Property and Equipment

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

3.	PROPERTY AND EQUIPMENT

At September 30, 2020, property and equipment consisted of the following:


Cost	Land			Buildings and Improvements			Equipment, Computers and Furniture		Leasehold Improvements		Capitalized Interest		Assets Under Construction			Total
As at January 1, 2020	$	3,272,439		$	33,377,471		$	35,509,871	$	68,681,497	$	2,500,000	$	21,372,116		$	164,713,394
Additions		586.867			21,128,482			4,794,342		12,413,970		342,966		6,118,878			45,385,505
Disposals		(979,930	)		(4,507,086	)		—		—		—		(6,978,389	)		(12,465,405	)

As at September 30, 2020	$	2,879,376		$	49,998,867		$	40,304,213	$	81,095,467	$	2,842,966	$	20,512,605		$	197,633,494


Accumulated Depreciation
As at January 1, 2020	$	—		$	2,236,254		$	3,882,178	$	2,998,287	$	—	$	—		$	9,116,719
As at September 30, 2020	$	—		$	2,939,951		$	8,375,318	$	8,426,333	$	166,800	$	—		$	19,908,402

Net book value
As at January 1, 2020	$	3,272,439		$	31,141,217		$	31,627,693	$	65,683,210	$	2,500,000	$	21,372,116		$	155,596,675
As at September 30, 2020	$	2,879,376		$	47,058,916		$	31,928,895	$	72,669,134	$	2,676,166	$	20,512,605		$	177,725,092

At December 31, 2019, property and equipment consisted of the following:


Cost	Land			Buildings and Improvements			Equipment, Computers and Furniture			Leasehold Improvements		Capitalized Interest		Assets Under Construction		Total
As at January 1, 2019	$	2,243,085		$	20,861,988		$	11,001,498		$	18,435,893	$	—	$	16,664,958	$	69,207,422
Additions		4,393,030			28,217,500			23,109,209			38,002,678		2,500,000		4,678,084		100,900,501
Additions from acquisitions		—			—			4,253,362			12,242,926		—		29,074		16,525,362
Disposals		(3,363,676	)		(15,702,017	)	$	(2,854,198	)		—		—		—		(21,919,891	)

As at December 31, 2019	$	3,272,439		$	33,377,471		$	35,509,871		$	68,681,497	$	2,500,000	$	21,372,116	$	164,713,394


Accumulated Depreciation
As at January 1, 2019	$	—		$	1,351,230		$	1,524,114		$	1,007,998	$	—	$	—	$	3,883,342
As at December 31, 2019	$	—		$	2,236,254		$	3,882,178		$	2,998,287	$	—	$	—	$	9,116,719

Net book value
As at January 1, 2019	$	2,243,085		$	19,510,758		$	9,477,384		$	17,427,895	$	—	$	16,664,958	$	65,324,080
As at December 31, 2019	$	3,272,439		$	31,141,217		$	31,627,693		$	65,683,210	$	2,500,000	$	21,372,116	$	155,596,675

Assets under construction represent construction in progress related to both cultivation and dispensary facilities not yet completed or otherwise not ready for use.

Depreciation expense for the three and nine months ended September 30, 2020 totaled $2,003,585 and $11,193,570, respectively of which $311,315 and $5,571,477, respectively, is included in cost of goods sold. Depreciation expense for the three and nine months ended September 30, 2019 totaled $2,494,601 and $5,113,195, respectively of which $1,732,146 and $3,541,236, respectively, is included in cost of goods sold.

On January 31, 2020, the Company closed a sale and lease back transaction to sell its Toledo, Ohio processing facility to Innovative Industrial Properties (“IIP”). Under the long-term agreement, the Company will lease back the facility and continue to operate and manage it. As a result of the sale, the Company disposed

of $205,000 of land and $2,695,000 of construction in progress. There was no gain or loss on the sale.

On March 6, 2020, the Company closed a sale and lease back transaction to sell its Oglesby, Illinois cultivation and processing facility to IIP. Under the long-term agreement, the Company will lease back the facility and continue to operate and manage it. As a result of the sale, the Company disposed

of $774,930 of land, $4,507,086 of buildings and improvements and $3,813,636 of construction in progress. The Company recognized a gain on the sale of Oglesby facility of $239,096 which was recorded within other income (expense) on the unaudited interim condensed consolidated statement of operations.

For further information regarding these transactions, see Note 5 - Leases.