RESTRUCTURING AND ASSET IMPAIRMENT CHARGES |
12 Months Ended |
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Dec. 31, 2023 | |
| Restructuring and Related Activities [Abstract] | |
| RESTRUCTURING AND ASSET IMPAIRMENT CHARGES | RESTRUCTURING AND ASSET IMPAIRMENT CHARGES During 2022, the Company approved several restructuring activities. The Company implemented various strategic initiatives targeted principally at reducing costs, enhancing organizational efficiency and optimizing its business model.
In February 2022, with the passage of Regulation 227, followed by the Joint Resolution 539 of 2022 by the Colombian Government in April 2022, the Company could export cannabis flower for medicinal use. With this significant development, the Company evaluated its current production capacity for cannabis extracts and thus identified the need to scale back on some of the extraction capacity and related assets. This initiative included a global workforce reduction and actions to right-size the Company’s extraction related assets, which triggered some asset write-off charges.
In December 2022, the Company approved a plan to shut-down its cultivation activities in Portugal in order to preserve cash. Subsequently, in January 2023, the Company further approved the wind-down of the entire Portuguese operations to improve operating margin and solely focusing its Cannabis cultivating and production in Colombia. Under this restructuring plan, the Company ceased its Portuguese flower cultivation, post-harvest processes, and manufacturing activities in full by the end of the first quarter of 2024. Subsequent to year end, the Company sold farm land in January 2024 and completed the wind-down process of its Portugal operations.
As part of its restructuring activities, the Company had incurred expenses that qualify as exit and disposal costs under GAAP. For the year ended December 31, 2022, total restructuring charges included employee severance of $2,233, asset write-off of $23,865, and exit and disposal cost of $844. Asset write off includes Property, plant and equipment write offs of $10,396 and other assets write off of $1,494 related to the exit of the Portuguese operations including inventory reserve of $6,726 and costs to maintain the facilities until an orderly wind-down. The Company charged the restructuring program costs to other operating expenses. No restructuring expenses were recorded during the year ended December 31, 2023.
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