Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING

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SEGMENT REPORTING
 6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
SEGMENT REPORTING

NOTE 12. 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 June 30, 2024, 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 second quarter of 2024. 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 Groove, Marley Natural, Keith Haring and Higher Standards, as well as lifestyle products and accessories from leading brands, such as 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 three and six months ended June 30, 2024 and 2023, respectively. There were no material intersegment sales during the three and six months ended June 30, 2024 and 2023, respectively.

 

The following table sets forth our net sales by major product category:

 

(in thousands)   Consumer Goods   Industrial Goods   Total   Consumer Goods   Industrial Goods   Total  
   

For the three months ended

June 30, 2024

  

For the three months ended

June 30, 2023

  
(in thousands)   Consumer Goods   Industrial Goods   Total   Consumer Goods   Industrial Goods   Total  
Net sales   $ 900   $ 1,752   $ 2,652   $ 6,025   $ 13,600   $ 19,625  
Cost of sales     757     884     1,641     4,222     10,829     15,051  
Gross profit   $ 143   $ 868   $ 1,011   $ 1,803   $ 2,771   $ 4,574  

 

(in thousands)   Consumer Goods   Industrial Goods   Total   Consumer Goods   Industrial Goods   Total  
    For the six months ended
June 30, 2024		   For the six months ended
June 30, 2023		  
(in thousands)   Consumer Goods   Industrial Goods   Total   Consumer Goods   Industrial Goods   Total  
Net sales   $ 3,174   $ 4,404   $ 7,578   $ 13,835   $ 29,749   $ 43,584  
Cost of sales     2,333     2,722     5,055     9,745     23,746     33,491  
Gross profit   $ 841   $ 1,682   $ 2,523   $ 4,090   $ 6,003   $ 10,093  

 

The following table sets forth specific asset categories which are reviewed by our CODM in the evaluation of operating segments:

 

(in thousands)   Consumer
Goods		   Industrial
Goods		   Total   Consumer
Goods		   Industrial
Goods		   Total  
    As of June 30, 2024   As of December 31, 2023  
(in thousands)   Consumer
Goods		   Industrial
Goods		   Total   Consumer
Goods		   Industrial
Goods		   Total  
Accounts receivable, net   $ 1,768   $ 155   $ 1,923   $ 642   $ 1,051   $ 1,693  
Inventories, net   $ 5,620   $ 11,648   $ 17,268   $ 8,881   $ 11,648   $ 20,529  
Vendor deposits   $ 1,930   $ 1,807   $ 3,737   $ 1,958   $ 1,807   $ 3,765