Annual report [Section 13 and 15(d), not S-K Item 405]

Segment Information

v3.25.1
Segment Information
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Segment Information

Note 11 - Segment Information

Management, including the Company’s Chief Executive Officer, who is considered the Company’s Chief Operating Decision Maker (“CODM”) (as defined in the FASB ASC Topic 280 Segment Reporting), assesses segment performance based on segment revenues, gross margins, and net income/(loss). For instance, the CODM uses both segment gross profit and segment profit/loss from operations to allocate resources (including labor or capital resources) to each of the geographical locations (entities) in the forecasts. An analysis of the gross profit from the regions enables decisions regarding marketing activities, additional investments or scale back of expansion plans, as well as, implementation of cost management strategies.

The Company divides its reportable operating segments primarily by geographic region. The Company has two reportable operating segments: Eastern Region and Western Region. The Eastern Region includes the Company’s operations in Florida, Maryland, Massachusetts, New York and New Jersey. The Eastern Region included results from its Vermont business until March 8, 2023 when it was sold and subsequently deconsolidated. The Western Region includes the Company’s operations in Arizona as well as its assets and investments in Colorado. The Western Region included results from its Nevada business until June 24, 2024 when it was sold and subsequently deconsolidated. The two geographic regions are looked at separately by the CODM and Company’s management as the operations within those regions are in different stages of development. The operations comprising the Western Region are more established than those in the Eastern Region. Most of the Company’s financial and operational growth is being driven by the Eastern Region. Both the Eastern Region and the Western Region segments generate revenues from the sale of cannabis products through retail dispensaries as well as wholesale supply agreements.

The “Other” category in the disclosure below comprises items not separately identifiable to the two reportable operating segments and are not part of the measures used by the Company when assessing the reportable operating segments’ results. It also includes items related to operating segments of the Company that did not meet the quantitative thresholds under ASC 280-10-50-12 to be considered reportable operating segments, nor did they meet the aggregation criteria under ASC 280-10-50-11 to qualify for aggregation with one of the two reportable operating segments of the Company. All inter-segment profits are eliminated upon consolidation.

Reportable Segments

 

Year Ended December 31,

 

 

2024

 

 

2023

 

 

 

 

 

 

 

(Adjusted)

 

Revenues, net of discounts

 

 

 

 

 

 

 

Eastern Region(1)

$

 

128,553

 

 

$

 

105,922

 

Western Region(2)

 

 

39,014

 

 

 

 

53,088

 

Other(3)

 

 

—

 

 

 

 

227

 

Total

$

 

167,567

 

 

$

 

159,237

 

Gross profit (loss)

 

 

 

 

 

 

 

Eastern Region

$

 

60,219

 

 

$

 

43,839

 

Western Region

 

 

14,895

 

 

 

 

19,609

 

Other

 

 

—

 

 

 

 

(279

)

Total

$

 

75,114

 

 

$

 

63,169

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

 

 

 

 

 

Eastern Region

 

 

34,555

 

 

 

 

33,957

 

Western Region

 

 

8,360

 

 

 

 

11,172

 

Other

 

 

19,267

 

 

 

 

22,734

 

Total

 

 

62,182

 

 

 

 

67,863

 

Depreciation and amortization

 

 

 

 

 

 

 

Eastern Region

$

 

15,186

 

 

$

 

17,306

 

Western Region

 

 

7,033

 

 

 

 

7,339

 

Other

 

 

462

 

 

 

 

498

 

Total

$

 

22,681

 

 

$

 

25,143

 

(Recoveries), write-downs and other charges, net

 

 

 

 

 

 

 

Eastern Region

$

 

(1,985

)

 

$

 

(454

)

Western Region

 

 

429

 

 

 

 

(4

)

Other

 

 

320

 

 

 

 

356

 

Total

$

 

(1,236

)

 

$

 

(102

)

Profit (loss) from operations

 

 

 

 

 

 

 

Eastern Region

$

 

12,463

 

 

$

 

(6,971

)

Western Region

 

 

(927

)

 

 

 

1,103

 

Other

 

 

(20,049

)

 

 

 

(23,867

)

Total

$

 

(8,513

)

 

$

 

(29,735

)

Other income and expenses, net:

 

 

 

 

 

 

 

Eastern Region

$

 

(868

)

 

$

 

(2,308

)

Western Region

 

 

(3,307

)

 

 

 

(256

)

Other

 

 

(12,626

)

 

 

 

(17,159

)

Total

$

 

(16,801

)

 

$

 

(19,723

)

Income tax (benefit) expense

 

 

 

 

 

 

 

Eastern Region

$

 

10,440

 

 

$

 

11,674

 

Western Region

 

 

8,513

 

 

 

 

3,373

 

Other

 

 

(36,631

)

 

 

 

12,116

 

Total

$

 

(17,678

)

 

$

 

27,163

 

Net loss

 

 

 

 

 

 

 

Eastern Region

$

 

1,157

 

 

$

 

(29,332

)

Western Region

 

 

(12,749

)

 

 

 

(3,200

)

Other

 

 

3,956

 

 

 

 

(44,089

)

Total

$

 

(7,636

)

 

$

 

(76,621

)

 

(1)
Eastern region no longer includes Vermont operations as results were deconsolidated as of March 8, 2023.
(2)
Western region no longer includes Nevada operations as results were deconsolidated as of June 24, 2024.
(3)
Revenues from segments below the quantitative thresholds are attributable to an operating segment of the Company that includes revenue from the sale of CBD products throughout the United States. This segment has never met any of the quantitative thresholds for determining reportable segments nor does it meet the qualitative criteria for aggregation with the Company’s reportable segments. The Company has deconsolidated results from its CBD operations as of May 8, 2023.

Supplemental Segment Disclosures:

 

Year Ended December 31,

 

 

2024

 

 

2023

 

Purchase of property, plant and equipment

 

 

 

 

 

 

 

Eastern Region

$

 

5,232

 

 

$

 

3,373

 

Western Region

 

 

189

 

 

 

 

192

 

Other

 

 

98

 

 

 

 

7

 

Total

$

 

5,519

 

 

$

 

3,572

 

Purchase of other intangible assets

 

 

 

 

 

 

 

Eastern Region

$

 

20

 

 

$

 

2,489

 

Other

 

 

185

 

 

 

 

15

 

Total

$

 

205

 

 

$

 

2,504

 

 

 

As of December 31,

 

 

As of December 31,

 

 

 

2024

 

 

 

2023

 

Assets

 

 

 

 

 

 

 

Eastern Region

$

 

212,007

 

 

$

 

215,743

 

Western Region

 

 

40,124

 

 

 

 

51,148

 

Other

 

 

18,912

 

 

 

 

10,516

 

Total

$

 

271,043

 

 

$

 

277,407

 

 

Major Customers

Major customers are defined as customers that each individually accounted for greater than 10% of the Company’s annual revenues. For the years ended December 31, 2024 and 2023, no sales were made to any one customer that represented in excess of 10% of the Company’s total revenues.

Geographic Information

As of December 31, 2024 and 2023, substantially all of the Company’s assets were located in the United States and all of the Company’s revenues were earned in the United States.

Disaggregated Revenues

The Company disaggregates revenues into categories that depict how the nature, amount, timing and uncertainty of the revenues and cash flows are affected by economic factors. For the years ended December 31, 2024 and 2023, the Company disaggregated its revenues as follows:

 

 

Year Ended December 31,

 

 

2024

 

 

2023

 

Revenues, net of discounts

 

 

 

 

 

 

 

iAnthus branded products

$

 

84,904

 

 

$

 

87,545

 

Third party branded products

 

 

64,506

 

 

 

 

61,108

 

Wholesale/bulk/other products

 

 

18,157

 

 

 

 

10,584

 

Total

$

 

167,567

 

 

$

 

159,237