Cannabist Co Holdings Inc. - Quarter Report: 2025 June (Form 10-Q)

Net loss——— ()()()()Balance as of March 31, 2025$ $— $()$— $()$— $()$()Equity-based compensation (1)— — — Conversion of convertible note—— — — — — Distributions——()— ()— ()

The accompanying notes are an integral part of these unaudited Condensed Consolidated Interim Financial Statements.

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THE CANNABIST COMPANY HOLDINGS INC. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, and 2024 (Expressed in thousands of U.S. dollars, except for share and per share amounts) (Unaudited)

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Revenue

$ $ $ Cultivation and wholesale $ $ $ $

and $, respectively, against the revenues. During the three and six months ended June 30, 2024, the Company netted discounts of $ and $, respectively, against the revenues.

$ Work-in-process - cannabis in cures and final vault Finished goods - dried cannabis, concentrate and edible products Total inventory$ $

The inventory values are net of inventory write-downs as a result of obsolescence or unmarketability charged to cost of sales. As a result of certain restructuring efforts, there were write-downs of $ and $ during the three and six months ended June 30, 2025, respectively. As a result of certain restructuring efforts, there were write-downs of $ and $ during the three and six months ended June 30, 2024.

and $ as of June 30, 2025 and December 31, 2024, respectively.

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$ 2027 Convertible Notes 2025 Convertible Notes 2028 Notes 2028 Convertible Notes Mortgage Note Unamortized debt discount()()Unamortized deferred financing costs()()Total debt, net Less current portion, net*()()Long-term portion$ $

*The current portion of the debt includes scheduled payments on the mortgage notes, convertible notes, and notes, net of corresponding portions of the unamortized debt discount and unamortized deferred financing costs.

The Company was in compliance with all financial covenants and was not in default of any provisions under any of its debt arrangements as of June 30, 2025.

2026 Notes

On February 3, 2022, the Company closed a private placement (the “February 2022 Private Placement”) of $ aggregate principal amount of % senior-secured first-lien notes due 2026 (the “2026 Notes”) and received aggregate gross proceeds of $. The 2026 Notes were senior secured obligations of the Company and were issued at % of face value. The 2026 Notes accrued interest in arrears which was payable semi-annually and were scheduled to mature on February 3, 2026, unless earlier redeemed or repurchased. The Company may redeem the 2026 Notes at par, in whole or in part, on or after February 3, 2024, as more particularly described in the fourth supplemental trust indenture governing the 2026 Notes. In connection with the offering of the 2026 Notes, the Company exchanged $ of the Company’s existing % senior secured first-lien notes (the “% Term Debt”), pursuant to private agreements in accordance with the trust indenture, for an equivalent amount of 2026 Notes plus accrued but unpaid interest and any negotiated premium thereon.

The premium and paid interest were paid out of funds raised from the February 2022 Private Placement. The total unamortized debt premium and debt issuance costs of $, related to the modified portion of the % Term Debt, was being amortized over the term of the 2026 Notes using the effective interest method. The Company incurred $ in creditor fees in connection with the modified % Term Debt and 2026 Notes and $ in third-party legal fees related to 2026 Notes, which were capitalized and were being amortized over the term of the 2026 Notes using the effective interest rate method.

On May 29, 2025, the 2026 Notes were exchanged for the 2028 Notes, see 2025 Debt Transactions (the 2028 Notes and the 2028 Convertible Notes). At the time of the exchange, the remaining unamortized debt premium, debt issuance costs, collector fees, and third party legal fees of $ were written off.

2027 Convertible Notes

On March 19, 2024, the Company closed a private placement (the “March 2024 Private Placement”) of $ aggregate principal amount of % senior-secured first-lien notes due 2027 (the “2027 Convertible Notes”) and received aggregate gross proceeds of $. The 2027 Convertible Notes were senior secured obligations of the Company and were issued at % of face value. The 2027 Convertible Notes accrued interest in arrears which was payable semi-annually and were scheduled to mature on March 19, 2027. In connection with the offering of the 2027 Convertible Notes, the Company exchanged $ of the Company’s existing % 2025 Convertible Notes. Through June 30, 2025, shares were issued to convert $ principal.

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on the date of issuance of debt with a corresponding debt discount and debt issuance costs of $, reflected as a reduction to the carrying value of the 2027 Convertible Notes. The Company fair valued the derivative liability at each balance sheet date. Changes in fair value of the embedded derivative were recognized in the condensed consolidated interim statements of operations and comprehensive loss. The debt discount and debt issuance costs were being amortized over the term of the 2027 Convertible Notes.

On May 29, 2025, the 2027 Convertible Notes were exchanged for the 2028 Notes, see 2025 Debt Transactions (the 2028 Notes and the 2028 Convertible Notes). At the time of the exchange, the remaining unamortized debt discount and debt issuance costs of $ were written off.

2025 Convertible Notes

On June 29, 2021, the Company completed an offering of % Secured Convertible Notes Due 2025 (“2025 Convertible Notes”) for an aggregate principal amount of $ million. The 2025 Convertible Notes were senior secured obligations of the Company and accrued interest payable semiannually in arrears and were scheduled to mature on June 29, 2025, unless earlier converted, redeemed, or repurchased. The 2025 Convertible Notes shall be convertible, at the option of the holder, from the date of issuance until the date that is days prior to their maturity date into Common Shares of the Company at a conversion price equal to $ payable on the business day prior to the date of conversion, adjusted downwards for any cash dividends paid to holders of Common Shares and other customary adjustments. The Company may redeem the 2025 Convertible Notes at par, in whole or in part, on or after June 29, 2023, if the volume weighted average price of the Common Shares trading on the Canadian Stock Exchange or Cboe Canada for 15 of the 30 trading days immediately preceding the day on which the Company exercises its redemption right, exceeds % of the conversion price of the 2025 Convertible Notes at a Redemption Price equal to % of the principal amount of the 2025 Convertible Notes redeemed, plus accrued but unpaid interest, if any, up to but excluding the Redemption Date.

The 2025 Convertible Notes required interest-only payments until June 29, 2025, at a rate of % per annum, payable semi-annually in June and December and commencing in December 2021. The 2025 Convertible Notes were schedule to mature on June 29, 2025. The Company incurred financing costs of $ in connection with the 2025 Convertible Notes. The principal amount of the 2025 Convertible Notes and the conversion price were denominated in U.S. dollars. As the debt was issued out of the Company's Canadian Holding company, but the functional currency of the Company is US Dollars, the amount of the liability to be settled depends on the applicable foreign exchange rate on the date of settlement. The 2025 Convertible Notes therefore represent an obligation to issue a fixed number of shares for a variable amount of liability. Due to this conversion feature within the 2025 Convertible Notes, the Company was unable to obtain an exception from derivative accounting. Accordingly, this conversion feature was accounted for as an embedded derivative liability and measured at fair value of $ on the date of issuance of debt with a corresponding debt discount, reflected as a reduction to the carrying value of the 2025 Convertible Notes. The Company fair valued the derivative liability at each balance sheet date. Changes in fair value of the embedded derivative were recognized in the condensed consolidated interim statements of operations and comprehensive loss. The debt discount was amortized over the term of the 2025 Convertible Notes.

On May 29, 2025, the 2025 Convertible Notes were exchanged for the 2028 Notes, see 2025 Debt Transactions (the 2028 Notes and the 2028 Convertible Notes). At the time of the exchange, the remaining unamortized finance costs of $, were written off.

January 2024 Debt Exchange

On January 22, 2024, the Company entered into an exchange agreement, as amended on June 30, 2024 and September 30, 2024 (the “Exchange Agreement”), with certain holders of the Company’s % senior secured 2025 Convertible Notes (the “Holders”), pursuant to which the Company agreed to the repurchase of up to $

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million principal amount of 2025 Convertible Notes in consideration of Common Shares issued at a price per Common Share equal to the greater of C$ per Common Share and the % discount to the days volume weighted average price of the Common Shares on Cboe prior to receipt of a Transfer notice;

•provided that the five-day volume weighted average price of the Common Shares on the Exchange is greater than C$ as of the close of trading at 4:01pm on January 31, 2024, transfer $ million principal amount of 2025 Convertible Notes in consideration of Common Shares issued at the Initial Exchange Price on or prior to February 29, 2024; and

•provided that the February Exchange is completed and the daily volume weighted average price of the Common Shares on Cboe is greater than C$ for 5 consecutive trading days, provided that, the trading volume of the Common Shares on Cboe was equal to or greater than Common Shares on the applicable trading dates, from the period commencing on January 1, 2024 and ending on June 30, 2025, (which date the parties extended to December 31, 2024), transfer in three separate equal tranches, an aggregate of $ million principal amount of 2025 Convertible Notes in consideration of Common Shares issued at a price per Common Share equal to the greater of C$ per Common Share and the % discount to the days volume weighted average price of the Common Shares on Cboe prior to receipt of a Transfer notice, in each case, subject to adjustment in certain instances, on or prior to December 31, 2024.

Through December 31, 2024, $ million of the potential $ million exchange had been completed. The term of the Exchange Agreement expired as of January 31, 2025.

2025 Debt Transaction (the 2028 Notes and the 2028 Convertible Notes)

On February 27, 2025, the Company entered into a support agreement (the “Support Agreement”) with certain holders (the “Supporting Noteholders”) of the aggregate principal amount of issued Senior Notes (as defined below) regarding the exchange of their Senior Notes for new notes having a later maturity date and additional covenants (the “2025 Debt Transaction”). The Senior Notes consist of: (i) the 2025 Convertible Notes; (ii) the 2026 Notes; and (iii) the 2027 Notes (together with the 2025 Convertible Notes and the 2026 Notes, the “Senior Notes”). Under the terms of the 2025 Debt Transaction, among other provisions, the holders of the 2025 Convertible Notes and the 2026 Notes exchanged their Senior Notes for an equal principal amount of % Senior Secured Notes due December 31, 2028 (subject to two six-month extension options available to the Company upon payment of a % fee, payable in cash) (the “2028 Notes”) and the holders of the 2027 Notes received either (i) an equal principal amount of the 2028 Notes or (ii) if elected, an equal principal amount of newly issued % convertible notes, which have the same conversion price as the existing 2027 Notes but will the same extended maturity date as the 2028 Notes (the “2028 Convertible Notes”, and together with the 2028 Notes, the “New Notes”).

The 2028 Notes and 2028 Convertible Notes require interest-only payments until December 31, 2028, payable semi-annually in June and December and commencing in December 2025 until maturity. The Company incurred financing costs of $ in connection with the 2025 Debt Transaction. The principal amount of the 2028 Convertible Notes and the conversion price are denominated in U.S. dollars. As the debt was issued out of the Company's Canadian Holding company, but the functional currency of the Company is US Dollars, the amount of the liability to be settled depends on the applicable foreign exchange rate on the date of settlement. The 2028 Convertible Notes therefore represent an obligation to issue a fixed number of shares for a variable amount of liability. Due to this conversion feature within the 2028 Convertible Notes, the Company is unable to obtain an exception from derivative accounting. Accordingly, this conversion feature was accounted for as an embedded derivative liability and measured at fair value of $ on the date of issuance of debt with a corresponding debt discount, reflected as a reduction to the carrying value of the 2028 Convertible Notes. The Company fair values the derivative liability at each balance sheet date. Changes in fair value of the embedded derivative are recognized in the condensed consolidated interim statements of operations and comprehensive loss. The debt financing costs are amortized over the term of the 2028 Notes and 2028 Convertible Notes.

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warrants to the Company shareholders on a pro rata basis, see Note 10 Warrants.

The 2028 Notes and 2028 Convertible Notes are secured by a first-priority security interest in all present and after-acquired personal property of the Company, including a pledge of the Equity Interests owned by the Issuer and each Guarantor; and a collateral assignment of leases in respect of certain leasehold property and all of the Company's interests therein as defined in the Amended and Restated Trust Indenture.

The Company completed its 2025 Debt Transaction effective May 29, 2025 following receipt of court approval.

Mortgages

In December 2021, the Company entered into a term loan and security agreement with a bank. The agreement provides for a $ mortgage on real property in New York and carries interest at a variable rate per annum equal to the Wall Street Prime Rate (“Index”) plus %. The debt is repayable in monthly installments and a final balloon payment due on January 1, 2027, which is estimated at $ as of June 30, 2025. In connection with this mortgage, the Company incurred financing costs of $.

In June 2022, the Company entered into a term loan and security agreement with a bank. The agreement provides for a $ mortgage on real property in New Jersey and carries interest at a variable rate per annum equal to the Index plus %. The debt is repayable in monthly installments and a final balloon payment due on July 15, 2027, which is estimated at $ as of June 30, 2025. In connection with this mortgage, the Company incurred financing costs of $.

On August 10, 2023, the Company entered into two term loans and security agreements with a bank as follows:

•The first agreement provides for a $ mortgage on real property in Maryland and carries interest at a variable rate per annum equal to the Index plus %. The debt is repayable in monthly installments and matures in August 2028. In connection with this mortgage, the Company incurred financing costs of $ and netted $ after the repayment of a prior outstanding mortgage on the property.

•The second agreement provides for a $ mortgage on real property in Delaware and carries interest at a variable rate per annum equal to the Index plus %. The debt is repayable in monthly installments and matures in August 2028. In connection with this mortgage, the Company incurred financing costs of $ and netted $. The mortgage was paid in full on January 15, 2025 with the sale of the property.

$ $ $ Amortization of debt discount Amortization of debt issuance costs Other interest expense (income), net()()()()Total interest expense, net$ $ $ $

The weighted average interest rate on the Company’s indebtedness was %.

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$ Furniture and fixtures Equipment Computers and software Leasehold improvements Construction in process Total property and equipment, gross Less: accumulated depreciation()()Total property and equipment, net$ $

Three months ended

Six months ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Total depreciation expense for three and six months ended

Included in:

Costs of sales related to inventory production

Selling, general and administrative expenses

$ Short term deposits Other current assets Excise and sales tax receivable Prepaid expenses and other current assets$ $

$ Long term tax receivable Investment in affiliates Restricted cash Other non-current assets$ $

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$ Other accrued expenses Payroll liabilities Other current liabilities Accrued expenses and other current liabilities$ $

of Restricted Stock Units (RSUs) during the six months ended June 30, 2025.

•Issued common shares upon vesting of Restricted Stock Units (RSUs).

•Issued common shares in connection with the 2028 Convertible Notes.

10.

$ $ October 1, 2025 May 29, 2027$ $ $ $ $ Issued Expired Balance as of June 30, 2024$ Balance as of December 31, 2024$ Issued Expired Balance as of June 30, 2025$

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11.

)$()$()$()Less: net profit attributable to non-controlling interests Net loss attributable to shareholders$()$()$()$()Denominator:Weighted average shares outstanding - basic and dilutedLoss per share - basic and diluted$()$()$()$()

Certain share-based equity awards were excluded from the computation of dilutive loss per share because inclusion of these awards would have had an anti-dilutive effect.

12.

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13.

$ $ $ Total assets$ $ $ $ Derivative liabilities$ $ $()$()Total liabilities$ $ $()$()December 31, 2024Investment securities$ $ $ $ Total assets$ $ $ $ Derivative liability$ $ $()$()Total liabilities$ $ $()$()

During the period included in these financial statements, there were no transfers of amounts between levels.

Level 1 investment securities are stated at observable inputs such as quoted prices in active markets.

There has been no change in the valuation methodology for the six months ended June 30, 2025. The carrying amounts of cash and restricted cash, accounts receivable, other current assets, accounts payable, accrued expenses, other current liabilities, the current portion of long-term debt, and lease liabilities as of June 30, 2025 and December 31, 2024 approximate their fair values because of the short-term nature of these items and are not included in the table above. The Company’s other long-term liabilities and long-term debt approximate fair value due to the market rate of interest used on initial recognition.

In addition to the disclosures for assets and liabilities required to be measured at fair value at the balance sheet date, companies are required to disclose the estimated fair values of all financial instruments, even if they are not presented at their fair value on the consolidated balance sheet. The fair values of financial instruments are estimates based upon market conditions and perceived risks as of June 30, 2025 and December 31, 2024. These estimates require management's judgment and may not be indicative of the future fair values of the assets and liabilities.

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14.

$ Trademarks Customer relationships Total intangible assets Less: accumulated amortization()()Total intangible assets, net$ $ $ $ $

15.

$ $ $ Professional fees Depreciation and amortization Operating facilities costs Operating office and general expenses Advertising and promotion Other fees and expenses Total selling, general and administrative expenses$ $ $ $

16.

$()$ $ Change in fair value of investments Restructuring expense() Other (income) /expense, net ()()()Adjustment for held-for-sale() Loss on disposal Rental income()()()()Total other expense, net$ $ $ $

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and $ in restructuring expense, respectively. As of June 30, 2025 and 2024, the balance outstanding on the Company’s restructuring reserve was $ and $$ respectively.

Loss on disposal arose primarily on the divestitures of a California store and related real estate as delineated in Note 17 below, and is stated net of any gains and losses attributable to minority investors.

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17.

dispensary and cultivation facility. The Utah Business was divested for gross proceeds of approximately $ million, with approximately $ million due on closing of the transaction, and a $ million Seller note payable to the Company not later than July 2025. The sale of the Utah assets was completed on March 7, 2024 and the Company received an early settlement of the Seller note on April 1, 2025 in the amount of $ million.

Arizona Divestiture

On July 29, 2024, the Company entered into definitive agreements, subject to closing conditions, to dispose of its Arizona operations (the "Arizona Business") which are comprised of dispensaries and cultivation / manufacturing facility. The Arizona Business was divested for gross proceeds of $ million, with approximately all $ million which was received on signing of the definitive agreement.

Eastern Virginia Divestiture

On July 29, 2024, the Company entered into a definitive agreement, subject to closing conditions, to dispose of a portion of its Virginia operations (the "East Virginia Business") which are comprised of dispensaries and cultivation / manufacturing facility. The East Virginia Business was divested for gross proceeds of $ million, consisting of approximately $ million in cash, $ million of equity in the Buyer, Verano Holdings Corp., due on closing of the transaction, and a $ million seller note payable to the Company over a month period.

In May 2025, the Company reached an agreement on the early settlement of the balance on this seller note Receivable, with a $ million one-time payment made as full and early settlement of the note. Accordingly, there is a $ balance receivable on the note as of June 30, 2025.

Florida Business Divestiture

On November 7, 2024, the Company sold the majority of its Florida operations (the "Florida Business") through the sale of dispensaries and cultivation / manufacturing facilities for gross proceeds of $ million, consisting of approximately $ million in cash and $ million of promissory note. Following the sale of the Florida Business, the Company had license and cultivation facility in the state, neither of which remained in active operation. On April 17, 2025, the Company sold the license for $ million in cash, with the potential for an additional $ million contingent payment in the event of an adult use program in the state.

Milford, Delaware Divestiture

On January 15, 2025, the Company sold its Milford II cultivation property, which had not yet been developed and was a non-operating asset. Gross proceeds from the sale were $ million, approximately $ million of which was used to fully settle the outstanding mortgage on the property.

North Hollywood, California Divestiture

On March 18, 2025, the Company entered into a definitive agreement, subject to closing conditions, to dispose of its North Hollywood dispensary (the "NoHo store"). The NoHo store was divested for gross proceeds of approximately $ million, with approximately $ thousand paid up-front and the balance due on completion of closing conditions.

DeSoto, California Divestiture

On April 3, 2025, the Company entered into a definitive agreement, subject to closing conditions, to dispose of its DeSoto, San Diego, dispensary (the "DeSoto store"). The DeSoto store was divested for gross proceeds of approximately $ million, with approximately $ thousand paid up-front and the balance due on completion of closing conditions.

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million, with approximately $ thousand paid up-front and the balance due on completion of closing conditions.

Florida License Divestiture

On April 17, 2025, the Company entered into a definitive agreement, subject to closing conditions, to dispose of its Florida paper License (the "Florida License"). The Florida License store was divested for gross proceeds of approximately $ million, with approximately $ million paid up-front and the balance due on completion of closing conditions.

$ $ $ Expense$ $ $ $ CaliforniaRevenue$ $ $ $ Expense$ $ $ $

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RESULTS OF OPERATIONS

Comparison of the three and six months ended June 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024:


	Three months ended
	June 30, 2025		June 30, 2024		$ Change		% Change
Revenues	$	86,350	$	125,190	$	(38,840)	(31)	%
Cost of sales related to inventory production	(69,197)		(77,138)		7,941		(10)	%
Gross profit	17,153		48,052		(30,899)		(64)	%

Selling, general and administrative expenses	(32,990)		(40,046)		7,056		(18)	%
Profit (loss) from operations	(15,837)		8,006		(23,843)		(298)	%
Other income / (expense), net	(18,328)		(12,007)		(6,321)		53	%
Income tax expense	(43,221)		(9,642)		(33,579)		348	%
Net loss	(77,386)		(13,643)		(63,743)		467	%
Net profit attributable to non-controlling interests	495		698		(203)		(29)	%
Net loss attributable to The Cannabist Company Holdings Inc.	$	(77,881)	$	(14,341)	$	(63,540)	443	%
Loss per share attributable to The Cannabist Company Holdings Inc.—based and diluted	$	(0.16)	$	(0.03)	$	(0.13)	416	%
Weighted average number of shares outstanding—basic and diluted	484,713,110		460,653,957

Revenues

The decrease in revenue of $38,840 for the three months ended June 30, 2025, as compared to the prior year period, was driven by the net decline in revenue of $10,902 in our existing retail and wholesale operations and a decline of $30,387 from the sale or closure of certain operations. This was partly offset by changes in regulation to adult use which contributed to a revenue growth of $2,449 during the three months ended June 30, 2025, as compared to the prior period.

Cost of Sales

The decrease in cost of sales of $7,941 for the three months ended June 30, 2025, as compared to the prior year period, was driven by a cost of sales decrease from the sale or closure of certain operations of $17,435. This was partly offset by an increase of $9,494 in our existing retail and wholesale operations, including from inventory impairment.

Gross Profit

The decrease in gross profit of $30,899 for the three months ended June 30, 2025, as compared to the prior year period, was directly attributable to the decline in revenues and the decline in cost of sales as described above.

Operating Expenses

The decrease of $7,065 in operating expenses for the three months ended June 30, 2025, as compared to the prior year period, was primarily attributable to decreases in operating facilities costs of $3,150, depreciation and amortization of $2,242, operating office and general expenses of $1,585, professional fees of $367, and other fees and expenses of $873. This was partially offset by increases in salaries and benefits of expenses of $638 and advertisement and promotion expense of $523 for the three months ended June 30, 2025.

Other Income / (expense), Net

The increase in other expenses, net of $6,321 for the three months ended June 30, 2025, as compared to the prior year period, was primarily due to increases in interest expense, net of $4,969, loss on disposal group of $3,676, change in fair value of investments of $713, change in fair value of the derivative liability of $377, and a decrease in rental income of $34. This was partially offset by decreases in restructuring expense of $3,558, loss on held for sale of $651, and interest expense on leases of $183.

Provisions for Income Taxes

The Company recorded income tax expense of $43,221 for the three months ended June 30, 2025, as compared to an income tax expense of $9,642 for the three months ended June 30, 2024.

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The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024:


	Six months ended
	June 30, 2025		June 30, 2024		$ Change		% Change
Revenues	$	173,790	$	247,801	$	(74,011)	(30)	%
Cost of sales related to inventory production	(127,352)		(157,212)		29,860		(19)	%
Gross profit	46,438		90,589		(44,151)		(49)	%
Fixed asset impairment	(193)		—		(193)		—	%
Selling, general and administrative expenses	(70,241)		(93,319)		23,078		(25)	%
Loss from operations	(23,996)		(2,730)		(21,266)		779	%
Other income / (expense), net	(41,581)		(26,971)		(14,610)		54	%
Income tax expense	(44,015)		(18,510)		(25,505)		138	%
Net loss	(109,592)		(48,211)		(61,381)		127	%
Net profit attributable to non-controlling interests	493		1,203		(710)		(59)	%
Net loss attributable to The Cannabist Company Holdings Inc.	$	(110,085)	$	(49,414)	$	(60,671)	123	%
Loss per share attributable to The Cannabist Company Holdings Inc.—based and diluted	$	(0.23)	$	(0.11)	$	(0.12)	111	%
Weighted average number of shares outstanding—basic and diluted	478,894,930		453,143,911

Revenues

The decrease in revenue of $74,011 for the six months ended June 30, 2025, as compared to the prior year period, was driven by the net

decline in revenue of $23,854 in our existing retail and wholesale operations and a decline of $56,319 from the sale or closure of certain

operations. This was partly offset by changes in regulation to adult use which contributed to a revenue growth of $6,162 during the six

months ended June 30, 2025, as compared to the prior period

Cost of Sales

The decrease in cost of sales of $29,860 for the six months ended June 30, 2025, as compared to the prior year period, was driven by the sale or closure of certain operations of $32,238. This was partly offset by an increase of $2,378 in our existing retail and wholesale operations, including from inventory impairment, as compared to the prior period.

Gross Profit

The decrease in gross profit of $44,151 for the six months ended June 30, 2025, as compared to the prior year period, was directly attributable to the decline in revenues and the decline in cost of sales as described above.

Operating Expenses

The decrease of $23,078 in operating expenses for the six months ended June 30, 2025, as compared to the prior year period, was primarily attributable to decreases in salary and benefits expenses of $8,697, operating facilities costs of $6,528, depreciation and amortization of $4,591, operating office and general expenses of $1,917, professional fees of $1,134, and other fees and expenses of $758. This was partially offset by an increase in advertisement and promotion expense of $547 for the six months ended June 30, 2025.

Other Income / (expense), Net

The increase in other expenses, net of $14,610 for the six months ended June 30, 2025, as compared to the prior year period, was primarily due to a increases in change in fair value of investments of $6,520, loss on held for sale of $2,868, loss on disposal group of $6,703, interest expense, net of $5,089, and a decrease in rental income of $67. This was partially offset by decreases change in fair value of the derivative liability of $1,970, restructuring expense of $3,438, interest on leases of $393, and other income (expense), net of $836.

Provisions for Income Taxes
The Company recorded income tax expense of $44,015 for the six months ended June 30, 2025, as compared to an income tax expense of $18,510 for the six months ended June 30, 2024.

Non-GAAP Measures

We use certain non-GAAP measures, referenced in this MD&A. These measures are not recognized measures under GAAP and do not have a standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies. Accordingly, these measures should not be considered in isolation from nor as a substitute for our financial information reported under GAAP. We use non-GAAP measures including EBITDA, Adjusted EBITDA and Adjusted EBITDA margin which may be calculated

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differently by other companies. These non-GAAP measures and metrics are used to provide investors with supplemental measures of our operating performance and liquidity and thus highlight trends in our business that may not otherwise be apparent when relying solely on GAAP measures. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented. We also recognize that securities analysts, investors, and other interested parties frequently use non-GAAP measures in the evaluation of companies within our industry. Finally, we use non-GAAP measures and metrics in order to facilitate evaluation of operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of executive compensation.

The following table provides a reconciliation of net loss for the period to EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024:


	Three months ended				Six months ended
	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
Net loss	$	(77,386)	$	(13,643)	$	(109,592)	$	(48,211)
Income tax	43,221		9,642		44,015		18,510
Depreciation and amortization	8,205		13,583		16,851		27,547
Interest expense, net and debt amortization	18,029		13,121		30,588		25,601
EBITDA (Non-GAAP measure)	(7,931)		22,703		(18,138)		23,447
Adjustments:
Share-based compensation	643		(8,144)		935		(4,962)
Legal settlement	—		(1,108)		—		(1,108)
Fair-value changes on investments and derivative liabilities	1,072		(18)		6,879		2,329
Adjustments for acquisition and other non-core costs	12,853		1,726		15,608		7,971
Restructuring expense	(1,592)		1,966		1,104		4,542
Fixed asset impairment	—		—		193		—
Adjustment for held-for-sale	(651)		—		2,868		—
Loss on disposal group	4,089		412		7,327		624
Adjusted EBITDA (Non-GAAP measure)	$	8,483	$	17,537	$	16,776	$	32,843
Revenue	$	86,350	$	125,190	$	173,790	$	247,801
Adjusted EBITDA (Non-GAAP measure)	$	8,483	$	17,537	$	16,776	$	32,843
Adjusted EBITDA margin (Non-GAAP measure)	9.8%		14.0%		9.7%		13.3%
Revenue	$	86,350	$	125,190	$	173,790	$	247,801
Gross profit	$	17,153	$	48,052	$	46,438	$	90,589
Gross margin	19.9%		38.4%		26.7%		36.6%

Adjusted EBITDA

The decrease in Adjusted EBITDA for the three and six months ended June 30, 2025, as compared to the prior year period, was primarily driven by declines in gross profit in the ongoing wholesale and retail operations and through restructuring and disposal activity, partially offset by improved leverage of revenues across selling, general, and administrative expenses such as facility costs, salary costs, and benefit costs.

Our future financial results are subject to significant potential fluctuations caused by, among other things, growth of sales volume in new and existing markets and our ability to control operating expenses. In addition, our financial results may be impacted significantly by changes to the regulatory environment in which we operate, on a local, state, and federal level.

Liquidity and Capital Resources

Our primary need for liquidity is to fund working capital requirements of our business, capital expenditures and for general corporate purposes. Historically, we have relied on external financing as our primary source of liquidity. Our ability to fund our operations and to make capital expenditures depends on our ability to successfully secure financing through issuance of debt or equity, as well as our ability to improve our future operating performance and cash flows, which are subject to prevailing economic conditions and financial, business and other factors, some of which are beyond our control.

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We are currently meeting our obligations and are earning revenues from our operations. However, we have sustained losses since inception and may require additional capital in the future. We estimate that based on our current business operations and working capital, we will continue to meet our obligations in the short term. As we continue to focus on profitability, we endeavor to remain opportunistic on growth through expansion or acquisition, therefore our cash flow requirements and obligations could materially change.

Recent Financing Transactions

2026 Notes

On February 3, 2022, the Company closed a private placement (the “February 2022 Private Placement”) of $185,000 aggregate principal amount of 9.50% senior-secured first-lien notes due 2026 (the “2026 Notes”) and received aggregate gross proceeds of $153,250. The 2026 Notes were senior secured obligations of the Company and were issued at 100.0% of face value. The 2026 Notes accrued interest in arrears which was payable semi-annually and were scheduled to mature on February 3, 2026, unless earlier redeemed or repurchased. The Company may redeem the 2026 Notes at par, in whole or in part, on or after February 3, 2024, as more particularly described in the fourth supplemental trust indenture governing the 2026 Notes. In connection with the offering of the 2026 Notes, the Company exchanged $31,750 of the Company’s existing 13.0% senior secured first-lien notes (the “13.0% Term Debt”), pursuant to private agreements in accordance with the trust indenture, for an equivalent amount of 2026 Notes plus accrued but unpaid interest and any negotiated premium thereon.

The premium and paid interest were paid out of funds raised from the February 2022 Private Placement. The total unamortized debt premium and debt issuance costs of $2,153, related to the modified portion of the 13.0% Term Debt, was being amortized over the term of the 2026 Notes using the effective interest method. The Company incurred $7,189 in creditor fees in connection with the modified 13.0% Term Debt and 2026 Notes and $301 in third-party legal fees related to 2026 Notes, which were capitalized and were being amortized over the term of the 2026 Notes using the effective interest rate method.

2027 Convertible Notes

On March 19, 2024, the Company closed a private placement (the “March 2024 Private Placement”) of $25,750 aggregate principal amount of 9.0% senior-secured first-lien notes due 2027 (the “2027 Notes”) and received aggregate gross proceeds of $15,600. The 2027 Notes were senior secured obligations of the Company and were issued at 80.0% of face value. The 2027 Notes accrued interest in arrears which was payable semi-annually and were scheduled to mature on March 19, 2027. In connection with the offering of the 2027 Notes, the Company exchanged $5,000 of the Company’s existing 6.0% 2025 Convertible Notes. Through June 30, 2025, 983,604 shares were issued to convert $300 principal.

The principal amount of the 2027 Convertible Notes and the conversion price were denominated in U.S. dollars. As the debt was issued out of the Company's Canadian Holding company, but the functional currency of the Company is US Dollars, the amount of the liability to be settled depends on the applicable foreign exchange rate on the date of settlement. The 2027 Convertible Notes therefore represented an obligation to issue a fixed number of shares for a variable amount of liability. Due to this conversion feature within the 2027 Convertible Notes, the Company was unable to obtain an exception from derivative accounting. Accordingly, this conversion feature was accounted for as an embedded derivative liability and measured at fair value of $2,632 on the date of issuance of debt with a corresponding debt discount and debt issuance costs of $5,952, reflected as a reduction to the carrying value of the 2027 Convertible Notes. The Company fair valued the derivative liability at each balance sheet date. Changes in fair value of the embedded derivative were recognized in the condensed consolidated interim statements of operations and comprehensive loss. The debt discount and debt issuance costs were being amortized over the term of the 2027 Convertible Notes.

2025 Convertible Notes

On June 29, 2021, the Company completed an offering of 6.0% Secured Convertible Notes Due 2025 (“2025 Convertible Notes”) for an aggregate principal amount of $74.5 million. The 2025 Convertible Notes were senior secured obligations of the Company and accrued interest payable semiannually in arrears and were scheduled to mature on June 29, 2025, unless earlier converted, redeemed, or repurchased.

The 2025 Convertible Notes shall be convertible, at the option of the holder, from the date of issuance until the date that is 10 days prior to their maturity date into Common Shares of the Company at a conversion price equal to $6.49 payable on the business day prior to the date of

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conversion, adjusted downwards for any cash dividends paid to holders of Common Shares and other customary adjustments. The Company may redeem the 2025 Convertible Notes at par, in whole or in part, on or after June 29, 2023, if the volume weighted average price of the Common Shares trading on the Canadian Stock Exchange or Cboe Canada for 15 of the 30 trading days immediately preceding the day on which the Company exercises its redemption right, exceeds 120.0% of the conversion price of the 2025 Convertible Notes at a Redemption Price equal to 100.0% of the principal amount of the 2025 Convertible Notes redeemed, plus accrued but unpaid interest, if any, up to but excluding the Redemption Date.

The 2025 Convertible Notes required interest-only payments until June 29, 2025, at a rate of 6.0% per annum, payable semi-annually in June and December and commencing in December 2021. The 2025 Convertible Notes were scheduled to mature on June 29, 2025. The Company incurred financing costs of $3,190 in connection with the 2025 Convertible Notes. The principal amount of the 2025 Convertible Notes and the conversion price were denominated in U.S. dollars. As the debt was issued out of the Company's Canadian Holding company, but the functional currency of the Company is US Dollars, the amount of the liability to be settled depends on the applicable foreign exchange rate on the date of settlement. The 2025 Convertible Notes therefore represented an obligation to issue a fixed number of shares for a variable amount of liability. Due to this conversion feature within the 2025 Convertible Notes, the Company was unable to obtain an exception from derivative accounting. Accordingly, this conversion feature was accounted for as an embedded derivative liability and measured at fair value of $15,099 on the date of issuance of debt with a corresponding debt discount, reflected as a reduction to the carrying value of the 2025 Convertible Notes. The Company fair valued the derivative liability at each balance sheet date. Changes in fair value of the embedded derivative were recognized in the condensed consolidated interim statements of operations and comprehensive loss. The debt discount was amortized over the term of the 2025 Convertible Notes.

January 2024 Debt Exchange

On January 22, 2024, the Company entered into an exchange agreement, as amended on June 30, 2024 and September 30, 2024 (the “Exchange Agreement”), with certain holders of the Company’s 6.0% senior secured 2025 Convertible Notes (the “Holders”), pursuant to which the Company agreed to the repurchase of up to $25 million principal amount of the 2025 Convertible Notes in exchange for Common Shares (the “January 2024 Debt Exchange”).

Pursuant to the terms of the Exchange Agreement, the Holders shall:

•by January 31, 2024, transfer $5 million principal amount of 2025 Convertible Notes in consideration of Common Shares issued at a price per Common Share equal to the greater of C$0.41 per Common Share and the 12.5% discount to the 5 days volume weighted average price of the Common Shares on Cboe prior to receipt of a Transfer notice;

•provided that the five-day volume weighted average price of the Common Shares on the Exchange is greater than C$0.47 as of the close of trading at 4:01pm on January 31, 2024, transfer $5 million principal amount of 2025 Convertible Notes in consideration of Common Shares issued at the Initial Exchange Price on or prior to February 29, 2024; and

•provided that the February Exchange is completed and the daily volume weighted average price of the Common Shares on Cboe is greater than C$0.87 for 5 consecutive trading days, provided that, the trading volume of the Common Shares on Cboe was equal to or greater than 600,000 Common Shares on the applicable trading dates, from the period commencing on January 1, 2024 and ending on June 30, 2025, (which date the parties extended to December 31, 2024), transfer in three separate equal tranches, an aggregate of $15 million principal amount of 2025 Convertible Notes in consideration of Common Shares issued at a price per Common Share equal to the greater of C$0.57 per Common Share and the 12.5% discount to the 5 days volume weighted average price of the Common Shares on Cboe prior to receipt of a Transfer notice, in each case, subject to adjustment in certain instances, on or prior to December 31, 2024.

Through December 31, 2024, $10 million of the potential $25 million exchange had been completed. The term of the Exchange Agreement expired as of January 31, 2025.

2025 Debt Transaction (the 2028 Notes and the 2028 Convertible Notes)

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On February 27, 2025, the Company entered into a support agreement (the “Support Agreement”) with certain holders (the “Supporting Noteholders”) of the aggregate principal amount of issued Senior Notes (as defined below) regarding the exchange of their Senior Notes for new notes having a later maturity date and additional covenants (the “2025 Debt Transaction”). The Senior Notes consist of: (i) the 2025 Convertible Notes; (ii) the 2026 Notes; and (iii) the 2027 Convertible Notes (together with the 2025 Convertible Notes and the 2026 Notes, the “Senior Notes”). Under the terms of the 2025 Debt Transaction, among other provisions, the holders of the 2025 Convertible Notes and the 2026 Notes exchanged their Senior Notes for an equal principal amount of 9.25% Senior Secured Notes due December 31, 2028 (subject to two six-month extension options available to the Company upon payment of a 0.5% fee, payable in cash) (the new “2028 Notes”) and the holders of the 2027 Convertible Notes received either (i) an equal principal amount of the 2028 Notes or (ii) if elected, an equal principal amount of newly issued 9.0% convertible notes, which have the same conversion price as the existing 2027 Convertible Notes but will the same extended maturity date as the 2028 Notes (the new “2028 Convertible Notes”, and together with the 2028 Notes, the “New Notes”).

The 2028 Notes and 2028 Convertible Notes require interest-only payments until December 31, 2028, payable semi-annually in June and December and commencing in December 2025 until maturity. The Company incurred financing costs of $12,155 in connection with the 2025 Debt Transaction. The principal amount of the 2028 Convertible Notes and the conversion price are denominated in U.S. dollars. As the debt was issued out of the Company's Canadian Holding company, but the functional currency of the Company is US Dollars, the amount of the liability to be settled depends on the applicable foreign exchange rate on the date of settlement. The 2028 Convertible Notes therefore represent an obligation to issue a fixed number of shares for a variable amount of liability. Due to this conversion feature within the 2028 Convertible Notes, the Company is unable to obtain an exception from derivative accounting. Accordingly, this conversion feature was accounted for as an embedded derivative liability and measured at fair value of $230 on the date of issuance of debt with a corresponding debt discount, reflected as a reduction to the carrying value of the 2028 Convertible Notes. The Company fair values the derivative liability at each balance sheet date. Changes in fair value of the embedded derivative are recognized in the condensed consolidated interim statements of operations and comprehensive loss. The debt financing costs are amortized over the term of the 2028 Notes and 2028 Convertible Notes.

In addition, as part of the 2025 Debt Transaction, the Company issued 118,209,105 warrants to the Company shareholders on a pro rata basis, see Note 10 Warrants.

The Company completed its 2025 Debt Transaction effective May 29, 2025 following receipt of court approval.

Mortgages

In December 2021, the Company entered into a term loan and security agreement with a bank. The agreement provides for a $20,000 mortgage on real property in New York and carries interest at a variable rate per annum equal to the Wall Street Prime Rate (“Index”) plus 2.25%. The debt is repayable in 59 monthly installments and a final balloon payment due on January 1, 2027, which is estimated at $17,920 as of June 30, 2025. In connection with this mortgage, the Company incurred financing costs of $655.

In June 2022, the Company entered into a term loan and security agreement with a bank. The agreement provides for a $16,500 mortgage on real property in New Jersey and carries interest at a variable rate per annum equal to the Index plus 2.25%. The debt is repayable in 59 monthly installments and a final balloon payment due on July 15, 2027, which is estimated at $15,549 as of June 30, 2025. In connection with this mortgage, the Company incurred financing costs of $209.

On August 10, 2023, the Company entered into two term loans and security agreements with a bank as follows:

•The first agreement provides for a $6,250 mortgage on real property in Maryland and carries interest at a variable rate per annum equal to the Index plus 2.25%. The debt is repayable in 59 monthly installments and matures in August 2028. In connection with this mortgage, the Company incurred financing costs of $195 and netted $2,903 after the repayment of a prior outstanding mortgage on the property.

•The second agreement provides for a $1,800 mortgage on real property in Delaware and carries interest at a variable rate per annum equal to the Index plus 2.25%. The debt is repayable in 59 monthly installments and matures in August 2028. In connection with this mortgage, the Company incurred financing costs of $77 and netted $1,723. The mortgage was paid in full on January 15, 2025 with the sale of the property.

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The weighted average interest rate on the Company’s indebtedness was 9.23%.

Cash Flows

The following table summarizes the sources and uses of cash for each of the periods presented:


	Six months ended
	June 30, 2025		June 30, 2024
Net cash used in operating activities	$	(11,072)	$	(9,659)
Net cash provided by investing activities	5,939		856
Net cash used in financing activities	(14,206)		$	(4,629)
Net decrease in cash	$	(19,339)	$	(13,432)

Operating Activities

During the six months ended June 30, 2025, operating activities used $11,072 of cash, primarily resulting from a net loss of $109,592 and this was partly offset by deferred income tax of $31,694, depreciation and amortization of $16,851, debt amortization expenses of $10,678, loss on deconsolidation of subsidiary of $10,494, change in investment fair value of $6,520, loss on early extinguishment of note of $3,227, provision for credit losses of $2,238, provision for obsolete inventory and other assets of $10,752, equity based compensation of $935, change in fair value of derivative liability of $359, impairment of fixed assets of $193, other expenses of $106, and net change in operating assets and liabilities of $13,953. The net change in operating assets and liabilities was primarily due to a decrease in notes receivable of $19,350, a decrease in inventory of $4,656, a decrease in other assets of $4,082; this was partially offset by a decrease in accrued expenses and other current liabilities of $12,616, a decrease in accounts payable of $9,108, an increase in income tax payable of $273, an increase in other long-term liabilities of $1,521, an increase in accounts receivable of $840, and an increase prepaid expenses and other current assets of $2,665.

During the six months ended June 30, 2024, operating activities used $9,659 of cash, primarily resulting from a net loss of $48,211, deferred taxes of $1,080, other items of $343, and equity-based compensation expense of $4,962, legal settlement of $1,108; this was partially offset by depreciation and amortization of $27,547, debt amortization expense of $4,307, provision for credit losses of $964, provision for obsolete inventory of $5,642, loss on deconsolidation of subsidiary of $624, change in fair value of derivative liability of $2,329, and net change in operating assets and liabilities of $5,596. The net change in operating assets and liabilities was primarily due to a decrease in other assets of $728, an increase in accounts payable of $4,138, an increase in income tax payable of $17,367, an increase in accrued expenses and other current liabilities of $12, and an increase in other long term liabilities of $609. This was offset by an increase in accounts receivable of $4,868, an increase in prepaid expenses and other current assets of $3,214, and an increase in inventory of $10,140.

Investing Activities

During the six months ended June 30, 2025, investing activities provided $5,939 of cash, mainly due to the proceeds from the sale of business of $5,687, proceeds from the sale of license of $4,000, and cash received on deposits, net of $108. This was partially offset by purchases of property and equipment of $3,856.

During the six months ended June 30, 2024, investing activities provided $856 of cash mainly due to the proceeds from the sale of the UT business of $2,999, cash received on deposits, net of $157, and proceeds from sale of license of $329. This was partially offset by purchases of property and equipment of $2,629.

Financing Activities

During the six months ended June 30, 2025, financing activities used $14,206 of cash, mainly due to payment of debt issuance costs of $12,155, payment of lease liabilities of $1,466, repayment of notes payable of $100, repayment of mortgage notes of $353, taxes paid on equity based compensation of $120, and distributions of $12.

During the six months ended June 30, 2024, financing activities used $4,629 of cash, mainly due to repayments of debt of $13,228, payment of lease liabilities of $3,582, payment of debt issuance costs of $802, repayment of sellers note of $750, taxes paid on equity based compensation of $1,255, distributions of $333, and repayment of mortgage notes of $279. This was partially offset by proceeds from issuance of convertible debt of $15,600.

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Contractual Obligations and Commitments

The following table summarizes contractual obligations as of June 30, 2025 and the effects that such obligations are expected to have on our liquidity and cash flows in future periods:


	Payments Due by Period
	Total		Less than 1 year		Year 1		Year 2		Year 3		Year 4		Year 5 and beyond
Lease commitments	$	223,732	$	11,620	$	22,471	$	21,992	$	19,887	$	17,386	$	130,376
Sale-leaseback commitments	206,068		5,258		10,743		11,090		11,449		11,819		155,709
2028 Notes (principal)	250,750		—		—		—		250,750		—		—
Interest on 2028 notes	83,373		13,790		23,194		23,131		23,258		—		—
2028 Convertible notes (principal)	19,200		—		—		—		19,200		—		—
Interest on convertible debt	6,211		1,027		1,728		1,723		1,733		—		—
Mortgage notes (principal)	40,789		362		793		33,675		5,959		—		—
Mortgage notes (interest)	9,315		3,112		4,065		1,684		454		—		—
Total contractual obligations	839,438		35,169		62,994		93,295		332,690		29,205		286,085

The above table excludes purchase orders for inventory in the normal course of business.

Effects of Inflation

Rising inflation rates have had a substantial impact on our financial performance to date and may have an impact on our financial performance in the future as our ability to pass on an increase in costs is not entirely within our control.

Critical Accounting Estimates

We make judgements, estimates and assumptions about the future that affect assets and liabilities, and revenues and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the review affects both current and future periods.

Judgements, estimates, and assumptions with the most significant effect on the amounts recognized in the consolidated financial statements are described below.

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FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

Our financial instruments consist of cash and cash equivalents, accounts receivable, notes receivable, deposits and other current assets, accounts payable, accrued expenses, current taxes payable and other current liabilities like interest payable and payroll liabilities, derivative liability, debt, and lease liabilities. The fair values of cash and restricted cash, accounts and notes receivable, deposits, accounts payable and accrued expenses and other current liabilities like interest payable and payroll liabilities, short-term debt and lease liabilities approximate their carrying values due to the relatively short-term to maturity or because of the market rate of interest used on initial recognition. The Cannabist Company classifies its derivative liability as fair value through profit and loss (FVTPL).

Financial instruments recorded at fair value are classified using a fair value hierarchy that reflects the significance of the inputs to fair value measurements. The three levels of fair value contained within the hierarchy are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; and

Level 3 – Inputs for the asset or liability that are not based on observable market data.

Our assets measured at fair value on a nonrecurring basis include investments, assets and liabilities held for sale, long-lived assets, and indefinite-lived intangible assets. We review the carrying amounts of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable or at least annually, for indefinite-lived intangible assets. Any resulting asset impairment would require that the asset be recorded at its fair value. The resulting fair value measurements of the assets are considered Level 3 measurements.

Financial Risk Management

We are exposed, in varying degrees, to a variety of financial instrument related risks. Our risk exposures and the impact on our financial instruments is summarized below:

Credit Risk

Credit risk is the risk of a potential loss to us if a customer or third party to a financial instrument fails to meet its contractual obligations. The maximum credit exposure at June 30, 2025 and December 31, 2024, is the carrying amount of cash and cash equivalents, subscription receivable, accounts receivable and notes receivable. We do not have significant credit risk with respect to our customers. All cash deposits are with regulated U.S. financial institutions.

We provide credit to our customers in the normal course of business and have established credit evaluation and monitoring processes to mitigate credit risk but have limited risk as the majority of our sales are transacted with cash.

Liquidity Risk

Liquidity risk is the risk that we will not be able to meet our financial obligations associated with financial liabilities. We manage liquidity risk through the management of our capital structure. Our approach to managing liquidity is to estimate cash requirements from operations, capital expenditures and investments and ensure that we have sufficient liquidity to fund our ongoing operations and to settle obligations and liabilities when due.

To date, we have incurred significant cumulative net losses and we have not generated positive cash flows from our operations. We have therefore depended on financing from the sale of our equity and from debt financing to fund our operations. Overall, we do not expect the net cash contribution from our operations and investments to be positive in the near term, and we therefore expect to rely on financing from equity or debt.

Market Risk

In addition to business opportunities and challenges applicable to any business operating in a fast-growing environment, our business operates in a highly regulated and multi-jurisdictional industry, which is subject to potentially significant changes outside of our control as individual states as well as the U.S. federal government may impose restrictions on our ability to grow our business profitably or enact new laws and regulations that open up new markets.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of our financial instrument will fluctuate because of changes in market interest rates. Our cash deposits bear interest at market rates.

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Currency Risk

Our operating results and financial position are reported in thousands of U.S. dollars. We may enter into financial transactions denominated in other currencies, which would result in your operations and financial position becoming subject to currency transaction and translation risks.

As of June 30, 2025, and December 31, 2024, we had no hedging agreements in place with respect to foreign exchange rates. We have not entered into any agreements or purchased any instruments to hedge possible currency risks at this time.

Price Risk

Price risk is the risk of variability in fair value due to movements in equity or market prices. We are subject to the risk of price variability pursuant to our products due to competitive or regulatory pressures.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no significant material changes to the market risks as disclosed in the Company’s 2024 Form 10-K. See also Financial Risk Management in Part I, Item 2 of this Form 10-Q.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report were effective to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that it is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934, as amended) during the three months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

Murchinson Ltd., an investment manager of holders of 2025 Convertible Notes and 2027 Convertible Notes (the “Applicant”), filed an application in the Ontario Superior Court of Justice (Commercial List) (the “Court”) on March 27, 2025, opposing the 2025 Debt Transaction and claiming the transaction was oppressive to the Applicant. The application filed by the Applicant also claims breach of contract and civil conspiracy. The Applicant seeks from the court, among other forms of relief, that the 2025 Debt Transaction be declared unlawful under the terms of the Canadian Business Corporations Act, an award of unspecified damages, and recovery of costs. By order dated May 21, 2025, the Court ruled in favor of the Company and the 2025 Debt Transaction was subsequently closed. Murchinson Ltd. has filed appeals to the Court of Appeal for Toronto that are currently pending.

Item 1A. Risk Factors

As of the date of this filing, there have been no material changes in our risk factors from those disclosed in Part I, Item 1A, of the Company’s 2024 Form 10-K, which is incorporated by reference herein.

The Company may not be able to retain or hire necessary qualified personnel

The Company’s ability to retain or hire qualified personnel is subject to a variety of uncertainties due to the challenging

financial conditions facing both the industry and the Company. If the Company is unable to retain or hire sufficiently

qualified resources, the Company may have difficulty executing on its operational and strategic plans.

Item 2. Unregistered Sales of Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

a)Not applicable.

b)Securities Trading Plans of Directors and Executive Officers

During the three months ended June 30, 2025, none of our directors or executive officers or any contract, instruction, or written plan for the purchase or sale of the Company’s securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K.

Item 6. Exhibit Index


Exhibit Number						Description
2.1						Arrangement Agreement, dated March 23, 2022, between Cresco Labs Inc. and Columbia Care Inc. (incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K, filed with the SEC on March 29, 2022)
2.2						Amending Agreement, dated February 27, 2023, between Cresco Labs Inc. and Columbia Care Inc. (incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K, filed with the SEC on February 28, 2023)
3.1						Articles, dated April 26, 2019 (incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K, filed with the SEC on September 22, 2023)
3.2						Certificate of Change of Name, dated September 19, 2023 (incorporated by reference to Exhibit 3.2 of the Registrant’s Form 8-K, filed with the SEC on September 22, 2023)

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4.1						Warrant Agency Agreement dated September 20, 2018 between Canaccord Genuity Growth Corp. and Odyssey Trust Company (incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form 10, filed with the SEC on December 14, 2021)
4.2						Warrant Agreement dated April 26, 2019 between Columbia Care Inc. and Canaccord Genuity Corp. (incorporated by reference to Exhibit 4.2 of the Registrant’s Registration Statement on Form 10, filed with the SEC on December 14, 2021)
4.3						Trust Indenture made as of March 31, 2020 between Columbia Care Inc. and Odyssey Trust Company (incorporated by reference to Exhibit 4.3 of the Registrant’s Registration Statement on Form 10, filed with the SEC on December 14, 2021)
4.4						Warrant Indenture dated March 31, 2020 between Columbia Care Inc. and Odyssey Trust Company (incorporated by reference to Exhibit 4.4 of the Registrant’s Registration Statement on Form 10, filed with the SEC on December 14, 2021)
4.5						Warrant Indenture dated May 14, 2020 between Columbia Care Inc. and Odyssey Trust Company (incorporated by reference to Exhibit 4.6 of the Registrant’s Registration Statement on Form 10, filed with the SEC on December 14, 2021)
4.6						Warrant Indenture dated July 2, 2020 between Columbia Care Inc. and Odyssey Trust Company (incorporated by reference to Exhibit 4.8 of the Registrant’s Registration Statement on Form 10, filed with the SEC on December 14, 2021)
4.7						Warrant Indenture dated October 29, 2020 between Columbia Care Inc. and Odyssey Trust Company (incorporated by reference to Exhibit 4.9 of the Registrant’s Registration Statement on Form 10, filed with the SEC on December 14, 2021)
4.8						Extension Notice dated March 28, 2023 to Odyssey Trust Company (incorporated by reference to Exhibit 4.14 of the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 29, 2023)
4.9						Amended and Restated Trust Indenture, among The Cannabist Company Holdings Inc. and The Cannabist Company Holdings (Canada) Inc, as co-issuers, and Odyssey Trust Company, as Trustee, dated May 29, 2025 (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K, filed with the SEC on June 4, 2025)
4.10						First Supplemental Indenture, among The Cannabist Company Holdings Inc. and The Cannabist Company Holdings (Canada) Inc, as co-issuers, and Odyssey Trust Company, dated May 29, 2025 (incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K, filed with the SEC on June 4, 2025)
10.1*†						Amendment to the Promissory Note effective May 27, 2025 between Verano Holdings, LLC and The Cannabist Company Holdings Inc.
10.2*						Waiver and Partial Payoff Agreement dated May 27, 2025 between Verano Holdings, LLC, The Cannabist Company Holdings Inc., and CC VA Holdco LLC.
10.3						Warrant Agency Agreement, between The Cannabist Company Holdings Inc. and Odyssey Trust Company, as Warrant Agent, dated May 29, 2025 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed with the SEC on June 4, 2025)
10.4*#						Summary of The Cannabist Company Holdings Inc. Transaction Bonus Plan
10.5*#						Second Amended and Restated At-Will Employment Agreement dated July 17, 2025 between The Cannabist Company Holdings Inc. and Jesse Channon
31.1*						Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1‡						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2‡						Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*						Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH*						Inline XBRL Taxonomy Extension Schema Document
101.CAL*						Inline XBRL Taxonomy Extension Calculation Linkbase Document

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101.DEF*						Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*						Cover Page Interactive Data File (embedded within the Inline XBRL document)

________________________

*Filed herewith.

#† Certain identified information has been omitted pursuant to Item 601(b)(10) of Regulation S-K because such information is both (i) not material and (ii) of the type that the Registrant customarily and actually treats as private or confidential. The Registrant hereby undertakes to furnish supplemental copies of the unredacted exhibit upon request by the SEC.

‡Document has been furnished, is not deemed filed and is not to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, irrespective of any general incorporation language contained in any such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	THE CANNABIST COMPANY HOLDINGS INC.

Date: August 7, 2025	By:	/s/ David Hart
		David Hart
		Chief Executive Officer

Date: August 7, 2025	By:	/s/ Derek Watson
		Derek Watson
		Chief Financial Officer

Cannabist Co Holdings Inc. - Quarter Report: 2025 June (Form 10-Q)

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