Warrants

9 Months Ended

Sep. 30, 2021

Warrants and Rights Note Disclosure [Abstract]

Warrants

9. WARRANTS

As part of the Company’s private placement financing, as well as other financing arrangements, the Company issued warrants to related parties, as well as unrelated third parties, which allow the holders to purchase Subordinate Voting Shares at an exercise price determined at the time of issuance.

The following table summarizes the number of warrants outstanding as of September 30, 2021 and December 31, 2020:

	Liability Classified								Equity Classified
	Number of Shares				Weighted Average Exercise Price (C$)		Weighted Average Remaining Contractual Life		Number of Shares		Weighted Average Exercise Price (USD)		Weighted Average Remaining Contractual Life
Balance as at December 31, 2020		2,485,794		C$		18.45		3.40		35,000		9.10		3.68
Warrants Issued		—				—		—		1,459,044		32.68		4.58
Warrants Exercised		(278,381	)			18.16		2.70		—		—		—
Warrants Expired		(109,482	)			22.90		1.03		—		—		—
Balance as at September 30, 2021		2,097,931		C$		18.26		2.67		1,494,044		32.13		4.56

(a)Liability Classified Warrants Outstanding

The following table summarizes the fair value of the liability classified warrants at September 30, 2021 and December 31, 2020:

				Fair Value
Warrant Liability	Strike Price	Warrants Outstanding		September 30, 2021		December 31, 2020		Change
Bridge Financing Warrants	C$22.90		100,723	$	1,089,500	$	2,544,500	$	(1,455,000	)
Private Placement Financing Warrants	C$19.39		1,606,533		25,188,000		28,756,500		(3,568,500	)
Modification Warrants	C$12.04		316,947		6,293,000		6,630,000		(337,000	)
Additional Modification Warrants	C$14.03		73,728		1,432,500		1,523,000		(90,500	)
Totals			2,097,931	$	34,003,000	$	39,454,000	$	(5,451,000	)

During the three and nine months ended September 30, 2021 and 2020, the Company recorded a gain of $13,461,750 and $5,451,000, and a loss of $3,181,114 and $2,060,771, respectively, on the change in the fair value of the warrant liability within other income (expense) on the unaudited interim condensed consolidated statements of operations.

The following table summarizes the significant assumptions used in determining the fair value of the warrant liability as of each reporting date (see Note 14 - Fair Value Measurements for additional details):

	September 30,	December 31,
Significant Assumptions	2021	2020
Volatility	52.27% - 75.30%	72.19% - 79.10%
Remaining Term	1.03 - 3.64 years	1.78 - 4.39 years
Risk Free Rate	0.52% - 0.81%	0.20% - 0.28%

9. WARRANTS (Continued)

(b)Equity Classified Warrants Outstanding

The following table summarizes the fair value of the equity classified warrants at September 30, 2021 and December 31, 2020:

					Fair Value
			Warrants		September 30,		December 31,
Warrants Included in Contributed Surplus	Strike Price		Outstanding		2021		2020
Dispensary Mortgage Warrants	$	9.10		35,000	$	181,272	$	181,272
Private Placement Refinancing Warrants	$	32.68		1,459,044		22,258,608		—
Totals				1,494,044	$	22,439,880	$	181,272

The equity warrants were valued as of the date of issuance using a Black Scholes Option Pricing model. The following table summarizes the significant assumptions used in determining the fair value of the warrants as of each respective issuance date:

Significant Assumptions	Private Placement Refinancing Warrants	Dispensary Mortgage Warrants
Date of Issuance	April 30, 2021	June 5, 2020
Volatility	73%	80%
Estimated Term	4 years	5 years
Risk Free Rate	0.74%	0.37%