12.Leases

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The following table provides the components of lease cost recognized in the condensed consolidated statements of operations and comprehensive income:

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The following table provides the weighted average discount rates and weighted average remaining lease terms for the Company’s leases:

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The maturity of the contractual undiscounted lease liabilities as of June 30, 2022 is as follows:

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On May 16, 2022, the Company, through its subsidiary Commonwealth Alternative Care, Inc. (“CAC”), completed the acquisition of the Taunton Facility for $13,047 cash consideration pursuant to a purchase option included in the Company’s lease with the previous owner of the Taunton Facility. Concurrently with the acquisition, CAC sold the Taunton Facility to Innovative Industrial Properties, Inc. (“IIP”) for $40,000 cash consideration and entered into a long-term lease for the Taunton Facility with a term of 20 years, with two 5-year extensions exercisable at the Company’s discretion. CAC anticipates no disruption to its operations as a result of these transactions.

The early lease termination and acquisition of the Taunton Facility resulted in derecognizing an ROU asset balance of $3,940, and lease liability balance of $4,454; and recognizing land and building balances of $6,276 and $6,278, respectively. The transaction with IIP was accounted for as a failed sale and leaseback transaction, where the Company retained the Taunton Facility balances included in property, plant, and equipment, and recognized a note payable of $40,000, see Note 11 – Notes Payable for the note payable terms.

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Of the cash proceeds from IIP used to pay the Taunton Facility purchase price, $25,466 was remitted to an escrow account as a compensating balance to the note payable and the remaining proceeds were used to pay transaction expenses.