View:
United States securities and exchange commission logo
January 14, 2022
Nicholas Vita
Chief Executive Officer
Columbia Care Inc.
680 Fifth Ave., 24th Floor
New York, NY 10019
Re: Columbia Care Inc.
Registration
Statement on Form 10-12G
Filed December 14,
2021
File No. 000-56294
Dear Mr. Vita:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Registration Statement on Form 10 filed December 14, 2021
Product Selection and Offerings, page 27
1. We note your response
to our prior comment 4 and reissue. Please disclose clearly
that none of your
products treat or cure any disease, that none of your products require
approval by the U.S.
Food and Drug Administration, and that none has been approved,
reviewed or cleared by
the FDA for any purpose. In this regard, we note that your
disclosure on page 28
indicates that certain of your products are "designed to provide
long-lasting relief
across a wide range of symptom and illness categories" and "address
the continuum of
patient conditions, symptoms and consumer needs."
Intellectual Property, page 32
2. We note your response
to our prior comment 5 and reissue in part. Please disclose the
jurisdictions in which
the applications for each patent family have been filed and the
expiration dates for
the applications of each patent family.
Nicholas Vita
FirstName LastNameNicholas Vita
Columbia Care Inc.
Comapany
January 14,NameColumbia
2022 Care Inc.
January
Page 2 14, 2022 Page 2
FirstName LastName
Results of Operations, page 120
3. We noted your response and revised disclosures related to prior
comment 7. Regarding
your explanations for the increase and/or decrease in revenues, cost
of sales and gross
profit, please address the following in revised disclosure for each
period presented, as
applicable:
You noted that your revenues are predominantly generated by retail
sales. We note
that during the nine months ended September 30, 2021, retail sales
represented
approximately 76% of net revenues. Please explain how the
remaining 25% of your
revenues are generated and explain the increase or decrease in
this revenue to the
corresponding period.
Clarify what "new market development" relates to and how this
impacted your gross
profit.
On a related note, please revise your disclosures throughout your
document to
maintain consistency regarding the significance of other market or
product
development. For instance, you disclose that revenues from outside
the U.S. are
immaterial, but you disclosures elsewhere in the document seem to
suggest
significant activity in those markets.
Clarify what "growth in our existing markets" relates to and how
this impacted your
gross profit.
Clarify why "same store sales" increased from prior period (i.e.,
disclose the extent to
which such growth was from volume and/or price).
You noted that during the nine months ended September 30, 2021 you
experienced
"$69,683 of organic growth as a result of increase in same store
sales year over year."
You also noted that during the nine months ended September 30,
2021 you
"experienced an increase in cost of sales of $68,821 related to an
increase in same
store sales year over year." This would appear to indicate that
gross profit increased
$862 in same store sales year over year which represents less than
1% of the increase
in gross profits. If this is true, please provide additional
disclosure to identify and
address this trend.
Clarify how your recent acquisitions contributed to the increase
in gross profits (i.e.
products acquired have lower cost of sales or visa versa).
Reliable data on the cannabis industry is not available, page 124
4. Please revise the last sentence under the heading to avoid the
implication that the
company is not responsible for the disclosure in the registration
statement. Also, please
tell us why is it appropriate to include the 2021 and 2026 market
projections on pages 18-
19 if they are based on unreliable market data.
Non-GAAP Measures, page 148
5. You continue to present Adjusted EBITDA margin on pages 25 and 26.
Please address the
following:
Revise your disclosure to include Adjusted EBITDA Margin as a
non-GAAP
Nicholas Vita
FirstName LastNameNicholas Vita
Columbia Care Inc.
Comapany
January 14,NameColumbia
2022 Care Inc.
January
Page 3 14, 2022 Page 3
FirstName LastName
measure and provide the required disclosures. Refer to release
No. 33-10751.
Further, tell us how you considered whether your disclosure of
Adjusted EBITDA
margin on pages 25 and 26, without balancing with actual GAAP
information
represents undue prominence.
Item 8. Legal Proceedings, page 151
6. We refer to your response to our prior comment 10 and note your
disclosure that there is
uncertainty whether there will be regulatory approval for the proposed
settlement in the
New York Proceeding. Accordingly, please revise this section to
quantify the dollar value
of the relief sought by the claimant in the New York Proceeding.
Item 10. Recent Sales of Unregistered Securities, page 154
7. We note your response to our prior comment 11 and reissue. Please
revise your
disclosures concerning each of the private placements to identify the
exemption relied
upon for the exemption and the facts supporting reliance upon that
exemption from
registration.
Columbia Care Inc. Notes to the Consolidated Financial Statements
Segment, geographic areas and customers information, page F-10
8. We noted your response and revised disclosure to prior comment 15. We
also note
your sales product mix presentation on pages 27 and 28 and the fact
that Green Leaf
Medical, LLC provides disaggregated revenue information on page F-136.
It appears that
disaggregated revenues information is available and would be valuable
to a reader's
investment decisions. As such, please provide the disaggregated
breakdown disclosures
pursuant to ASC 280-10-50-40 in the notes to the financial statements.
If such information
is not available, disclose that fact.
Revenue Recognition, page F-16
9. Please address the following regarding your responses and revised
disclosure related to to
prior comments 7 and 16, including your disclosure that approximately
25% of your
revenues are not generated by retail sales:
As previously requested, revise to separately quantify each of
your other revenue
streams, including management services and your Columbia National
Credit card
program, and disclose your revenue recognition policy for each.
If you believe your additional revenue streams are immaterial,
tell us the amounts
related to that programs, and disclose that assertion. As such,
ensure to balance your
disclosure of such programs elsewhere in your filing to
consistently describe the
significance of these programs.
Revise to provide footnote that disclosure that clearly presents
the assets, liabilities,
revenues and expenses related to your Columbia National Credit
card program, and
the line items in which those amounts are reflected.
Nicholas Vita
FirstName LastNameNicholas Vita
Columbia Care Inc.
Comapany
January 14,NameColumbia
2022 Care Inc.
January
Page 4 14, 2022 Page 4
FirstName LastName
As previously requested, please quantify net sales discounts
for each period presented
and identify any significant adjustments to your estimates. If
you believe your
revenue adjustments are immaterial, tell us the amounts, and
disclose that assertion.
COLUMBIA CARE, INC. AND TGS GLOBAL, LLC
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS,
page F-116
10. Please address the following regarding your unaudited pro forma
condensed combined
statements of operations:
You disclose on page F-116 that pro forma information is derived
from the TGS
Global LLC's historical unaudited condensed combined statement of
operations for
the fiscal year ended June 30, 2020 included in this Form 10
filing. However, the
condensed combined statement of operations line items for TSG
Global LLC do not
agree to the TSG Global LLC s historical unaudited condensed
combined statement
of operations for the period ended June 30, 2020 on page F-109.
Please revise the header to the unaudited pro forma condensed
combined statements
of operations on page F-117 to properly identify the period
covered by the TSG
Global LLC s historical unaudited condensed combined statement
of operations
column.
Please revise accordingly and provide additional quantitative and
narrative disclosure
about the period excluded from or included more than once to
inform readers about
the effects of unusual charges or adjustment in the omitted or
double-counted period.
If you used a period ending on other than June 30, 2020, for the
TSG Global LLC
column, please tell us why and provide us with your basis for
doing so. Refer to
Article 11 of Regulation S-X including paragraph 11(c)(3).
COLUMBIA CARE INC. AND GREEN LEAF MEDICAL, LLC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS,
page F-171
11. Please address the following regarding your historical unaudited
condensed combined
statement of operations presented on page F-172:
The condensed combined statement of operations line items to
the Green Leaf
Medical LLC's historical unaudited condensed combined statement
of operations for
the period ended March 31, 2021 do not agree to the Green Leaf
Medical
LLC's historical unaudited condensed combined statement of
operations on page F-
157. Please explain this discrepancy or revise accordingly and
provide additional
quantitative and narrative disclosure about the period excluded
from or included more
than once to inform readers about the effects of unusual charges
or adjustment in the
omitted or double-counted period.
We note your disclosure in the fourth bullet point that
Greenleaf s historical
unaudited condensed combined statement of operations presents the
period ended
Nicholas Vita
Columbia Care Inc.
January 14, 2022
Page 5
June 10, 2021. Revise to correct this disclosure as necessary. To
the extent your
presentation does present that period rather than the period ended
March 31, 2021,
please tell us how you determine that was appropriate in light of
the guidance of
Article 11 of Regulation S-X.
You disclose on page F-170 various events in the subsequent
footnote, including the
fact that the subsidiaries of Green Leaf that were spun-off and not
included in the
acquisition. Tell us how you considered these transactions in your
pro forma
presentation for adjustments and/or narrative disclosure. Refer to
Rule 11 of
Regulation S-X.
Please tell us why you have a separate pro forma presentation here
reflecting the
Green Leaf acquisition that does not reflect the TGS Global LLC
acquisition. Revise
to provide a single combined pro forma presentation reflecting all
significant
acquisitions as required by Article 11, or tell us how you
determined your
presentation was appropriate.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Sasha Parikh at (202) 551-3627 or Kevin Vaughn at (202)
551-3494 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Jordan Nimitz at (202) 551-6001 or Joe McCann at (202) 551-6262 with
any other
questions.
Sincerely,
FirstName LastNameNicholas Vita
Division of
Corporation Finance
Comapany NameColumbia Care Inc.
Office of Life
Sciences
January 14, 2022 Page 5
cc: James Guttman
FirstName LastName