In April 2019, we adopted the 2019 Equity Incentive Plan (the “2019 Plan”). We previously registered 5,000,000 shares of Class A common stock that are or may become issuable under the 2019 Plan as stock options and other equity-based awards to employees, directors and executive officers. In August 2021, we adopted, and our shareholders approved, the Amended and Restated 2019 Equity Incentive Plan (the "Amended 2019 Plan"), which amends and restates the 2019 Plan in its entirety. The Amended 2019 Plan, among other things, increases the number of shares of Class A common stock available for issuance under the 2019 Plan by 2,860,367.

The Amended 2019 Plan provides eligible participants with compensation opportunities in the form of cash and equity incentive awards. The 2019 Plan is designed to enhance our ability to attract, retain and motivate our employees, directors, and executive officers, and incentivizes them to increase our long-term growth and equity value in alignment with the interests of our stockholders.

On August 31, 2021, we completed our previously announced merger with KushCo pursuant to the Merger Agreement dated as of March, 31, 2021. See "Note 3 - Business Acquisitions" for additional details.

At the effective time of the Mergers, options to purchase shares of Class A common stock (the “Greenlane options”) and shares of Greenlane restricted stock were treated as follows:

•Each unvested Greenlane option, other than Greenlane options held by non-employee directors of Greenlane, accelerated and became vested in full;

•Each Greenlane option held by non-employee directors of Greenlane, whether vested or unvested, remained outstanding (and unvested, as applicable) in accordance with the terms of Greenlane’s equity plan covering each such option;

•Each unvested share of Greenlane restricted stock and each unvested common unit of the Operating Company, other than Greenlane restricted stock or Greenlane restricted common units held by non-employee directors of Greenlane, accelerated and became vested in full in accordance with the terms of Greenlane’s equity plan covering each such award; and

•Each unvested share of Greenlane restricted stock or Greenlane restricted common units of Greenlane held by non-employee directors of Greenlane, whether vested or unvested, remained outstanding (and unvested, as applicable) in accordance with the terms of Greenlane’s equity plan covering each such award.

The Greenlane equity awards vesting acceleration was accounted for as a modification under ASC Topic 718, Compensation - Stock Compensation.

As described in "Note 3 - Business Acquisitions," in connection with the completion of our merger with KushCo, we assumed the sponsorship of the KushCo Equity Plan. We do not intend to make future grants under the KushCo Equity Plan.

During the year ended December 31, 2021, Section 16 officers Aaron LoCascio and Adam Schoenfeld had equity trading plans in place in accordance with Rule 10b5-1(c)(1) under the Exchange Act. An equity trading plan is a written document that preestablishes the amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of our Class A common stock, including shares acquired under our equity plans.

Equity-based compensation expense is included within "salaries, benefits and payroll taxes" in our consolidated statement of operations and comprehensive loss. We recognized equity-based compensation expense as follows:


	For the year ended December 31,
(in thousands)	2021		2020
Stock options - Class A common stock	$	4,204	$	1,592
Restricted shares - Class A common stock	1,009		43
Restricted stock units (RSUs) - Class A common stock	53		40
Common units of the Operating Company	449		(822)
Total equity-based compensation expense	$	5,715	$	853

During the year ended December 31, 2021, we granted an aggregate of 1,676,355 options to our directors and certain employees. The stock options were granted with exercise prices ranging from $1.00 per share to $6.20 per share, and vesting periods ranging from six months to four years.

During the year ended December 31, 2020, we granted an aggregate of 949,126 options to our directors and certain employees. The stock options were granted with exercise prices ranging from $2.00 per share to $6.14 per share, and vesting periods ranging from six months to four years.


	Remaining Unrecognized Compensation Expense December 31, 2021		Weighted Average Period over which Remaining Unrecognized Compensation Expense is Expected to be Recognized
	(in thousands)		(in years)
Stock options - Class A common stock	$	1,291	0.5
Restricted shares - Class A common stock	10		0.2
Restricted stock units (RSUs) - Class A common stock	28		3.1
Common units of the Operating Company	—		0
Total remaining unrecognized compensation expense	$	1,329

The fair value of the stock option awards granted during the years ended December 31, 2021 and 2020 was determined on the grant date using the Black-Scholes valuation model based on the following ranges of weighted-average assumptions:


	December 31, 2021	December 31, 2020
Expected volatility (1)	100% - 107%	96% - 103%
Expected dividend yield (2)	—	—
Expected term (3)	5.25 - 6.25 years	5.15 - 6.25 years
Risk-free interest rate (4)	0.78% - 1.37%	0.23% - 1.72%

(1)Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.

(3)Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.

(4)The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.

A summary of stock option activity for the years ended December 31, 2021 and 2020 is as follows:


	Stock Options
	Number of Options	Weighted-Average Exercise Price
Outstanding as of December 31, 2019	629,773	$	8.98
Granted	949,126	3.72
Exercised	—	—
Forfeited	(204,927)	6.94
Outstanding as of December 31, 2020	1,373,972	5.47
Granted	4,789,317	3.14
Exercised	(101,066)	2.40
Forfeited	(743,305)	4.30
Outstanding as of December 31, 2021	5,318,918	$	3.59

The weighted-average grant date fair value of options granted for the years ended December 31, 2021 and 2020 was $3.14 and $2.95, respectively. The total fair value of stock options vested during the years ended December 31, 2021 and 2020 was approximately $1.5 million and $1.4 million, respectively.

In connection with the closing of the IPO, we consummated certain organizational transactions with the Operating Company, as described in further detail in "Note 1—Business Operations and Organization," among which, the Operating Company

reclassified unvested Class B membership interests and profits interests which had been granted as equity-based compensation into Common Units of the Operating Company.

The following table provides a summary of the unvested Common Units outstanding and related transactions:


			Common Units Subject to Vesting
Unvested Common Units as of December 31, 2019			816,659
Granted			—
Vested			(368,489)
Forfeited			(244,266)
Unvested Common Units as of December 31, 2020			203,904
Granted			—
Vested			(198,758)
Forfeited			(5,146)
Unvested Common Units as of December 31, 2021			—