8. Intangible Assets

Intangible asset balances consisted of the following:

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Amortization expense for the years ended December 31, 2022 and 2021, was $14,706 and $14,648, respectively, which is included in depreciation and amortization in operating expenses in the consolidated statements of operations and comprehensive loss.

The Company tests intangible assets with indefinite useful lives for potential impairment on an annual basis. The Company has two indefinite-lived intangible assets, both of which pertain to licenses for cultivation and processing. The fair values of the intangible assets are determined and then compared to their respective carrying amounts to determine the amount of impairment, if any. Based on the impairment testing performed for the Company’s intangible assets as of December 31, 2022, the Company recorded an impairment loss of $11,351 related to license rights for Standard Farms PA and Standard Farms OH, which is included in impairment loss and loss on disposal of assets on the consolidated statements of operations and comprehensive loss. There were no impairments of intangible assets during the year ended December 31, 2021.

The following table outlines the estimated future annual amortization expense related to intangible assets as of December 31, 2022:

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