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ITEM 1A. RISK FACTORS

Certain factors may have a material adverse effect on our business, financial condition, and results of operations. You should carefully consider the following risks, together with all of the other information contained in this Annual Report on Form 10-K, including the sections titled “Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K. Any of the following risks could have an adverse effect on our business, financial condition, operating results, or prospects and could cause the trading price of shares of our Class A common stock to decline, which would cause you to lose all or part of your investment. Our business, financial condition, operating results, or prospects could also be harmed by risks and uncertainties not currently known to use or that we currently do not believe are material.

Summary of Risk Factors

Our business is subject to a number of risks and uncertainties of which you should be aware before making a decision to invest in our Class A common stock. This summary does not address all of the risks that we face. These risks include, among others, the following:

•the effect of the volatility of the market price and liquidity risks on shares of our Class A common stock;

•risks related to our capital structure, including the concentration of voting control associated with our Class B common stock and the automatic conversion of such shares;

•our ability to attract and maintain key personnel;

•risks related to our ability to expand our operations, including opening new dispensaries, cultivation and processing facilities and integrating acquisitions;

•the illegality of cannabis under federal law;

•our ability to comply with state and federal regulations;

•the uncertainty regarding enforcement of cannabis laws;

•risks related to compliance with complex and evolving state and local cannabis regulations, including licensing, renewals and enforcement;

•the effect of constraints on marketing and risks related to our products;

•the effect of unfavorable tax treatment for cannabis businesses;

•the effect of proposed legislation on our tax liabilities and financial performance;

•the effect of infringement or misappropriation claims by third parties;

•our ability to comply with potential future U.S. Food and Drug Administration (the “FDA”) regulations;

•our ability to enforce our contracts;

•the effect of unfavorable publicity or consumer perception;

•risks related to acquisitions, dispositions and other strategic transactions, including the failure to realize anticipated benefits;

•the effect of agricultural and environmental risks;

•the effect of climate change;

•risks related to cybersecurity, data privacy, information technology systems and reliance on third-party service providers;

•the effect of unknown health impacts associated with the use of cannabis and cannabis derivative products;

•risks related to litigation, regulatory investigations and enforcement actions;

•the effect of risks related to the results of future clinical research;

•the effect of intense competition in the industry;

•the effect of the maturation of the cannabis market;

•the effect of adverse changes in the wholesale and retail prices;

•risks related to challenging or volatile global economic, political or financial conditions, including inflation, interest rates, supply chain disruptions and reduced consumer spending;

Risk Factors

Risks Related to Our Business and Industry

Cannabis remains illegal under U.S. federal law, and enforcement of cannabis laws could change in a manner that materially or adversely affects our business.

We are currently engaged in the cannabis industry in the United States, both directly and indirectly, where local and state laws permit such activities. However, investors are cautioned that cannabis is a Schedule I controlled substance pursuant to the United States Controlled Substances Act (21 U.S.C. § 811) (the “CSA”), and is illegal under U.S. federal law. Even in those states in which the use of cannabis has been legalized, its use, cultivation, sale and distribution remains a violation of federal law. Since federal law criminalizing the use of cannabis preempts state laws that legalize its use, strict enforcement of federal law regarding cannabis would harm our business, prospects, results of operation, and financial condition.

Unlike in Canada, which has federal legislation uniformly governing the cultivation, distribution, sale and possession of medical and adult-use cannabis, for both adult-use and medical purposes, cannabis is largely regulated at the state level in the United States. To date, the cultivation and sale of cannabis for medical uses has been legalized in a significant number of U.S. states, territories, and the District of Columbia, and adult-use cannabis has been legalized in a growing number of jurisdictions. Notwithstanding such state-level legalization, the sale, distribution, and cultivation of cannabis and cannabis-related products remains illegal under U.S. federal law pursuant to the CSA.

Any reclassification of cannabis to Schedule III of the CSA, whether through executive action or congressional legislation, would not, in itself, render medical or adult-use cannabis lawful under federal law; further legislative amendments would be required to achieve that result. However, such a reclassification could have other significant legal and regulatory implications for companies operating in the cannabis industry, including potential changes to the application of Section 280E of the Internal Revenue Code, which currently limits the ability of businesses trafficking in Schedule I or Schedule II controlled substances to deduct ordinary business expenses for federal income tax purposes.

Unless and until the United States Congress (“Congress”) amends the CSA with respect to cannabis (and the President approves such amendment), there is a risk that federal authorities may enforce current federal law. If that occurs, we may be deemed to be producing, cultivating or dispensing cannabis and drug paraphernalia in violation of federal law. Any person connected to the cannabis industry in the United States may be at risk of federal criminal prosecution and civil liability in the United States. Any investments may be subject to civil or criminal forfeiture and total loss.

We are directly or indirectly engaged in the medical and adult-use cannabis industry in the United States where local state law permits such activities. Although our activities are believed to be compliant with applicable state and local laws, strict compliance with state and local laws with respect to cannabis may neither absolve us from liability under United States federal law, nor may it provide a defense to any federal proceeding which may be brought against us. There can be no assurances that the federal government of the United States will not seek to enforce the applicable laws against us. Enforcement of federal law regarding cannabis is a significant risk and would greatly harm our business, prospects, revenue, results of operation and financial condition.

Due to the conflicting views between state legislatures and the federal government regarding cannabis, cannabis businesses are subject to inconsistent laws and regulations. In August 2013, the U.S. Department of Justice (the “DOJ”) issued guidance outlining certain federal enforcement priorities relating to cannabis-related offenses in jurisdictions that had implemented regulatory frameworks for cannabis. That guidance was subsequently rescinded, and there is currently no DOJ guidance that limits the discretion of federal prosecutors in determining whether to pursue enforcement actions relating to cannabis activities, notwithstanding the existence of state-level cannabis laws. As a result, federal prosecutors retain broad discretion with respect to the enforcement of federal cannabis laws, and there can be no assurance as to the enforcement posture that will be adopted by the DOJ or U.S. Attorneys at any given time.

We may be subject to enforcement or other action by the U.S. federal government.

U.S. federal authorities have the authority to investigate and take enforcement action against businesses involved in cannabis-related activities, including through the seizure or forfeiture of assets. Any such enforcement action could result in, among other things, the shutdown of some or all of our operations, the seizure or forfeiture of our cash or other assets, the loss or non-renewal of state-issued licenses, or the imposition of significant civil or criminal penalties.

In addition, federal authorities could allege that we, our subsidiaries, or our directors, officers, employees, managers or investors have aided and abetted violations of federal law, conspired to violate federal law, or otherwise engaged in conduct subject to federal criminal or civil statutes in connection with our cannabis-related activities. Defending against any such proceedings could require substantial financial and management resources and could materially and adversely affect our business, financial condition, results of operations, and prospects, regardless of the outcome. Such enforcement actions could also have adverse consequences for our non-U.S. employees, directors, officers, or investors, including restrictions on travel to or entry into the United States.

Violations of federal laws or regulations, or allegations of such violations, could result in significant fines, penalties, administrative sanctions, settlements, convictions or other adverse consequences, including disgorgement of profits, cessation of business activities or divestiture. Any of these outcomes could materially and adversely affect our reputation, our ability to conduct business, our ownership or operation of cannabis licenses, the listing of our securities on stock exchanges, our financial condition, liquidity and results of operations, or the market price of our Class A common stock.

U.S. state and local regulation of cannabis is complex, evolving, and uncertain.

Our activities are, and will continue to be, subject to evolving regulation and interpretation by various governmental authorities. The medical and adult-use cannabis industries are subject to various local, state and federal laws, regulations, guidelines, and licensing requirements relating to the manufacture, sale, distribution, management, transportation, storage, and disposal of cannabis, as well as being subject to laws and regulations relating to health and safety, the conduct of operations, and the protection of the environment. There is no assurance that state laws legalizing and regulating the sale and use of cannabis will not be repealed or overturned, or that local governmental authorities will not limit the applicability of state laws within their respective jurisdictions. Changes in applicable laws or regulations, or in their interpretation or enforcement, could restrict our operations, increase our compliance costs, limit our ability to expand into new markets, or adversely affect our business or operations in one or more states.

As a result of the conflicting views between state legislatures and the federal government regarding cannabis, the rulemaking process applicable to cannabis operators at the state and local level is ongoing and subject to frequent change. Maintaining compliance with applicable regulatory requirements is essential to our operations, and compliance efforts and the process of obtaining and maintaining regulatory approvals can be costly and time-consuming. No assurance can be given that we will obtain or continue to hold all licenses, permits, or approvals required to operate our businesses as currently operated or as proposed to be operated in the future, or that we will be able to complete business transactions, including acquisitions or transfers of licenses or other regulated assets, on acceptable terms or at all.

In addition, local laws and ordinances could restrict our business activity. Although our operations are legal under the laws of the states in which we operate, local governments have the ability to limit, restrict and ban cannabis businesses from operating within their jurisdiction. Land use, zoning, local ordinances and similar laws could be adopted or amended in a manner that materially and adversely affects our business.

Multiple states where medical and/or adult-use cannabis is legal have or are considering imposing special taxes or fees on businesses in the cannabis industry and other states may adopt similar measures in the future. The implementation of special taxes or fees could have a material adverse effect upon our business, prospects, revenue, results of operation and financial condition.

We are affected by evolving and dynamic laws and regulations governing the cannabis industry, which could adversely affect our business strategy, operating results, and profitability.

The legal and regulatory framework governing the cannabis industry continues to evolve at the local, state, and federal levels. Even where current laws and regulations permit our operations, future legislative, regulatory or policy changes, or changes in the interpretation or enforcement of existing requirements, could alter the structure, economics or competitive dynamics of the cannabis industry in ways that adversely affect our business. Such changes could require us to modify our business practices, adjust our operating model, or incur significant additional costs to enhance compliance programs, implement new systems or processes, obtain additional licenses or approvals, or respond to new regulatory requirements. Any increase in compliance or operational costs could reduce our operating margins, adversely affect our profitability, or limit our ability to pursue growth opportunities.

Regulatory developments that are perceived as favorable to the cannabis industry, including federal legalization or other reform initiatives, could nevertheless have adverse effects on our business, including developments such as federal legalization, rescheduling, descheduling, the authorization of interstate commerce in cannabis, or other reform initiatives. Such developments could significantly alter the structure, economics and competitive dynamics of the markets in which we operate. For example, federal legalization or the introduction of interstate commerce could reduce or eliminate barriers to entry that currently exist under state-based regulatory regimes, including limitations on the number of licenses and vertical integration requirements. Such changes could permit new market participants, including well-capitalized domestic or international companies with established national distribution networks, recognized brands and substantial financial resources, to enter the cannabis industry. Increased competition could result in pricing pressure, margin compression, consolidation and loss of market share. In addition, the ability to transport cannabis products across state lines could disrupt supply and demand dynamics and adversely affect the economics of vertically integrated, in-state production models. Additionally, if cannabis were reclassified as a Schedule III substance under the CSA, we could face increased competition from new entrants, including large, well-capitalized companies operating in adjacent industries such as pharmaceuticals, tobacco and alcohol, which could further intensify competition and adversely affect our market position, pricing and margins.

In addition, we face competition from illicit or unlicensed cannabis operators and from products marketed as hemp-derived cannabinoids pursuant to the 2018 Farm Bill. The illicit market for cannabis products remains significant in certain jurisdictions and may offer products at lower prices due to the absence of regulatory compliance costs, testing requirements, licensing obligations or state and local taxes applicable to licensed operators. Similarly, certain hemp-derived products, including products containing delta-8 tetrahydrocannabinol and other hemp-derived cannabinoids, are marketed and sold in certain jurisdictions outside of state-regulated cannabis frameworks based on interpretations of the 2018 Farm Bill. These products may be available through retail channels that are not subject to the same licensing, labeling, age-verification, product testing or taxation requirements applicable to state-licensed cannabis businesses. Competition from illicit operators or from hemp-derived products could place downward pressure on pricing, divert consumers from regulated markets, create consumer confusion, or otherwise adversely affect our sales, margins, market share or competitive position. Changes in federal or state regulation or enforcement practices relating to illicit cannabis activity or hemp-derived products may mitigate or exacerbate these competitive dynamics.

The timing, scope and impact of future regulatory developments and enforcement priorities are difficult to predict. Our failure to anticipate or adapt to changes in the regulatory environment or competitive landscape could impair our ability to execute our business strategy, negatively affect our financial condition or results of operations, or otherwise materially and adversely affect our business.

State regulatory agencies may require us to post bonds, maintain large insurance policies, or post significant fees.

There is a risk that a greater number of state regulatory agencies will begin requiring entities engaged in certain aspects of the legal cannabis industry to post a bond or significant fees when applying, for example, for a dispensary license or renewal as a guarantee of payment of sales and franchise taxes. We are not able to quantify at this time the potential scope of such bonds or fees in the states in which we currently operate or may in the future operate. Any such bonds, insurance requirements or fees, if material, could have a negative impact on our business, financial condition, results of operations, or liquidity.

We may be subject to heightened scrutiny by Canadian regulatory authorities.

Our Class A common stock is traded on the CSE. Our business, operations and investments are in the United States, and any future business, operations or investments, may become the subject of heightened scrutiny by regulators, stock exchanges and other authorities in Canada and the United States. As a result, we may be subject to significant direct and indirect interaction with public officials. There can be no assurance that such scrutiny will not result in the imposition of restrictions or conditions on our ability to operate, invest, or access capital markets in the United States or other jurisdictions.

In 2017, there were concerns that the Canadian Depository for Securities Limited, through its subsidiary CDS Clearing and Depository Services Inc. (“CDS”), Canada’s central securities depository responsible for clearing and settling trades in the Canadian equity, fixed income and money markets, would refuse to settle trades for cannabis issuers that have investments in the United States. To date, CDS has not implemented this policy.

On February 8, 2018, the Canadian Securities Administrators published Staff Notice 51-352 describing the Canadian Securities Administrators’ disclosure expectations for specific risks facing issuers with cannabis-related activities in the U.S. Staff Notice 51-352 confirms that a disclosure-based approach remains appropriate for issuers with U.S. cannabis-related activities. Staff Notice 51-352 includes additional disclosure expectations that apply to all issuers with U.S. cannabis-related activities, including those with direct and indirect involvement in the cultivation and distribution of cannabis, as well as issuers that provide goods and services to third parties involved in the U.S. cannabis industry.

On February 8, 2018, following discussions with the Canadian Securities Administrators and recognized Canadian securities exchanges, the TMX Group, which is the owner and operator of CDS, announced the signing of a Memorandum of Understanding (“MOU”) with Aequitas NEO Exchange Inc., the CSE, the Toronto Stock Exchange and the TSX Venture Exchange. The MOU outlines the parties’ understanding of Canada’s regulatory framework applicable to the rules, procedures and regulatory oversight of the exchanges and CDS as it relates to issuers with cannabis-related activities in the United States.

Although the MOU indicated that there were no plans to prohibit the clearing and settlement of securities of issuers with cannabis-related activities in the United States, there can be no assurance that this regulatory approach will continue in the future. If clearing or settlement of our Class A common stock through CDS were restricted or prohibited while our shares are listed on a Canadian stock exchange, the liquidity of our Class A common stock could be materially and adversely affected, and holders of our shares could experience difficulty effecting or settling trades through the facilities of the applicable Canadian exchange.

Limitations on cannabis license ownership may constrain our growth and operational flexibility.

In certain states, cannabis laws and regulations limit not only the number and types of licenses issued, but also the number of licenses or types of licenses that a single person or entity may own or control. In addition, some jurisdictions require that certain qualified applicants or individuals participate in the ownership or control of licensed entities.

These ownership limitations may restrict our ability to expand our operations or consolidate licenses within a given state and may require us to rely on alternative arrangements, such as wholesale relationships, management or support services agreements, joint ventures, or other contractual structures, to participate in certain markets. Such arrangements may provide us with less control over operations, reduced economic benefits, increased regulatory complexity, or greater exposure to disputes or changes in regulatory interpretation.

If ownership limitations are expanded, enforced more strictly, or applied in a manner that restricts the use of these alternative structures, our ability to grow our business in certain states could be materially adversely affected.

Our ability to expand our product offerings and dispensary services may be limited.

As we introduce or expand our cannabis product offerings and dispensary services, we may incur losses or otherwise fail to enter certain markets successfully. Our expansion into new markets may place us in competitive and regulatory environments with which we are unfamiliar and involve various risks, including the need to invest significant resources and the possibility that returns on those investments will not be achieved for several years, if at all. In pursuing new product offerings or dispensary services, we may incur significant expenses and face various other challenges, including the need to expand our work force and management personnel, and comply with complex and evolving cannabis regulations applicable to the new markets. We may also be unable to successfully demonstrate the value of new offerings to consumers, and failure to do so would compromise our ability to successfully expand these additional revenue streams.

We face risks associated with licensing relating to supply, supply chain and market constraints.

Cannabis laws and regulations in the states in which we operate limit the number and types of licenses that may be issued for dispensaries, cultivation facilities and production operations. The availability, timing and issuance of licenses by category may be limited, delayed or denied, and the number of licenses granted in each operating category may not be balanced across the supply chain. As a result, licensing constraints may lead to mismatches between cultivation, production and retail capacity, which can adversely affect product availability, inventory levels, pricing and supply chain efficiency. Such imbalances could result in market volatility, supply disruptions or pricing pressures, any of which could materially and adversely affect our business, financial condition, results of operations or prospects.

We may become subject to FDA or Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) regulation.

Cannabis remains a Schedule I controlled substance under U.S. federal law. If cannabis were reclassified under the Controlled Substances Act, including to Schedule II or Schedule III, the FDA could assert regulatory authority over cannabis or cannabis-derived products pursuant to the Food, Drug, and Cosmetic Act of 1938. In such circumstances, the FDA could impose additional requirements relating to, among other things, the manufacturing, processing, labeling, marketing or sale of cannabis or cannabis-related products. The scope, timing and applicability of any such regulatory framework are uncertain, and compliance with any new or expanded FDA requirements could be costly, time-consuming or operationally burdensome, or could otherwise adversely affect our business, financial condition, results of operations or prospects if we are unable to comply or if such regulations materially restrict our activities.

In addition, it is possible that cannabis or certain cannabis products could become subject to regulation by other federal authorities, including the ATF, which could impose additional rules or restrictions relating to the manufacture, distribution, transportation, sale, or advertising of cannabis products. The impact of any such regulatory developments is uncertain and could materially and adversely affect our business or operations.

Cannabis businesses are subject to applicable anti-money laundering laws and regulations and have restricted access to banking and other financial services.

We are subject to a variety of laws and regulations in the United States that involve money laundering, financial record-keeping and proceeds of crime, including the U.S. Currency and Foreign Transactions Reporting Act of 1970 (the “Bank Secrecy Act”) as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (which we refer to as the Patriot Act), and any related or similar rules, regulations or guidelines, issued, administered or enforced by governmental authorities in the United States. Since the cultivation, manufacture, distribution and sale of cannabis remains illegal under the CSA, banks and other financial institutions providing services to cannabis-related businesses risk violation of federal anti-money laundering statutes (18 U.S.C. §§ 1956 and 1957) and the Bank Secrecy Act, among other applicable federal statutes. Accordingly, pursuant to the Bank Secrecy Act, banks or other financial institutions that provide a cannabis business with a checking account, debit or credit card, small business loan or any other service could be criminally prosecuted for willful violations of money laundering statutes, in addition to being subject to other criminal, civil and regulatory enforcement actions.

Banks often refuse to provide banking services to businesses involved in the cannabis industry due to the present state of the laws and regulations governing financial institutions in the U.S. The lack of banking and financial services presents unique and significant challenges to businesses in the cannabis industry. The potential lack of a secure place in which to deposit and store cash, the inability to pay creditors through the issuance of checks and the inability to secure traditional forms of operational financing, such as lines of credit, are some of the many challenges presented by the unavailability of traditional banking and financial services.

In February 2014, the FinCEN issued the FinCEN Memorandum providing instructions to banks seeking to provide services to cannabis-related businesses. The FinCEN Memorandum provides guidance to financial institutions regarding the provision of services to cannabis-related businesses but does not provide any safe harbor or legal defense from regulatory or criminal enforcement actions.

If our operations, or proceeds thereof, dividend distributions or profits or revenues derived from our operations were found to be in violation of money laundering legislation or otherwise, such transactions may be viewed as proceeds from a crime (the sale of a Schedule I drug) under the Bank Secrecy Act’s money laundering provisions. This may restrict our ability to declare or pay dividends or effect other distributions.

The FinCEN Memorandum does not provide any safe harbors or legal defenses from examination or regulatory or criminal enforcement actions by the DOJ, FinCEN, or other federal regulators. As a result, many financial institutions remain unwilling to provide banking services to cannabis-related businesses, and there can be no assurance that access to banking or other financial services will improve.

On April 26, 2023, the Secure and Fair Enforcement Banking Act (the “SAFE Banking Act”) was reintroduced in the House of Representatives and the Senate. Legislation such as the SAFE Banking Act and the SAFER Banking Act has been introduced to address banking access for state-legal cannabis businesses, but there can be no assurance that such legislation will be enacted or will become law in its current form, if at all.

As written, the SAFE Banking Act and SAFER Banking Act would allow financial institutions to provide their services to state-legal cannabis clients and ancillary businesses serving state-legal cannabis businesses without fear of federal sanctions. There is no guarantee either the SAFE Banking Act, the SAFER Banking Act, or similar legislation will become law in their current forms, if at all.

We are subject to proceeds of crime statutes.

We are subject to laws and regulations relating to money laundering, financial recordkeeping and proceeds of crime in the United States and Canada, including: the Bank Secrecy Act, as amended by Title III of the Patriot Act, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), and other applicable rules, regulations, and guidance issued, administered or enforced by governmental authorities in the United States and Canada.

If any of our activities or proceeds thereof were determined to violate applicable money laundering or proceeds-of-crime laws, such proceeds could be treated as proceeds of unlawful activity, which could materially and adversely affect us, including by restricting our ability to declare or pay dividends or make other distributions, and subjecting us to civil or criminal penalties.

We face risks related to U.S. tax provisions related to controlled substances.

Limits on U.S. deductibility of certain expenses may have a material adverse effect on our financial condition, results of operations and cash flows. Section 280E (“Section 280E”) of the United States Internal Revenue Code of 1986, as amended, prohibits businesses from deducting certain expenses associated with the trafficking of controlled substances (within the meaning of Schedule I and II of the CSA). The IRS has applied Section 280E broadly in tax audits against various cannabis businesses in the U.S. that are permitted under applicable state laws, seeking substantial sums in tax liabilities, interest, and penalties resulting from the underpayment of taxes due to the lack of deductibility of otherwise ordinary business expenses the deduction of which is prohibited by Section 280E. Although the IRS issued a clarification allowing the deduction of certain expenses that can be categorized as cost of goods sold, the scope of such items is interpreted very narrowly, and the bulk of operating costs and general administrative costs are not permitted to be deducted. While there are currently several pending cases before various administrative and federal courts challenging these restrictions, there is no guarantee that these courts will issue an interpretation of Section 280E that is favorable to cannabis businesses.

The Company has filed amended tax returns with the IRS on behalf of itself and its subsidiaries claiming refunds of tax for 2020 and 2021 and a refund and/or reduction of tax for 2022 which had been incurred as a result of the application of Section 280E based on a legal interpretation that Section 280E does not apply to solely intrastate cannabis-related business activities. The Company took this position for the 2023 and 2024 filing years and intends to continue to take this position for the 2025 filing year. There is no guarantee that the IRS will not challenge our refund request and prevail in such challenge.

If our tax filing positions were to be challenged by federal, state and local or foreign tax jurisdictions, we may not be wholly successful in defending our tax filing positions. We record reserves for unrecognized tax benefits based on our assessment of the probability of successfully sustaining tax filing positions. We, therefore, analyze and consider the appropriateness of recording reserves for unrecognized tax benefits each quarter. Management exercises significant judgment when assessing the probability of successfully sustaining tax filing positions, and in determining whether a contingent tax liability should be recorded and, if so, estimating the amount. If our tax filing positions are successfully challenged, payments could be required that are in excess of reserved amounts or we may be required to reduce the carrying amount of our net deferred tax asset, either of which result could be significant to our financial condition or results of operations.

On May 21, 2024, the United States Department of Justice published a notice of proposed rulemaking with the Federal Register to initiate a formal rulemaking process to consider rescheduling cannabis under the CSA. As of the date of this filing, no final rule has been adopted, and cannabis remains classified as a Schedule I controlled substance under federal law. In June 2024, the IRS issued a press release stating that, until any final rule becomes effective, cannabis remains subject to the limitations of Section 280E. The IRS further stated that taxpayers seeking refunds related to Section 280E by filing amended returns are not entitled to refunds or payments and that the IRS is taking steps to address such claims. In December 2025, the President of the United States issued an executive order directing the Attorney General and other federal agencies to complete and, where appropriate, expedite the administrative rulemaking process to reconsider marijuana’s classification under the CSA. The executive order does not amend the CSA or otherwise change marijuana’s classification, and cannabis remains a Schedule I controlled substance unless and until a final rule is adopted or Congress amends the CSA. There can be no assurance as to the timing, outcome or scope of any rescheduling process or whether any such action would ultimately result in changes to the application of Section 280E. The Company is currently engaged with certain state and federal departments of revenue in respect to certain of the Company’s income tax returns that have been selected for examination.

Our business and activities are subject to extensive regulation by state and local governmental authorities. Our ability to operate our existing facilities, expand into new markets, maintain our current operations and complete acquisitions or other strategic transactions is contingent, in part, upon obtaining, maintaining, renewing and transferring required licenses, permits and other regulatory approvals.

Regulatory authorities have broad discretion in administering and enforcing applicable licensing and approval regimes, including with respect to the timing, scope and conditions of such approvals. As a result, there can be no assurance that required approvals will be obtained or maintained on acceptable terms or within anticipated timeframes, or at all.

Delays in obtaining, or failures to obtain or maintain, required licenses, permits, or approvals — including approvals related to the acquisition or transfer of licensed operations — may prevent or delay the commencement or continuation of operations, restrict our ability to pursue growth opportunities, require modifications to our business plans, increase compliance costs, or result in the loss of existing licenses or market access. Any such delays, conditions or failures could materially adversely affect our business, financial condition, results of operations, or prospects.

Our business is concentrated in a limited number of states, and adverse developments in any of those states could have a disproportionate impact on our business.

Substantially all of our operations, revenues and assets are concentrated in a limited number of U.S. states, including Illinois, New Jersey, Massachusetts, Michigan, Maryland, Ohio, and Pennsylvania. As a result, our business, financial condition, results of operations, and prospects are highly dependent on the regulatory, economic, political, and competitive conditions in those jurisdictions.

Adverse developments in any of these states, including regulatory, legislative, economic, political, or competitive changes, may have a disproportionate impact on our operations and financial performance compared to companies with more geographically diversified operations. Because our assets and operations are capital-intensive and often highly specific to particular states and licenses, we may be unable to readily redeploy capital or operations to other jurisdictions on acceptable terms, or at all.

As a result, adverse developments affecting even a single significant market could have a material adverse effect on our business, financial condition, results of operations, and cash flows, and could impair our ability to execute our growth strategy.

We may face difficulties in enforcing our contracts.

Because our contracts involve cannabis and other activities that are currently illegal under U.S. federal law and the laws of certain other jurisdictions, we may face difficulties in enforcing our contracts in U.S. federal courts and certain state courts.

Certain courts have determined that contracts relating to state-legal cannabis activities are unenforceable on the grounds that they are illegal under U.S. federal law and therefore void as a matter of public policy.

As a result, notwithstanding compliance with applicable state law, there remains uncertainty as to whether contracts involving cannabis-related activities will be enforceable in certain jurisdictions. We may not be assured of having a legal remedy in the event of a breach of contract. If borrowers fail or refuse to repay loans and we are unable to legally enforce our contracts, we may suffer substantial losses for which we have no legal remedy. The potential inability of us to enforce any of our contracts could have a material adverse effect on our business, revenues, operating results, financial condition or prospects.

We have limited trademark and intellectual property protection.

As long as cannabis remains illegal under U.S. federal law as a Schedule I controlled substance pursuant to the CSA, the benefit of certain federal laws which may be available to most businesses, such as federal trademark protection, may not be available to us. Because producing, manufacturing, processing, possessing, distributing, selling and using cannabis is illegal under the CSA, the United States Patent and Trademark Office generally will not permit the registration of trademarks that directly identify cannabis products or services that are unlawful under U.S. federal law. As a result, our intellectual property may never be adequately or sufficiently protected against use or misappropriation by third parties. In addition, since the regulatory framework of the cannabis industry is in a constant state of flux, there can be no assurance that we will be able to obtain or maintain effective intellectual property protection on a federal, state, or local level.

Any infringement or misappropriation of our intellectual property could damage its value and limit our ability to compete. We may have to engage in litigation to protect the rights to our intellectual property, which could result in significant litigation costs and require a significant amount of our time.

Competitors may also harm our sales by designing products that mirror our products or processes without infringing on our intellectual property rights. If we do not obtain sufficient protection for our intellectual property, or if we are unable to effectively enforce our intellectual property rights, our competitiveness could be impaired, which would limit our growth and future revenue.

We may also find it necessary to bring infringement or other actions against third parties to seek to protect our intellectual property rights. Litigation of this nature, even if successful, is often expensive and time-consuming to prosecute and there can be no assurance that we will have the financial or other resources to enforce our rights or be able to prevent other parties from developing similar products or processes or designing around our intellectual property.

We are and may continue to be subject to constraints on marketing our products.

We have committed and expect to continue committing significant resources and capital to develop and market existing products and new products and services. The development of our business and operating results may be adversely affected by applicable restrictions on sales and marketing activities imposed by regulatory bodies. Certain of the states in which we operate have enacted strict regulations regarding marketing and sales activities relating to cannabis products. Restrictions may include regulations that specify what, where and to whom product information and descriptions may appear and/or be advertised. Marketing, advertising, packaging and labeling regulations also vary from state to state, potentially limiting the consistency and scale of consumer branding communication and product education efforts. The regulatory environment in the U.S. limits our ability to compete for market share in a manner similar to other industries. If we are unable to effectively market our products and compete for market share, or if the costs of compliance with government legislation and regulation cannot be absorbed through increased selling prices for our products, our sales and operating results could be adversely affected.

We face risks related to the results of future clinical research.

Research regarding the medical benefits, viability, safety, efficacy, dosing and social acceptance of cannabis or isolated cannabinoids (such as cannabidiol, commonly referred to as CBD, and tetrahydrocannabinol, commonly referred to as THC) remains in early stages. While certain clinical research and observational studies regarding cannabis and isolated cannabinoids have been conducted, additional double-blind placebo-controlled clinical trials in the United States are needed to demonstrate potential therapeutic benefits, determine safe and effective dosing, and evaluate appropriate product formats for specific medical conditions. Although various articles, reports and studies have addressed the potential medical uses and effects of cannabis, future research and clinical trials may prove such statements to be incorrect, or could raise concerns regarding, and perceptions relating to, cannabis.

Further, the federal illegality of cannabis and associated limits on our ability to properly fund and conduct research on cannabis, together with the lack of comprehensive FDA oversight of cannabis products, means there is limited information about the long-term safety and efficacy of cannabis in its various forms, when combusted or combined with various cannabis and/or non-cannabis derived ingredients and materials or when ingested, inhaled, or topically applied. Future research or oversight may reveal negative health and safety effects, which may significantly impact our reputation, operations and financial performance.

Future research studies and clinical trials may draw opposing conclusions to those stated in this Annual Report on Form 10-K or reach negative conclusions regarding the medical benefits, viability, safety, efficacy, dosing, social acceptance or other facts and perceptions related to cannabis, which could have a material adverse effect on the demand for our products, with the potential to have a material adverse effect on our business, prospects, revenue, results of operation and financial condition.

We lack access to U.S. bankruptcy protections.

Because cannabis is illegal under U.S. federal law, and bankruptcy is a strictly federal proceeding, many courts have denied cannabis businesses federal bankruptcy protections, thus making it very difficult for lenders to recoup their investments in the cannabis industry in the event of a bankruptcy. If we were to seek protection from creditors pursuant to applicable bankruptcy or insolvency laws, there is no guarantee that U.S. federal bankruptcy protections would be available to our United States operations, which would have a material adverse effect on us, our creditors, and other stakeholders. While state-level receivership options do exist in some states as an alternative to bankruptcy, the efficacy of these alternatives cannot be guaranteed.

Cannabis businesses may be subject to civil asset forfeiture.

As an entity that conducts business in the cannabis industry, we may be subject to federal and state forfeiture laws (criminal and civil) that permit the government to seize the proceeds of criminal activity. Civil forfeiture laws could provide an alternative enforcement mechanism for the federal government, state or local authorities that seek to enforce applicable laws even where criminal liability may be difficult to establish.

Individuals may be required to forfeit property considered to be from proceeds of crime even if the individual is not convicted of a criminal offense, and the standard of proof in a civil forfeiture matter is lower than the burden in a criminal matter. Depending on the applicable law, whether federal or state, the federal government or the state, as applicable, may be required to prove that the money or property at issue is proceeds of a crime only by either clear and convincing evidence or a mere preponderance of the evidence.

In addition, investors, employees, officers, or other stakeholders located in jurisdictions where cannabis remains illegal may be subject to enforcement risks under applicable federal or state laws, including the potential forfeiture of assets or proceeds. Many states remain able to take action to prevent the proceeds of cannabis businesses from entering their state. Because state legalization is relatively new, it remains to be seen whether these states would take such action and whether a court would approve it.

We face physical security risks related to our operations and cash handling.

Our operations involve the cultivation, processing, distribution and retail sale of cannabis products, which may make our facilities, inventory and equipment targets for theft, robbery or other security breaches. Break-ins or other security incidents at our cultivation, processing or dispensary locations could result in the loss of cannabis plants, finished products, equipment or other assets and could disrupt operations.

In addition, because portions of the cannabis industry continue to operate with limited access to traditional banking services, our business involves the handling and transportation of cash. The movement and storage of cash and cannabis products expose us to risks of theft, robbery and employee misconduct. While we have implemented security measures designed to mitigate these risks, there can be no assurance that such measures will be sufficient to prevent losses.

Any significant security incident involving our facilities, inventory or cash could result in financial losses, increased operating costs, regulatory scrutiny, reputational harm or business interruption, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

We are a holding company.

We are a holding company and substantially all of our assets consist of the capital stock of our subsidiaries operating in our seven geographic markets: Illinois, Maryland, Massachusetts, Michigan, New Jersey, Ohio, and Pennsylvania. As a result, our stockholders are subject to the risks attributable to our subsidiaries and the law, rules and regulatory schemes of each jurisdiction in which they operate. As a holding company, we conduct substantially all of our business through our subsidiaries, which generate substantially all of our revenues. Consequently, our cash flows and ability to fund operations, service debt, or pursue current or desirable future growth or enhancement opportunities are dependent on the earnings of our subsidiaries and the distribution of those earnings to us. The ability of these entities to pay dividends and other distributions depends on their operating results and is subject to applicable laws and regulations, including requirements to maintain solvency and capital standards, as well as contractual restrictions contained in the instruments governing their indebtedness. In the event of a bankruptcy, liquidation or reorganization of any of our material subsidiaries, holders of indebtedness and trade creditors would generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are available for distribution to us.

We face intense competition, which could adversely affect our business, financial condition, and results of operations.

We face intense competition from other companies operating in the cannabis industry, some of which have longer operating histories, greater financial resources, broader geographic footprints, and more extensive manufacturing, retail and marketing experience than we do. Increased competition from larger and better-capitalized competitors could materially and adversely affect our business, financial condition, and results of operations.

Because the cannabis industry remains relatively early-stage and continues to evolve, we also face competition from new entrants and from existing operators expanding into additional markets. As consumer demand for cannabis products increases, competition for market share, qualified personnel, real estate, and other strategic assets is expected to intensify. In addition, consolidation within the industry may further increase competitive pressure by enabling certain competitors to achieve greater scale, operational efficiencies and access to capital.

The competitive landscape varies significantly by state and is influenced by differing regulatory frameworks. In certain jurisdictions with fewer limitations on the number of licenses or cultivation capacity, increased supply has at times placed pressure on wholesale and retail pricing, which may adversely affect margins. In limited-license states, competition for licenses and operational scale may constrain growth opportunities and increase operating costs. To remain competitive across these varied environments, we must continue to invest significant resources in product development, marketing, talent acquisition and retention, and operational infrastructure. We may not be able to sustain these investments at levels sufficient to compete effectively, which could materially and adversely affect our business and results of operations.

Competition for the acquisition and leasing of properties suitable for cannabis operations may adversely affect our business.

Competition for the acquisition and leasing of properties suitable for the cultivation, production and sale of medical and adult-use cannabis may limit our ability to secure desirable locations or increase the costs associated with doing so, which could adversely affect our operating results and financial condition.

We compete for the acquisition and leasing of such properties with entities engaged in agriculture, real estate investment, consumer products manufacturing and retail activities, including corporate agriculture companies and other cannabis operators. These competitors may prevent us from acquiring or leasing suitable properties, require us to pay higher prices, or result in less favorable lease terms. Some competitors may have greater financial or operational resources and may be willing to pay more for certain assets or accept greater risk than we believe can be prudently managed.

In addition, increased investor participation, industry consolidation and changes in regulatory frameworks may further intensify competition for suitable properties and increase pricing. If we are unable to acquire or lease properties on acceptable terms, or if we incur higher real estate costs, our profitability, cash flows, and ability to grow our operations could be materially adversely affected.

We face risks due to industry immaturity or limited comparable, competitive or established industry best practices.

Although the medical and adult-use cannabis industry has continued to evolve, it remains relatively immature compared to many other regulated industries, and there are limited established operators with long-term operating histories or widely adopted best practices. Similarly, there is limited information about comparable companies available for potential investors to review in deciding about whether to invest in us.

Stockholders and investors should consider, among other factors, our prospects for success considering the risks and uncertainties encountered by companies operating in evolving and highly regulated industries. For example, unanticipated expenses and problems or technical difficulties may occur, which may result in material delays in the operation of our business. We may fail to successfully address these risks and uncertainties or successfully implement our operating strategies. If we fail to do so, it could materially harm our business adversely, affect our financial condition, results of operations, and prospects, and could impair the value of the shares of Class A common stock .

Our business is subject to the risks inherent in agricultural operations.

Medical and adult-use cannabis is an agricultural product. There are risks inherent in the cultivation business, such as insects and pests, plant diseases, mold, crop contamination, genetic variability, equipment failures, power outages, and other environmental or operational risks. Although the products are usually grown indoors or in greenhouses under climate-controlled conditions, with conditions monitored, there can be no assurance that biological, environmental or operations factors will not have a material adverse effect on the production of our products and, consequentially, our business, financial condition, or results of our operations.

In addition, cultivation operations depend on the consistent performance of specialized equipment, utilities and inputs, including lighting, HVAC systems, irrigation, nutrients, and electricity. Disruptions to any of these systems, whether due to mechanical failure, human error, supply shortages or external events, could adversely affect crop yields, product quality, or production timelines. Variability in crop yields or product quality may result in increased costs, reduced revenues, inventory write-downs, or an inability to meet customer demand.

We may be adversely impacted by rising or volatile energy costs and dependent on inputs.

Our cannabis cultivation operations consume considerable energy, which makes them vulnerable to rising energy costs. Accordingly, rising or volatile energy costs may adversely affect our business, our margins and our ability to operate profitably.

In addition, our business is dependent on a number of key inputs and their related costs, including raw materials and supplies related to our growing operations, as well as electricity, water, and other utilities. Any significant interruption or negative change in the availability, cost or reliability of these inputs could materially impact our financial condition and operating results. Macroeconomic conditions, geopolitical events, supply chain disruptions, inflationary pressures, and changes in utility pricing or availability may increase the cost of energy, materials, or transportation or limit access to critical inputs. Any inability to secure required supplies and services, or to do so on acceptable terms, could have a materially adverse impact on our business, financial condition, and operating results.

We may encounter environmental risks related to properties used in our operations.

There can be no assurance that we will not encounter hazardous conditions, such as asbestos or lead, at the sites of the real estate used to operate our businesses, which may delay the development of our businesses. Upon encountering a hazardous condition, work at our facilities may be suspended. If we receive notice of a hazardous condition, we may be required to correct the condition prior to continuing construction or operations. If additional hazardous conditions were present, it would likely delay development or ongoing operations and may require significant expenditure of our resources to correct the conditions. Such conditions could have a material impact on our business, financial condition, or results of operations. In addition, environmental laws, and regulations may impose liability for investigation or remediation of contamination regardless of fault, and compliance with such requirements could increase operating costs or limit the use of certain properties.

Climate change may have an adverse effect on our operations.

Over the past several years, changing weather patterns and climatic conditions due to natural and man-made causes have added to the unpredictability and frequency of extreme weather events such as severe weather, heat waves, wildfires, flooding, hailstorms, snow storms, and the spread of disease and insect infestations. These events could damage, destroy or hinder the operations at our physical facilities, or the facilities of our suppliers or customers, and adversely affect our financial results as a result of decreased production output, increased operating costs or reduced availability of transportation.

Government action to address climate change, greenhouse gas emissions, water usage, and land use may result in the enactment of additional or more stringent laws and regulations, which could require us to incur increased compliance costs, capital expenditures, or operational constraints, or otherwise adversely affect our financial condition.

In addition, increasingly our employees, customers and investors expect that we minimize the negative environmental impacts of our operations. Failure to mitigate or adequately respond to the risks of climate change or evolving environmental expectations could result in additional regulatory scrutiny, loss of team members, customers and investors, and an adverse impact on our brand and reputation.

We are dependent on key inputs, suppliers, and skilled labor.

We are dependent on a number of key inputs and their related costs, including raw materials and supplies related to cultivation operations, as well as electricity, water, and other local utilities. Any significant interruption or negative change in the availability, cost or reliability of the supply chain for key inputs, or natural or other disruptions to power or other utility systems, could materially impact our business, financial condition, results of operations or prospects. Some of these inputs may only be available from a single supplier or a limited group of suppliers. If a sole source supplier was to go out of business, we might be unable to find a replacement for such source in a timely manner, or at all. If a sole source supplier were to be acquired by a competitor, that competitor may elect not to sell to us in the future. Any inability to secure required supplies and services, or to do so on commercially reasonable terms, could have a materially adverse impact on our business, prospects, revenue, results of operation and financial condition.

Our ability to compete and grow will also depend on our access, at a reasonable cost and in a timely manner, to skilled labor, equipment, parts, and components. We may experience difficulty sourcing such labor, equipment, parts or components due to supply chain constraints, labor market conditions, or increased competition. Any such challenges could have an adverse effect on our financial results.

We depend on our ability to attract, retain and motivate key personnel.

Our success and our ability to manage anticipated future growth is dependent upon the ability, expertise, judgment, discretion, and good faith of our senior management team and other key personnel. Although we have invested in succession planning, the loss of one or more members of our senior management team or other key personnel could nevertheless have a material adverse effect on our business. If one or more of our senior management team or other key personnel are unable or unwilling to continue in their present positions, we may not be able to replace them readily, if at all, or on acceptable terms. We may also incur additional expenses to recruit and retain new key personnel.

Our business also depends on our ability to continue to attract, motivate, and retain a large number of highly qualified personnel in order to achieve business results. There can be no assurance that we will be able to attract or retain highly qualified personnel. We face significant competition for skilled personnel in our industries. In particular, if the cannabis industry continues to grow, demand for personnel may become more competitive, which could increase labor costs and make it more difficult to attract, hire and retain qualified employees.

From time to time, we may experience changes in personnel as we continue to develop and scale our operations. Changes and turnover of employees present particular challenges to the extent they involve the departure of knowledgeable and experienced personnel and the resulting need to identify and train existing or new candidates, which may result in unexpected costs, reduced productivity, and difficulties with respect to internal processes and controls.

There may be unknown health impacts associated with the use of cannabis and cannabis derivative products.

There is limited scientific research regarding the short-term and long-term health effects of cannabis and cannabis-derived products, whether used for recreational or medicinal purposes. In particular, there are relatively few long-term, large-scale or longitudinal studies assessing the potential health impacts of cannabis use, dosage, potency, frequency of consumption, methods of administration or interactions with other substances.

As scientific research and public health understanding of cannabis continue to evolve, future studies, or regulatory reviews may identify previously unknown or unanticipated adverse health effects associated with cannabis use. Any such findings could result in increased regulatory scrutiny, restrictions on product formulations, labeling, potency, advertising or distribution, product recalls, or changes in consumer perception and demand.

In addition, adverse health effects, whether real or perceived, could expose us to product liability claims, class action litigation, governmental investigations or enforcement actions, and increased compliance and insurance costs, regardless of the ultimate merit of such claims. The occurrence of any of the foregoing could materially and adversely affect our business, financial condition, results of operations and reputation.

We face an inherent risk of product liability and similar claims.

As a distributor of products designed to be ingested by humans, we face an inherent risk of exposure to product liability claims, regulatory action and litigation if our products are alleged to have failed to meet expected standards or to have caused significant loss or injury. In addition, the sale of our products involves the risk of injury to consumers due to tampering by unauthorized third parties or product contamination. Previously unknown or unforeseeable adverse reactions resulting from human consumption of our products alone or in combination with other medications or substances could occur. We may be subject to various product liability claims, including, among others, claims that our products caused injury or illness, contained inadequate instructions for use, or included inadequate warnings concerning possible side effects or interactions with other substances. As an agricultural product, cannabis may exhibit natural variability in quality, potency and other characteristics, and despite quality control, testing and labeling processes, we may be subject to claims alleging defects, contamination, mislabeling, or failure to meet expected standards.

A product liability claim, product recall, or regulatory action against us could result in increased costs, could adversely affect our reputation with our clients and consumers generally and could have a material adverse effect on our business, results of operations and financial condition. There can be no assurances that we will be able to obtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities. Such insurance is expensive and may not be available in the future on acceptable terms, or at all. The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of our products.

We may be exposed to infringement or misappropriation claims by third parties, which, if determined adversely to us, could subject us to significant liabilities and other costs.

Our success may depend on our ability to use and develop new extraction technologies, recipes, know-how and new strains of cannabis without infringing the intellectual property rights of third parties. We cannot assure that third parties will not assert intellectual property claims against us. We are subject to additional risks if entities licensing intellectual property to us do not have adequate rights to the licensed materials. If third parties assert copyright or patent infringement or violation of other intellectual property rights against us, we will be required to defend ourselves in litigation or administrative proceedings, which can be both costly and time consuming and may significantly divert the efforts and resources of management personnel. An adverse determination in any such litigation or proceedings to which we may become a party could subject us to significant liability to third parties, require us to seek licenses from third parties, require us to pay ongoing royalties or subject us to injunctions that may prohibit or restrict the development, manufacture, distribution, or sale of certain products. Any of the foregoing could materially and adversely affect our business, financial condition, results of operations, and prospects.

Our products may be subject to product recalls.

Manufacturers, distributors and retailers of products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labeling disclosure. If any of our products or products sold at our retail stores are voluntarily or involuntarily recalled due to an alleged product defect or for any other reason, we could be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection with the recall. We may lose a significant amount of sales and may not be able to replace those sales at an acceptable margin, if at all. In addition, a product recall may require significant management attention.

Although we have detailed procedures in place for testing our products and requiring compliant labeling of third-party products we sell, there can be no assurance that any quality, potency or contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action or lawsuits. Additionally, if any of our brands were subject to recall, our image and the image of that brand could be harmed. A recall for any of the foregoing reasons could lead to decreased demand for our products and could have a material adverse effect on the results of our operations and financial condition. In addition, product recalls may result in increased scrutiny by state or local regulatory authorities and could require additional management attention, compliance efforts, legal fees, and other expenses.

Adverse changes in the wholesale and retail prices could result in earnings declines.

The cannabis industry is a margin-based business in which gross profits depend on the excess of sales prices over costs. Consequently, profitability is sensitive to shifts in wholesale and retail prices caused by changes in supply (which itself depends on other factors such as new entrants into retail markets, new entrants into the cultivation markets or cultivation expansions by existing operators, weather, fuel, equipment and labor costs, shipping costs, economic situation and demand), taxes, government programs and policies for the cannabis industry (including price controls and wholesale price restrictions that may be imposed by government agencies responsible for the sale of cannabis), and other market conditions, all of which are factors beyond our control.

Wholesale and retail prices for cannabis products may decline due to increased competition, oversupply in certain markets, the entry of new operators, expansions by existing cultivators or retailers, changes in consumer preferences, and pricing and promotional activity by competitors. In some jurisdictions, relatively low barriers to expansion or the absence of meaningful limits on cultivation capacity or retail density have contributed to periods of excess supply and downward pressure on prices. Our operating income may be significantly and adversely affected by a decline in the price of cannabis and will be sensitive to changes in the price of cannabis and the overall condition of the cannabis industry, as our profitability is directly related to the price of cannabis. In addition, we may be unable to offset declines in wholesale or retail prices through corresponding reductions in operating costs, particularly where costs are fixed or increase due to inflation, labor availability, energy prices or regulatory compliance obligations. There is currently not an established market price for cannabis and the price of cannabis is affected by numerous factors beyond our control. Pricing may fluctuate significantly over short periods of time, and sustained price declines, increased discounting or promotional activity, or an inability to pass increased costs on to customers may have a material adverse effect on us.

We may face unfavorable publicity or consumer perception.

Our ability to generate revenue and be successful in the implementation of our business plan is dependent on consumer acceptance of and demand for our product lines. The medical and adult-use cannabis industry is highly dependent upon consumer perception regarding the safety, efficacy and quality of the cannabis produced.

Acceptance of our products depends on several factors, including availability, cost, ease of use, familiarity of use, convenience, effectiveness, safety and reliability. If customers do not accept our products, or if such products fail to adequately meet customers’ needs and expectations, our ability to continue generating revenues could be affected.

Consumer perception of our current or proposed products may be significantly influenced by scientific research or findings, regulatory investigations, litigation, media attention and other publicity regarding the consumption of cannabis products. There can be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention or other research findings or publicity will be favorable to the cannabis market or any particular product, or consistent with earlier publicity. Future research reports, findings, regulatory proceedings, litigation, media attention or other publicity that is perceived as less favorable than, or questions earlier research reports, findings or publicity could have a material adverse effect on the demand for our products. Our dependence upon consumer perceptions means that such adverse reports, whether or not accurate or with merit, could ultimately have a material adverse effect on our business, results of operations, financial condition and cash flows.

Further, adverse publicity reports or other media attention regarding the safety, efficacy and quality of cannabis in general, or our products specifically, or associating the consumption of cannabis with illness or other negative effects or events, could have such a material adverse effect on us. Although we use quality control processes and procedures to ensure our consumer packaged goods meet our standards, a failure or alleged failure of such processes and procedures could result in negative consumer perception of our products or legal claims against us. Adverse publicity reports or other media attention could arise even if the adverse effects associated with such products resulted from consumers’ failure to consume such products appropriately or as directed.

Certain of our products are e-vapor or “vape” products. The use of vape products and vaping may pose health risks. Public health authorities, including the Centers for Disease Control and Prevention, have previously identified potential health concerns associated with vaping and inhaled products. Clinical studies regarding the long-term safety and efficacy of vape products have not been submitted to or approved by the FDA. Adverse findings, regulatory investigations, litigation, media attention, and other publicity regarding the consumption of vape or other inhaled products, including adverse publicity regarding underage use of vape or other inhaled products, may adversely affect us.

Our business is highly dependent upon our brand recognition and reputation, and the erosion or degradation of our brand recognition or reputation would likely adversely affect our business and operating results.

Our business is highly dependent on the Ascend brand identity and our reputation, which is critical to our ability to attract and retain customers and consumers. The importance of our brand recognition and reputation is expected to continue to increase as competition in the markets in which we operate continues to develop. Our success in this area will depend on a wide range of factors, some of which are within our control and some of which are not. The factors affecting our brand recognition and reputation that are within our control include the following:

•the efficacy of our marketing efforts;

•our ability to maintain high satisfaction among consumers and customers;

•the quality of our products;

•our ability to successfully differentiate our products from competitors’ products; and

•our compliance with laws and regulations.

In addition, our brand recognition and reputation may be affected by factors that are outside our control, such as:

•actions of competitors or other third parties;

•consumers’ experiences with our services or products;

•positive or negative publicity, including with respect to events or activities attributed to us, the cannabis industry generally, our employees, partners, or others associated with any of these parties; and

•litigation or regulatory developments.

Damage to our reputation and loss of brand equity from one or more of the factors listed above may reduce demand for our products and have an adverse effect on our business, operating results and financial condition. Moreover, any attempts to rebuild our reputation and restore the value of our brand may be costly and time-consuming, and such efforts may not ultimately be successful.

We may face competition from pharmaceutical, synthetic cannabinoid and other alternative products.

The pharmaceutical industry and other well-capitalized companies may seek to compete with or displace traditional cannabis products through the development, approval and commercialization of synthetic cannabinoids or other cannabis-derived or cannabis-inspired products intended to replicate or emulate the effects of organic cannabis. Such products may be subject to different regulatory regimes, benefit from greater physician acceptance, insurance reimbursement, or broader distribution channels, and may be perceived by consumers, regulators or healthcare providers as more consistent, standardized, or safer than plant-based cannabis products.

If synthetic or pharmaceutical alternatives gain widespread acceptance or regulatory preference, demand for organic cannabis products could decline, which could reduce industry growth, place downward pressure on pricing and margins, and adversely affect the volume and profitability of our operations. In addition, advances in technology, formulation, delivery methods, or manufacturing processes by competitors could reduce the competitive differentiation of our products or require us to make significant investments to remain competitive. Any of the foregoing could materially adversely affect our business, results of operations, financial condition and prospects.

We may have increased labor costs and operational constraints as a result of union activity.

Labor unions are actively seeking to organize workforces within the cannabis industry. As of December 31, 2025, approximately 33% of our workforce was represented by labor organizations for purposes of collective bargaining, pursuant to thirteen collective bargaining agreements with local chapters of labor unions, with expiration dates ranging from May 2026 to December 2028. Although we believe that our relationship with our employees and union representatives is constructive, and we have not experienced any material work stoppages, there can be no assurance that labor disruptions, including strikes or work stoppages, will not occur in the future. Union activities and collective bargaining obligations may increase our labor costs, limit our operational flexibility, or impose additional requirements, which could adversely affect our business, profitability, and ability to reinvest in growth initiatives.

In addition, we regularly engage with labor organizations that may seek to represent additional segments of our workforce, and it is possible that employees at additional retail, cultivation or manufacturing locations may become unionized in the future. We cannot predict the outcome of future collective bargaining negotiations, whether new or existing agreements may result in increased compensation, benefits or other costs, or whether we will be able to meet union requirements without adversely affecting our financial condition. Labor unions may also limit our flexibility in dealing with our workforce.

Any deterioration in our labor relations, work stoppages, or reduced workforce flexibility could disrupt operations, delay production or distribution, strain customer relationships, and result in lost revenue, which could materially and adversely affect our business, results of operations, and financial condition.

As the cannabis market continues to mature, our products may become obsolete, less competitive, or less marketable.

Because the cannabis market and related products continue to be rapidly evolving, both domestically and internationally, we may be unable to anticipate and/or respond to developments in consumer preferences, product formats, regulatory requirements, or competitive dynamics in a timely and cost-efficient manner. The process of developing our products is complex and requires significant costs, development efforts, and reliance on third-party commitments. Our failure to develop new products or to adapt our existing products, processes or technologies to evolving market conditions, and the potential disuse or reduced market acceptance of our existing products could adversely affect our business, financial condition and operations.

In addition, competitors may introduce new or alternative product formats, formulations or delivery methods that gain greater market acceptance than our products, which could reduce demand for certain of our offerings.

Implementation of certain new technologies used to support product development, manufacturing efficiency, or consumer engagement, including automation, data analytics, or other emerging technologies, may have unintended consequences due to their limitations, potential manipulation, or our failure to use them effectively. Our success will depend, in part, on our ability to continually invest in research and development and process improvements to maintain competitive product offerings, and to enhance our existing technologies and products in a cost-effective manner. There can be no assurance that these efforts will be successful, timely or commercially viable, and any failure to do so could materially and adversely affect our business, financial condition, results of operations and prospects.

Risks Related to Ownership of Our Class A Common Stock

We do not intend to pay dividends on our shares of Class A common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our shares of Class A common stock.

We have never declared or paid any cash dividend on our shares of Class A common stock and do not currently intend to do so in the foreseeable future. We currently anticipate that we will retain future earnings, if materialized, for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends in the foreseeable future. Therefore, the success of an investment in our shares of Class A common stock will depend upon any future appreciation in their value. Our shares of Class A common stock may not appreciate in the short term or long term or even maintain the price at which such shares of Class A common stock were purchased. Accordingly, an investment in our shares of Class A common stock may not be suitable for all investors. Investors should be prepared to bear the risk of loss of some or all of their investment and should have no need for immediate liquidity.

Our capital structure and voting control may cause unpredictability in the price of our Class A common stock.

Abner Kurtin, one of our founders, a director, and our Executive Chairman, and Frank Perullo, one of our founders, a director and our President, have the ability to exercise significant voting power with respect to our outstanding shares because of the shares of Class B common stock that are held by AGP Partners, LLC (“AGP”), an entity which Mr. Kurtin and Mr. Perullo control. While shares of Class A common stock are entitled to one vote per share, shares of Class B common stock are entitled to 1,000 votes per share. Through AGP, Mr. Kurtin and Mr. Perullo controlled approximately 14% of our total issued and outstanding shares and approximately 35% of the voting power attached to all of our issued and outstanding shares as of December 31, 2025. Each share of our Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock and, in addition, will automatically convert into one share of Class A common stock on May 4, 2026 (the “Final Conversion Date”), in accordance with our certificate of incorporation. Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions described in our certificate of incorporation. Upon the automatic conversion of the Class B common stock on the Final Conversion Date, Mr. Kurtin and Mr. Perullo will no longer have super-voting rights, and the concentration of voting control currently held by the holders of Class B common stock will be eliminated. This conversion may result in a significant shift in control over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions.

The automatic conversion of the Class B common stock may create uncertainty regarding our governance, strategic direction and stockholder base and could result in increased volatility or fluctuations in the trading price of our Class A common stock, including around the Final Conversion Date.

Given the concentration of voting control held by the holders of the Class B common stock, both the existence of our current dual-class capital structure and the automatic conversion of the Class B common stock could adversely affect the trading price and volatility of our Class A common stock, including through increased fluctuations around the Final Conversion Date or negative market perception.

The market price for the shares of Class A common stock may be volatile, which may affect the price at which you could sell the shares of Class A common stock.

The market price for securities of cannabis companies generally is likely to be volatile. In addition, the market price for the shares of Class A common stock has been and may be subject to wide fluctuations in response to numerous factors beyond our control, including, but not limited to:

•actual or anticipated fluctuations in our quarterly results of operations;

•recommendations by securities research analysts;

•changes in the economic performance or market valuations of companies in the industry in which we operate;

•addition or departure of our executive officers and other key personnel;

•release or expiration of transfer restrictions on outstanding shares of Class A common stock;

•sales or perceived sales of additional shares of Class A common stock;

•our operating and financial performance relative to the expectation of management, securities analysts and investors;

•regulatory changes affecting our industry generally and our business and operations both domestically and abroad, or legislative or regulatory decisions to halt adult-use or medical cannabis programs;

•announcements of developments and other material events by us or our competitors;

•fluctuations in the costs of vital production materials and services;

•changes in global financial markets and global economies and general market conditions, such as interest rates;

•significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors;

•actual or threatened litigation, arbitration proceedings or governmental investigations involving us or our industry;

•operating and share price performance of other companies that investors deem comparable to us or the lack of market comparable companies; and

•news reports relating to trends, concerns, technological or competitive developments, regulatory changes and other related issues in our industry or target markets.

Financial markets have at times historically experienced significant price and volume fluctuations that: (i) have particularly affected the market prices of equity securities of companies, and (ii) have often been unrelated to the operating performance, underlying asset values or prospects of such companies. Accordingly, the market price of the shares of Class A common stock from time to time may decline even if our operating results, underlying asset values or prospects have not changed. Additionally, these factors, as well as other related factors, may cause decreases in asset values that may result in impairment losses to us. Further fluctuations in price and volume of equity securities may occur in the future. If increased levels of volatility and market turmoil continue, our operations could be adversely impacted, and the trading price of the shares of Class A common stock may be materially adversely affected.

Sales of substantial amounts of shares of Class A common stock, or a decline in our stock price, could adversely affect the market price of our shares and our ability to raise capital.

Sales of a substantial number of shares of Class A common stock in the public market could occur at any time, subject to certain restrictions described below. These sales, or the perception in the market that holders of many shares intend to sell shares, or the availability of such securities for sale, could adversely affect the prevailing market prices for the shares of Class A common stock. A decline in the market prices of the shares of Class A common stock could impair our ability to raise additional capital through the sale of securities should we seek to do so.

In addition, a sustained decline in the market price of Class A common stock could reduce the liquidity of our shares and adversely affect our ability to raise capital on acceptable terms, or at all. Because a significant portion of our operations have been and will be financed through the sale of equity securities, a decline in the price of our Class A common stock could be especially detrimental to our liquidity and our operations. If our stock price declines, there can be no assurance that we will be able to raise additional capital or generate funds from operations sufficient to meet our obligations. If we are unable to raise sufficient capital in the future, our business, financial condition and results of operations could be materially adversely affected.

Additional issuances of shares of Class A common stock may result in further dilution.

We may issue additional equity or convertible debt securities in the future, which may dilute an existing stockholder’s holdings. Our certificate of incorporation permits the issuance of 750 million shares of our Class A common stock, and existing stockholders will have no preemptive rights in connection with such further issuances. Our Board has discretion to determine the price and the terms of further issuances, and such terms could include rights, preferences and privileges superior to those of holders of shares of Class A common stock. To the extent holders of our options or other convertible securities convert or exercise their securities and sell shares of Class A common stock they receive, the trading price of the shares of Class A common stock may decrease due to the additional number of shares of Class A common stock available in the market. We cannot predict the size or nature of future issuances or the effect that future issuances and sales of shares of Class A common stock will have on the market price of the shares of Class A common stock. Issuances of a substantial number of additional shares of Class A common stock, or the perception that such issuances could occur, may adversely affect prevailing market prices for the shares of Class A common stock. With any additional issuance of shares of Class A common stock, our investors will suffer dilution to their voting power and economic interest.

An active trading market for our Class A common stock may not be sustained, which could limit liquidity and increase volatility.

Our shares of Class A common stock are listed on the CSE and our continued listing is subject to our ongoing compliance with the listing requirements of the CSE. Trading in securities listed on the CSE may be less liquid than trading in securities listed on larger U.S. exchanges. As a result, there may be limited liquidity, trading volume and analyst coverage for our shares of Class A common stock. We cannot predict the prices at which our shares of Class A common stock will trade, and there can be no assurance that an active or orderly trading market will be sustained.

Our shares of Class A common stock do not currently trade on any U.S. securities exchange. Even if our shares were to trade on a U.S. securities exchange in the future, there can be no assurance that such listing would result in increased liquidity, improved market depth or reduced volatility. We cannot predict the prices at which our shares of Class A common stock would trade on any such exchange, or whether an active trading market would develop or be sustained.

We incur increased costs as a result of being a United States company listed on the CSE and maintaining a public listing.

Shares of our Class A common stock are listed on the CSE and we are subject to the rules and regulations of Canadian securities regulators as well as certain U.S. securities laws and regulatory requirements applicable to U.S.-based public companies. As a result, we are, and will continue to be, subject to ongoing reporting, disclosure, corporate governance, accounting and compliance obligations under applicable Canadian and U.S. securities laws and the rules of the securities exchanges on which our securities may be listed.

Compliance with these requirements has resulted, and is expected to continue to result, in significant legal, accounting, advisory, audit, internal control, and other compliance costs. In addition, changes in existing rules or the adoption of new or more stringent requirements by Canadian or U.S. regulatory authorities could further increase our compliance costs and make certain business activities more difficult, time-consuming or costly. These obligations may place significant demands on our management, personnel, systems, and resources and could adversely affect our business, financial condition and results of operations.

Anti-takeover provisions in our certificate of incorporation and bylaws and Delaware law could discourage a takeover.

Our certificate of incorporation and bylaws contain provisions that might enable our management to resist a takeover. These provisions could make it more difficult for a third party to acquire control of us or for stockholders to replace our Board or management without the approval of our Board. These provisions include:

•authorizing the issuance of “blank check” preferred stock that could be issued by our Board to increase the number of outstanding shares and dilute the ownership of a potential acquirer or otherwise impede a takeover attempt;

•advance notice requirements applicable to stockholders for matters to be brought before a meeting of stockholders and requirements as to the form and content of a stockholder’s notice;

•restrictions on the transfer of our outstanding shares of Class B common stock, which shares represent approximately 25% of the voting rights of our capital stock;

•the dual-class structure of our common stock, which gives our founders significant influence over all matters requiring stockholder approval, including the election of directors, amendments to our charter documents and significant corporate transactions, such as a merger or other sale of our company or its assets;

•the inability of our stockholders to act by written consent;

•a requirement that the authorized number of directors may be changed only by resolution of the Board;

•allowing all vacancies, including newly created directorships, to be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum, except as otherwise required by law;

•limiting the forum for certain litigation against us to Delaware; and

•limiting the persons that can call special meetings of our stockholders to our Board, the chief executive officer, the president, the secretary or a majority of the authorized number of directors.

These provisions might discourage, delay or prevent a change in control of our company or a change in our Board or management. These provisions, individually or in combination, could adversely affect the voting power of holders of Class A common stock and limit the price that investors might be willing to pay in the future for shares of our Class A common stock. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder unless specified conditions are met.

Our Board may issue preferred stock with rights senior to our Class A common stock, which could adversely affect our stockholders and deter a change in control.

Our certificate of incorporation authorizes us to issue one or more series of preferred stock. Our Board has the authority, without further stockholder approval, to determine the preferences, limitations, and relative rights of any series of preferred stock and to fix the number of shares and designation of such series. Any preferred stock we issue could have voting, liquidation, dividend, or other rights senior to those of our Class A common stock. The issuance of preferred stock could dilute the voting power and economic interests of holders of our Class A common stock and could materially adversely affect the market price of our Class A common stock. In addition, the issuance of preferred stock could delay, discourage or prevent a change in control of us, including transactions that holders of our Class A common stock may otherwise consider favorable, and could discourage bids for our Class A common stock at a premium to the then-current market price.

Our bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our bylaws provide that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees to us or to our stockholders, (iii) any action asserting a claim arising pursuant to the Delaware General Corporation Law (the “DGCL”) or our certificate of incorporation or bylaws, (iv) any action to interpret apply, enforce or determine the validity of our certificate of incorporation or bylaws, or (v) any action asserting a claim governed by the internal affairs doctrine.

This exclusive forum provision does not apply to suits brought to enforce any liability or duty created by the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act of 1934, as amended (the “Exchange Act”), or any other claim for which the federal courts have exclusive jurisdiction. Our bylaws further provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act or the Exchange Act.

The choice-of-forum provisions described above may limit a stockholder’s ability to bring a claim in a judicial forum that the stockholder believes is favorable for disputes with us or our directors, officers, or other employees, may increase the costs associated with bringing such claims, or may discourage such lawsuits altogether. Alternatively, if a court were to find any choice-of-forum provision contained in our certificate of incorporation or bylaws to be inapplicable or unenforceable in a particular action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially harm our business, operating results and financial condition.

It may be difficult to enforce civil liabilities in the U.S. under Canadian securities laws.

We are incorporated in the State of Delaware and our corporate headquarters are located in New Jersey. A majority of our directors and executive officers and certain of the experts named in this Annual Report on Form 10-K reside principally in the U.S. and the majority of our assets and all or a substantial portion of the assets of these persons is located outside of Canada. It may be difficult for investors who reside in Canada to effect service of process upon these persons in Canada, or to enforce a Canadian court judgment predicated upon the civil liability provisions of the Canadian securities laws against us or any of these persons. U.S. courts may refuse to hear a claim based on an alleged violation of Canadian securities laws against us or these persons on the grounds that the U.S. is not the most appropriate forum in which to bring a claim. Even if a U.S. court agrees to hear a claim, it may determine that U.S. law and not Canadian law is applicable to the claim. If Canadian law is found to be applicable, the content of applicable Canadian law must be proved as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by U.S. law.

We are an SEC foreign issuer under Canadian securities laws and, therefore, are exempt from certain requirements of Canadian securities laws applicable to other Canadian reporting issuers.

Although we are currently a reporting issuer in Canada, we are an “SEC foreign issuer” as defined in National Instrument 71-102 – Continuous Disclosure and Other Exemptions Relating to Foreign Issuers, and are exempt from certain Canadian securities laws relating to continuous disclosure obligations and proxy solicitation if we comply with certain reporting requirements applicable in the U.S., provided that the relevant documents filed with the SEC are filed in Canada and sent to our stockholders in Canada to the extent and in the manner and within the time required by applicable U.S. requirements. In some cases, the disclosure obligations applicable in the U.S. are different or less onerous than the comparable disclosure requirements applicable in Canada for a Canadian reporting issuer that is not exempt from Canadian disclosure obligations. Therefore, there may be less or different publicly available information about us than would be available if we were a Canadian reporting issuer that is not exempt from such Canadian disclosure obligations. While we expect to be an SEC foreign issuer for the foreseeable future, we may lose the ability to rely upon such exemption in the event of a significant increase in the number of our Canadian resident stockholders and/or in the event of a significant change in the administration of our business or the location of our assets, which would in turn require us, as a consequence, to comply with the Canadian disclosure requirements in addition to those of the U.S., thereby necessitating the devotion of further administrative and legal resources in order to meet such requirement.

Risks Related to Our Finances, Acquisitions, and Capital Requirements

We may acquire other companies or technologies.

Our success will depend, in part, on our ability to grow our business in response to the demands of consumers and other constituents within the cannabis industry as well as competitive pressures. In some circumstances, we may determine to do so through the acquisition of complementary businesses rather than through internal development. The identification of suitable acquisition candidates can be difficult, time-consuming, and costly, and we may not be able to identify, negotiate or successfully complete identified acquisitions on acceptable terms, or at all.

In addition, acquisitions involve a number of inherent risks, including: difficulties integrating acquired businesses, assets, personnel, systems or technologies; diversion of management attention; assumption of unknown or contingent liabilities; failure to achieve expected synergies, cost savings or strategic benefits; and the potential issuance of equity or incurrence of debt, any of which could adversely affect our business, financial condition or results of operations.

We may face difficulties acquiring additional or traditional financing.

Due to the present state of the laws and regulations governing financial institutions in the U.S., banks often refuse to provide banking services to businesses involved in the cannabis industry. Consequently, it may be difficult for us to obtain financing from large U.S. financial institutions on terms comparable to those available to companies operating in other industries.

We have historically, and continue to have, access to equity and debt financing from non-public (i.e., private placement) markets. Our business plan continues to include growth initiatives, both in the form of additional acquisitions and through facility expansion and improvements. Accordingly, we may require equity and/or debt financing to support ongoing operations, to undertake capital expenditures or to undertake acquisitions and/or other business combination transactions. There can be no assurance that additional financing will be available to us when needed, in sufficient amounts, or on terms that are acceptable. Our inability to raise financing, whether through traditional banking channels or alternative sources, to fund ongoing operations, capital expenditures or acquisitions could require us to delay, reduce, or abandon planned investments or strategic initiatives and may have a material adverse effect on our business, prospects, revenue, results of operations, and financial condition.

Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.

Under Section 382 and related provisions of the Code, if a corporation undergoes an “ownership change” (generally defined as a greater than 50% change (by value) in its equity ownership over a rolling three-year period), the corporation’s ability to use its pre-change federal net operating loss carryforwards and certain other pre-change tax attributes to offset post-change taxable income may be limited.

As of December 31, 2025, we had gross state and local net operating loss carryforwards totaling approximately $44.8 million, which begin to expire in 2026. In addition, we may generate federal, state or local net operating losses or other tax attributes in future periods. We have not completed a study to assess whether an “ownership change” for purposes of Section 382 and related provisions of the Code has occurred, and it cannot be determined whether we have experienced, or may experience in the future as a result of subsequent shifts in our stock ownership, experience an “ownership change.” Thus, our ability to utilize carryforwards of our net operating losses and other tax attributes to reduce future tax liabilities may be substantially restricted for federal or (if applicable) state and local tax purposes.

Material acquisitions, dispositions, and other strategic transactions involve a number of risks for us.

Material acquisitions, dispositions and other strategic transactions may involve a number of risks for us, including: (i) potential disruption of our ongoing business; (ii) distraction of management; (iii) increased financial leverage; (iv) the anticipated benefits, synergies or cost savings of such transactions may not be realized or may take longer to realize than anticipated; (v) increased scope and complexity of our operations; and (vi) loss or reduction of control over certain of our assets.

Additionally, we may issue additional shares of Class A common stock or other equity or convertible securities in connection with such transactions, which would dilute a stockholder’s holdings in the Company.

The presence of material liabilities or obligations of an acquired business that are known but believed to be immaterial, or that are unknown to us at the time of acquisition could have a material adverse effect on our business, prospects, revenue, results of operation, and financial condition. A strategic transaction may result in a significant change in the nature of our business, operations, or strategy. In addition, we may encounter unforeseen obstacles or costs in implementing a strategic transaction or integrating any acquired business into our operations.

Our growth strategy may include acquisitions, investments or other strategic transactions, the completion of which may be subject to regulatory approvals, including cannabis regulatory, antitrust or other governmental clearances, as well as other customary closing conditions. The timing and outcome of such approval processes are often uncertain, may be lengthy, and may result in the imposition of conditions or restrictions that could reduce the anticipated benefits of a transaction or make it less attractive. There can be no assurance that required approvals will be obtained on acceptable terms or within anticipated timeframes, or at all, or that announced transactions will be completed as expected. Delays, conditions or failures to complete such transactions could result in increased costs, diversion of management attention, lost business opportunities, or reputational harm, any of which could materially adversely affect our business, financial condition or results of operations.

We may be subject to growth-related risks.

We may be subject to risks associated with managing growth, including capacity constraints and pressure on our internal systems and controls. Our ability to manage growth effectively will require us to continue to implement and improve our operational and financial systems and to expand, train and manage our employee base. Our inability to deal with this growth may have a material adverse effect on our business, prospects, revenue, results of operation and financial condition.

Our growth strategy is dependent upon expanding our product and service offerings into new business areas or new geographic markets. There can be no assurance that any new business areas and geographic markets will generate the clients and revenue anticipated. In addition, any expansion into new business areas or geographic markets could expose us to new risks, including compliance with applicable laws and regulations, changes in the regulatory or legal environment, differing customer preferences or habits, adverse exchange rate fluctuations, adverse tax consequences, difficulties staffing and managing new operations, infringement of third-party intellectual property rights, new costs to adapting our products and services for new markets, and difficulties collecting accounts receivable. As a result of such expansion, we may incur losses or otherwise fail to enter new markets successfully.

We may invest in pre-revenue or other revenue-generating cannabis companies which may not be able to meet anticipated revenue targets in the future.

We may make investments in companies with no significant sources of operating cash flow and no revenue from operations. Our investments in such companies will be subject to risks and uncertainties that new companies with no operating history may face. In particular, there is a risk that our investment in these pre-revenue companies will not be able to meet anticipated revenue targets or will generate no revenue at all. The risk is that underperforming pre-revenue companies may lead to these businesses failing, which could have a material adverse effect on our business, prospects, revenue, results of operation and financial condition.

There can be no assurance that our current or future contractual relationships or strategic alliances will have a beneficial impact on our business, financial condition and results of operation.

We currently have, and may in the future enter into, additional strategic alliances and partnerships with third parties that we believe will complement or augment our existing business. Our ability to identify, enter into and maintain such relationships is dependent upon, and may be limited by, the availability of suitable counterparties, regulatory considerations and capital. In addition, contractual relationships and strategic alliances may present unforeseen operational, regulatory or integration challenges or costs, may not enhance our business, and may involve risks that could adversely affect us, including the diversion of management time and resources required to pursue, implement and maintain such arrangements. These relationships may also involve reliance on third parties, shared control, additional costs or contingent liabilities. There can be no assurance that any current or future contractual relationships or strategic alliances will achieve or continue to achieve the expected benefits to our business, or that we will be able to consummate future strategic alliances on satisfactory terms, if at all. If any such relationships fail to perform as expected, are terminated, or otherwise do not deliver anticipated benefits, our business, financial condition and results of operations could be materially adversely affected.

Our sales are difficult to forecast.

As a result of ongoing regulatory and policy changes in the medical and adult-use cannabis industries, the relative immaturity of certain markets, and variability in supply and demand conditions, reliable market data is limited and, in some cases, unavailable. Accordingly, we must rely largely on our own market research and internal estimates to forecast sales, as detailed third-party forecasts are not generally obtainable in the states in which we operate.

Any market research and projections regarding estimated retail sales, demographics, demand or similar metrics are based on assumptions derived from limited or incomplete data. Such projections are inherently subject to uncertainty and depend on the occurrence and timing of a number of future events, many of which are outside of our control. There can be no assurance that the assumptions underlying these projections will be realized.

Actual results may differ materially from projected results due to a variety of factors, including changes in regulatory or legal frameworks, shifts in consumer demand, increases in operating costs, supply chain disruptions, competitive dynamics, or broader economic conditions. Accordingly, stockholders should not place undue reliance on any sales forecasts or projections as indicators of future performance.

Changes in our customer, product, or competition mix could cause our product margin to fluctuate.

From time to time, we may experience changes in our customer mix, product mix, or competitive environment, each of which may affect our operating margins. Changes in customer mix may result from geographic expansion or contraction, differences in consumer preferences across markets, legislative or enforcement priorities affecting permitted products, or shifts in demand among medical and adult-use consumers.

Changes in product mix may result from the introduction of new products, promotional or pricing strategies, regulatory changes affecting product availability, or evolving consumer preferences, including increased demand for lower-margin products or categories. Changes in our competitive environment, including the entry or expansion of well-capitalized competitors or increased promotional or discounting activity, may place downward pressure on pricing or require us to adjust our product offerings or pricing strategies.

If demand shifts toward lower-margin products or categories, if competitive or regulatory pressures limit our ability to price products at levels sufficient to maintain historical margins, or if we are unable to offset such changes through cost controls or operational efficiencies, our gross margins, operating results, and financial condition could be materially adversely affected.

We have a limited operating history and a history of net losses and negative cash flows from operating activities, and we may not achieve or maintain profitability or positive cash flows in the future.

We began operating in May 2018 and have not achieved sustained profitability. We generated a net loss of $118.2 million during the year ended December 31, 2025.During the year ended December 31, 2025, we had positive cash flows from operating activities of $38.1 million resulting in total “cash and cash equivalents” of approximately $85.7 million as of December 31, 2025. We intend to continue to expend significant funds to expand our cultivation and processing facilities, to make acquisitions, and to fund our working capital. We cannot guarantee we will have a positive cash flow status in the future, and we may be subject to litigation matters in the general course of business that, if we suffer an adverse outcome or enter into unfavorable settlement agreement, may impact results from operations

Our efforts to grow our business may be more costly than we expect and we may not be able to increase our revenue enough to offset higher operating expenses. We may incur significant losses in the future for a number of reasons, including as a result of unforeseen expenses, difficulties, complications and delays, the other risks described in this Annual Report on Form 10-K and our other reports and disclosure documents as well as other unknown events. The amount of future net losses will depend, in part, on the growth of our future expenses and our ability to generate revenue. If we continue to incur losses in the future, the net losses and historical negative cash flows incurred to date, together with any such future losses, will have an adverse effect on our stockholders’ equity and working capital. Because of the numerous risks and uncertainties associated with producing cannabis products, as

outlined herein, we are unable to accurately predict when, or if, we will be able to achieve profitability. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. If we are unable to achieve and sustain profitability, the market price of our Class A common stock may significantly decrease and our ability to raise capital, expand our business or continue our operations may be impaired. A decline in our value may also cause you to lose all or part of your investment.

We face increased costs as a result of operating as a public company and our management will be required to devote substantial time to new compliance initiatives.

Operating as a public company requires significant legal, accounting, and other compliance efforts. Our management and other personnel must devote substantial time to complying with reporting requirements, maintaining effective internal control over financial reporting and disclosure controls and procedures, and addressing evolving regulatory and governance expectations. Our existing management team will need to devote a substantial amount of time to these compliance initiatives, and we may need to hire additional personnel or engage external advisors to assist us with complying with these requirements. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time consuming and costly and may divert management’s attention from operating and growing our business.

There is no assurance that our management’s past experience will be sufficient to enable us to operate successfully as a public company.

There is no guarantee that our current cash position, expected revenue growth and anticipated financing transactions will be sufficient to fund our operations for the next twelve months.

We have an accumulated deficit of $518.5 million and $400.4 million as of December 31, 2025 and 2024, respectively, as well as a net loss for each of the years ended December 31, 2025, 2024, and 2023. We generated positive cash flows from operating activities during the years ended December 31, 2025, 2024 and 2023, but incurred negative cash flows from operating activities during prior years. If we are unable to raise additional capital on favorable terms, if or when needed, we may be forced to delay, reduce, or curtail certain of our operations until such time as additional capital becomes available. Additionally, if we are unable to continue as a going concern, our stockholders may lose some or all of their investment in the Company.

We are subject to a number of restrictive debt covenants under our loan agreements.

Many of our loan agreements contain certain restrictive covenants, which restrict our ability to, among other things, incur additional indebtedness, incur certain liens on our assets or sell assets, make investments, make capital expenditures, pay dividends and make other restricted payments. Many of our loan agreements also require us to maintain specified financial ratios under certain conditions and satisfy financial condition tests, including minimum cash balances and debt to assets ratios.

Our ability to meet those financial ratios and tests and otherwise comply with our financial covenants may be affected by the factors described herein and other factors outside our control, and we may not be able to meet those ratios, tests and covenants. Our ability to generate sufficient cash from operations to meet our debt obligations will depend upon our future operating performance, which will be affected by general economic, financial, competitive, business and other factors beyond our control. A breach of any of these covenants, ratios, tests or restrictions, as applicable, or any inability to pay interest on, or principal of, our outstanding debt as it becomes due could result in an event of default. Upon an event of default, if not waived by our lenders, our lenders may declare all amounts outstanding as due and payable. Such an acceleration of the maturity of our indebtedness may, among other things, prevent or limit us from engaging in transactions that benefit us, including responding to changing business and economic conditions and taking advantage of attractive business opportunities.

General Risk Factors

Limited analyst coverage or unfavorable analyst reports could adversely affect the market price and trading volume of our Class A common stock.

The trading market for our shares of Class A common stock will be influenced by the research and reports that securities or industry analysts publish about us, our business, our market or our competitors. If no or few securities or industry analysts cover us, the trading price and volume of our shares would likely be negatively impacted. If one or more of the analysts who covers us downgrades our shares or publishes inaccurate or unfavorable research about our business, or provides more favorable relative recommendations about our competitors, our stock price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our shares could decrease, which could cause our stock price or trading volume to decline.

We are eligible to be treated as an “emerging growth company” as defined in the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make the shares of Class A common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, among others, (1) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), (2) reduced disclosure obligations regarding executive compensation in this Annual Report on Form 10-K and periodic reports and proxy statements, and (3) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We may remain an emerging growth company for up to five years following our initial public offering, unless we earlier cease to qualify as an emerging growth company due to one or more of the following events: (i) the market value of the shares of our Class A common stock held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, (ii) we have total annual gross revenues of $1.07 billion or more during any fiscal year, or (iii) we issue more than $1.0 billion in non-convertible debt during any three-year period, in which case we would no longer be an emerging growth company as of the applicable determination date. We expect to cease to qualify as an emerging growth company as of December 31, 2026, unless we earlier cease to qualify under one of the foregoing criteria. Beginning with the first filing period for which such status no longer applies, we will be required to comply with the additional reporting and disclosure requirements applicable to other public companies, including the requirement that our independent registered public accounting firm attest to management’s assessment of internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act.

We cannot predict if investors will find the shares of Class A common stock less attractive because we may rely on these exemptions. If some investors find our shares less attractive as a result, there may be a less active trading market for the shares of our Class A common stock, and the market price of our Class A common stock may be more volatile.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. As a result, our financial statements may not be comparable to those of companies that are not emerging growth companies or that have elected not to take advantage of such exemptions.

We have broad discretion in the use of our cash, cash equivalents, and investments and may not use them effectively.

Our management has broad discretion over the use of our cash, cash equivalents and investments, including proceeds from financings, and may deploy such funds in ways that do not improve our results of operations or enhance the value of our Class A common stock. The failure by our management to use our cash, cash equivalents and investments effectively could result in financial losses and could adversely affect our business, financial condition, results of operations and the market price of our Class A common stock, including by delaying or limiting strategic initiatives, capital investments or growth opportunities. Pending their use, we may invest our cash, cash equivalents and investments in a manner that does not generate meaningful returns or may be subject to market risk or loss of principal.

Proposed legislation in the U.S. Congress, including changes in U.S. tax law and the Inflation Reduction Act of 2022, may adversely impact us and the value of shares of our Class A common stock.

Changes to U.S. tax laws (which changes may have retroactive application) could adversely affect us or holders of our Class A common stock. In recent years, many changes to U.S. federal income tax laws have been proposed and made, and additional changes to U.S. federal income tax laws are likely to continue to occur in the future.

The U.S. Congress is currently considering, and may continue to consider, numerous items of legislation which may be enacted prospectively or with retroactive effect, which legislation could adversely impact our financial performance and the value of shares of our Class A common stock. Additionally, states in which we operate or own assets may impose new or increased taxes. If enacted, most of the proposals would be effective for the current or later years. The proposed legislation remains subject to change, and its impact on us or our investors is uncertain.

In addition, the Inflation Reduction Act of 2022 includes provisions that impact the U.S. federal income taxation of corporations. Among other items, this legislation includes provisions that impose a minimum tax on the book income of certain large corporations and an excise tax on certain corporate stock repurchases that is imposed on the corporation repurchasing such stock. It is unclear how this legislation will be implemented by the U.S. Department of the Treasury and we cannot predict how this legislation or any future changes in tax laws might affect us or investors in our Class A common stock.

We face exposure to fraudulent or illegal activity by employees, contractors and consultants.

We face exposure to the risk that employees, independent contractors or consultants may engage in fraudulent or other illegal activities. Misconduct by these parties could involve intentional, reckless and/or negligent conduct. There may be disclosure of unauthorized activities that violate government regulations, manufacturing standards, healthcare laws, abuse laws and other financial reporting laws. Further, it may not always be possible for us to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent these activities may not always be effective in controlling unknown or unmanaged risks or losses, or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations.

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, contractual damages, reputational harm, diminished profits and future earnings, or curtailment of our operations, any of which could have a material adverse effect on our business, financial condition, results of operations or prospects.

Our reputation and ability to do business may be negatively impacted by the improper conduct by our business partners, employees or agents.

In certain states, we depend on third-party suppliers to produce and ship our orders. Products purchased from our suppliers are resold to our customers. These suppliers could fail to produce products to our specifications or quality standards or may not deliver units on a timely basis. Any changes in our suppliers’ production capabilities or product availability could impact our ability to fulfill orders and could also disrupt our business due to delays in identifying or qualifying new alternative suppliers.

Furthermore, we cannot provide assurance that our internal controls and compliance systems will protect us from acts committed by our employees, agents, or business partners in violation of U.S. federal, state or local laws. Any improper acts or allegations thereof could damage our reputation and subject us to civil or criminal investigations and related stockholder lawsuits, could lead to substantial civic and criminal monetary and non-monetary penalties and could cause us to incur significant legal and investigatory fees.

We face risks related to our information technology systems, and potential cyber-attacks and security breaches.

Our operations depend, in part, on how well we and our suppliers protect networks, equipment, information technology (“IT”) systems and software against damage and threats, including, but not limited to, cable cuts, damage to physical plants, natural disasters, intentional damage and destruction, fire, power loss, hacking, computer viruses, vandalism and theft. We are susceptible to operational, financial and information security risks resulting from cyber-attacks, ransomware attacks, phishing attempts, insider threats, malfunctioning technology or other security incidents. Our operations also depend on the timely maintenance and replacement of network equipment, IT systems and software, as well as investments to mitigate associated risks. Any of the foregoing and other events could result in information system failures, delays, increases in capital expenses, financial losses, the inability to process transactions, the unauthorized release of customer information and reputational risk. If there was a breach in security or a failure or prolonged interruption of our IT systems, it could adversely affect our reputation and business continuity.

Additionally, we may store and collect personal information about customers, employees, and business partners, where allowed by law, and are responsible for protecting that information from privacy breaches that may occur through procedural or process failure, IT malfunction or deliberate unauthorized intrusions. We are subject to laws, rules and regulations in the United States and, in some cases, other jurisdictions relating to the collection, processing, storage, transfer and use of personal data. Our ability to execute transactions and to possess and use personal information and data in conducting our business subjects us to legislative and regulatory burdens that may require us to notify regulators and customers, employees and other individuals of a data security breach. Any such theft or privacy breach could have a material adverse effect on our business, prospects, revenue, results of operation and financial condition.

In addition, non-compliance could result in proceeding by governmental entities, significant fines, reputational harm or other adverse impacts on our business, financial condition, and operating results.

We have not experienced any material losses to date relating to cyber-attacks or other information security breaches, but there can be no assurance that we will not incur any further losses in the future. Our risk and exposure to these matters cannot be fully mitigated because, among other things, cyberthreats are constantly evolving and becoming increasingly sophisticated, as threat actors may utilize artificial intelligence and machine learning. As a result, cybersecurity and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access is a priority. As cyber threats continue to evolve, we may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.

Our use of artificial intelligence technologies may expose us to operational, regulatory, data privacy, and reputational risks.

We utilize artificial intelligence (“AI”) and related data analytics technologies in certain limited aspects of our business, including customer engagement and marketing analytics. These technologies rely on data, algorithms and assumptions that may be incomplete, inaccurate or subject to bias, and the outputs generated by such systems may not always be accurate. If such tools produce inaccurate or unintended results, they could adversely affect customer experience, marketing effectiveness and, to a lesser extent, certain operational or compliance-related processes that incorporate data analytics.

Our use of AI technologies may involve the collection, processing and analysis of customer or other personal data and may increase our exposure to data privacy, cybersecurity and information security risks, as well as evolving laws and regulations governing automated decision-making, consumer protection and the use of personal data. In addition, to the extent our AI-enabled tools are perceived to be unfair, misleading, discriminatory or insufficiently transparent, or if such systems fail to perform as intended or result in the unauthorized use or disclosure of data, our reputation, business, financial condition and results of operations could be materially adversely affected.

We face risks related to our insurance coverage and uninsurable risks.

Our business is subject to a number of risks and hazards generally, including adverse environmental conditions, accidents, labor disputes, destruction from civil unrest and changes in the regulatory environment. Such occurrences could result in damage to assets, personal injury or death, environmental damage, delays in operations, monetary losses and possible legal liability.

Although we intend to continue to maintain insurance to protect against certain risks in such amounts as we consider to be reasonable, our insurance will not cover all the potential risks associated with our operations. We may also be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards encountered in our operations is not generally available on acceptable terms. We might also become subject to liability for pollution or other hazards which it may not be insured against or which we may elect not to insure against because of premium costs or other reasons. Losses from these events may cause us to incur significant costs that could have a material adverse effect upon our financial performance and results of operations.

We may be subject to litigation, arbitration, or other legal proceedings that could adversely affect our business.

From time to time, we may be involved in litigation, arbitration proceedings, regulatory investigations and other legal matters in the ordinary course of business. Such matters may relate to, among other things, commercial disputes, employment matters, regulatory compliance, intellectual property, contractual obligations or other issues. Litigation and other legal proceedings are inherently uncertain, and outcomes are difficult to predict. Adverse judgments, settlements, penalties or other outcomes could result in significant monetary damages, fines, injunctive relief, operational restrictions or reputational harm, and could adversely affect our financial condition, results of operations or the market price of our Class A common stock. Even if we ultimately prevail, legal proceedings can be costly, time-consuming and disruptive to our operations and may divert the attention of management and other personnel. Please refer to the “Legal Proceedings” section of this Annual Report on Form 10-K for a description of our significant legal matters.

We may be negatively impacted by challenging global economic conditions.

Our business, financial condition, results of operations and cash flows may be negatively impacted by challenging global economic conditions. Unfavorable or uncertain economic and market conditions can be caused by declines in economic growth, business activity or consumer confidence, limitations on the availability of or increases in the cost of credit and capital, increases in inflation or interest rates, high unemployment, natural disasters, public health events, geopolitical instability, state or local government insolvency, or a combination of these or other factors.

These macroeconomic developments could negatively impact our business, which depends in part on the general economic environment and levels of consumer discretionary spending. As a result, we may be unable to maintain our existing customers or attract new customers, experience reduced demand for our products, or be required to adjust pricing or promotional strategies, any of which could adversely affect our revenues, margins and cash flows. We are unable to predict the likelihood, duration or severity of adverse global economic conditions or disruptions in credit and financial markets, and any sustained economic downturn could have a material adverse effect on our business, financial condition, results of operations and cash flows.

To date, the Company has not been significantly impacted by inflationary pressures; however, sustained increases in inflation, interest rates or other adverse economic conditions, including governmental efforts to manage or reduce inflation, could adversely impact our cost structure, including labor, energy, materials and other operating expenses, as well as consumer demand for our products. While we intend to take actions, where possible, to mitigate the effects of inflation and other adverse economic conditions, such mitigation efforts may not be effective, particularly in the event of prolonged or widespread inflationary pressures.

In addition, the United States has imposed and may impose additional quotas, duties, tariffs or other trade protection measures, which may increase the cost of certain materials used in our operations, including packaging materials, or otherwise adversely affect our suppliers or customers. The evolving and uncertain nature of tariff structures, coupled with ongoing developments in U.S. trade policy, may disrupt procurement channels and increase the costs associated with sourcing products or materials from abroad. Changes in tariff rates, import duties or other trade restrictions could increase our costs, disrupt supply chains, reduce demand for our products or contribute to broader economic volatility, any of which could materially adversely affect our business, financial condition or results of operations.

We are subject to risks arising from epidemic diseases.

Public health events, including epidemics or pandemics, may disrupt our operations or those of our employees, contractors, suppliers, and other business partners, including as a result of workforce availability issues, supply chain disruptions, facility closures or other preventative measures taken by governmental authorities or private parties.

While restrictions implemented in response to the COVID-19 pandemic have largely been lifted in the jurisdictions in which we operate, future public health events or resurgences could adversely affect our business by disrupting the manufacture, distribution or sale of our products, increasing operating costs, or limiting the availability of our workforce or that of our suppliers. The extent to which any such event may impact our business, financial condition or results of operations will depend on future developments that are uncertain and difficult to predict.

In addition, because cannabis remains illegal under U.S. federal law, we may be ineligible to participate in certain government relief programs or other forms of financial assistance that may be made available in response to public health emergencies, which could place us at a competitive disadvantage relative to other industries.

Our business may be affected by political and economic instability.

We may be affected by political or economic instability. The risks include, but are not limited to, terrorism, military repression, extreme fluctuations in currency exchange rates, high rates of inflation and other negative impacts on the global economy, capital markets or other geopolitical conditions. Changes in medical and agricultural development or investment policies or shifts in political viewpoints of certain countries may adversely affect our business. Operations may be affected in varying degrees by government regulations with respect to restrictions on production, distribution, price controls, export controls, income taxes, expropriation of property, maintenance of assets, environmental legislation, land use, land claims of local people, and water use. The effect of these factors cannot be accurately predicted.

Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.

As a public company, we are required to maintain effective internal controls over financial reporting and to evaluate the effectiveness of those controls. We will be required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act if and when we become an accelerated filer or large accelerated filer and are no longer eligible for any applicable exemption from such requirements.

If we are unable to design, implement or maintain effective internal controls over financial reporting, or if our internal controls are found to be deficient, we may not be able to conclude on an ongoing basis that our internal controls are effective. In addition, we cannot predict the timing or outcome of our evaluation, testing and any remediation actions, or the impact such efforts may have on our operations.

If we fail to maintain effective internal controls over financial reporting or to comply with the requirements of Section 404 in a timely manner, our independent registered public accounting firm may be unable to provide an unqualified attestation opinion when required, and we may be subject to regulatory scrutiny, including by the SEC. Any such outcome could result in a loss of investor confidence in the reliability of our financial statements, negatively affect the trading price of our securities, and require us to incur additional costs, including the hiring of additional personnel or consultants, which could adversely affect our results of operations and cash flows.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 1C. CYBERSECURITY

Cybersecurity Risk Management and Strategy

The operation of our businesses is dependent on the secure functioning of our computer infrastructure, digital information systems, and third-party hosted services. We use these systems to maintain sensitive business and customer data, operate record-keeping and accounting functions, process business transactions, and for other key aspects of our business.

We rely on our information technology (“IT”) department, management, and third-party service providers to identify, assess, and manage cybersecurity threats and risks, including those associated with artificial intelligence. Our information security program utilizes various security tools and strategies, including risk assessments, incident detection and response, vulnerability management, disaster recovery and business continuity plans, internal controls within our accounting and financial reporting functions, encryption of data, network security controls, access controls, physical security, and systems monitoring. We also work with third parties that assist us to identify, assess, and manage cybersecurity risks, including professional services firms, consulting firms, and threat intelligence service providers. These assessments encompass evaluations of both the design and operational effectiveness of our security measures and consider the evolution of different cybersecurity threats, including through artificial intelligence.

Our cybersecurity risk management is integrated into our overall risk management system. Our IT department works closely with our management and other relevant teams to regularly assess and identify possible material risks from cybersecurity threats, including, but not limited to, financial, operations, reputational and regulatory impact to the Company, as well as impacts on our employees and customers. The Company maintains an Incident Response Plan designed to detect, respond to and mitigate cybersecurity incidents. The Incident Response Plan is administered by a designated Cybersecurity Incident Response Team (“CIRT”), comprised of information technology leadership and designated systems administrators with defined roles and responsibilities for preparation, detection, containment, recovery and post-incident analysis. Under this plan, cybersecurity incidents are assessed based on defined severity levels and significant risk findings are escalated to executive leadership, including the Executive Leadership Team (“ELT”), based on the nature and severity of the incident. Following resolution, incidents are formally documented and reviewed, including post-incident analysis and “lessons learned,” to enhance the Company’s cybersecurity posture.

Our business strategy, results of operations, and financial condition have not been materially affected by risks from cybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents. For more information on our cybersecurity-related risks, see “Risk Factors – We face risks related to our information technology systems, and potential cyber-attacks and security breaches.”

Cybersecurity Governance

AAWH US Equity

AAWH · 10-K · period ended 2025-12-31

ITEM 1A. RISK FACTORS

ITEM 1B. UNRESOLVED STAFF COMMENTS

ITEM 1C. CYBERSECURITY

AAWH US Equity☆

AAWH · 10-K · period ended 2025-12-31

ITEM 1A. RISK FACTORS

ITEM 1B. UNRESOLVED STAFF COMMENTS

ITEM 1C. CYBERSECURITY

AAWH US Equity