Business Segment Information

12 Months Ended

Dec. 31, 2019

25. Business Segment Information

As of October 1, 2019, the Company has two operating segments based on major product categories: Cannabis and Hemp. These operating segments are also the Company’s reportable segments. Historical financial information has been recast to reflect the current segment structure.

The Cannabis segment cultivates, processes and distributes medical and adult-use cannabis products in a variety of formats, as well as related accessories, on a global basis. The Hemp segment cultivates, processes and distributes a diverse portfolio of hemp-based natural food and wellness products within North America.

The results of each segment are regularly reviewed by the Company’s Chief Executive Officer, who is the Company’s chief operating decision maker, to assess the performance of the segment and make decisions regarding the allocation of resources. The Company’s chief operating decision maker uses revenue and gross profit as the measure of segment profit or loss. The accounting policies of each segment are the same as those set out under the summary of significant accounting policies in Note 2. There are no intersegment sales or transfers.

	Year ended December 31,
	2019					2018				2017
	Revenue		Gross profit			Revenue		Gross profit		Revenue		Gross profit
Cannabis	$	107,147	$	(42,302	)	$	43,130	$	14,275	$	20,538	$	11,377
Hemp	$	59,832	$	18,806		$	—	$	—	$	—	$	—
Total	$	166,979	$	(23,496	)	$	43,130	$	14,275	$	20,538	$	11,377

No asset information is provided for the segments because the Company’s chief operating decision maker does not receive asset information by segment on a regular basis.

Total revenue and gross profit for the reportable segments is equal to the Company’s consolidated revenue and gross profit.

	Year ended December 31,
	2019			2018			2017
Gross profit for the segments	$	(23,496	)	$	14,275		$	11,377
General and administrative expenses		(81,968	)		(29,461	)		(7,499	)
Sales and marketing expenses		(61,084	)		(15,366	)		(7,164	)
Research and development expenses		(6,558	)		(4,264	)		(3,171	)
Depreciation and amortization expenses		(11,607	)		(1,598	)		(902	)
Stock-based compensation expense		(31,842	)		(20,988	)		(139	)
Impairment of assets		(112,070	)		—			—
Acquisition-related income (expense), net		31,427			(248	)		—
Loss from equity method investments		(4,504	)		—			—
Foreign exchange (loss) gain, net		5,944			(7,234	)		1,363
Interest expense, net		(34,690	)		(9,110	)		(1,686	)
Finance income from ABG		764			—			—
Loss on disposal of property and equipment		(2,436	)		(190	)
Other income, net		2,501			2,010			12
Loss before income taxes	$	(329,619	)	$	(72,174	)	$	(7,809	)

Sources of revenue were as follows:

	Year Ended December 31,
	2019		2018		2017
Dried cannabis	$	82,753	$	21,674	$	16,260
Cannabis extracts		24,139		21,179		3,965
Hemp products		59,832		—		—
Accessories and other		255		277		313
Total	$	166,979	$	43,130	$	20,538

Channels of revenue were as follows:

	Year Ended December 31,
	2019		2018		2017
Cannabis
Adult-use	$	55,763	$	3,521	$	—
Canada - medical		12,556		18,052		19,642
International - medical		13,378		2,912		896
Bulk		25,450		18,645		—
Total Cannabis revenue	$	107,147	$	43,130	$	20,538
Hemp		59,832		—		—
Total	$	166,979	$	43,130	$	20,538

Revenue attributed to geographic region based on the location of the customer was as follows:

	Year Ended December 31,
	2019		2018		2017
Canada	$	130,291	$	40,209	$	19,775
United States		23,516		—		—
Other countries		13,172		2,921		763
Total	$	166,979	$	43,130	$	20,538

Long-lived assets consisting of property and equipment, net of accumulated depreciation, attributed to geographic regions based on their physical location were as follows:

	December 31,
	2019		2018
Canada	$	144,065	$	64,687
Portugal		36,908		15,455
United States		3,171		—
Other countries		73		72
Total	$	184,217	$	80,214

Major Customers

Two customers accounted for 13% each of revenue for the year ended December 31, 2019. One customer accounted for 24% of the Company’s revenue for the year ended December 31, 2018. No one customer accounted for greater than 10% of the Company’s revenue for the year ended December 31, 2017.

Two customers accounted for 20% and 10%, respectively, of the Company’s accounts receivable balance as of December 31, 2019. Two customers accounted for 30% and 16%, respectively, of the Company’s accounts receivable balance as of December 31, 2018. No one customer accounted for greater than 10% of the Company’s accounts receivable as of December 31, 2017.