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What changed in Greenlane Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Greenlane Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+241 added−221 removedSource: 10-K (2025-03-21) vs 10-K (2024-07-19)

Top changes in Greenlane Holdings, Inc.'s 2024 10-K

241 paragraphs added · 221 removed · 163 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe also own and operate one of the industry’s most visited North American direct-to-consumer e-commerce websites, Vapor.com, as well as PuffItUp.com, and Vaposhop which serves the European market. We also sell our proprietary products direct to consumers via Higherstandards.com, and MarleyNaturalShop.com. We operate storefronts on Amazon, Ebay, Etsy, and other online high traffic marketplaces. Market Knowledge and Understanding.
Biggest changeWe also sell our proprietary products direct to consumers via Higherstandards.com, and MarleyNaturalShop.com. We operate storefronts on Amazon, Ebay, Etsy, and other online high traffic marketplaces. Market Knowledge and Understanding. Because of our experience and our extensive, long-term industry relationships, we believe we have a deep understanding of customer needs and desires in our business channels.
Our B2B customers compete primarily on the basis of the breadth, style, quality, pricing and availability of merchandise, the level of customer service, brand recognition and loyalty. We successfully reach our B2B customers through our direct sales force and other marketing initiatives, and provide them with our strategically-curated mix of brands and products, merchandise planning strategies and exceptional customer service.
Our B2B customers compete primarily on the basis of breadth, style, quality, pricing and availability of merchandise, the level of customer service, brand recognition and loyalty. We successfully reach our B2B customers through our direct sales force and other marketing initiatives and provide them with our strategically curated mix of brands and products, merchandise planning strategies and exceptional customer service.
This platform provides our business customers seamless access to our catalog of products for purchase 24 hours a day, 365 days a year. The wholesale website offers customers an improved user experience with an easy-to-use layout that streamlines processes and allows customers to interact with us at their convenience. Business-to-Consumer.
This platform provides our business customers with seamless access to our catalog of products for purchase 24 hours a day, 365 days a year. The wholesale website offers customers an improved user experience with an easy-to-use layout that streamlines processes and allows customers to interact with us at their convenience. Business-to-Consumer.
In addition, our management team has expertise in accounting and finance, mergers and acquisitions, supply chain, information technology, and operations . 7 Our Operating Strategies We intend to leverage our competitive strengths to increase shareholder value through the following core strategies: Plan to Accelerate Path to Profitability and Capitalize the Business In today’s economic landscape, particularly within the cannabis industry, achieving profitability and preserving working capital are paramount.
In addition, our management team has expertise in accounting and finance, mergers and acquisitions, supply chain, information technology, marketing and operations. 7 Our Operating Strategies We intend to leverage our competitive strengths to increase shareholder value through the following core strategies: Plan to Accelerate Path to Profitability and Capitalize the Business In today’s economic landscape, particularly within the cannabis industry, achieving profitability and preserving working capital are paramount.
Over time, we expect an increasing percentage of our overall sales to be from our Greenlane Brands, which in turn should allow our gross margin to trend upwards and should allow for lasting brand value to be built in the marketplace. 8 USPS PACT Act Exemption On January 11, 2022, we announced via press release that the United States Postal Service (the “USPS”) had approved our application for a business and regulatory exemption to the PACT Act (with respect to the business and regulatory exemption granted by the USPS, the “PACT Act Exemption”), allowing us to ship vaporizers and accessories classified as electronic nicotine delivery systems (“ENDS”) products to other compliant businesses.
Over time, we expect an increasing percentage of our overall sales to be from our Greenlane Brands, which in turn should allow our gross margin to trend upwards and should allow for lasting brand value to be built in the marketplace. 9 USPS PACT Act Exemption On January 11, 2022, we announced via press release that the United States Postal Service (the “USPS”) had approved our application for a business and regulatory exemption to the PACT Act (with respect to the business and regulatory exemption granted by the USPS, the “PACT Act Exemption”), allowing us to ship vaporizers and accessories classified as electronic nicotine delivery systems (“ENDS”) products to other compliant businesses.
We expect to enhance our operating margins as our business expands through a combination of additional product purchasing discounts, reduced inbound and outbound shipping and handling rates, reduced transaction processing fees, increased operating efficiencies, and realization of benefits through leveraging our existing assets and consolidated distribution facilities..
We expect to enhance our operating margins as our business expands through a combination of additional product purchasing discounts, reduced inbound and outbound shipping and handling rates, reduced transaction processing fees, increased operating efficiencies, and realization of benefits through leveraging our platform, existing assets and consolidated distribution facilities.
We believe our market knowledge, large product selection, relationships with vaporizer brands, in-house search engine optimization teams, social media focus and distribution facilities will enable us to remain a market leader in e-commerce. 10 Trademarks We own a number of registered trademarks and service marks, including without limitation, trademarks in the relevant classes of goods for Greenlane, Higher Standards, Aerospaced, Groove, and Pollen Gear.
We believe our market knowledge, large product selection, relationships with vaporizer brands, in-house search engine optimization teams, social media focus and distribution facilities will enable us to remain a market leader in e-commerce. 11 Trademarks We own a number of registered trademarks and service marks, including without limitation, trademarks in the relevant classes of goods for Greenlane, Higher Standards, Aerospaced, Groove, and Pollen Gear.
We expect these taxes would impact our competitors similarly, assuming their compliance with applicable laws. 11 The Consolidated Appropriations Act, 2021, which was signed into law on December 27, 2020, contains provisions that prohibit the mailing of electronic nicotine delivery systems (“ENDS”) through the United States Postal Service (“USPS”) and place certain regulatory requirements on shipment of ENDS through other carriers.
We expect these taxes would impact our competitors similarly, assuming their compliance with applicable laws. 12 The Consolidated Appropriations Act, 2021, which was signed into law on December 27, 2020, contains provisions that prohibit the mailing of electronic nicotine delivery systems (“ENDS”) through the United States Postal Service (“USPS”) and place certain regulatory requirements on shipment of ENDS through other carriers.
The Greenlane Brands, along with a curated set of third-party products, are offered to customers through our proprietary, owned and operated e-commerce platforms which include Wholesale.Greenlane.com, Vapor.com, PuffItUp.com, HigherStandards.com, and MarleyNaturalShop.com. Additionally, our presence on popular e-commerce platforms such as Amazon, Etsy, and eBay enables us to reach customers directly, providing them with valuable resources and a seamless purchasing experience.
The Greenlane Brands, along with a curated set of third-party products, are offered to customers through our proprietary, owned and operated e-commerce platforms which include Wholesale.Greenlane.com, Vapor.com, PuffItUp.com, HigherStandards.com, and MarleyNaturalShop.com. Additionally, our presence on popular e-commerce platforms such as Amazon, Etsy, and eBay enable us to reach customers directly, providing them with valuable resources and a seamless purchasing experience.
We merchandise vaporizers, packaging, and other ancillary products in the United States, Canada, Europe, and Latin America. We distribute products to retailers through wholesale operations and distribute products to consumers through constantly evolving e-commerce activities. We operate our own distribution centers in the United States, while also utilizing third-party logistics (“3PL”) locations in the United States, Europe, and Canada.
We merchandise vaporizers, packaging, and other ancillary products in the United States, Canada, Europe, and Latin America. We distribute products to retailers through wholesale operations and distribute products to consumers through constantly evolving e-commerce activities. We operate our own distribution center in the United States, while also utilizing third-party logistics (“3PL”) locations in Canada.
Management believes that these initiatives will significantly reduce costs, help accelerate the Company’s path to profitability, support business growth, and allow the Company to reinvest capital into its highest demand and highest potential product lines. During 2022 and 2023, the Company received capital from various sources permitting it to right-size the business and position the company for growth.
Management believes that these initiatives will significantly reduce costs, help accelerate the Company’s path to profitability, support business growth, and allow the Company to reinvest capital into its highest demand and highest potential product lines. During 2023, 2024 and 2025, the Company received capital from various sources permitting it to right-size the business and position the company for growth.
We are focused on ensuring our employees see Greenlane as a home of possibility with good jobs, a sense of belonging, and a bright future. 9 Business Seasonality We have historically experienced only moderate seasonality in our Consumer Goods business, particularly during the fourth quarter, which coincides with Cyber Monday (the first Monday after Thanksgiving, when online retailers typically offer holiday discounts), and as our customers build up their inventories in anticipation of the holiday season and for which we have related promotional marketing campaigns.
We are focused on ensuring our employees see Greenlane as a home of possibility with good jobs, a sense of belonging, and a bright future. 10 Business Seasonality We have historically experienced only moderate seasonality in our direct to consumer business, particularly during the fourth quarter, which coincides with Cyber Monday (the first Monday after Thanksgiving, when online retailers typically offer holiday discounts), and as our customers build up their inventories in anticipation of the holiday season and for which we have related promotional marketing campaigns.
In exchange we would earn quarterly and annual commission payments from our strategic partners. While the strategic partnerships may result in a decrease in top line revenue for these packaging and vape products, these partnerships combined with some of our other restructuring initiatives should allow us to reduce our overall cost-structure and enhance our margins, thereby improving our balance sheet.
In exchange we would earn quarterly and annual commission payments from our strategic partner. While the strategic partnership may result in a decrease in top line revenue for these vape products, this partnership combined with some of our other restructuring initiatives should allow us to reduce our overall cost-structure and enhance our margins, thereby improving our balance sheet.
We have made tremendous progress consolidating and streamlining our warehouse and distribution in 2023, including the consolidations of our warehouse in Worcester, MA and 3PL location in Hebron, KY to our owned facility in Moreno Valley, California in 2023. Greenlane offers a full-spectrum of Consumer and Industrial Goods, positioning us to meet all our customers’ growing demands.
We made tremendous progress consolidating and streamlining our warehouse and distribution in 2023 and 2024, including the consolidations of our warehouse in Worcester, MA and 3PL location in Hebron, KY to our owned facility in Moreno Valley, California in 2023. Greenlane offers a full spectrum of products, positioning us to meet all our customers’ growing demands.
During 2022 and 2023, we completed a series of reductions in force, which we expect to result in approximately $10.0 million in annualized cash compensation cost savings. We believe our current headcount and resources are sufficient to execute our plan of achieving profitability in the near-term, while remaining flexible to scale our hiring as industry demand and our sales grow.
During 2023 and 2024, we completed a series of reductions in force, which resulted in approximately $10.1 million in annualized cash compensation cost savings. We believe our current headcount and resources are sufficient to execute our plan of achieving profitability in the near term, while remaining flexible to scale our hiring as industry demand and our sales grow.
Our Consumer Goods segment focuses on serving consumers across wholesale, retail, and e-commerce operations—offering all of our Greenlane Brands, as well as ancillary products and accessories from select leading third-party brands such as Storz and Bickel, Grenco Science, PAX, Cookies, and more.
We focus on serving consumers across wholesale, retail, and e-commerce operations—offering all of our Greenlane Brands, as well as ancillary products and accessories from select leading third-party brands such as Storz and Bickel, Grenco Science, PAX, Cookies, and more.
We expect the ability to fulfill ENDS orders with the USPS to allow us to reduce shipping costs, decrease fulfillment times and enhance the overall customer experience for approved wholesale customers. Enhance Our Operating Margins.
We currently have the ability to fulfill ENDS orders with the USPS which allows us to reduce shipping costs, decrease fulfillment times and enhance the overall customer experience for approved wholesale customers. Enhance Our Operating Margins.
We believe our largest trademarks are widely recognized throughout the world and have considerable value. The duration of trademark registrations varies from country to country. However, trademarks are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained.
We believe our largest trademarks are widely recognized throughout the world and have considerable value. The duration of trademark registrations varies from country to country. However, trademarks are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained. Recent Developments On February 19, 2025, Greenlane Holdings, Inc.
Second, we entered into a strategic partnership with an affiliate of one of our existing vape suppliers (“Vape Partner”) to service certain key customers with vaporizer goods and services (the “Vape Partnership”).
MJ Packaging however, remains a distribution customer of the Company. 8 Second, we entered into a strategic partnership with an affiliate of one of our existing vape suppliers (“Vape Partner”) to service certain key customers with vaporizer goods and services (the “Vape Partnership”).
Additionally, certain countries in Europe, including Germany, which approved a plan to legalize some recreational cannabis use in August 2023, are considering the adoption of laws that would legalize cannabis for adult use.
Additionally, certain countries in Europe, including Germany, which approved a plan to legalize some recreational cannabis use in August 2023, are considering the adoption of laws that would legalize cannabis for adult use. Other Drivers for the Legal Cannabis Industry Several factors have driven the growth of the legal cannabis industry.
Certain provinces, such as Ontario, have legislation in place that restricts the packaging of vapor products and the manner in which vapor products are displayed or promoted in stores. The Canadian market grew from CAD 4.8 billion in 2022 to CAD 5.6 billion in 2023, marking a 16.7% increase (Government of Canada, Cannabis Market Reports).
Certain provinces, such as Ontario, have legislation in place that restricts the packaging of vapor products and the manner in which vapor products are displayed or promoted in stores. The Canadian market declined from CAD 5.5 billion in 2023 to CAD 5.3 billion in 2024, marking a 3.27% decrease (Government of Canada, Cannabis Market Reports).
Inventory Management: In 2023, we implemented a new inventory management and lifecycle strategy that is focused on a quarterly turn and a regular review of inventory to avoid future write-offs. 6.
Inventory Management: In 2024, we continued to refine and improve our inventory management and lifecycle strategy that is focused on a quarterly turn and a regular review of inventory to avoid future write-offs. 6.
Our industry knowledge, market reach, and resources allow us to establish trusted relationships with many industry suppliers. Our senior management team makes tremendous efforts to establish and build these key relationships to help ensure Greenlane has a strong supply chain established for in-demand products at favorable pricing.
Our senior management team makes tremendous efforts to establish and build these key relationships to help ensure Greenlane has a strong supply chain established for in-demand products at favorable pricing.
In April 2023, we formed two strategic partnerships (described below in greater detail) to increase margins and significantly reduce working capital requirements in our Industrial Goods segment. Similarly, our Consumer Goods segment restructured arrangements with several third-party brands in 2022 and 2023 to reduce our working capital needs. 5.
Cost Structure Optimization: We continue to reduce our overall cost structure while improving margins. In April 2023, we formed two strategic partnerships (described below in greater detail) to increase margins and significantly reduce working capital requirements. Similarly, we restructured arrangements with several third-party brands to reduce our working capital needs. 5.
Developing A World-Class Portfolio of Products. We intend to continue to develop a portfolio of brands that includes our Greenlane Brands, exclusively licensed brands and third party brand products, which over time will help to increase our blended margins and create increased long-term value.
We intend to continue to develop a portfolio of brands that includes our Greenlane Brands, exclusively licensed brands and third party brand products, which over time will help to increase our blended margins and create increased long-term value. Our brand development is based upon our proprietary industry intelligence that allows us to identify market opportunities for new brands and products.
In the United States, the number of users grew from 42 million in 2022 to 47 million in 2023, an 11.9% increase (Cannabis Consumer Trends Study 2023. Canada. Legal access to dried cannabis for medical purposes was first allowed in Canada in 1999.
In the United States, the number of users grew from 47 million in 2023 to 52.5 million in 2024, an 11.7% increase ( Cannabis Facts and Stats | Cannabis and Public Health | CDC ) Canada. Legal access to dried cannabis for medical purposes was first allowed in Canada in 1999.
We believe our entrepreneurial, results-driven culture fosters highly-dedicated employees who provide our customers with superior service. We invest in our talent by providing ongoing training and have successfully developed programs that provide comprehensive product knowledge and tools needed to have a unique understanding of our customers’ goals and decision-making processes. Customers.
We invest in our talent by providing ongoing training and have successfully developed programs that provide comprehensive product knowledge and tools needed to have a unique understanding of our customers’ goals and decision-making processes. Customers. We believe we offer superior services and solutions due to our comprehensive product offering, proprietary industry data and analytics, product expertise and quality of service.
This coincides with Cyber Monday (the first Monday after Thanksgiving, when online retailers typically offer holiday discounts), and as our customers build up their inventories in anticipation of the holiday season. We also have related promotional marketing campaigns during this period.
We have historically experienced only moderate seasonality in the direct to consumer side of our business, particularly during the fourth quarter. This coincides with Cyber Monday (the first Monday after Thanksgiving, when online retailers typically offer holiday discounts), and as our customers build up their inventories in anticipation of the holiday season.
We are a global platform for the development and distribution of premium cannabis accessories, packaging, vape solutions, and lifestyle products, reaching thousands of retail locations, including, licensed cannabis dispensaries, smoke shops, head shops, and specialty retailers.
We are a global platform for the development and distribution of premium cannabis accessories, packaging, vape solutions, and lifestyle products, reaching thousands of retail locations, including, licensed cannabis dispensaries, smoke shops, head shops, and specialty retailers. We also own and operate one of the industry’s most visited North American direct-to-consumer e-commerce websites, Vapor.com, as well as PuffItUp.com..
Our Industrial Goods business is generally not affected by seasonality. Human Capital Resources As of July 18, 2024, we had 66 full-time employees. Approximately 54 were employed in the U.S., and 12 were employed in Europe. None of our employees are represented by a labor union. We have never experienced a labor-related work stoppage.
Human Capital Resources As of March 17,2025, we had 49 full-time employees. Approximately 47 were employed in the U.S., and two were employed in Canada. None of our employees are represented by a labor union. We have never experienced a labor-related work stoppage.
This diversification in our business segments contributes to greater overall financial stability and resilience against market fluctuations. 3 Organization Greenlane Holdings, Inc. (“Greenlane” and, collectively with the Operating Company (as defined below) and its consolidated subsidiaries, the “Company”, “we”, “us” and “our”) was formed as a Delaware corporation on May 2, 2018.
We also have related promotional marketing campaigns during this period. 3 Organization Greenlane Holdings, Inc. (“Greenlane” and, collectively with the Operating Company (as defined below) and its consolidated subsidiaries, the “Company”, “we”, “us” and “our”) was formed as a Delaware corporation on May 2, 2018.
In 2022, we launched our new business to business (“B2B”) customer portal at Wholesale.Greenlane.com which provides our business customers seamless access to our catalog of products for purchase 24-hours a day, 365 days a year. Consumers can access our products easily by purchasing from our e-commerce properties or access many of our products via large marketplaces such Amazon. Suppliers .
We deliver products to our customers in a precise, safe and timely manner with complementary support from our dedicated sales and service teams. In 2022, we launched our new business to business (“B2B”) customer portal at Wholesale.Greenlane.com which provides our business customers seamless access to our catalog of products for purchase 24-hours a day, 365 days a year.
Our brand development is based upon our proprietary industry intelligence that allows us to identify market opportunities for new brands and products. We leverage our distribution infrastructure and customer relationships to penetrate the market quickly with our proprietary brands and to gain placement in thousands of retail stores.
We leverage our distribution infrastructure and customer relationships to penetrate the market quickly with our proprietary brands and to gain placement in thousands of retail stores. Currently, we sell such products directly to consumers through our brand websites and our e-commerce properties.
Headcount Reduction: We have significantly reduced our headcount and associated salary expenses, focusing on maintaining a core group of key employees as we collectively right-size the business. 4. Cost Structure Optimization: We continue to reduce our overall cost structure while improving margins.
Facility Footprint Rationalization: In 2023 and 2024, we optimized our facilities footprint by reducing warehouse and office space while increasing operational efficiency and improving fulfillment practices. 3. Headcount Reduction: We have significantly reduced our headcount and associated salary expenses, focusing on maintaining a core group of key employees as we collectively right-size the business. 4.
During 2023 and 2024, the Company also entered into certain arrangements to reduce working capital requirements and improve its balance sheet. In April 2023, we entered into two strategic partnerships. First, we entered into a strategic partnership (the “MJ Packaging Partnership”) with A&A Global Imports d/b/a MarijuanaPackaging.com (“MJ Pack”), a provider of packaging solutions to the cannabis industry.
First, we entered into a strategic partnership (the “MJ Packaging Partnership”) with A&A Global Imports d/b/a MarijuanaPackaging.com (“MJ Pack”), a leading provider of packaging solutions to the cannabis industry. On August 8, 2024 the Company terminated its strategic partnership with MJ Packaging and is resuming its business as a direct provider of packaging solutions to the cannabis industry.
In Canada, all ten provinces and three territories have legalized cannabis, with significant improvements in regulatory frameworks and retail infrastructure between 2022 and 2023, particularly in Ontario and British Columbia (Health Canada Reports). In Canada, cannabis consumers increased from 7.6 million in 2022 to 8.3 million in 2023, a 9.2% rise (Canadian Cannabis Consumer Survey 2023).
Despite this decline, the Canadian cannabis market is expected to grow at a CAGR of 10.1% between 2024 and 2030. In Canada, all ten provinces and three territories have legalized cannabis, with significant improvements in regulatory frameworks and retail infrastructure between 2022 and 2023, particularly in Ontario and British Columbia (Health Canada Reports).
We have also established strong relationships with a wide array of industry participants including leading MSOs, SSOs, retailers, and third party ancillary product producers. Comprehensive and Best-in-Class Product Offering. We offer a curated portfolio of products and accessories across many major categories with diverse, best-in-class offerings that cater to our customers’ needs.
This allows us to influence customer demand and the pipeline between product manufacturers, suppliers, advertisers and the marketplace. We have also established strong relationships with a wide array of industry participants including leading MSOs, SSOs, retailers, and third party ancillary product producers. Comprehensive and Best-in-Class Product Offering.
In addition to our Consumer Goods segment, we have our Industrial Goods segment, which focuses on serving Cannabis Operators by providing ancillary products essential to their daily operations and growth, such as packaging and vaporization solutions, including our Greenlane Brand Pollen Gear.
Our direct to consumer channels form a central part of our growth strategy, especially as it relates to scaling our own portfolio of higher-margin proprietary owned brands. In addition we serve Cannabis Operators by providing ancillary products essential to their daily operations and growth, such as packaging and vaporization solutions, including our Greenlane Brand Pollen Gear.
This comprehensive and best-in-class product offering creates a “one-stop shop” for many of our customers and positively distinguishes us from our competitors. In addition, we have carefully cultivated a portfolio of well-known brands and premium products and have helped many of the brands we distribute to become established names in the industry. Entrepreneurial Culture.
In addition, we have carefully cultivated a portfolio of well-known brands and premium products and have helped many of the brands we distribute to become established names in the industry. Entrepreneurial Culture. We believe our entrepreneurial, results-driven culture fosters highly dedicated employees who provide our customers with superior service.
Such sources are described in greater detail in the Liquidity and Capital Resources Section of this report. During 2022, the Company also monetized several non-core assets to provide necessary working capital including the sale and lease-back of its headquarters building and the sale of its interest in the Vibes brand.
Such sources are described in greater detail in the Liquidity and Capital Resources Section of this report. During 2023, 2024 and 2025, the Company also entered into certain arrangements to reduce working capital requirements and improve its balance sheet.
Product Innovation: In 2023, we launched Groove, an innovative new product line with a value-based price point and in 2024 we have begun to expand our product offering to further enhance our assortment available to our customers. 8.
Product Innovation: In 2024, we expanded our product offering to further enhance our assortment available to our customers to include the most up to date technology available and launched our health and safety product line promoting safe and responsible consumption. 8.
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The Consumer Goods segment forms a central part of our growth strategy, especially as it relates to scaling our own portfolio of higher-margin proprietary owned brands.
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We offer a curated portfolio of products and accessories across many major categories with diverse, best-in-class offerings that cater to our customers’ needs. This comprehensive and best-in-class product offering creates a “one-stop shop” for many of our customers and positively distinguishes us from our competitors.
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Refer to Note 11 — Segment Reporting within Item 8 of this Annual Report on Form 10-K for additional information on our reportable segments We have historically experienced only moderate seasonality in the Consumer Goods side of our business, particularly during the fourth quarter.
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Consumers can access our products easily by purchasing from our e-commerce properties or access many of our products via large marketplaces such Amazon. Suppliers . Our industry knowledge, market reach, and resources allow us to establish trusted relationships with many industry suppliers.
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Our Industrial Goods business is generally not affected by seasonality, which provides an important advantage to our overall business model. The stability of the Industrial Goods segment helps to offset the moderate seasonality in Consumer Goods, providing a more consistent revenue stream throughout the year.
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In 2023 and 2024 we completed several initiatives to optimize our working capital requirements due to our inability to access capital markets on equitable terms and stock-outs and shortages of higher velocity inventory. In April 2023, we entered into two strategic partnerships.
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Europe’s legal cannabis market also saw significant growth, with revenues rising from €2.1 billion in 2022 to €2.5 billion in 2023, a 19% increase (Prohibition Partners Europe Cannabis Report 2023).
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We have successfully renegotiated many of our vendor and supplier partnership terms and are continuing to improve working capital arrangements with our vendors and suppliers. We have made progress consolidating and streamlining our office, warehouse, and distribution operations footprint. We have reduced our workforce significantly to reduce costs and align with our revenue projections.
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In Europe, the number of countries with legalized medical cannabis grew from seven in 2022 (Germany, Italy, Netherlands, Czech Republic, Greece, Denmark, and Poland) to nine in 2023, with Luxembourg and Malta joining the list, representing a 28.6% increase (European Monitoring Centre for Drugs and Drug Addiction, EMCDDA).
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(the “Company”) consummated a private placement (the “Private Placement”) pursuant to a securities purchase agreement (“Purchase Agreement”) with institutional investors (the “Purchasers”) for the purchase and sale of approximately $25.0 million of shares of the Company’s Class A common stock (the “Common Stock”) and investor warrants at a price of $1.19 per Common Unit.
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Europe also saw a significant rise in cannabis consumers, from 1.2 million in 2022 to 1.5 million in 2023, a 25% increase (Prohibition Partners Europe Cannabis Report 2023). Other Drivers for the Legal Cannabis Industry Several factors have driven the growth of the legal cannabis industry.
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The entire transaction was priced at the market under Nasdaq rules.
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Because of our experience and our extensive, long-term industry relationships, we believe we have a deep understanding of customer needs and desires in our Consumer Goods and Industrial Goods business segments. This allows us to influence customer demand and the pipeline between product manufacturers, suppliers, advertisers and the marketplace.
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The offering consisted of the sale of Common Units (or Pre-Funded Units), each consisting of (i) one (1) share of Common Stock or one (1) Pre-Funded Warrant, (ii) one (1) Series A PIPE Common Warrant to purchase one (1) share of Common Stock per warrant at an exercise price of $1.4875 (the “Series A Warrant”) and (iii) one (1) Series B PIPE Common Warrant to purchase one (1) share of Common Stock per warrant at an exercise price of $2.975 (the “Series B Warrant” and together with the Series A Warrant, the “Warrants”).
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We believe we offer superior services and solutions due to our comprehensive product offering, proprietary industry data and analytics, product expertise and quality of service. We deliver products to our customers in a precise, safe and timely manner with complementary support from our dedicated sales and service teams.
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The initial exercise price of each Series A Warrant is $1.4875 per share of Common Stock. The Series A Warrants are exercisable following stockholder approval and expire five (5) years thereafter. The number of securities issuable under the Series A Warrant is subject to adjustment as described in more detail in the Series A Warrant.
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Facility Footprint Rationalization: In 2023, we optimized our facilities footprint by reducing warehouse and office space while increasing operational efficiency and improving fulfillment practices. The full benefit of those efforts are expected to be realized in 2024. 3.
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The initial exercise price of each Series B Warrant is $2.975 per share of Common Stock or pursuant to an alternative cashless exercise option. The Series B Warrants are exercisable following stockholder approval and expire two and one-half (2.5) years thereafter.
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Currently, we sell such products directly to consumers through our brand websites and our e-commerce properties.
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The number of securities issuable under the Series B Warrant is subject to adjustment as described in the Series B Warrant.
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In connection with the Private Placement, the Company entered into a registration rights agreement with the Purchasers on February 18, 2025 (the “Registration Rights Agreement”), pursuant to which the Company is required to file a registration statement covering the resale of the Securities within 30 calendar days of the closing of the offering. Developing A World-Class Portfolio of Products.
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(the “Company”) consummated a private placement (the “Private Placement”) pursuant to a securities purchase agreement (“Purchase Agreement”) with institutional investors (the “Purchasers”) for the purchase and sale of approximately $25.0 million of shares of the Company’s Class A common stock (the “Common Stock”) and investor warrants at a price of $1.19 per Common Unit.
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The entire transaction was priced at the market under Nasdaq rules.
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The offering consisted of the sale of Common Units (or Pre-Funded Units), each consisting of (i) on e (1) share of Common Stock or one (1) Pre-Funded Warrant, (ii) one (1) Series A PIPE Common Warrant to purchase one (1) share of Common Stock per warrant at an exercise price of $1.4875 (the “Series A Warrant”) and (iii) one (1) Series B PIPE Common Warrant to purchase one (1) share of Common Stock per warrant at an exercise price of $2.975 (the “Series B Warrant” and together with the Series A Warrant, the “Warrants”).
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The initial exercise price of each Series A Warrant is $1.4875 per share of Common Stock. The Series A Warrants are exercisable following stockholder approval and expire five (5) years thereafter. The number of securities issuable under the Series A Warrant is subject to adjustment as described in more detail in the Series A Warrant.
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The initial exercise price of each Series B Warrant is $2.975 per share of Common Stock or pursuant to an alternative cashless exercise option. The Series B Warrants are exercisable following stockholder approval and expire two and one-half (2.5) years thereafter.
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The number of securities issuable under the Series B Warrant is subject to adjustment as described in the Series B Warrant.
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In connection with the Private Placement, the Company entered into a registration rights agreement with the Purchasers on February 18, 2025 (the “Registration Rights Agreement”), pursuant to which the Company is required to file a registration statement covering the resale of the Securities within 30 calendar days of the closing of the offering.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

68 edited+10 added−15 removed450 unchanged
Biggest changeIf we are required to seek additional financing sources, they may not be available to us on attractive terms if at all and could restrict our ability to engage in certain business activities . Due to limited access to the debt markets, we have been required to issue equity at prices that are dilutive to stockholders.
Biggest changeDue to limited access to the debt markets, we have been required to issue equity at prices that are dilutive to stockholders. We may be forced to continue to seek equity capital at dilutive prices through other means if other financing is not available to us to fund our working capital needs.
As a result of the transfer, we became eligible to request an additional an additional 180-day compliance period.
As a result of the transfer, we became eligible to request an additional 180-day compliance period.
These factors include: ● the relative mix of vaporization products and consumption accessories sold during the period; ● the general economic environment and competitive conditions, such as pricing; ● the timing of procurement cycles by our customers; ● seasonality in customer spending and demand for products we provide; 30 ● variability in supplier programs; ● the introduction of new and upgraded products; ● changes in prices from our suppliers; ● changes to our strategy; ● trade show attendance; ● promotions; ● the loss or consolidation of significant suppliers or customers; ● our ability to control costs; ● the timing of our capital expenditures; ● the condition of our industry in general and our customers specifically; ● regulatory developments that limit or expand the products we may sell, or the manner in which those products may be transported; ● any inability on our part to obtain adequate quantities of products; ● delays in the release by suppliers of new products and inventory adjustments; ● delays in the release of imported products by customs authorities; ● our expenditures on new business ventures and acquisitions; ● performance of acquired businesses; ● adverse weather conditions, natural disasters, pandemics, or other events that affect supply or customer response; ● distribution or shipping to our customers; and ● geopolitical events.
These factors include: ● the relative mix of vaporization products and consumption accessories sold during the period; ● the general economic environment and competitive conditions, such as pricing; ● the timing of procurement cycles by our customers; ● seasonality in customer spending and demand for products we provide; 31 ● variability in supplier programs; ● the introduction of new and upgraded products; ● changes in prices from our suppliers; ● changes to our strategy; ● trade show attendance; ● promotions; ● the loss or consolidation of significant suppliers or customers; ● our ability to control costs; ● the timing of our capital expenditures; ● the condition of our industry in general and our customers specifically; ● regulatory developments that limit or expand the products we may sell, or the manner in which those products may be transported; ● any inability on our part to obtain adequate quantities of products; ● delays in the release by suppliers of new products and inventory adjustments; ● delays in the release of imported products by customs authorities; ● our expenditures on new business ventures and acquisitions; ● performance of acquired businesses; ● adverse weather conditions, natural disasters, pandemics, or other events that affect supply or customer response; ● distribution or shipping to our customers; and ● geopolitical events.
Certain of our executive officers are engaged in other activities and have interests in other entities on their own behalf or on behalf of other persons. Neither we, nor our stockholders will have any rights in these ventures or their income or profits. Specifically, we sold $0.0 million and $0.4 million in products and supplies to Blum Holdings, Inc.
Certain of our executive officers are engaged in other activities and have interests in other entities on their own behalf or on behalf of other persons. Neither we, nor our stockholders will have any rights in these ventures or their income or profits. Specifically, we sold $0.0 million and $0.0 million in products and supplies to Blum Holdings, Inc.
A “trade war” between the United States and China or other governmental action related to tariffs or international trade agreements or policies has the potential to adversely impact demand for our products, our costs, customers, suppliers and/or the United States economy or certain sectors thereof and, thus, to adversely impact our businesses and results of operations.
A “trade war” between the United States, China and other nations or other governmental action related to tariffs or international trade agreements or policies has the potential to adversely impact demand for our products, our costs, customers, suppliers and/or the United States economy or certain sectors thereof and, thus, to adversely impact our businesses and results of operations.
Such a de-listing would likely have a negative effect on the price of our Class A common stock and would impair your ability to sell or purchase our Class A common stock when you wish to do so, as well as adversely affect our ability to issue additional securities and obtain additional financing in the future. 13 On August 21, 2023, we received a letter from the staff of Nasdaq indicating that we were not in compliance with Nasdaq Listing Rule 5450(a)(1) because the closing bid price per share for our Class A common stock had closed below $1.00 for the previous 30 consecutive business days (the “Minimum Bid Price Requirement”).
Such a de-listing would likely have a negative effect on the price of our Class A common stock and would impair your ability to sell or purchase our Class A common stock when you wish to do so, as well as adversely affect our ability to issue additional securities and obtain additional financing in the future. 14 On August 21, 2023, we received a letter from the staff of Nasdaq indicating that we were not in compliance with Nasdaq Listing Rule 5450(a)(1) because the closing bid price per share for our Class A common stock had closed below $1.00 for the previous 30 consecutive business days (the “Minimum Bid Price Requirement”).
Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of the Operating Company and its subsidiaries will be available to satisfy the claims of our stockholders only after all of our and Greenlane Holdings, LLC’s and its subsidiaries’ liabilities and obligations have been paid in full.
Therefore, in the event of a bankruptcy, liquidation or reorganization, our assets and those of the Operating Company and its subsidiaries will be available to satisfy the claims of our stockholders only after all of our and Greenlane Holdings, LLC’s and its subsidiaries’ liabilities and obligations have been paid in full.
The CCPA Guidance provided clarity on the requirements of the VPLPR and the authority of the CCPSA to address safety issues posed by a vaping product not marketed for therapeutic use or by a cannabis accessory (such as a vaporizer represented to be used in the consumption of cannabis) not marketed for a therapeutic use. 18 In addition to federal regulations, several provinces, including Alberta, British Columbia, Nova Scotia, Ontario, Prince Edward Island (“PEI”), Quebec, and Saskatchewan, have passed regulations fully restricting or limiting the advertising and sales of certain types of nicotine vaping products.
The CCPA Guidance provided clarity on the requirements of the VPLPR and the authority of the CCPSA to address safety issues posed by a vaping product not marketed for therapeutic use or by a cannabis accessory (such as a vaporizer represented to be used in the consumption of cannabis) not marketed for a therapeutic use. 19 In addition to federal regulations, several provinces, including Alberta, British Columbia, Nova Scotia, Ontario, Prince Edward Island (“PEI”), Quebec, and Saskatchewan, have passed regulations fully restricting or limiting the advertising and sales of certain types of nicotine vaping products.
The potential issuance of preferred stock may delay or prevent a change in control of us, discourage bids for our Class A common stock at a premium to the market price, and materially and adversely affect the market price and the voting and other rights of the holders of our Class A common stock. 43 Our amended and restated certificate of incorporation and bylaws provide that the Court of Chancery of the State of Delaware is the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
The potential issuance of preferred stock may delay or prevent a change in control of us, discourage bids for our Class A common stock at a premium to the market price, and materially and adversely affect the market price and the voting and other rights of the holders of our Class A common stock. 45 Our amended and restated certificate of incorporation and bylaws provide that the Court of Chancery of the State of Delaware is the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Inventory shortages might delay shipments to customers, reduce revenue, negatively impact customer relationships and diminish brand loyalty, which in turn could have a material adverse effect on our business, results of operations and financial condition. 20 Our success is dependent in part upon our ability to distribute popular products from new suppliers, as well as the ability of our existing suppliers to develop and market products that meet changes in market demand or regulatory requirements.
Inventory shortages might delay shipments to customers, reduce revenue, negatively impact customer relationships and diminish brand loyalty, which in turn could have a material adverse effect on our business, results of operations and financial condition. 21 Our success is dependent in part upon our ability to distribute popular products from new suppliers, as well as the ability of our existing suppliers to develop and market products that meet changes in market demand or regulatory requirements.
There can be no assurance as to the ultimate content, timing or effect of any regulation of vaporizer products by governmental bodies, nor can there be any assurance that potential corresponding declines in demand resulting from negative media attention would not have a material adverse effect on our business, results of operations and financial condition. 23 Significant increases in state and local regulation of our vaporizer products have been proposed and enacted, and are likely to continue to be proposed and enacted in numerous jurisdictions.
There can be no assurance as to the ultimate content, timing or effect of any regulation of vaporizer products by governmental bodies, nor can there be any assurance that potential corresponding declines in demand resulting from negative media attention would not have a material adverse effect on our business, results of operations and financial condition. 24 Significant increases in state and local regulation of our vaporizer products have been proposed and enacted, and are likely to continue to be proposed and enacted in numerous jurisdictions.
During the administration of former President Obama, each memorandum acknowledged the DOJ’s authority to enforce the CSA in the face of state laws, but noted that the DOJ was more committed to using its limited investigative and prosecutorial resources to address the most significant threats associated with cannabis in the most effective, consistent, and rational way. 24 On August 29, 2013, the DOJ issued what came to be called the “Cole Memorandum,” which gave U.S.
During the administration of former President Obama, each memorandum acknowledged the DOJ’s authority to enforce the CSA in the face of state laws, but noted that the DOJ was more committed to using its limited investigative and prosecutorial resources to address the most significant threats associated with cannabis in the most effective, consistent, and rational way. 25 On August 29, 2013, the DOJ issued what came to be called the “Cole Memorandum,” which gave U.S.
In addition, changes in environmental, employee health and safety or other laws, more vigorous enforcement thereof or other unanticipated events could require extensive changes to our operations or give rise to material liabilities, which could have a material adverse effect on our business, financial condition and results of operations. 36 We are transitioning our business and have engaged, and may continue in engage in, dispositions via sales of our assets or other exit activities and other strategic initiatives and we may face risks related to such transactions.
In addition, changes in environmental, employee health and safety or other laws, more vigorous enforcement thereof or other unanticipated events could require extensive changes to our operations or give rise to material liabilities, which could have a material adverse effect on our business, financial condition and results of operations. 37 We are transitioning our business and have engaged, and may continue in engage in, dispositions via sales of our assets or other exit activities and other strategic initiatives and we may face risks related to such transactions.
While we do not believe vaporizers intended for use with non-tobacco substances meet the FDA’s definition of ENDS, it is possible that the FDA could require premarket authorization for such products. 17 Our suppliers who make vaporizers that are currently, or in the future become, subject to FDA regulation must timely file applications for the appropriate authorizations so that we may continue selling their products in the United States.
While we do not believe vaporizers intended for use with non-tobacco substances meet the FDA’s definition of ENDS, it is possible that the FDA could require premarket authorization for such products. 18 Our suppliers who make vaporizers that are currently, or in the future become, subject to FDA regulation must timely file applications for the appropriate authorizations so that we may continue selling their products in the United States.
Accordingly, we cannot predict with any certainty the range of claims that may be allowed or enforced concerning the products that we sell. 34 In addition, there can be no assurance that standard intellectual property confidentiality and assignment agreements with employees, consultants and other advisors will not be breached, that we will have adequate remedies for any breach, or that our trade secrets will not otherwise become known to or independently developed by competitors.
Accordingly, we cannot predict with any certainty the range of claims that may be allowed or enforced concerning the products that we sell. 35 In addition, there can be no assurance that standard intellectual property confidentiality and assignment agreements with employees, consultants and other advisors will not be breached, that we will have adequate remedies for any breach, or that our trade secrets will not otherwise become known to or independently developed by competitors.
Moreover, such events could result in severe damage to property, personal injuries, fatalities, regulatory enforcement proceedings or in us being named as a defendant in lawsuits asserting claims for large amounts of damages, which in turn could lead to significant liabilities. 37 We are subject to risks associated with public health crises, such as pandemics and epidemics, , which may have a material adverse effect on our business.
Moreover, such events could result in severe damage to property, personal injuries, fatalities, regulatory enforcement proceedings or in us being named as a defendant in lawsuits asserting claims for large amounts of damages, which in turn could lead to significant liabilities. 38 We are subject to risks associated with public health crises, such as pandemics and epidemics, which may have a material adverse effect on our business.
If customer demand for lower-margin products increases and demand for higher-margin products decreases, our business, results of operations and financial condition may suffer. 21 Because a material portion of our revenues are derived from sales to consumers indirectly through third-party retailers who operate traditional brick-and-mortar locations, the shift of sales to more online retail business could harm our market share and our revenues in certain sectors.
If customer demand for lower-margin products increases and demand for higher-margin products decreases, our business, results of operations and financial condition may suffer. 22 Because a material portion of our revenues are derived from sales to consumers indirectly through third-party retailers who operate traditional brick-and-mortar locations, the shift of sales to more online retail business could harm our market share and our revenues in certain sectors.
If we do not have sufficient funds to pay tax or other liabilities or to fund our operations, we may have to borrow funds, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. 38 The Tax Receivable Agreement (the “TRA”) may require us to make cash payments to the members of the Operating Company in respect of certain tax benefits to which we may become entitled.
If we do not have sufficient funds to pay tax or other liabilities or to fund our operations, we may have to borrow funds, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. 39 The Tax Receivable Agreement (the “TRA”) may require us to make cash payments to the members of the Operating Company in respect of certain tax benefits to which we may become entitled.
In the jurisdictions in which we operate, we need to comply with various standards and practices of different regulatory, tax, judicial and administrative bodies. 35 There are a number of risks associated with international business operations, including political instability (e.g., the threat of war, terrorist attacks or civil unrest), inconsistent regulations across jurisdictions, unanticipated changes in the regulatory environment, and import and export restrictions.
In the jurisdictions in which we operate, we need to comply with various standards and practices of different regulatory, tax, judicial and administrative bodies. 36 There are a number of risks associated with international business operations, including political instability (e.g., the threat of war, terrorist attacks or civil unrest), inconsistent regulations across jurisdictions, unanticipated changes in the regulatory environment, and import and export restrictions.
Any loss of consumer brand loyalty to our products or in our ability to effectively brand our products in a recognizable way will have a material effect on our ability to continue to sell our products and maintain our market share, which could have a material adverse effect on our business, results of operations and financial condition. 22 We may not be able to establish sustainable relationships with large retailers or regional or national chains.
Any loss of consumer brand loyalty to our products or in our ability to effectively brand our products in a recognizable way will have a material effect on our ability to continue to sell our products and maintain our market share, which could have a material adverse effect on our business, results of operations and financial condition. 23 We may not be able to establish sustainable relationships with large retailers or regional or national chains.
These, or other developments that remove us from, or limit our role in, the distribution chain, may harm our competitive position in the marketplace and reduce our sales and earnings and adversely affect our business. 19 We are vulnerable to third-party transportation risks, including governmental laws and common carriers’ policies that prevent the shipment of the types of products we sell.
These, or other developments that remove us from, or limit our role in, the distribution chain, may harm our competitive position in the marketplace and reduce our sales and earnings and adversely affect our business. 20 We are vulnerable to third-party transportation risks, including governmental laws and common carriers’ policies that prevent the shipment of the types of products we sell.
The tobacco industry and others expect significant regulatory developments to take place over the next few years, driven principally by the FCTC. 29 If the United States ratifies the FCTC and/or national laws are enacted in the United States that reflect the major elements of the FCTC, our business, results of operations and financial condition could be materially and adversely affected.
The tobacco industry and others expect significant regulatory developments to take place over the next few years, driven principally by the FCTC. 30 If the United States ratifies the FCTC and/or national laws are enacted in the United States that reflect the major elements of the FCTC, our business, results of operations and financial condition could be materially and adversely affected.
To the extent the measures we have taken prove to be insufficient or inadequate, we may become subject to litigation or administrative sanctions, which could result in significant fines, penalties or damages and harm to our reputation. 33 If the methodologies of internet search engines are modified, traffic to our websites and corresponding consumer origination volumes could decline.
To the extent the measures we have taken prove to be insufficient or inadequate, we may become subject to litigation or administrative sanctions, which could result in significant fines, penalties or damages and harm to our reputation. 34 If the methodologies of internet search engines are modified, traffic to our websites and corresponding consumer origination volumes could decline.
If we are unable to hire and retain a sufficient number of qualified employees, our ability to conduct and expand our business could be seriously reduced. 15 The market for vaporizer products and related items is a niche market, subject to a great deal of uncertainty and is still evolving. Vaporizer products comprise a significant portion of our product portfolio.
If we are unable to hire and retain a sufficient number of qualified employees, our ability to conduct and expand our business could be seriously reduced. 16 The market for vaporizer products and related items is a niche market, subject to a great deal of uncertainty and is still evolving. Vaporizer products comprise a significant portion of our product portfolio.
The agency is prepared to work with Congress on this matter. 26 We currently distribute very limited products containing hemp-derived CBD and other cannabinoids. Although the Farm Bill removed hemp and its derivatives from the definition of “marijuana” under the CSA, uncertainties remain regarding the cultivation, sourcing, production and distribution of hemp and products containing hemp derivatives.
The agency is prepared to work with Congress on this matter. 27 We currently distribute very limited products containing hemp-derived CBD and other cannabinoids. Although the Farm Bill removed hemp and its derivatives from the definition of “marijuana” under the CSA, uncertainties remain regarding the cultivation, sourcing, production and distribution of hemp and products containing hemp derivatives.
In the event our determination is challenged and found to have been incorrect, we may be subject to claims by one or more state attorney generals, federal regulators, or private plaintiffs and we may additionally be subject to claims or fines from credit associations. 28 We are subject to certain U.S. federal regulations relating to cash reporting. The U.S.
In the event our determination is challenged and found to have been incorrect, we may be subject to claims by one or more state attorney generals, federal regulators, or private plaintiffs and we may additionally be subject to claims or fines from credit associations. 29 We are subject to certain U.S. federal regulations relating to cash reporting. The U.S.
The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of products. 32 The scientific community has not yet extensively studied the long-term health effects of the use of vaporizers, electronic cigarettes or e-liquids products.
The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of products. 33 The scientific community has not yet extensively studied the long-term health effects of the use of vaporizers, electronic cigarettes or e-liquids products.
We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs. 41 As a public reporting company, we are subject to rules and regulations established from time to time by the SEC regarding our internal control over financial reporting.
We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs. 42 As a public reporting company, we are subject to rules and regulations established from time to time by the SEC regarding our internal control over financial reporting.
The Operating Company is treated as a partnership for U.S. federal income tax purposes and, as such, is not subject to any entity-level U.S. federal income tax. Instead, taxable income is allocated to holders of Common Units. As of December 31, 2023 and 2022, we hold all of the outstanding Common Units.
The Operating Company is treated as a partnership for U.S. federal income tax purposes and, as such, is not subject to any entity-level U.S. federal income tax. Instead, taxable income is allocated to holders of Common Units. As of December 31, 2024 and 2023, we hold all of the outstanding Common Units.
However, if we were to cease participation in the management of the Operating Company, our interest in The Operating Company could be deemed an “investment security” for purposes of the 1940 Act. 39 We and the Operating Company intend to continue to conduct our operations so that we will not be deemed an investment company.
However, if we were to cease participation in the management of the Operating Company, our interest in The Operating Company could be deemed an “investment security” for purposes of the 1940 Act. 40 We and the Operating Company intend to continue to conduct our operations so that we will not be deemed an investment company.
New tariffs and the evolving trade policy dispute between the United States and China may adversely affect our business. In 2018, the United States imposed significant tariffs on steel and aluminum imports from a number of countries, including China.
New tariffs and the evolving trade policy dispute between the United States, China and other nations may adversely affect our business. In 2018, the United States imposed significant tariffs on steel and aluminum imports from a number of countries, including China.
Such a contamination event could have a material adverse effect on our business, results of operations and financial condition. 31 We may not have adequate insurance for potential liabilities, including liabilities arising from litigation.
Such a contamination event could have a material adverse effect on our business, results of operations and financial condition. 32 We may not have adequate insurance for potential liabilities, including liabilities arising from litigation.
Although we held all of the outstanding Common Units as of December 31, 2023 and 2022, payments under the TRA are not conditioned on any member’s continued ownership of Common Units or our Class A common stock.
Although we held all of the outstanding Common Units as of December 31, 2024 and 2023, payments under the TRA are not conditioned on any member’s continued ownership of Common Units or our Class A common stock.
The majority of the Cannabis Act and the Cannabis Regulations came into force on October 17, 2018; additional Cannabis Regulations took effect on October 17, 2019. 25 As of December 2022, the Minister of Health and the Minister of Mental Health and Addictions has launched the legislative review of the Cannabis Act.
The majority of the Cannabis Act and the Cannabis Regulations came into force on October 17, 2018; additional Cannabis Regulations took effect on October 17, 2019. 26 As of December 2022, the Minister of Health and the Minister of Mental Health and Addictions has launched the legislative review of the Cannabis Act.
The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, particularly after we are no longer an “emerging growth company.” As a public company, we are required to comply with various regulatory and reporting requirements, including those required by the SEC.
The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, particularly now that we are no longer an “emerging growth company.” As a public company, we are required to comply with various regulatory and reporting requirements, including those required by the SEC.
We are also required to obtain permits and other authorizations or licenses from governmental authorities for certain of our operations and we or our suppliers’ must protect our intellectual property worldwide.
We are also required to obtain permits and other authorizations or licenses from governmental authorities for certain of our operations and we or our suppliers must protect our intellectual property worldwide.
In addition, changes in cannabis laws or interpretations of such laws are difficult to predict, and could materially and adversely affect our business. 27 Officials of the U.S.
In addition, changes in cannabis laws or interpretations of such laws are difficult to predict, and could materially and adversely affect our business. 28 Officials of the U.S.
(“Blum”) in the years ended December 31, 2023 and 2022, respectively. Total gross accounts receivable due from Blum were approximately $0.4 million and $0.4 million as of December 31, 2023 and 2022, respectively.
(“Blum”) in the years ended December 31, 2024 and 2023, respectively. Total gross accounts receivable due from Blum were approximately $0.4 million and $0.4 million as of December 31, 2024 and 2023, respectively.
Both domestic and international markets experienced significant inflationary pressures in 2022 and inflation rates in the U.S. are currently expected to continue at elevated levels for the near-term.
Both domestic and international markets experienced significant inflationary pressures in 2023 and 2024 and inflation rates in the U.S. are currently expected to continue at elevated levels for the near-term.
On May 21, 2024, we received a notice from Nasdaq stating that because we had not yet filed our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, we were no longer in compliance with Nasdaq Listing Rule 5250(c)(1).
On May 21, 2024, we received a notice from Nasdaq stating that because we had not yet filed our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, we were no longer in compliance with Nasdaq Listing Rule 5250(c)(1). We were notified by Nasdaq that we had regained compliance on July 26, 2024.
We are required to comply with laws and regulations in other countries and are exposed to business risks associated with our international operations. For the years ended December 31, 2023 and 2022, we derived 7.1% and 7.8%, respectively, of our net sales from outside the United States, primarily in Canada and certain European countries.
We are required to comply with laws and regulations in other countries and are exposed to business risks associated with our international operations. For the years ended December 31, 2024 and 2023, we derived 17.9% and 7.1%, respectively, of our net sales from outside the United States, primarily in Canada and certain European countries.
Many of our products are purchased from suppliers located in foreign countries and we make payments for our products in numerous currencies. Thus, we bear certain foreign exchange rate risk for certain of our inventory purchases. In addition, we recently expanded our footprint in Canada and Europe, and as part of our strategy, we may undertake further international expansion.
Many of our products are purchased from suppliers located in foreign countries and we make payments for our products in numerous currencies. Thus, we bear certain foreign exchange rate risk for certain of our inventory purchases. In addition, and as part of our strategy, we may undertake further international expansion.
We had cash available as of December 31, 2023 of $0.5 million. In addition, our revenue for the year ended December 31, 2023 was down from prior years and has declined in recent quarters.
We had cash available as of December 31, 2024, of $0.9 million. In addition, our revenue for the year ended December 31, 2024, was down from prior years and has declined in recent quarters.
Our ten largest customers, in the aggregate, represented approximately 39.0% and 40.7% of our net sales for the years ended December 31, 2023 and 2022, respectively. The loss of a significant number of customers, or a substantial decrease in a significant customer’s orders, may have an adverse effect on our revenue.
Our ten largest customers, in the aggregate, represented approximately 51.1 and 39.0% of our net sales for the years ended December 31, 2024 and 2023, respectively. The loss of a significant number of customers, or a substantial decrease in a significant customer’s orders, may have an adverse effect on our revenue.
We have failed, and may continue to fail, to meet the listing standards of Nasdaq, and as a result our Class A common stock may become delisted, which could have a material adverse effect on the liquidity of our Class A common stock.
We have failed in the past, and fail in the future to meet the listing standards of Nasdaq, and as a result our Class A common stock could become delisted, which could have a material adverse effect on the liquidity of our Class A common stock.
If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and our stock price may decline or be more volatile.
If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and our stock price may decline or be more volatile. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
As a result of this and other factors, our gross and operating margins have historically been narrow. Narrow margins magnify the impact of variations in operating costs and of gross margin and of unforeseen adverse events on operating results.
We are subject to intense price competition. As a result of this and other factors, our gross and operating margins have historically been narrow. Narrow margins magnify the impact of variations in operating costs and of gross margin and of unforeseen adverse events on operating results.
We could use the shares that are available for future issuance in dilutive equity financing transactions, or to oppose a hostile takeover attempt or delay or prevent changes in control or changes in or removal of management, including transactions that are favored by a majority of the stockholders or in which the stockholders might otherwise receive a premium for their shares over then-current market prices or benefit in some other manner.
We could use the shares that are available for future issuance in dilutive equity financing transactions, or to oppose a hostile takeover attempt or delay or prevent changes in control or changes in or removal of management, including transactions that are favored by a majority of the stockholders or in which the stockholders might otherwise receive a premium for their shares over then-current market prices or benefit in some other manner. 44 Anti-takeover provisions in our certificate of incorporation and amended and restated bylaws and Delaware law could discourage a takeover.
No shares of Class B common stock or preferred stock are outstanding. With respect to authorized but unissued and unreserved shares, we could also use such shares to oppose a hostile takeover attempt or delay or prevent changes in control or changes in or removal of management.
With respect to authorized but unissued and unreserved shares, we could also use such shares to oppose a hostile takeover attempt or delay or prevent changes in control or changes in or removal of management.
In connection with our assessment of the effectiveness of our disclosure controls and procedures, we identified certain material weaknesses in our internal control over financial reporting, which caused our Chief Executive Officer and Chief Financial Officer to determine that our internal control over financial reporting, as well as our disclosure controls and procedures, were not effective as of December 31, 2020 and these material weaknesses have not yet been fully remediated as of December 31, 2023.
In connection with our assessment of the effectiveness of our disclosure controls and procedures, we identified certain material weaknesses in our internal control over financial reporting, which caused our Chief Executive Officer and Chief Financial Officer to determine that our internal control over financial reporting, as well as our disclosure controls and procedures, were not effective as of December 31, 2020 and these material weaknesses have not yet been fully remediated as of December 31, 2024 As a public reporting company, we are subject to the rules and regulations established from time to time by the SEC.
Anti-takeover provisions in our certificate of incorporation and amended and restated bylaws and Delaware law could discourage a takeover. Our amended and restated certificate of incorporation and our amended and restated bylaws contain provisions that might enable our management to resist a takeover.
Our amended and restated certificate of incorporation and our amended and restated bylaws contain provisions that might enable our management to resist a takeover.
Only a limited number of suppliers may have the ability to produce certain products we sell at the volumes we need, and it could be costly or time-consuming to locate and approve such alternative sources.
In the event of a disruption to our supply of products, we would have to identify new suppliers that can meet our needs. Only a limited number of suppliers may have the ability to produce certain products we sell at the volumes we need, and it could be costly or time-consuming to locate and approve such alternative sources.
Nasdaq Listing Rule 5250(c)(1) requires listed companies to timely file all required periodic financial reports with the Securities and Exchange Commission.
Nasdaq Listing Rule 5250(c)(1) requires listed companies to timely file all required periodic financial reports with the Securities and Exchange Commission. We were notified by Nasdaq that we had regained compliance on July 26, 2024.
The ERP system serves as our existing core financial system. Concurrently, in 2023, the re-design of the user access roles and permissions in the new ERP system were completed, and new controls were put into place. Therefore we expect that the previously reported material weaknesses related to ineffective user access controls will be considered remediated in 2024.
The ERP system serves as our existing core financial system. Concurrently, in 2023, the re-design of the user access roles and permissions in the new ERP system were completed, and new controls were put into place.
There is uncertainty related to the regulation of vaporization products and certain other consumption accessories. Increased regulatory compliance burdens, no matter how they arise, could have a material adverse impact on our business development efforts and our operations.
Increased regulatory compliance burdens, no matter how they arise, could have a material adverse impact on our business development efforts and our operations.
These factors could also make it more difficult for us to attract and retain qualified members to our Board in the future, particularly to serve on our audit committee, and qualified executive officers.
These factors could also make it more difficult for us to attract and retain qualified members to our Board in the future, particularly to serve on our audit committee, and qualified executive officers. As we are no longer an “emerging growth company” as defined in the JOBS Act, we must now comply with various reporting requirements.
As a public reporting company, we are subject to the rules and regulations established from time to time by the SEC. These rules and regulations require that, among other things, we establish and periodically evaluate procedures with respect to our internal control over financial reporting.
These rules and regulations require that, among other things, we establish and periodically evaluate procedures with respect to our internal control over financial reporting. Reporting obligations as a public company are likely to place a considerable strain on our financial and management systems, processes and controls, as well as on our personnel.
Failure to successfully manage these risks in the implementation, expansion or operation of new and existing lines of business and markets or the offering of new products or services could have a material adverse effect on our reputation, business, results of operations and financial condition. 16 A significant percentage of our revenue is dependent on sales of products from a relatively small number of key suppliers, and a decline in sales of products from these suppliers could materially harm our business.
Failure to successfully manage these risks in the implementation, expansion or operation of new and existing lines of business and markets or the offering of new products or services could have a material adverse effect on our reputation, business, results of operations and financial condition. 17 There is uncertainty related to the regulation of vaporization products and certain other consumption accessories.
As such, demand for our vaporizer products may be particularly sensitive to economic conditions such as inflation, recession, high energy costs, unemployment, changes in interest rates and money supply, changes in the political environment and other factors beyond our control, any combination of which could result in a material adverse effect on our business, results of operations and financial condition. 12 Our ability to fund our capital requirements will depend on many factors, and if we are unsuccessful in increasing sales and generating positive cash flows we may have to further reduce our costs by curtailing future operations to continue as a business.
As such, demand for our vaporizer products may be particularly sensitive to economic conditions such as inflation, recession, high energy costs, unemployment, changes in interest rates and money supply, changes in the political environment and other factors beyond our control, any combination of which could result in a material adverse effect on our business, results of operations and financial condition. 13 If we are required to seek additional financing sources, they may not be available to us on attractive terms if at all and could restrict our ability to engage in certain business activities .
We may be forced to continue to seek equity capital at dilutive prices through other means if other financing is not available to us to fund our working capital needs. In the past, because of the nature of our industry, we have had difficulties establishing relationships with certain financial institutions and may continue to face such difficulties.
In the past, because of the nature of our industry, we have had difficulties establishing relationships with certain financial institutions and may continue to face such difficulties. As a result, indebtedness or other forms of financing may not be available to us on attractive terms or at all.
Our Second Amended and Restated 2019 Equity Incentive Plan provides for the grant of equity-based awards to our directors, officers and employees.
Our Second Amended and Restated 2019 Equity Incentive Plan provides for the grant of equity-based awards to our directors, officers and employees. The issuance of any shares of Class A common stock will dilute the proportionate ownership and voting power of existing security holders.
There can be no assurance that, if we do appeal the delisting determination by Nasdaq to the hearings panel, that such appeal would be successful. On January 24, 2024, Gina Collins gave notice of her resignation from our Board of Directors and from each committee of the Board, effective immediately. Ms.
On January 24, 2024, Gina Collins gave notice of her resignation from our Board of Directors and from each committee of the Board, effective immediately. Ms.
The issuance of any shares of Class A common stock will dilute the proportionate ownership and voting power of existing security holders. 40 Substantial sales and issuances of our Class A common stock have and may continue to occur, or may be anticipated, which have and could continue to cause our stock price to decline.
Furthermore, we may issue additional equity securities that could have rights senior to those of our common stock. 41 Substantial sales and issuances of our Class A common stock have and may continue to occur, or may be anticipated, which have and could continue to cause our stock price to decline.
We may be unable to identify or contract with new suppliers in the event of a disruption to our supply. In the event of a disruption to our supply of products, we would have to identify new suppliers that can meet our needs.
These developments, together with the passed and proposed federal and provincial regulations may have a material adverse effect on our business, results of operations, and financial condition. We may be unable to identify or contract with new suppliers in the event of a disruption to our supply.
When these exemptions cease to apply, we expect to incur additional expenses and devote increased management effort toward ensuring compliance with them. We will remain an “emerging growth company” for up to five years, although we may cease to be an “emerging growth company” earlier under certain circumstances.
With these new requirements, we expect to incur additional expenses and devote increased management effort toward ensuring compliance with them.
In accordance with Nasdaq Listing Rules 5605(b)(1)(A) and 5605(c)(4), to regain compliance with the Nasdaq Listing Rules, we have until the earlier of our next annual stockholders meeting or January 24, 2025.
In accordance with Nasdaq Listing Rules 5605(b)(1)(A) and 5605(c)(4), to regain compliance with the Nasdaq Listing Rules . With the resignation of Mr. Snyder, we were notified on July 26, 2024 that we had regained compliance with the Independent Director Rule.
Our independent registered public accounting firm will be engaged to provide an attestation report on the effectiveness of our internal control over financial reporting at such time as we cease to be an ‘‘emerging growth company,’’ as defined in the JOBS Act. 42 We have not paid dividends in the past and have no current plans to pay dividends in the future, and any return on investment may be limited to the value of our common stock.
These previously reported material weaknesses related to ineffective user access controls were not yet remediated as of 12/31/2024. 43 We have not paid dividends in the past and have no current plans to pay dividends in the future, and any return on investment may be limited to the value of our common stock.
We timely submitted the plan to regain compliance to Nasdaq and Nasdaq granted us additional time to file the Form 10K and 10Q. 14 Our narrow margins may magnify the impact of variations in operating costs and of adverse or unforeseen events on operating results. We are subject to intense price competition.
On August 26, 2024, we received a notice from Nasdaq stating that we had met the minimum bid requirements as of August 23, 2024, and were back in compliance with Nasdaq minimum bid requirements. 15 Our narrow margins may magnify the impact of variations in operating costs and of adverse or unforeseen events on operating results.
Removed
Our ability to fund our capital requirements out of our available cash and cash generated from our operations in the future will depend on many factors, but largely on our ability to (i) increase sales of our products, (ii) raise capital on favorable terms, and (iii) generate positive cash flow and/or profits from our operations.
Added
We regained compliance with the requirement that the Audit Committee of the Board of Directors be comprised of three independent directors on December 31, 2024 with the addition of Mr. Howe to the Audit Committee.
Removed
If we are not successful in generating needed funds from operations or in equity or debt capital raising transactions, we may need to further reduce our costs, which measures could include selling or consolidating certain operations or assets, and delaying, canceling or scaling back product development and marketing programs.
Added
We timely submitted the plan to regain compliance to Nasdaq and Nasdaq granted us additional time to file the Form 10K and 10Q. On June 26, 2024, we were notified by Nasdaq that a filing extension was granted through July 31, 2024, for our Annual Report on Form 10-K and Quarterly Report on Form 10-Q.
Removed
In addition, our low cash balance and negative cash flow may cause an inability to pay our vendors on time, purchase all the inventory we need, and meet various other obligations going forward. Also, if we are not successful in generating funds from operations or from capital-raising transactions, substantial doubt may be raised about our status as a going concern.
Added
On July 26, 2024, we received a notification by Nasdaq that we had regained compliance with the Independent Director Rule, and due to the filing of our Annual Report on Form 10-K and Quarterly Report on Form 10-Q was back in compliance with the Nasdaq Filing Rule.
Removed
As a result, indebtedness or other forms of financing may not be available to us on attractive terms or at all.
Added
Future securities issuances could result in significant dilution to our stockholders and impair the market price of our common stock. Future issuances of shares of our common stock could depress the market price of our common stock and result in dilution to existing holders of our common stock.
Removed
As a result of several factors, including but not limited to our financial performance, market sentiment about the cannabis industry, volatility in the financial markets generally due to the tightening of monetary policy by the Board of Governors of the United States Federal Reserve Bank (the “Federal Reserve”) and other geopolitical events, events such as the ongoing wars around the world, the per share price of our Class A common stock has declined below the minimum bid price threshold required for continued listing.
Added
Also, to the extent outstanding options and warrants to purchase our shares of our common stock are exercised or options or other equity-based awards are issued or become vested, there will be further dilution. The amount of dilution could be substantial depending upon the size of the issuances or exercises.
Removed
If we do not regain compliance during the second 180-day period, then Nasdaq will notify us of its determination to delist our Class A common stock, at which point we would have an opportunity to appeal the delisting determination to a hearings panel. We would remain listed on Nasdaq pending the hearings panel’s decision.
Added
No shares of Class B common stock or preferred stock are outstanding.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+0 added−0 removed6 unchanged
Biggest changeWe regularly assess and enhance our cybersecurity posture through comprehensive risk assessments, security audits, and vulnerability assessments. Governance Cybersecurity is a shared responsibility requiring collaboration and cooperation across all levels of our organization. Greenlane recognizes that cybersecurity is not solely a technology issue but also a people and process issue.
Biggest changeWe regularly assess and enhance our cybersecurity posture through comprehensive risk assessments, security audits, and vulnerability assessments. 46 Governance Cybersecurity is a shared responsibility requiring collaboration and cooperation across all levels of our organization. Greenlane recognizes that cybersecurity is not solely a technology issue but also a people and process issue.
The Company’s Audit Committee oversees cybersecurity risk. The Audit Committee is promptly notified by Information Technology leadership of any potentially serious incidents including details and recommendations on the detection, mitigation, and remediation of the same. During the calendar year 2023, there have been no known reported cybersecurity incidents that have materially affected our operations or financial results.
The Company’s Audit Committee oversees cybersecurity risk. The Audit Committee is promptly notified by Information Technology leadership of any potentially serious incidents including details and recommendations on the detection, mitigation, and remediation of the same. During the calendar year 2024, there have been no known reported cybersecurity incidents that have materially affected our operations or financial results.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−1 removed0 unchanged
Biggest changeWe believe that our facilities are adequate for our current global operational needs and we are capable of acquiring or leasing additional space as necessary.
Biggest changeITEM 2. PROPERTIES We lease our administrative office space in Boca Raton, Florida and our distribution center and offices in Moreno Valley, California in the United States, and an administrative office location in Canada. We believe that our facilities are adequate for our current global operational needs and we are capable of acquiring or leasing additional space as necessary.
Removed
ITEM 2. PROPERTIES We lease our headquarters in Boca Raton, Florida with approximately 1,600 square feet of office space. We have also entered into a lease for our distribution center in the United States, and an administrative office location in Europe.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+10 added−1 removed6 unchanged
Biggest changeAs of the date of this Annual Report on Form 10-K, all July 2023 Pre-Funded Warrants have been exercised, based upon which we issued an additional 1,911,000 shares of our Class A common stock subsequent to year end, for de minimis net proceeds.
Biggest changeAs of the date of this Annual Report on Form 10-K, all July 2023 Pre-Funded Warrants have been exercised, based upon which we issued an additional 1,911,000 shares of our Class A common stock for de minimis net proceeds in 2024.
We intend to retain any future earnings and do not expect to pay cash dividends in the foreseeable future. Unregistered Sales of Equity Securities There were no unregistered sales of equity securities during the year ended December 31, 2023.
We intend to retain any future earnings and do not expect to pay cash dividends in the foreseeable future. Unregistered Sales of Equity Securities There were no unregistered sales of equity securities during the year ended December 31, 2024.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Class A common stock is listed on the Nasdaq Captial Market under the symbol “GNLN”. Holders As of July 18, 2024 , there were approximately 78 stockholders of record of our Class A common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Class A common stock is listed on the Nasdaq Capital Market under the symbol “GNLN”. Holders As of March 19, 2025, there were approximately 91 stockholders of record of our Class A common stock.
Removed
All other terms of the Prior Warrants remained unchanged. ITEM 6. [Reserved]
Added
All other terms of the Prior Warrants remained unchanged. On August 12, 2024, the Company entered into a securities purchase agreement with a single institutional investor for aggregate gross cash proceeds of $6.5 million. In connection with the private placement, the Company issued an aggregate of 2,363,637 units and pre-funded units.
Added
The pre-funded units were sold at the same purchase price as the units, less the pre-funded warrant exercise price of $0.001. Each unit and pre-funded unit consisted of one share of common stock (or one pre-funded warrant) and two common warrants, each exercisable for one share of common stock at an exercise price of $2.50 per share.
Added
The common warrant are exercisable on the initial exercise date described in the common warrant and will expire 5.0 years from such date.
Added
On October 29, 2024, the Company entered into an Exchange Agreement with its Senior Subordinated Lender, whereby the Company agreed to exchange an aggregate of $4,617,307 of debt originally owed to Agile Capital Funding LLC and Cedar Advance LLC in a 3(a)(9) exchange for new Senior Subordinated Notes in the principal amount of $4,000,000 due one year from issuance (the “Exchange Note”), reducing outstanding indebtedness by approximately $617,000.
Added
The Exchange Note was convertible at the option of the holder at $3.17 per share. In connection with the Exchange, the Company issued an aggregate of 1,261,830 five year warrants with an exercise price of $3.04 per share (the “Exchange Warrants”). The Exchange Note was repaid out of the proceeds of the February 2025 Offering.
Added
In addition, pursuant to the terms of the Exchange Agreement, the Company agreed to issue warrants to the Holders, with an initial exercise price of $3.04, exercisable 180 days after issuance (the “Exchange Inducement Warrants”).
Added
The Exchange Inducement Warrants were issued to incentivize the holders to exercise some or all of their existing warrants originally issued on August 13, 2024 (the “Existing Warrants”) for cash, which existing warrants have an exercise price of $2.50 per share.
Added
The Exchange Inducement Warrants are initially exercisable for zero shares, but to the extent that the Holders exercise any of such Existing Warrants during the one-hundred sixty day inducement period, the Exchange Inducement Warrants will become exercisable on April 30, 2025 for 200% of the number of Existing Warrants exercised for cash during such inducement period.
Added
As part of the February 2025 Offering, the exercise price of these warrants was adjusted to $1.19 per share.
Added
Also, pursuant to the Exchange Agreement, the Senior Subordinated Lender agreed that it will exercise its Existing Warrants for cash prior to exercising any of its outstanding pre-funded warrants, contingent on the market price of the common stock being above $2.50 per share and certain other conditions. ITEM 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

48 edited+40 added−31 removed56 unchanged
Biggest changeRecent Accounting Pronouncements See “Note 2—Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K. 49 Results of Operations The following table presents operating results for the years ended December 31, 2023 and 2022: For the Year Ended December 31, (in thousands) % of Net sales Change 2023 2022 2023 2022 $ % Net sales $ 65,373 $ 137,085 100.0 % 100.0 % (71.6 ) (52.3 )% Cost of sales 47,547 112,102 72.7 % 81.8 % (64.6 ) (57.6 )% Gross profit 17,826 24,983 27.3 % 22.3 % (7.2 ) (28.6 )% Operating expenses: Salaries, benefits and payroll taxes 17,454 31,290 26.7 % 22.8 % (13.8 ) (44.2 )% General and administrative 24,213 41,000 37.0 % 29.9 % (16.8 ) (40.9 )% Goodwill and indefinite-lived intangibles impairment charge — 71,360 — % 52.1 % (71.4 ) (100.0 )% Definite-lived intangibles impairment charge — 50,694 — % 37.0 % (50.7 ) (100.0 )% PP&E impairment charge — 7,336 — % 5.4 % (7.3 ) (100.0 )% Depreciation and amortization 2,243 7,405 3.4 % 5.4 % (5.2 ) (69.7 )% Total operating expenses 43,910 209,085 67.2 % 152.5 % (165.2 ) (79.0 )% Loss from operations (26,084 ) (184,102 ) (39.9 )% (134.3 )% 158.0 (85.8 )% Other income(expense), net: Interest expense (5,450 ) (2,450 ) (8.3 )% (1.8 )% (3.0 ) 122.4 % Employee retention credits — 4,854 — % 3.5 % (4.9 ) (100.0 )% Other expense, net (791 ) (541 ) (1.2 )% (0.4 )% 0.3 (46.3 )% Total other (expense) income, net (6,241 ) 1,863 (9.5 )% 1.4 % (8.1 ) (435.0 )% Loss before income taxes (32,325 ) (182,239 ) (49.4 )% (132.9 )% 149.9 (82.3 )% (Benefit from) provision for income taxes — (13 ) — % — % — (100.0 )% Net loss (32,325 ) (182,226 ) (49.4 )% (132.9 )% 149.9 (81.8 )% Net (loss) income attributable to non-control interest (150 ) (12,717 ) (0.2 )% (9.3 )% 12.6 (98.8 )% Net loss attributable to Greenlane Holdings, Inc. $ (32,175 ) $ (169,509 ) (49.2 )% (123.7 )% 137.3 (81.0 )% Consolidated Results of Operations Net Sales For the year ended December 31, 2023, total net sales were approximately $65.4 million, compared to approximately $137.1 million for the year ended December 31, 2022, representing a decrease of $71.7 million, or 52.3%.
Biggest changeRecent Accounting Pronouncements See “Note 2—Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K. 52 Results of Operations The following table presents operating results for the years ended December 31, 2024 and 2023: For the Year Ended December 31, (in thousands) % of Net sales Change 2024 2023 2024 2023 $ % Net sales $ 13,275 $ 65,373 100.0 % 100.0 % (52,098 ) (79.7 )% Cost of sales 6,993 47,547 52.7 % 72.7 % (40,544 ) (85.3 )% Gross profit 6,282 17,826 47.3 % 27.3 % (11,544 ) (64.8 )% Operating expenses: Salaries, benefits and payroll taxes 7,380 17,454 55.6 % 26.7 % (10,074 ) (57.7 )% General and administrative 9,764 24,213 73.6 % 37.0 % (14,449 ) (59.7 )% Impairment of property and equipment 153 — 1.2 % 0.0 % 153 — Depreciation and amortization 800 2,243 6.0 % 3.4 % (1,443 ) (64.4 )% Total operating expenses 18,097 43,910 136.3 % 67.2 % (25,813 ) (58.8 )% Loss from operations (11,815 ) (26,084 ) (89.0 )% (39.9 )% 14,269 (54.7 )% Other income(expense), net: Interest expense (5,941 ) (5,450 ) (44.8 )% (8.3 )% (491 ) (9.0 )% Change in fair value of contingent consideration 1,000 — 7.5 % — % 1,000 — % Loss on extinguishment of debt (876 ) — (6.6 )% — % (876 ) — % Other expense, net (25 ) (791 ) (0.2 )% (1.2 )% 766 (96.8 )% Total other expense, net (5,842 ) (6,241 ) (44.0 )% (9.5 )% 399 (6.4 )% Loss before income taxes (17,657 ) (32,325 ) (133.0 )% (49.4 )% 14,668 (45.4 )% (Benefit from) provision for income taxes — — — % — % — — % Net loss (17,657 ) (32,325 ) (133.0 )% (49.4 )% 14,668 (45.4 )% Net loss attributable to non-control interest (17 ) (150 ) (0.1 )% (0.2 )% 133 (88.7 )% Net loss attributable to Greenlane Holdings, Inc. $ (17,640 ) $ (32,175 ) (132.9 )% (49.2 )% 14,535 (45.2 )% Consolidated Results of Operations Net Sales For the year ended December 31, 2024, total net sales were approximately $13.3 million, compared to approximately $65.4 million for the year ended December 31, 2023, representing a decrease of $52.1 million, or 79.7%.
Second, we entered into a strategic partnership with an affiliate of one of our existing vape suppliers (“Vape Partner”) to service certain key customers with vaporizer goods and services (the “Vape Partnership”).
Second, we entered into a strategic partnership with an affiliate of one of our existing vape suppliers (“Vape Partner”) to service certain key customers with vaporizer goods and services (the “Vape Partnership”).
As part of the Vape Partnership, we will introduce our Vape Partner to certain key customers, assist with the promotion and the sale of certain vaporizer goods and services, and help coordinate the logistics, storage and distribution of such vaporizer products.
As part of the Vape Partnership, we will introduce our Vape Partner to certain key customers, assist with the promotion and the sale of certain vaporizer goods and services, and help coordinate the logistics, storage and distribution of such vaporizer products.
If our Vape Partner and key customer(s) enter into a direct relationship, the customers would directly purchase vaporizer goods and services, which we currently sell them, directly from our Vape Partner and we would no longer need to purchase such vape inventory on behalf of such key customer(s).
If our Vape Partner and key customer(s) enter into a direct relationship, the customers would directly purchase vaporizer goods and services, which we currently sell them, directly from our Vape Partner and we would no longer need to purchase such vape inventory on behalf of such key customer(s).
Reverse Stock Split On June 2, 2023, we filed a Certificate of Amendment to the A&R Charter with the SSSD, which effected a one-for-10 reverse stock split (the “2023 Reverse Stock Split” and together with the 2022 Reverse Stock Split, the “Reverse Stock Splits”) of our issued and outstanding shares of Common Stock at 5:01 PM Eastern Time on June 5, 2023.
Reverse Stock Splits On June 2, 2023, we filed a Certificate of Amendment to the A&R Charter with the SSSD, which effected a one-for-10 reverse stock split (the “2023 Reverse Stock Split” and together with the 2022 Reverse Stock Split, the “Reverse Stock Splits”) of our issued and outstanding shares of Common Stock at 5:01 PM Eastern Time on June 5, 2023.
H Since the launch of the ATM program in August 2021 and through December 31, 2022, we sold shares of our Class A common stock which generated gross proceeds of approximately $12.7 million and we paid fees to the sales agent of approximately $0.4 million.
Since the launch of the ATM program in August 2021 and through December 31, 2022, we sold shares of our Class A common stock which generated gross proceeds of approximately $12.7 million and we paid fees to the sales agent of approximately $0.4 million.
Greenlane is a leading ancillary cannabis company, providing a wide array of consumer ancillary products and industrial ancillary products to thousands of cannabis producers, processors, brands, and retailers (“Cannabis Operators”), in addition to specialty retailers, smoke shops and head shops, convenience stores, and consumers directly through our own proprietary web stores and large online marketplaces such as Amazon. 45 We have been developing a world-class portfolio of our own proprietary brands (the “Greenlane Brands”) and carefully curated third-party products that we believe will, over time, deliver higher margins and create long-term value for our customers and shareholders.
Greenlane is a leading ancillary cannabis company, providing a wide array of consumer ancillary products and industrial ancillary products to thousands of cannabis producers, processors, brands, and retailers (“Cannabis Operators”), in addition to specialty retailers, smoke shops and head shops, convenience stores, and consumers directly through our own proprietary web stores and large online marketplaces such as Amazon. 48 We have been developing a world-class portfolio of our own proprietary brands (the “Greenlane Brands”) and carefully curated third-party products that we believe will, over time, deliver higher margins and create long-term value for our customers and shareholders.
Net Cash Provided by Investing Activities During 2023, net cash provided by investing activities of (i) approximately $0.1 million from $1.1 million of cash proceeds from the sale of certain equity securities investments, offset by approximately $1.0 million of cash used for capital expenditures, including development costs for our new enterprise resource planning system.
During 2023, net cash provided by investing activities of approximately $0.1 million from $1.1 million of cash proceeds from the sale of certain equity securities investments, offset by approximately $1.0 million of cash used for capital expenditures, including development costs for our new enterprise resource planning system.
As a result, in 2023, 100% of the Operating Company’s US and state income and expenses are now included in our US and state tax returns. Our deferred income tax assets and liabilities are computed for differences between the tax basis and financial statement amounts that will result in taxable or deductible amounts in the future.
As a result, beginning 2023, 100% of the Operating Company’s US and state income and expenses are included in our US and state tax returns. Our deferred income tax assets and liabilities are computed for differences between the tax basis and financial statement amounts that will result in taxable or deductible amounts in the future.
Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section titled “Risk Factors” in Item 1A of this Annual Report on Form 10-K for the year ended December 31, 2023 .
Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section titled “Risk Factors” in Item 1A of this Annual Report on Form 10-K for the year ended December 31, 2024 .
We have no uncertain tax positions that qualify for inclusion in our consolidated financial statements. 48 In addition to tax expenses, we may incur expenses related to our operations and may be required to make payments under the Tax Receivable Agreement (the “TRA”), which could be significant.
We have no uncertain tax positions that qualify for inclusion in our consolidated financial statements. 51 In addition to tax expenses, we may incur expenses related to our operations and may be required to make payments under the Tax Receivable Agreement (the “TRA”), which could be significant.
We have successfully renegotiated supplier partnership terms and are continuing to improve working capital arrangements with suppliers. We have made progress consolidating and streamlining our office, warehouse, and distribution operations footprint. We have reduced our workforce by approximately 49% throughout fiscal year 2023 to reduce costs and align with our revenue projections.
We have successfully renegotiated supplier partnership terms and are continuing to improve working capital arrangements with suppliers. We have made progress consolidating and streamlining our office, warehouse, and distribution operations footprint. We have reduced our workforce by approximately 43% throughout fiscal year 2024 to reduce costs and align with our revenue projections.
See “Note 10 — Compensation Plans” for more information. 47 All share and per share amounts in this Annual Report on Form 10-K for the fiscal year ended December 31, 2023 have been retroactively adjusted for all periods presented to give effect to the Reverse Stock Split.
See “Note 10 — Compensation Plans” for more information. 50 All share and per share amounts in this Annual Report on Form 10-K for the fiscal year ended December 31, 2024 have been retroactively adjusted for all periods presented to give effect to the Reverse Stock Split.
The recent macroeconomic environment has caused weaker demand than contemplated under our business plan, resulting in a reduction in projected revenue and cash flows for the twelve-month period included in the going concern evaluation.
The recent macroeconomic environment has caused weaker demand than contemplated under our business plan, resulting in a reduction in projected revenue for the twelve-month period included in the going concern evaluation.
Our primary requirements for liquidity and capital are working capital, debt service related to recent acquisitions and general corporate needs.
Our primary requirements for liquidity and capital are working capital, equity fundraising, debt service related to recent acquisitions and general corporate needs.
Net Cash (Used in) Provided by Financing Activities During 2023, net cash used in financing activities primarily consisted of (i) approximately $3.9 million of cash proceeds from the issuance of Class A common stock related to our July 2023 Offering, (ii) approximately $3.9 million of cash proceeds from our future receivables financing, (iii) $2.1 million of cash proceeds from a secured bridge loan, offset by (iv) approximately $0.3 million of cash used for contingent consideration payments, (v) and approximately $2.1 million of cash used for repayments related to the Eyce and DaVinci promissory notes, and (vi) the $15.0 million payoff of asset based lending loans.
During 2023, net cash used in financing activities primarily consisted of approximately $3.9 million of cash proceeds from the issuance of Class A common stock related to our July 2023 Offering, approximately $3.9 million of cash proceeds from our future receivables financing, $2.1 million of cash proceeds from a secured bridge loan, offset by approximately $0.3 million of cash used for contingent consideration payments, and approximately $2.1 million of cash used for repayments related to the Eyce and DaVinci promissory notes, and the $15.0 million payoff of asset based lending loans.
ERC Sale On February 16, 2023, two of our wholly owned subsidiaries, Warehouse Goods LLC and KIM International LLC, entered into an agreement with a third-party institutional investor pursuant to which the investor purchased, for approximately $4.85 million in cash, an economic participation interest, at a discount, in our rights to payment from the United States Internal Revenue Service for certain periods with respect to the employee retention credits filed by us under the Employee Retention Credit program.
See “Note 6 - Long Term Debt” for more information. 57 ERC Sale On February 16, 2023, two of our wholly owned subsidiaries, Warehouse Goods LLC and KIM International LLC, entered into an agreement with a third-party institutional investor pursuant to which the investor purchased, for approximately $4.85 million in cash, an economic participation interest, at a discount, in our rights to payment from the United States Internal Revenue Service for certain periods with respect to the employee retention credits filed by us under the Employee Retention Credit program.
The Reverse Stock Split did not change the par value of the Common Stock or the authorized number of shares of Common Stock.
The Reverse Stock Splits did not change the par value of the Common Stock or the authorized number of shares of Common Stock.
As of December 31, 2023, we had approximately $0.5 million of cash, of which none was restricted and $0.1 million was held in foreign bank accounts, and approximately $3.7 million of working capital, which is calculated as total current assets minus total current liabilities, as compared to approximately $6.5 million of cash, of which $0.8 million was held in foreign bank accounts, and approximately $41.0 million of working capital as of December 31, 2022.
As of December 31, 2024, we had approximately $0.9 million of cash, of which none was restricted and $0.1 million was held in foreign bank accounts, and approximately $1.5 million of working capital, which is calculated as total current assets minus total current liabilities, as compared to approximately $0.5 million of cash, of which none was restricted and $0.1 million was held in foreign bank accounts, and approximately $3.7 million of working capital as of December 31, 2023.
We believe that our cash on hand and the cash flow that we generate from our operations will not be sufficient to fund our working capital and capital expenditure requirements, as well as our debt repayments and other liquidity requirements associated with our existing operations, for the next 12 months.
We believe that our cash on hand and the cash flow that we generate from our operations and financing activities from recent equity fundraisings will be sufficient to fund our working capital and capital expenditure requirements, as well as our debt repayments and other liquidity requirements associated with our existing operations, for the next 12 months.
We expect the ability to fulfill ENDS orders with the USPS to allow us to reduce shipping costs, decrease fulfillment times and enhance the overall customer experience for approved wholesale customers.
We currently possess the ability to fulfill ENDS orders with the USPS which allows us to reduce shipping costs, decrease fulfillment times and enhance the overall customer experience for approved wholesale customers.
As of December 31, 2023 , we did not have any off-balance sheet arrangements that are reasonably likely to have a material current or future effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources. 55 Cash Flows The following summary of cash flows for the periods indicated has been derived from our consolidated financial statements included in Part II, Item 8 of this Form 10-K: Year Ended December 31, (in thousands) 2023 2022 Net cash provided by (used in) operating activities $ (1,793 ) $ (26,426 ) Net cash provided by (used in) investing activities 30 12,025 Net cash (used in) provided by financing activities (10,140 ) 13,930 Net Cash Used in Operating Activities During 2023, net cash used in operating activities of approximately $1.8 million was a result of a net loss of $32.3 million offset by non-cash adjustments to net loss of $6.5 million, including a $24.0 million increase in cash provided by working capital primarily driven by decreases in our accrued expenses and accounts payable, and decreases in inventories offset by higher other current assets.
As of December 31, 2024 , we did not have any off-balance sheet arrangements that are reasonably likely to have a material current or future effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources. 59 Cash Flows The following summary of cash flows for the periods indicated has been derived from our consolidated financial statements included in Part II, Item 8 of this Form 10-K: Year Ended December 31, (in thousands) 2024 2023 Net cash used in operating activities $ (6,750 ) $ (1,793 ) Net cash (used in) provided by investing activities (244 ) 30 Net cash provided by (used in) financing activities 7,427 (10,140 ) Net Cash Used in Operating Activities During 2024, net cash used in operating activities of approximately $6.8 million was a result of a net loss of $17.7 million offset by non-cash adjustments to net loss of $6.4 million and a $4.4 million increase in working capital driven by decreases in inventories of $6.3 million and decreases in other current assets of $3.5 million reduced by an increase in accounts receivable of $2.8 million, decrease in accrued expenses of $0.8 million and a decrease in accounts payable of $2.3 million.
We have incurred net losses of $32.3 million and $182.2 million for the years ended December 31, 2023 and 2022, respectively. For the year ended December 31, 2023, cash used in operating activities was $ 1.8 million and cash used in operating activities for the year ended December 31, 2022 was $26.4 million.
We have incurred net losses of $17.7 million and $32.3 million for the years ended December 31, 2024 and 2023, respectively. For the year ended December 31, 2024, cash used in operating activities was $ 6.8 million and cash used in operating activities for the year ended December 31, 2023 was $1.8 million.
Our primary sources of liquidity are our cash on hand and the cash flow that we generate from our operations, as well as proceeds from equity issuances, such as our June 2022, October 2022 and July 2023 Offerings, each as described and defined below.
Our primary sources of liquidity are our cash on hand and the cash flow that we generate from our equity and debt transactions , as well as proceeds from equity issuances, such as our July 2023, August 2024, and February 2025 Offerings, each as described and defined below.
Future Receivables Financings In July, August, October , and November 2023, the Company received an aggregate of approximately $3.9 million in cash pursuant to the terms of future receivables financings (collectively, the “Future Receivables Financings”) entered into with two private lenders.
Future Receivables Financings In July, August, October, and November 2023, the Company received an aggregate of approximately $3.9 million in cash pursuant to the terms of future receivables financings (collectively, the “Future Receivables Financings”) entered into with two private lenders. As of December 31, 2024, there were no outstanding balances under this agreement.
The decrease in cost of sales is aligned with the decrease in revenue of 52.3%. Gross margin increased by 5% to 27.3% for the year ended December 31, 2023, compared to gross margin of 22.3% for the same period in 2022.
The decrease in cost of sales is aligned with the decrease in revenue of 79.7%. Gross margin increased by 20.0% to 47.3% for the year ended December 31, 2024, compared to gross margin of 27.3% for the same period in 2023.
Management believes that these initiatives will significantly reduce costs, help accelerate the Company’s path to profitability, support business growth, and allow the Company to reinvest capital into its highest demand and highest potential product lines. During 2022 and 2023, the Company received capital from various sources permitting it to right-size the business and position the company for growth.
Management believes that these initiatives in conjunction with the capital received in the February 2025 Private Placement will significantly reduce costs, help accelerate the Company’s path to profitability, support business growth, and allow the Company to reinvest capital into its highest demand and highest potential product lines.
During 2022, net cash used in operating activities of approximately $26.4 million was a result of a net loss of $182.2 million offset by non-cash adjustments to net loss of $140.6 million, including an impairment charge related to goodwill and indefinite-lived intangibles of $71.4 million, and a $15.2 million increase in cash provided by working capital primarily driven by decreases in our accrued expenses and accounts payable, and decreases in inventories offset by higher other current assets..
During 2023, net cash used in operating activities of approximately $1.8 million was a result of a net loss of $32.3 million offset by non-cash adjustments to net loss of $6.5 million, including a $24.0 million increase in cash provided by working capital primarily driven by decreases in our accrued expenses and accounts payable, and decreases in inventories offset by higher other current assets.
The year-over-year decrease was primarily due to an overall business decline in the Industrial and Consumer Goods segments as described above. For the year ended December 31, 2023, our Canadian net sales were approximately $1.3 million, compared to approximately $5.8 million for the same period in 2022 , representing a decrease of $4.5 million, or 77.8%.
The year-over-year decrease was primarily due to the Company restructuring as described above. For the year ended December 31, 2024, our Canadian net sales were approximately $0.2 million, compared to approximately $1.3 million for the same period in 2023 , representing a decrease of $1.1 million, or 87.9%.
See “Note 6 - Long Term Debt” for more information. 54 Management Initiatives We have completed several initiatives to optimize our working capital requirements. We launched Groove, a new, innovative Greenlane Brands product line, and we also rationalized our third-party brands product offering, which enables us to reduce inventory carrying costs and working capital requirements.
The Note Amendment was repaid out of the February 2025 Private Placement. 58 Management Initiatives We have completed several initiatives to optimize our working capital requirements. We launched Groove, a new, innovative Greenlane Brands product line, and we also rationalized our third-party brands product offering, which enables us to reduce inventory carrying costs and working capital requirements.
The year-over-year decrease was primarily due to an overall business decline in the Industrial and Consumer Goods segments as described above. For the year ended December 31, 2023, our European net sales were approximately $5.1 million, compared to approximately $4.9 million for the same period in 2022 , representing an increase of $0.11 million, or 2.6%.
The year-over-year decrease was primarily due to the Company restructuring as described above. For the year ended December 31, 2024, our European net sales were approximately $2.2 million, compared to approximately $5.5 million for the same period in 2023 , representing a decrease of $3.3 million, or 60.0%.
These platforms allow us to reach customers directly with helpful resources and a seamless purchasing experience. We merchandise vaporizers, packaging, and other ancillary products in the United States, Canada, Europe and Latin America.
Our world-class product portfolio is offered to customers through our proprietary, owned and operated e-commerce platforms which include Vapor.com, PuffItUp.com, HigherStandards.com, MarleyNaturalShop.com and Wholesale.Greenlane.com. These platforms allow us to reach customers directly with helpful resources and a seamless purchasing experience. We merchandise vaporizers, packaging, and other ancillary products in the United States, Canada, Europe and Latin America.
The increase in gross margins is related to transitioning to a commission revenue model for the majority of the vaporizer sales with 100% margin versus gross revenue with lower margins. Also contributing to the increase in margin is the Company’s continued focus on consumer in-house brands with higher margins and moving away from third-party brands with lower margins.
The increase in gross margins is in part related to transitioning to a commission revenue model for the majority of the vaporizer sales with 100% margin versus gross revenue with lower margins.
Liquidity, Capital Resources and Going Concern Our primary requirements for liquidity and capital are working capital, debt service related to recent acquisitions and general corporate needs. Our primary sources of liquidity are our cash on hand and the cash flow that we generate from our operations, as well as proceeds other equity issuances.
Our primary sources of liquidity are our cash on hand and the cash flow that we generate from our operations, as well as proceeds from equity issuances.
On June 29, 2023, we entered into securities purchase agreements with certain investors, pursuant to which we agreed to issue and sell an aggregate of 560,476 shares of our Class A common stock, pre-funded warrants to purchase up to 3,487,143 shares of our Class A Common Stock (the “July 2023 Pre-Funded Warrants”) and warrants to purchase up to 8,095,238 shares of our Class A common stock (the “July 2023 Standard Warrants”).
Due to the untimely filing of certain of our Quarterly and Annual Reports that was remediated in 2024, we are unable to issue additional shares of Class A common stock pursuant to the ATM Program or otherwise use the Shelf Registration Statement and once eligible will be required to file a new S-3 for utilization of our Shelf Registration Statement. 55 Common Stock and Warrant Offerings On June 29, 2023, we entered into securities purchase agreements with certain investors, pursuant to which we agreed to issue and sell an aggregate of 560,476 shares of our Class A common stock, pre-funded warrants to purchase up to 3,487,143 shares of our Class A Common Stock (the “July 2023 Pre-Funded Warrants”) and warrants to purchase up to 8,095,238 shares of our Class A common stock (the “July 2023 Standard Warrants”).
Salaries, Benefits and Payroll Taxes Salaries, benefits and payroll taxes expenses decreased by approximately $13.8 million, or 44.2% , to $17.4 million for the year ended December 31, 2023, compared to $31.3 million for the same period in 2022. The decrease is related to a major restructuring effort by the company to reduce headcount and cost to align with revenue.
General and Administrative Expenses General and administrative expenses decreased by approximately $14.4 million, or 59.7 %, for the year ended December 31, 2024 , compared to the same period in 2023 . The decrease is related to major restructuring effort by the Company to reduce cost and right-size the business.
Inventory Management: In 2023, we implemented a new inventory management and lifecycle strategy that is focused on a quarterly turn and a regular review of inventory to avoid future write-offs. 6.
In April 2023, we formed two strategic partnerships (described below in greater detail) to increase margins and significantly reduce working capital requirements. 5. Inventory Management: In 2024, we continued to refine and improve our inventory management and lifecycle strategy that is focused on a quarterly turn and a regular review of inventory to avoid future write-offs. 6.
Gross margin was approximately 21.4% for the year ended December 31, 2023, compared to gross margin of approximately 17.3% for the same period in 2022 , representing 4.1% year over year increase. 52 Net Sales by Geographic Regions Year Ended December 31, % of Net sales Change 2023 2022 2023 2022 $ % Net sales: United States $ 58,539 $ 126,333 89.5 % 92.2 % $ (67,794 ) (53.7 )% Canada 1,291 5,810 1.9 % 4.2 % (4,519 ) (77.8 )% Europe 5,072 4,942 7.8 % 3.6 % 130 2.6 % Total net sales $ 65,373 $ 137,085 100.0 % 100.0 % $ (71,712 ) (52.3 )% For the year ended December 31, 2023, our United States net sales to customers in the United States were approximately $58.5 million, compared to approximately $126.3 million for the same period in 2022 , representing a decrease of $67.8 million, or 53.7%.
The change is primarily due to non-recurring costs during the year ended December 31, 2023. 54 Net Sales by Geographic Regions Year Ended December 31, % of Net sales Change 2024 2023 2024 2023 $ % Net sales: United States $ 10,900 $ 58,539 82.1 % 89.5 % $ (47,639 ) (81.4 )% Canada 157 1,291 1.2 % 2.0 % (1,134 ) (87.9 )% Europe 2,218 5,543 16.6 % 8.5 % (3,325 ) (60.0 )% Total net sales $ 13,275 $ 65,373 100.0 % 100.0 % $ (52,098 ) (79.7 )% For the year ended December 31, 2024, our United States net sales to customers in the United States were approximately $10,9 million, compared to approximately $58.5 million for the same period in 2023 , representing a decrease of $47.6 million, or 81.4%.
General and Administrative Expenses General and administrative expenses decreased by approximately $16.8 million, or 40.9 %, for the year ended December 31, 2023 , compared to the same period in 2022 .
Depreciation and Amortization Expense Depreciation and amortization expense decreased $1.4 million , or 64.4% , for the year ended December 31, 2024 , compared to the same period in 2023 .
Such sources are described in greater detail in the Liquidity and Capital Resources Section of this report.
Such sources are described in greater detail in the Liquidity and Capital Resources Section of this report. 49 During 2023 and 2024, the Company also entered into certain arrangements to reduce working capital requirements and improve its balance sheet.
Facility Footprint Rationalization: In 2023, we optimized our facilities footprint by reducing warehouse and office space while increasing operational efficiency and improving fulfillment practices. The full benefit of those efforts are expected to be realized in 2024. 3.
Technology Enhancements: We remain fully committed to improving our technology, particularly our B2B and e-commerce platforms, to provide a seamless shopping experience for our wholesale and retail customers. 2. Facility Footprint Rationalization: In 2023 and 2024, we optimized our facilities footprint by reducing warehouse and office space while increasing operational efficiency and improving fulfillment practices. 3.
Refer to “Note 12— Segment Reporting” within Item 8 to this Annual Report on Form 10-K for additional information on our reportable segments. Plan to Accelerate Path to Profitability and Capitalize the Business In today’s economic landscape, particularly within the cannabis industry, achieving profitability and preserving working capital are paramount.
Plan to Accelerate Path to Profitability and Capitalize the Business In today’s economic landscape, particularly within the cannabis industry, achieving profitability and preserving working capital are paramount. At Greenlane, we are intensely focused on making our business profitable and well-capitalized for long-term sustainability. Our key initiatives include: 1.
The 2023 decline in the Consumer Goods segment is due to a major restructuring effort by the Company during fiscal year 2023 to reduce sales and marketing cost to align with revenue, sale of the Company’s minority interest in Vibes brand and a shift in strategy to focus on in-house brands that have a higher margin profile and rationalized third-party brand offering generating top line revenue with lower margins.
Revenues decreased in the Consumer Brands Group due, in part, to restructuring efforts and shift in strategy to focus on in-house brands that carry a higher margin profile while rationalizing third-party brand offerings, which generated top line revenue with lower margins.
Since the end of 2021, the Company has invested significantly in technology, including its e-commerce platforms, internal ERP systems, and B2B capabilities. Our world-class product portfolio is offered to customers through our proprietary, owned and operated e-commerce platforms which include Vapor.com, PuffItUp.com, HigherStandards.com, MarleyNaturalShop.com and Wholesale.Greenlane.com.
In 2024, we expanded our assortment to include health and safety products and entered into strategic partnerships with Safety Strips and Swabtek, offering fentanyl and Drink Spike testing products. Since the end of 2021, the Company has invested significantly in technology, including its e-commerce platforms, internal ERP systems, and B2B capabilities.
Based on our cash on hand and working capital at December 31, 2023, we may have insufficient cash to fund planned operations into the third quarter of 2024. This is evident from our continued efforts to raise capital and leverage external funding to fulfill our capital needs as highlighted below.
Based on our cash on hand and working capital at December 31, 2024, we expect to have sufficient cash to fund planned operations into the second quarter of 2026. This is largely due to the Company’s Private Placement that occurred on February 19, 2025. See Note 13 for more information.
Product Innovation: In 2023, we launched Groove, an innovative new product line with a value-based price point and in 2024 we have begun to expand our product offering to further enhance our assortment available to our customers. 8.
Product Innovation: In 2024, we expanded our product offering to further enhance our assortment available to our customers to include the most up to date technology available and launched our health and safety product line promoting safe and responsible consumption. 8.
During 2022, net cash provided by financing activities primarily consisted of (i) approximately $21.1 million of cash proceeds from the issuance of Class A common stock related to our ATM Program, the June 2022 Offering and the October 2022 Offering, (2) approximately $14.6 million of cash proceeds from our Asset-Based Loan, offset by debt issuance costs of $1.5 million, and (iii) approximately $0.9 million of cash used for contingent consideration payments, (iv) and approximately $19.4 million of cash used for repayments related to the Eyce and DaVinci promissory notes, the payoff of the Real Estate Note, and repayment of our bridge loan.
Net Cash Provided by (Used in) Financing Activities During 2024, net cash provided by financing activities of $7.4 million primarily consisted of cash proceeds of approximately $3.0 million from the issuance of debt, $5.6 million from the issuance of Class A common stock, and $1.8 million from the exercise of stock options and warrants, partially offset by approximately $3.2 million in payments on notes payable, finance lease obligations and other long-term liabilities.
Interest expense increased approximately $3.0 million during the fiscal year 2023 versus fiscal year 2022. The increase is primarily related to the exiting ABL facility which accelerated deferred interest expense as well as the promissory notes for the Eyce and DaVinci acquisition. Other expense, net.
The increase is related to the write-off of certain fixed assets during the year ended December 31, 2024. Other Income (Expense), Net Interest expense . Interest expense increased approximately $0.5 million during the fiscal year 2024 versus fiscal year 2023. The increase is primarily related to overall debt financing and refinancing debt on more favorable terms.
Removed
We manage our business in two different, but complementary, business segments. The first is the Consumer Goods segment, which focuses on serving consumers across wholesale, retail, and e-commerce operations—offering both our Greenlane Brands as well as ancillary products and accessories from select leading third-party brands, such as Storz and Bickel, Grenco Science, PAX, Arizer and more.
Added
During 2023 and 2024, the Company received capital from various sources permitting it to right-size the business and position the company for growth and in 2025 the Company received capital from a Private Placement in February.
Removed
The Consumer Goods segment forms a central part of our growth strategy, especially as it relates to scaling our own portfolio of higher-margin proprietary owned brands.
Added
The Loan Modification Agreement was restructured on October 29, 2024 as part of the First Amendment to Amended and Restated Secured Promissory Note.
Removed
In addition to our Consumer Goods segment, we have our Industrial Goods segment, which focuses on serving Cannabis Operators by providing ancillary products essential to their daily operations and growth, such as packaging and vaporization solutions, including our Greenlane Brand Pollen Gear.
Added
On June 18, 2024, the Board unanimously approved and declared advisable, and recommended that our stockholders approve at a Special Meeting that took place on July 29, 2024, the adoption of the 2024 Amendment to effect a reverse stock split of our Common Stock at any whole number between, and inclusive of, one-for-two to one-for-twenty.
Removed
At Greenlane, we are intensely focused on making our business profitable and well-capitalized for long-term sustainability. Our key initiatives include: 1. Technology Enhancements: We remain fully committed to improving our technology, particularly our B2B and e-commerce platforms, to provide a seamless shopping experience for our wholesale and retail customers. 2.
Added
Approval of the Proposed 2024 Reverse Stock Split at the 2024 Special Meeting granted the Board the authority, but not the obligation, to file the 2024 Amendment to effect the Proposed 2024 Reverse Stock Split no later than August 5, 2024, with the exact ratio and timing of the Proposed 2024 Reverse Stock Split to be determined at the discretion of the Board.
Removed
In April 2023, we formed two strategic partnerships (described below in greater detail) to increase margins and significantly reduce working capital requirements in our Industrial Goods segment. Similarly, our Consumer Goods segment restructured arrangements with several third-party brands in 2022 and 2023 to reduce our working capital needs. 5.
Added
On July 23, 2024, the Board approved the reverse split at a ratio of one-for-11 and the Amendment has been filed with the Secretary of State of the State of Delaware, that became effective on August 5, 2024 at 12:01 AM Eastern Time, before the opening of trading on the Nasdaq.
Removed
During 2022, the Company also monetized several non-core assets to provide necessary working capital including the sale and lease-back of its headquarters building and the sale of its interest in the Vibes brand. 46 During 2023 and 2024, the Company also entered into certain arrangements to reduce working capital requirements and improve its balance sheet.
Added
For additional information about the July 29, 2024 Special Meeting and the 2024 Reverse Stock Split, see the Company’s Definitive Proxy Statement filed with the SEC on June 28, 2024 and Form 8-K filed with the SEC on July 31, 2024.
Removed
As part of the MJ Packaging Partnership, we will no longer purchase additional packaging inventory and MJ Pack will become our strategic partner to continue providing and enhancing packaging solutions for our customers. As a result of the MJ Packaging Partnership, we are no longer seeking a purchaser for our packaging division.
Added
The year-over-year decrease in net sales was due to a major restructuring in April of 2023, involving our packaging and industrial vaping product lines; transitioning much of this business from a gross sales to a commission structure to preserve working capital.
Removed
The year-over-year decrease was a result of the Industrial segment transitioning to a commission revenue model versus gross revenue previously recorded for the largest vaporizer product customers and discontinuing the packaging products business.
Added
The consumer products were affected by the inability to access capital markets on equitable terms, resulting in stock-outs and shortages of higher velocity inventory. The Company is continuing to focus on profitable revenue and as a result top line revenue has significantly been reduced.
Removed
The Consumer segment sales decreased due to declining business globally, reduction in sales staff and marketing spend and the company was out of stock for high demand inventory items due to capital restrictions to invest in inventory purchases. 50 Cost of Sales and Gross Margin For the year ended December 31, 2023, cost of sales decreased by $64.6 million, or 57.6%, as compared to the year ended December 31, 2022.
Added
Concurrently, the Company has continued its focus on right-sizing the business during the fiscal year ended December 31, 2024 and through present, in an effort to reduce sales and marketing costs and reduce or eliminate certain administrative functions. 53 Cost of Sales and Gross Margin For the year ended December 31, 2024, cost of sales decreased by $40.6 million, or 85.3%, as compared to the year ended December 31, 2023.
Removed
The decrease is related to a major reduction in expenses across to align with revenue Goodwill and Indefinite-Lived Intangibles Impairment Charge We incurred a goodwill and indefinite-lived intangibles impairment charge of approximately $71.4 million and a definite-lived intangibles impairment charge of approximately $50.7 million during the twelve months ended December 31, 2022, compared to no such impairment charge for the comparable period in 2023.
Added
Salaries, Benefits and Payroll Taxes Salaries, benefits and payroll taxes expenses decreased by approximately $10.1 million, or 57.7%, to $7.4 million for the year ended December 31, 2024, compared to $17.5 million for the same period in 2023. The decrease is related to the reduction in workforce to right-size the business and focus on profitability.
Removed
We incurred a impairment charge of approximately $7.3 million to fixed assets related to the ERP system during the year ended December 31, 2022, compared to no such impairment charge fore the comparable year in 2023. This impairment charges were due to declining business and declining enterprise value.
Added
The Company focused on reduction across the board in general and administrative expenses and drove large decreases in professional and outside services, facility expenses, outbound freight, other general and administrative, marketing, taxes and licenses, and general insurance.
Removed
Depreciation and Amortization Expense Depreciation and amortization expense decreased $5.2 million , or 69.7% , for the year ended December 31, 2023 , compared to the same period in 2022 . The decrease is primarily related to the intangible and fixed asset impairments recorded as of December 31, 2023, reducing amortization expense. Other Income (Expense), Net Interest expense.
Added
The decrease is related to a major restructuring effort to reduce cost and right-size the business resulting in the sale and disposal of assets related to reducing our warehousing and office footprint. Impairment of property and equipment Impairment of property and equipment increased $0.2 million, for the year ended December 31, 2024, compared to the same period in 2023.
Removed
Other expense, net, increased by approximately $0.3 million for the year ended December 31, 2023 , for slight changes to non-recurring costs during the year ended December 31, 2023. Segment Operating Performance Following the completion of the KushCo merger in late August 2021, we reassessed our operating segments based on our new organizational structure.
Added
Change in fair value of contingent consideration . There was a change in fair value of contingent consideration of approximately $1.0 million for the year ended December 31, 2024 compared to the same period in 2023. The change is primarily related to reductions in earnouts related to Davinci and Eyce products.
Removed
Based on this assessment, we determined we had two operating segments as of December 31, 2021, which are the same as our reportable segments: (1) Consumer Goods, which largely comprises Greenlane’s legacy operations across the United States, Canada, and Europe, and (2) Industrial Goods, which largely comprises KushCo’s legacy operations.
Added
Loss on debt extinguishment There was an increase in loss on debt extinguishment of approximately $0.9 million for the year ended December 31, 2024, compared to the same period in 2023. The change is primarily related to the October 29, 2024 debt restructuring during the year ended December 31, 2024.
Removed
These changes in operating segments align with how we manage our business as of the fourth quarter of 2023.
Added
For further information, see Note 6, “Debt” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K. Other expense, net. Other expense, net, decreased by approximately $0.8 million for the year ended December 31, 2024 compared to the same period in 2023.
Removed
The Consumer Goods segment focuses on serving consumers across wholesale, retail and e-commerce operations—through both our proprietary brands, including Eyce, DaVinci, Marley Natural, Keith Haring, and Higher Standards, as well as lifestyle products and accessories from leading brands, like Storz and Bickel, Grenco Science, and many more.
Added
The year-over-year decrease was primarily due to the Company restructuring as described above. Liquidity, Capital Resources and Going Concern Our primary requirements for liquidity and capital are working capital, debt service related to recent acquisitions and general corporate needs.

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