The Company has operating leases for its retail stores, processing and cultivation facilities, as well as for corporate office space. 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 real estate leases and the related fixed 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 years ended December 31, 2023, 2022 and 2021 the Company recorded operating lease expense of $48,231 thousand, $43,985 thousand and $34,124 thousand, respectively.

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


	December 31, 2023	December 31, 2022
Weighted average remaining lease term (years)	11.75	11.64
Weighted average discount rate	12.40%	12.42%

Maturities of lease liabilities for operating leases as of December 31, 2023 were as follows:


		Maturities of Lease Liability
Year Ending December 31,		Third-Party		Related Party		Total
		(in thousands)
2024	$	43,633	$	437	$	44,070
2025		41,845		343		42,188
2026		41,073		350		41,423
2027		41,420		357		41,777
2028		40,863		364		41,227
2029 and Thereafter		318,590		1,364		319,954
Total Lease Payments		527,424		3,215		530,639
Less: Interest		(267,672)		(1,206)		(268,878)
Present Value of Lease Liability	$	259,752	$	2,009	$	261,761

Wendy Berger, a director of the Company, is a principal of WBS Equities, LLC, which is the Manager of Mosaic Real Estate, LLC, which owned the facilities leased by the Company. Additionally, Mosaic Real Estate, LLC is 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). On December 16, 2022, the Company purchased land located at 5401 NW 44th Ave. Ocala, Florida for $5,584 thousand, excluding transaction costs, from Mosaic Real Estate Ocala, LLC. This transaction resulted in the termination of the Florida related party leasing agreement. For the years ended December 31, 2023, 2022 and 2021, the Company recorded lease expense of $553 thousand, $1,129 thousand and $1,185 thousand, respectively, associated with these leasing arrangements.

On November 12, 2019, the Company closed a sale and lease back transaction to sell its Danville, Pennsylvania cultivation and processing facility to Innovative Industrial Properties, Inc. (“IIP”).

On June 29, 2022 the Company amended (the “Amendment”) its original lease agreement with IIP. The Amendment provided an additional tenant improvement allowance of $55,000 thousand to be used on enhancements to the facility. In addition to the tenant improvement allowance of $19,300 thousand received in November 2019, the total tenant improvement allowance provided by IIP was $74,300 thousand, and brings IIP's total investment in the property to $94,600 thousand. The Amendment to the lease was treated as a modification and resulted in a gain of $3,061 thousand as well as an increase in the right of use asset and related lease liability to $81,720 thousand.