v3.20.2
Leases
6 Months Ended
Jun. 30, 2020
Leases [Abstract]  
Leases LEASES
Greenlane as a Lessee
As of June 30, 2020, we had 12 facilities financed under operating leases consisting of warehouses, offices, and retail stores, with lease term expirations between 2020 and 2026. Lease terms are generally three years to nine years for warehouses, office space and retail store locations. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Beginning January 2020, we began taking steps to optimize our distribution network, transitioning to a more streamlined distribution center network with fewer, centrally-located, highly automated facilities. In May 2020, we closed our Delta, B.C, Canada distribution center, and in June 2020 we terminated the lease agreements for our Torrance, California distribution center and Toronto, Canada office location. In March 2020, we entered into a new operating lease agreement for a new retail store location in Barcelona, Spain and we permanently closed our Ponce City Market retail store. During the second quarter of 2020, we entered into service agreements with two third-party logistics facilities located in Hebron, Kentucky and Delta, B.C., Canada, both of which will serve as improved replacement facilities to the distribution centers we have closed.
During the six months ended June 30, 2020, we recorded approximately $1.7 million in charges related to these closures, including $1.3 million related to right-of-use asset impairments, $0.1 million related to impairments of leasehold improvements, and a lease cancellation fee of approximately $0.3 million. These charges were offset by the derecognition of the associated operating lease liabilities of approximately $1.4 million, recorded within "general and administrative expenses" in our condensed consolidated statement of operations and comprehensive loss for the six months ended June 30, 2020.
Additionally, we plan to close our Jacksonville, Florida and Visalia, California distribution centers in the third quarter of 2020. The aggregate right-of-use asset and operating lease liability balances for these distribution centers were approximately $0.5 million as of June 30, 2020.
The following table provides details of our future minimum lease payments under finance and operating lease liabilities recorded in our condensed consolidated balance sheet as of June 30, 2020. The table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown.
(in thousands) Finance Leases Operating Leases Total
Remainder of 2020 $ 62    $ 466    $ 528   
2021 114    958    1,072   
2022 52    1,060    1,112   
2023 18    1,023    1,041   
2024   714    718   
Thereafter —    241    241   
Total minimum lease payments 250    4,462    4,712   
Less: imputed interest 14    464    478   
Present value of minimum lease payments 236    3,998    4,234   
Less: current portion 110    792    902   
Long-term portion $ 126    $ 3,206    $ 3,332   
Rent expense under operating leases was approximately $0.4 million and $0.9 million for the three and six months ended June 30, 2020. Rent expense under operating leases was approximately $0.2 million and $0.4 million for the three and six months ended June 30, 2019.
The majority of our finance lease obligations relate to leased warehouse equipment. Payments under our finance lease agreements are fixed for terms ranging from three to five years. We recorded approximately $0.2 million and $0.3 million of finance lease assets, net within "property and equipment, net" as of June 30, 2020 and December 31, 2019, and the related liabilities within "current portion of finance leases" and "finance leases, less current portion" in our condensed consolidated balance sheets.
The following expenses related to our finance and operating leases were included in "general and administrative expenses" within our condensed consolidated statements of operations and comprehensive loss for the six months ended June 30, 2020 and 2019:
Six Months Ended June 30,
(in thousands) 2020 2019
Finance lease costs
Amortization of leased assets $ 58    $ 62   
Interest of lease liabilities 10    12   
Operating lease costs
Operating lease cost
571    245   
Variable lease cost
63    101   
Total lease costs $ 702    $ 420   

The table below presents lease-related terms and discount rates as of June 30, 2020:
June 30, 2020
Weighted average remaining lease terms  
Operating leases 4.3 years
Finance leases 2.4 years
Weighted average discount rate
Operating leases 4.9  %
Finance leases 6.6  %
Greenlane as a Lessor
We have five operating leases for office space leased to third-party tenants in our corporate headquarters building in Boca Raton, Florida. For the three and six months ended June 30, 2020 and 2019, rental income of approximately $0.2 million, and $0.3 million related to these operating leases was included within “other income, net” in our condensed consolidated statements of operations and comprehensive loss. The following table represents the maturity analysis of undiscounted cash flows related to lease payments which we expect to receive from our existing operating lease agreements with tenants:
Rental Income (in thousands)
Remainder of 2020 $ 335   
2021 665   
2022 198   
2023 96   
Thereafter 120   
Total $ 1,414   
Leases LEASES
Greenlane as a Lessee
As of June 30, 2020, we had 12 facilities financed under operating leases consisting of warehouses, offices, and retail stores, with lease term expirations between 2020 and 2026. Lease terms are generally three years to nine years for warehouses, office space and retail store locations. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Beginning January 2020, we began taking steps to optimize our distribution network, transitioning to a more streamlined distribution center network with fewer, centrally-located, highly automated facilities. In May 2020, we closed our Delta, B.C, Canada distribution center, and in June 2020 we terminated the lease agreements for our Torrance, California distribution center and Toronto, Canada office location. In March 2020, we entered into a new operating lease agreement for a new retail store location in Barcelona, Spain and we permanently closed our Ponce City Market retail store. During the second quarter of 2020, we entered into service agreements with two third-party logistics facilities located in Hebron, Kentucky and Delta, B.C., Canada, both of which will serve as improved replacement facilities to the distribution centers we have closed.
During the six months ended June 30, 2020, we recorded approximately $1.7 million in charges related to these closures, including $1.3 million related to right-of-use asset impairments, $0.1 million related to impairments of leasehold improvements, and a lease cancellation fee of approximately $0.3 million. These charges were offset by the derecognition of the associated operating lease liabilities of approximately $1.4 million, recorded within "general and administrative expenses" in our condensed consolidated statement of operations and comprehensive loss for the six months ended June 30, 2020.
Additionally, we plan to close our Jacksonville, Florida and Visalia, California distribution centers in the third quarter of 2020. The aggregate right-of-use asset and operating lease liability balances for these distribution centers were approximately $0.5 million as of June 30, 2020.
The following table provides details of our future minimum lease payments under finance and operating lease liabilities recorded in our condensed consolidated balance sheet as of June 30, 2020. The table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown.
(in thousands) Finance Leases Operating Leases Total
Remainder of 2020 $ 62    $ 466    $ 528   
2021 114    958    1,072   
2022 52    1,060    1,112   
2023 18    1,023    1,041   
2024   714    718   
Thereafter —    241    241   
Total minimum lease payments 250    4,462    4,712   
Less: imputed interest 14    464    478   
Present value of minimum lease payments 236    3,998    4,234   
Less: current portion 110    792    902   
Long-term portion $ 126    $ 3,206    $ 3,332   
Rent expense under operating leases was approximately $0.4 million and $0.9 million for the three and six months ended June 30, 2020. Rent expense under operating leases was approximately $0.2 million and $0.4 million for the three and six months ended June 30, 2019.
The majority of our finance lease obligations relate to leased warehouse equipment. Payments under our finance lease agreements are fixed for terms ranging from three to five years. We recorded approximately $0.2 million and $0.3 million of finance lease assets, net within "property and equipment, net" as of June 30, 2020 and December 31, 2019, and the related liabilities within "current portion of finance leases" and "finance leases, less current portion" in our condensed consolidated balance sheets.
The following expenses related to our finance and operating leases were included in "general and administrative expenses" within our condensed consolidated statements of operations and comprehensive loss for the six months ended June 30, 2020 and 2019:
Six Months Ended June 30,
(in thousands) 2020 2019
Finance lease costs
Amortization of leased assets $ 58    $ 62   
Interest of lease liabilities 10    12   
Operating lease costs
Operating lease cost
571    245   
Variable lease cost
63    101   
Total lease costs $ 702    $ 420   

The table below presents lease-related terms and discount rates as of June 30, 2020:
June 30, 2020
Weighted average remaining lease terms  
Operating leases 4.3 years
Finance leases 2.4 years
Weighted average discount rate
Operating leases 4.9  %
Finance leases 6.6  %
Greenlane as a Lessor
We have five operating leases for office space leased to third-party tenants in our corporate headquarters building in Boca Raton, Florida. For the three and six months ended June 30, 2020 and 2019, rental income of approximately $0.2 million, and $0.3 million related to these operating leases was included within “other income, net” in our condensed consolidated statements of operations and comprehensive loss. The following table represents the maturity analysis of undiscounted cash flows related to lease payments which we expect to receive from our existing operating lease agreements with tenants:
Rental Income (in thousands)
Remainder of 2020 $ 335   
2021 665   
2022 198   
2023 96   
Thereafter 120   
Total $ 1,414   
Leases LEASES
Greenlane as a Lessee
As of June 30, 2020, we had 12 facilities financed under operating leases consisting of warehouses, offices, and retail stores, with lease term expirations between 2020 and 2026. Lease terms are generally three years to nine years for warehouses, office space and retail store locations. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Beginning January 2020, we began taking steps to optimize our distribution network, transitioning to a more streamlined distribution center network with fewer, centrally-located, highly automated facilities. In May 2020, we closed our Delta, B.C, Canada distribution center, and in June 2020 we terminated the lease agreements for our Torrance, California distribution center and Toronto, Canada office location. In March 2020, we entered into a new operating lease agreement for a new retail store location in Barcelona, Spain and we permanently closed our Ponce City Market retail store. During the second quarter of 2020, we entered into service agreements with two third-party logistics facilities located in Hebron, Kentucky and Delta, B.C., Canada, both of which will serve as improved replacement facilities to the distribution centers we have closed.
During the six months ended June 30, 2020, we recorded approximately $1.7 million in charges related to these closures, including $1.3 million related to right-of-use asset impairments, $0.1 million related to impairments of leasehold improvements, and a lease cancellation fee of approximately $0.3 million. These charges were offset by the derecognition of the associated operating lease liabilities of approximately $1.4 million, recorded within "general and administrative expenses" in our condensed consolidated statement of operations and comprehensive loss for the six months ended June 30, 2020.
Additionally, we plan to close our Jacksonville, Florida and Visalia, California distribution centers in the third quarter of 2020. The aggregate right-of-use asset and operating lease liability balances for these distribution centers were approximately $0.5 million as of June 30, 2020.
The following table provides details of our future minimum lease payments under finance and operating lease liabilities recorded in our condensed consolidated balance sheet as of June 30, 2020. The table below does not include commitments that are contingent on events or other factors that are currently uncertain or unknown.
(in thousands) Finance Leases Operating Leases Total
Remainder of 2020 $ 62    $ 466    $ 528   
2021 114    958    1,072   
2022 52    1,060    1,112   
2023 18    1,023    1,041   
2024   714    718   
Thereafter —    241    241   
Total minimum lease payments 250    4,462    4,712   
Less: imputed interest 14    464    478   
Present value of minimum lease payments 236    3,998    4,234   
Less: current portion 110    792    902   
Long-term portion $ 126    $ 3,206    $ 3,332   
Rent expense under operating leases was approximately $0.4 million and $0.9 million for the three and six months ended June 30, 2020. Rent expense under operating leases was approximately $0.2 million and $0.4 million for the three and six months ended June 30, 2019.
The majority of our finance lease obligations relate to leased warehouse equipment. Payments under our finance lease agreements are fixed for terms ranging from three to five years. We recorded approximately $0.2 million and $0.3 million of finance lease assets, net within "property and equipment, net" as of June 30, 2020 and December 31, 2019, and the related liabilities within "current portion of finance leases" and "finance leases, less current portion" in our condensed consolidated balance sheets.
The following expenses related to our finance and operating leases were included in "general and administrative expenses" within our condensed consolidated statements of operations and comprehensive loss for the six months ended June 30, 2020 and 2019:
Six Months Ended June 30,
(in thousands) 2020 2019
Finance lease costs
Amortization of leased assets $ 58    $ 62   
Interest of lease liabilities 10    12   
Operating lease costs
Operating lease cost
571    245   
Variable lease cost
63    101   
Total lease costs $ 702    $ 420   

The table below presents lease-related terms and discount rates as of June 30, 2020:
June 30, 2020
Weighted average remaining lease terms  
Operating leases 4.3 years
Finance leases 2.4 years
Weighted average discount rate
Operating leases 4.9  %
Finance leases 6.6  %
Greenlane as a Lessor
We have five operating leases for office space leased to third-party tenants in our corporate headquarters building in Boca Raton, Florida. For the three and six months ended June 30, 2020 and 2019, rental income of approximately $0.2 million, and $0.3 million related to these operating leases was included within “other income, net” in our condensed consolidated statements of operations and comprehensive loss. The following table represents the maturity analysis of undiscounted cash flows related to lease payments which we expect to receive from our existing operating lease agreements with tenants:
Rental Income (in thousands)
Remainder of 2020 $ 335   
2021 665   
2022 198   
2023 96   
Thereafter 120   
Total $ 1,414