions were passed by the United States government, which extend and slightly expand the qualified wage caps on these credits through December 31, 2021. Based on these additional provisions, the tax credit is now equal to 70% of qualified wages paid to employees during a quarter, and the limit on qualified wages per employee has been increased to $10,000 of qualified wages per quarter. The Company qualifies for the tax credit under the CARES Act. During the year ended December 31, 2024, the Company recorded $ 815,422 (2023 - $ 5,855,076 ) related to the CARES Employee Retention credit in other income on the consolidated statement of net loss and comprehensive loss for the year ended December 31, 2024. ​ On May 25, 2023, the Company and Grown Rogue entered into a strategic agreement whereby Grown Rogue will support the Company in the optimization of its cannabis flower products. As part of this strategic agreement Grown Rogue granted the Company 8,500,000 warrants to purchase subordinate voting shares of Grown Rogue on October 5, 2023. Subsequently, on October 9, 2024, the Company and Grown Rogue mutually agreed to terminate the advisory agreement. As part of the termination agreement, the Company forfeited 4,500,000 of the previously granted 8,500,000 warrants. On December 31, 2024, these 4,000,000 warrants were revalued at a fair value of $ 2,270,964 (2023 $ 1,937,532 ). The fair value was derived from a black-scholes valuation using a stock price of $ 0.65 , an exercise price of $ 0.156 , an expected life of 3.76 years, an annual risk free rate of 4.38 %, and volatility of 100 %. The change in valuation from December 31, 2023, to December 31, 2024, of $ 333,612 was recorded as other income in the statement of net loss and comprehensive loss for the year ended December 31, 2024. ​ 114 Table of Contents 20. General and Administrative Expenses General and administrative expenses are comprised of the following items: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 Salaries and benefits ​ $ 14,370,584 ​ $ 15,198,589 Professional fees ​ 4,872,397 ​ 4,098,050 Insurance expenses ​ 1,816,616 ​ 2,626,922 Advertising ​ ​ 859,535 ​ ​ 791,980 Other expenses ​ 6,143,918 ​ 5,502,439 Total ​ $ 28,063,050 ​ $ 28,217,980 ​ ​ 21. Segment Reporting The Company utilized the guidance in ASC 280 to determine how many reportable segments the Company has. We considered various attributes of the overall Company including but not limited to the nature of products and services, the nature of production processes, the types of customers, the regulatory environment, business geography, and the level at which the Chief Operating Decision Maker evaluates the performance and allocates resources. Given the similarities in the types of products, cannabis products in various form factors, the types of customers, retail and wholesale customers, the geography and regulatory environment in which sales are made, the United States, and the Chief Operating Decision Maker, the Chief Executive Officer, assesses performance and allocates resources at the consolidated level, the Company has determined that it only has one reportable segment, cannabis. The Company’s Chief Executive Officer is the Company’s chief operating decision maker. The chief operating decision maker assesses performance for the cannabis segment and decides how to allocate resources based on operating profit and net income that also is reported on the income statement as consolidated net income. The measure of segment assets is reported on the balance sheet total as consolidated assets. The chief operating decision maker uses net income to evaluate income generated from segment assets in deciding the appropriate capital allocation strategy. A comparison of budgeted results to actual results is also used by the chief operating decision maker to assess business performance. The Company’s cannabis segment cultivates, processes and distributes medical and adult-use cannabis products in a variety of formats, as well as related accessories in the United States. Revenue is derived from the sale of these products in the United States, and the assets used to produce these products are also held in the United States. The accounting policy for recording revenue, and all other accounting policies, are the same as those described in the summary of significant accounting policies footnote (Note 2). The financial statements of the cannabis segment are presented in Item 8 of this form 10-K. 22. Income Taxes For financial reporting purposes, loss before income taxes includes the following components: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2024 2023 United States ​ $ ( 16,894,509 ) ​ $ ( 17,824,089 ) Total ​ $ ( 16,894,509 ) ​ $ ( 17,824,089 ) ​ 115 Table of Contents The (recoveries) expenses for income taxes consists of: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2024 2023 Current: ​ ​ ​ Federal ​ $ 11,058,000 ​ $ 6,111,000 State ​ 55,000 ​ ( 75,000 ) Total ​ 11,113,000 ​ 6,036,000 ​ ​ ​ ​ ​ ​ ​ Deferred: ​ ​ Federal ​ — ​ 1,663,000 State ​ — ​ 24,000 Total ​ — ​ 1,687,000 Total ​ $ 11,113,000 ​ $ 7,723,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2024 2023 Loss before income taxes: ​ $ ( 16,894,509 ) ​ $ ( 17,824,089 ) Income tax benefits at statutory rate ​ ( 3,547,846 ) ​ ( 3,743,059 ) State Taxes ​ ( 1,510,248 ) ​ ( 1,061,542 ) Non-deductible expenses ​ 34,369 ​ ​ 26,928 Stock based and other compensation ​ 761,833 ​ ​ 873,096 Warrant income ​ ​ — ​ ( 406,844 ) Change in valuation allowance ​ ​ 6,851,000 ​ ​ 6,676,000 Uncertain Tax Position ​ ​ 10,968,000 ​ ​ 22,356,000 Federal true up ​ ​ ( 2,450,194 ) ​ ​ ( 14,388,074 ) State true up ​ ​ — ​ ​ ( 2,123,580 ) Rate true up and other ​ ​ 6,086 ​ ( 485,925 ) Income tax expense, net ​ $ 11,113,000 ​ $ 7,723,000 ​ 116 Table of Contents The following table summarizes the components of deferred tax: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ 2024 2023 Deferred tax assets ​ ​ Operating loss carryforwards - United States ​ $ 8,018,000 ​ $ 7,478,000 Credit losses ​ 68,000 ​ 71,000 Inventory reserve ​ 268,000 ​ 186,000 Inventory ​ 1,217,000 ​ ​ 1,438,000 Financing lease liability ​ 30,081,000 ​ 28,318,000 Intangible assets ​ ​ 1,916,000 ​ 564,000 Property and equipment ​ ​ 1,515,000 ​ ​ 1,695,000 Capital loss carryforward ​ ​ 1,060,000 ​ ​ 888,000 Excess business interest expense ​ ​ 14,484,000 ​ ​ 10,382,000 Accrued Vacation ​ ​ 84,000 ​ ​ — Employee Retention Tax Credit ​ ​ 397,000 ​ ​ — Share based compensation ​ — ​ 188,000 Total Deferred tax assets ​ 59,108,000 ​ 51,208,000 Less valuation allowance ​ ( 31,928,000 ) ​ ( 25,077,000 ) Net deferred tax assets ​ 27,180,000 ​ 26,131,000 Deferred tax liabilities ​ ​ ​ ​ Finance lease asset ​ 26,544,000 ​ 25,080,000 Installment sale ​ — ​ 1,051,000 Warrants receivable ​ 636,000 ​ — Total deferred tax liabilities ​ 27,180,000 ​ 26,131,000 Net deferred tax asset/(tax liabilities) ​ $ — ​ $ — ​ At December 31, 2024, the Company had United States federal net operating loss carryforwards of approximately $ 28,100,000 that can be carried forward indefinitely and are limited in annual use to 80 % of current year taxable income, and state net operating loss carryforwards of approximately $ 39,000,000 that can be carried forward fifteen years . State net operating loss carryforwards begin to expire on December 31, 2034. ​ The Company recognizes the financial statement impact of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest impact that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority. ​ The Company recognizes interest and, if applicable, penalties (not included in the “unrecognized tax benefits” table above) for any uncertain tax positions. Interest and penalties are recorded as a component of income tax expenses. As of both December 31, 2024 and 2023, the Company had a cumulative balance of accrued interest and penalties on unrecognized tax positions of $ 2,178,000 and $ 635,000 , respectively on the consolidated balance sheet. ​ The Company’s federal and state income tax returns are subject to examination by income taxing authorities, generally for three years after the returns are filed and six years where a taxpayer has omitted reporting 25% or more of their gross income on their tax return. The Company is not currently under examination in any jurisdiction for any period. The Company believes it is no longer subject to income tax examinations for fiscal periods ended prior to 2020. ​ The Company operates in a number of domestic tax jurisdictions and is subject to examination of its income tax returns by tax authorities in these jurisdictions who may challenge any item of those returns. Because tax matters that may be challenged by tax authorities are typically complex, the ultimate outcome of these challenges is uncertain. The Company accounts for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon technical merits, it is more-likely-than-not that the position will be sustained upon examination. The Company evaluates uncertain tax positions on a quarterly basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. The measurement of the uncertain tax position is based on the largest 117 Table of Contents benefit amount to be realized upon settlement of the matter. If payment ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary. If the Company’s estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to income tax expense may result. As of December 31, 2024 and 2023, the Company recorded an uncertain tax liability for uncertain tax positions primarily related to the treatment of certain transactions and deductions under IRC Section 280E based on legal interpretations that challenge the Company’s tax liability under IRC Section 280E. The Company and its subsidiaries filed the 2023 tax return and amended tax returns for periods ending 2020 through 2022, to reflect this position. The Company does not expect any resolution to this uncertain tax position in the next 12 months. An estimate of the range of the possible change cannot be made until these tax matters are further developed or resolved. ​ The following table shows a summary of uncertain tax positions: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Beginning Balances ​ $ 22,356,000 ​ $ — Increase related to tax positions taken during a prior year ​ 2,735,000 ​ 16,711,000 Increases related to tax positions taken during the current year ​ 8,233,000 ​ 5,645,000 Ending Balances ​ $ 33,324,000 ​ $ 22,356,000 ​ ​ 23. Supplemental Cash Flow Information (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 Cash paid for interest ​ $ 27,171,569 ​ $ 24,965,769 Cash paid for income taxes ​ — ​ 2,043,094 Change in construction accrued expenses ​ 367,553 ​ 444,865 Stock issued in connection with financing activities ​ 5,387,500 ​ 497,055 Conversion of convertible debt ​ ​ 9,774,558 ​ ​ — ​ (1) For supplemental cash flow information related to leases, refer to Note 10. ​ 24. Financial Instruments Credit risk Credit risk is the risk of loss associated with counterparty’s inability to fulfill its payment obligations. The Company’s credit risk is primarily attributable to cash, accounts receivable, and deposits. A small portion of cash is held on hand, from which management believes the risk of loss is remote. Trade receivables relate primarily to wholesale sales. The Company does not have significant credit risk with respect to customers. The Company’s maximum credit risk exposure is equivalent to the carrying value of these instruments. The Company has been granted licenses pursuant to the laws of the states of Maryland, Minnesota, and New York with respect to cultivating, processing, and/or distributing marijuana. Presently, this industry is illegal under United States federal law. The Company has, and intends, to adhere strictly to the state statutes in its operations. Liquidity risk The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As of December 31, 2024, the Company’s financial liabilities consist of accounts payable and accrued liabilities, debt and convertible debt. The Company manages liquidity risk by reviewing its capital requirements on an ongoing basis. Historically, the Company’s main source of funding has been additional funding from investors and debt issuances. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity financing. 118 Table of Contents Legal Risk Vireo U.S. operates in the United States. The United States federal government regulates drugs through the Controlled Substances Act (21 U.S.C. § 811), which places controlled substances, including cannabis, in a schedule. Cannabis is classified as a Schedule I drug. Under United States federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of accepted safety for the use of the drug under medical supervision. The United States Food and Drug Administration has not approved marijuana as a safe and effective drug for any indication. In the United States marijuana is largely regulated at the state level. State laws regulating cannabis are in direct conflict with the federal Controlled Substances Act, which makes cannabis use and possession federally illegal. Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign currency rates. The Company is not exposed to significant currency risk. Interest rate risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company currently carries variable interest-bearing debt subject to fluctuations in the United States Prime rate. A change of 100 basis points in interest rates during the year ended December 31, 2024, would have resulted in a corresponding change in the statement of net loss and comprehensive loss of $ 603,535 . ​ 25. Related Parties Transactions As of December 31, 2024, and 2023, there was $ 0 and $ 121,846 , respectively, due to related parties. Details surrounding the lending relationships between the Company and Chicago Atlantic, are described in Notes 14 and 15. During the years ended December 31, 2024 and 2023, the Company paid Chicago Atlantic $ 712,720 and $ 0 , respectively, for services rendered in connection with the Mergers (Note 3), which is included in transaction related expenses in the consolidated statement of net loss and comprehensive loss for the year ended December 31, 2024. For the years ended December 31, 2024, and 2023, the Company paid a related party (Bengal Impact Partners, of which Joshua Rosen, who is the Company’s Chief Executive Officer, Interim Chief Financial Officer, and a member of the Company’s Board of Directors, is a managing partner) $ 0 and $ 1,613 , respectively, for ongoing corporate advisory services. ​ 26. Subsequent Events ​ On January 23, 2025, the Company entered into a letter agreement (the “ Letter Agreement ”) with Bill’s Nursery, Inc., whereby the parties agreed to extend the Exclusivity Period, as defined in that certain Memorandum of Understanding (“ MOU ”) effective as of December 18, 2024 between the parties, from January 24, 2025 to February 23, 2025. Except as so modified, the parties’ obligations under the MOU remain otherwise unchanged. ​ On February 21, 2025, the Company entered into a letter agreement (the “ Second Letter Agreement ”) with Bill’s Nursery, Inc., whereby the parties confirmed that they have paused negotiations concerning the Definitive Agreement, as defined in the MOU effective as of December 18, 2024 between the parties. The parties also agreed in the Second Letter Agreement to amend the provision in Section 4 of the MOU providing that, in the case the parties do not execute and deliver a Definitive Agreement, that Bill’s Nursery, Inc. shall pay to the Company US$ 1.25 million within two business days. The Second Letter Agreement amends Section 4 to provide that such payment shall be in the amount of US$ 1 million to be paid within 45 calendar days. Except as so modified, the parties’ obligations under the MOU remain otherwise unchanged. ​ In January of 2025, the Company granted 3,989,414 RSUs and 159,156 employee stock options under the 2019 Equity Incentive Plan. ​ ​ 119 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. ​