Annual report pursuant to Section 13 and 15(d)

Segment Reporting

v3.23.1
Segment Reporting
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Segment Reporting SEGMENT REPORTING
We define our segments as those operations whose results are regularly reviewed by our CODM to analyze performance and allocate resources. Therefore, segment information is prepared on the same basis that management reviews financial information for operational decision-making purposes. Our CODM is a committee comprised of our CEO and our CFO.
We determined we had two operating segments as of December 31, 2022, which are the same as our reportable segments: (1) Consumer Goods, and (2) Industrial Goods. These operating segments align with how we manage our business as of the fourth quarter of 2022. The accounting policies of the reportable segments are the same as those described in "Note 2 - Summary of Significant Accounting Policies."
The Consumer Goods segment focuses on serving consumers across wholesale, retail and e-commerce operations—through both our proprietary Greenlane Brands, including Eyce, DaVinci, Groove, Marley Natural, Keith Haring, and Higher Standards, as well as lifestyle products and accessories from leading brands, like Storz and Bickel, PAX, and many more. The Consumer Goods segment forms a central part of our growth strategy, especially as it relates to scaling our own portfolio of higher-margin Greenlane Brands.
The Industrial Goods segment focuses on serving the premier brands, operators, and retailers through our wholesale operations by providing ancillary products essential to their growth, such as customizable packaging and supply products, which includes our vaporization solutions offering including CCELL branded products.
Our CODM allocates resources to and assesses the performance of our two operating segments based on the operating segments' net sales and gross profit. The following table sets forth information by reportable segment for the years ended December 31, 2022 and 2021. There were no material intersegment sales during the years ended December 31, 2022 and 2021.
For the year ended December 31, 2022 For the year ended December 31, 2021
(in thousands) Consumer Goods Industrial Goods Total Consumer Goods Industrial Goods Total
Net sales $ 48,134  $ 88,951  $ 137,085  $ 110,105  $ 55,955  $ 166,060 
Cost of sales 38,531  73,571  112,102  87,561  44,646  132,207 
Gross profit $ 9,603  $ 15,380  $ 24,983  $ 22,544  $ 11,309  $ 33,853 
The following table sets forth specific asset categories which are reviewed by our CODM in the evaluation of operating segments:
As of December 31, 2022 As of December 31, 2021
(in thousands) Consumer Goods Industrial Goods Total Consumer Goods Industrial Goods Total
Accounts receivable, net $ 967  $ 5,501  $ 6,468  $ 3,746  $ 10,944  $ 14,690 
Inventories, net $ 19,259  $ 21,384  $ 40,643  $ 32,142  $ 34,840  $ 66,982 
Vendor deposits $ 3,269  $ 3,027  $ 6,296  $ 9,675  $ 8,800  $ 18,475 
The following table sets forth our net sales by major product category:
For the year ended December 31,
(in thousands) 2022 2021
Industrial Vape Products 53,664  25,312 
Other Industrial Products 35,287  30,643 
Consumer Products - Greenlane Brands 15,063  26,067 
Consumer Products - 3rd Party Brands 33,071  84,038 
Total net sales $ 137,085  $ 166,060 
The following table sets forth net sales disaggregated by geography:
For the year ended December 31,
(in thousands) 2022 2021
United States $ 126,333  $ 146,006 
Canada 5,810  9,717 
Europe 4,942  10,337 
Total net sales $ 137,085  $ 166,060 
The following table sets forth our long-lived assets by geographic area, which consist of property and equipment, net, and operating lease right-of-use assets:
As of December 31,
(in thousands) 2022 2021
United States $ 14,177  $ 29,186 
Canada 48  122 
Europe 279  671 
Total long-lived assets $ 14,504  $ 29,979 
See "Note 8—Supplemental Financial Statement Information" for goodwill by reportable segment.