Leases
The Company has entered into leases primarily for the land-use rights, office and research premises and equipment used in the production of cannabis and other related products. The Company’s leases have terms that range from 19 months to six years, excluding land use rights, which generally extend to 15 years. These leases often include options to extend the term of the lease for up to 10 years. When it is reasonably certain that the option will be exercised, the impact of the option is included in the lease term for purposes of determining total future lease payments.
Operating leases greater than one year are included in right-of-use assets and operating lease liabilities. Finance leases are included in property, plant and equipment on the Company’s consolidated balance sheet. The Company’s finance leases were not material for any of the periods presented.
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| As of December 31, |
| 2025 | | 2024 | | 2023 | |
| Lease cost | | | | | | |
| Operating lease cost | $ | 703 | | | $ | 613 | | | $ | 685 | | |
| Short-term lease cost | — | | | — | | | — | | |
| Total lease cost | $ | 703 | | | $ | 613 | | | $ | 685 | | |
| | | | | | |
| Supplemental cash flow and other information | | | | | | |
| Operating cash flows - cash paid for operating lease obligations | $ | 1,207 | | | $ | 1,137 | | | $ | 1,124 | | |
| Non-cash activity - right-of-use assets obtained in exchange for lease obligations | 371 | | | 566 | | | — | | |
| | | | | | |
| Weighted-average remaining lease term (years) – operating leases | 4.5 | | 3.6 | | 3.6 | |
| Weighted-average discount rate – operating leases | 8.19 | % | | 7.71 | % | | 7.62 | % | |
For the years ended December 31, 2025, 2024 and 2023, the aggregate depreciation expense on right-of-use assets was $569, $486 and $455, respectively, and was included in general and administrative expenses on the consolidated statements of net income (loss) and comprehensive income (loss).
The following is a summary of the Company’s future minimum lease payments under operating leases for its premises due in future fiscal years:
| | | | | |
| As of December 31, 2025 |
| 2026 | $ | 500 | |
| 2027 | 376 | |
| 2028 | 376 | |
| 2029 | 200 | |
| 2030 | 147 | |
| Thereafter | 256 | |
| Total lease payments | 1,855 | |
| Less: imputed interest | (346) | |
| Present value of lease liabilities | $ | 1,509 | |
In addition to the minimum lease payments, the Company is required to pay realty taxes and other occupancy costs in accordance with the terms of the lease agreements.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.