2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated unaudited interim financial statements have been prepared in accordance with (i) United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information, (ii) the instructions to Form 10-Q, and (iii) Article 10 of Regulation S-X. In the opinion of our management, our condensed consolidated unaudited financial statements and accompanying notes (the “Financial Statements”) include all normal recurring adjustments that are necessary for the fair statement of the interim periods presented. Interim results of operations are not necessarily indicative of results for the full year, or any other period. The Financial Statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “Form 10-K”), as filed with the SEC on April 10, 2025 and with the relevant Canadian securities regulatory authorities under our profile on SEDAR+. Except as noted below, there have been no

material changes to the Company's significant accounting policies and estimates during the six months ended June 30, 2025. Certain information, footnotes and disclosures normally included in the annual financial statements, prepared in accordance with U.S. GAAP, have been condensed or omitted in accordance with SEC rules and regulations.

The financial data included in the Financial Statements contain all normal and recurring adjustments necessary to state fairly the consolidated financial condition, results of operations, statements of changes in shareholders’ equity (deficit), and cash flows of the Company for the six months ended June 30, 2025 and 2024. Operating results for the six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the current year ending December 31, 2025.

Assets Held for Sale and Discontinued Operations

In accordance with Accounting Standards Codification (“ASC”) Subtopic 205-20 “Discontinued Operations,” a business is classified as held for sale when management having the authority to approve the action commits to a plan to sell the business, the business is available for immediate sale in its present condition and an active program to locate a buyer has been initiated. Additionally, the sale must be probable to occur during the next 12 months at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate it is unlikely significant changes to the plan will be made or the plan will be withdrawn. A business classified as held for sale is recorded at the lower of (i) its carrying amount and (ii) estimated fair value less costs to sell. When the carrying amount of the business exceeds its estimated fair value less costs to sell, a loss is recognized and updated in each reporting period as appropriate. Assets held for sale are not depreciated or amortized.

The results of operations of businesses classified as held for sale are reported as discontinued operations if the disposal represents a strategic shift that will have a major effect on the entity’s operations and financial results. When a business is identified for discontinued operations reporting: (i) results for prior periods are retrospectively reclassified as discontinued operations; (ii) results of operations are reported in a single line, net of tax, in the consolidated statement of operations; and (iii) assets and liabilities are reported as held for sale in the consolidated balance sheets in the period in which the business is classified as held for sale.

In 2024, the Company announced a strategic review, whereby it planned to divest of its plant-touching assets. On January 28, 2025, the Company entered into an asset purchase agreement with In Good Health, Inc. for the sale of the Retail Disposal Group. During the three months ended June 30, 2025, the Company determined that the sale of the Wholesale Disposal Group would have a major effect on its operations and financial results. The Company concluded that the Disposal Groups met the held for sale and discontinued operations criteria during the second quarter of 2025. The Company determined the ultimate disposal will represent a strategic shift that will have a major effect on its operations and financial results. As such, the results of the Disposal Groups are presented as discontinued operations in the condensed consolidated statements of operations and comprehensive loss for all periods presented. The agreed upon sales price for the Retail Disposal Group is $2,000 cash plus the assumption of certain liabilities. The sales price for the Wholesale Disposal Group had not been finalized as of June 30, 2025.

Prior periods have been adjusted to conform to the current presentation. The assets and liabilities of the Disposal Groups have been reflected as assets and liabilities held for sale in the condensed consolidated balance sheets for all periods presented. The net revenue and expense activities from the Disposal Groups have been reflected as the loss from discontinued operations in the condensed consolidated statement of operations and comprehensive loss. The cash flows from discontinued operations are reflected as cash flows of discontinued operations in the condensed consolidated statements of cash flows.

Unless otherwise noted, all amounts and disclosures included in these notes to condensed consolidated financial statements reflect only our continuing operations. See Note 4 — Assets Held for Sale and Discontinued Operations for additional information.

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Principles of Consolidation

The Financial Statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its subsidiaries, as well as the accounts of any entities over which the Company has a controlling financial interest in accordance with ASC 810 Consolidation. All transactions and balances between these entities have been eliminated upon consolidation.

Use of Estimates

The preparation of these Financial Statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, and revenue and expenses. Actual results may differ from these estimates.

Restricted Cash

The Company had $1,277 and $1,276 in restricted cash as of June 30, 2025 and December 31, 2024, respectively. Included in restricted cash was a certificate of deposit related to Jupiter customs bonds totaling $1,255 as of both June 30, 2025 and December 31, 2024.

Revenue Recognition

Concentration Risk

Customers that account for 10% or more of the Company’s net sales consist of the following:

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Deferred Revenue

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Contract assets represent the right to receive payment for goods and services that have been transferred to the customer, conditional upon something other than the passage of time. Deferred revenues include obligations to provide goods and services for which payment has been received. There are no contract assets on unsatisfied performance obligations as of June 30, 2025 and December, 31, 2024. The consolidated balance sheets include deferred revenue of $1,425 and $3,143 as of June 30, 2025 and December 31, 2024, respectively, for advance consideration received from wholesale customers for the sale of vaporization and inhalation devices through Jupiter. The amount of $2,414 included in deferred revenue as of December 31, 2024 was recognized in revenue during the six months ended June 30, 2025. The amount of $5,679 included in deferred revenue as of December 31, 2023 was recognized in revenue during the six months ended June 30, 2024.

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Recently Adopted and Issued Accounting Pronouncements

Recent accounting pronouncements, other than those below, issued by the Financial Accounting Standards Board (“FASB”), the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material effect on the Company’s present or future financial statements.

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Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU No. 2024-03 does not change or remove existing expense disclosure requirements but requires disaggregated disclosures about

certain expense categories and captions, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses. This guidance will be effective for public business entities for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2024-03 on its financial statements and related disclosures.

Recently Adopted Accounting Pronouncements

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In December 2023, the FASB issued accounting standards update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires public companies to annually disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold, certain information about income taxes paid, and certain information disaggregated between federal, state, and/or domestic, and foreign. This guidance is effective for public business entities after December 15, 2024, with early adoption permitted. The Company adopted this standard on January 1, 2025, and there was no material impact to its current financial position or results of operations.