The Company has operating leases for its retail stores and processing and cultivation facilities located throughout the U.S., as well as corporate office space located in Illinois. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date.

All real estate leases are recorded on the balance sheet. Equipment and other non-real estate leases with an initial term of twelve months or less are not recorded on the balance sheet. Lease agreements for some locations provide for rent escalations and renewal options. Certain real estate leases require payment for fixed and variable non-lease components, such as taxes, insurance and maintenance. The Company accounts for each real estate lease and the related non-lease components together as a single component.

The Company determines if an arrangement is a lease at inception. The Company must consider whether the contract conveys the right to control the use of an identified asset. Certain arrangements require significant judgment to determine if an asset is specified in the contract and if the Company directs how and for what purpose the asset is used during the term of the contract. For the three and nine months ended September 30, 2023, the Company recorded operating lease expense of $11,628 thousand and $35,996 thousand, respectively compared to operating lease expense of $11,884 thousand and $31,906 thousand for the three and nine months ended September 30, 2022, respectively.

Other information related to operating leases as of September 30, 2023 and December 31, 2022 were as follows:


	September 30, 2023	December 31, 2022
Weighted average remaining lease term (years)	11.98	11.64
Weighted average discount rate	12.41%	12.42%

Maturities of lease liabilities for operating leases as of September 30, 2023 were as follows:


		Maturities of Lease Liability
Year Ending December 31,		Third Party		Related Party		Total
		(in thousands)
Remainder of 2023	$	10,669	$	143	$	10,812
2024		43,250		437		43,687
2025		41,114		343		41,457
2026		40,409		350		40,759
2027		40,793		357		41,150
2028 and Thereafter		358,013		1,728		359,741
Total Lease Payments		534,248		3,358		537,606
Less: Interest		(274,503)		(1,268)		(275,771)
Present Value of Lease Liability	$	259,745	$	2,090	$	261,835

The Company has leasing arrangements that are related party transactions, including for certain facilities in Maryland, Massachusetts and Nevada. Wendy Berger, a director of the Company, is a principal of WBS Equities, LLC, which is the Manager of Mosaic Real Estate, LLC, and owns the facilities leased by the Company. Additionally, Mosaic Real Estate, LLC is indirectly owned in part by Ms. Berger (through the Wendy Berger 1998 Revocable Trust), Benjamin Kovler, the Chairman and Chief Executive Officer of the Company (through KP Capital, LLC), and Anthony Georgiadis, the President and a director of the Company (through Three One Four Holdings, LLC). The terms of these leases range from 7 years to 15 years. For the three and nine months ended September 30, 2023, the Company recorded lease expense of $139 thousand and $415 thousand, respectively, compared to lease expense of $296 thousand and $886 thousand for the three and nine months ended September 30, 2022, respectively.