RESTRUCTURING

9 Months Ended

Sep. 30, 2025

Restructuring and Related Activities [Abstract]

16. RESTRUCTURING

On July 22, 2024, the Company announced a strategic restructuring plan focused on long-term profitability and advancing growth initiatives in key areas of its Cultivation and Gardening segment such as its proprietary brands, commercial sales, and e-commerce business. The restructuring plan primarily included reductions in cost structure by closing and consolidating 12 redundant or underperforming retail locations, workforce reductions, and other operational improvements in inventory management, sales and marketing, and administrative activities.

The Company's restructuring and restructuring-related charges consisted of inventory disposal costs, retail location closure costs including related contract termination costs and fixed asset disposals, employee termination benefits, asset impairments including the impairment of operating lease right-of-use assets, and other associated costs.

The Company substantially completed its restructuring activities as of March 31, 2025. Overall, the Company incurred aggregate restructuring and restructuring-related costs of $3.5 million, of which $1.1 million were incurred during the nine months ended September 30, 2025, and $2.1 million were incurred during the three and nine months ended September 30, 2024.

These costs are presented on the Condensed Consolidated Statements of Operations in the following table. The Company does not expect to incur significant additional restructuring and restructuring-related costs in future periods.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Cultivation and Gardening segment:
Cost of sales(1)	$	—	$	1,039	$	—	$	1,039
Gross profit	—		(1,039)		—		(1,039)
Store operations and other operational expenses (2)	—		658		765		658
Segment operating loss	—		(1,697)		(765)		(1,697)
Corporate expenses:
Selling, general, and administrative (3)	—		88		376		88
Impairment loss (4)	—		220		—		220
Other expense (5)	—		50		—		50
Total restructuring and restructuring-related charges	$	—	$	(2,055)	$	(1,141)	$	(2,055)

(1) Includes inventory disposal costs
(2) Costs consist primarily of property and equipment disposals, lease contract termination costs and employee termination benefits
(3) Costs consist of corporate operational and administrative contract terminations and employee termination benefits
(4) Consists of asset impairments for operating lease right-of-use assets
(5) Includes non-operating losses related to retail location closures

In conjunction with the Company's restructuring activities related to operational and administrative improvements, the Company reassessed and shortened the estimated useful life of certain capitalized software assets. These capitalized software assets became fully amortized and were retired during the nine months ended September 30, 2025.

The liabilities associated with restructuring costs were included in Accrued liabilities and Payroll and payroll tax liabilities on the Condensed Consolidated Balance Sheets. Activities related to liabilities incurred under the restructuring plan were as follows:


	Retail Location Closures		Termination Benefits		Total
Balance as of January 1, 2025	$	115	$	9	$	124
Additions	765		—		765
Payments and other adjustments	(880)		(9)		(889)
Balance as of September 30, 2025	$	—	$	—	$	—

GrowGeneration Corp. 10-Q