SecProbe.io

United States securities and exchange commission logo
February 28, 2024
Andrew Thut
Chief Executive Officer
4Front Ventures Corp.
7010 E. Chauncey Lane, Suite 235
Phoenix, AZ 85054
Re:4Front Ventures Corp.
Form 10-K for Fiscal Year Ended December 31, 2022
Response dated February 7, 2024
File No. 000-56075
Dear Andrew Thut:
            We have reviewed your February 7, 2024 response to our comment letter and have the
following comments.
            Please respond to this letter 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 a
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to this letter, we may have additional comments. Unless
we note otherwise, any references to prior comments are to comments in our  January 30,
2024 letter.
Form 10-K for Fiscal Year Ended December 31, 2022
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Non-GAAP Financial and Performance Measures
Adjusted EBITDA, page 38
1.We note your response to prior comment 1.  It is unclear from your response why
accounting for a failed lease back transaction under US GAAP, as though it did not fail,
does not constitute an individually tailored recognition method under Question 100.04 of
the Compliance and Disclosure Interpretations (“C&DIs”) for Non-GAAP Financial
Measures.  Please specifically tell us how you considered the guidance of Question 100.04
in determining that your presentation does not constitute an individually tailored
recognition method or remove this adjustment from future filings.

 FirstName LastNameAndrew  Thut
 Comapany Name4Front Ventures Corp.
 February 28, 2024 Page 2
 FirstName LastNameAndrew  Thut
4Front Ventures Corp.
February 28, 2024
Page 2
2.We note your response to comment 2 and that you believe that your Matteson facility
charges are not normal, recurring, cash operating expenses necessary to operate your
business. We note that your company appears to be growing and that you will continue to
construct new facilities as you grow. You further state your Matteson facility charges have
historically varied from period to period and are based on factors largely outside of your
control, such as labor costs and rates of inflation.  It appears you are trying to normalize
your costs.  Considering these factors outlined, please explain to us in more detail how
you considered if the Matteson facility start-up costs are normal, recurring, cash operating
expenses necessary to operate your business. Refer to the guidance in Questions 100.01 of
the C&DIs for Non-GAAP Financial Measures.
3.We note from your response to prior comment 3 that you have excluded $3.8 million of
litigation funding from your adjusted EBITDA.  However, your proposed disclosures in
response to comment 3 in our letter dated December 15, 2023 does not appear to exclude
the litigation funding from adjusted EBITDA.  Please address the following:

•Clarify if the $3.8 million litigation funding is included in your Adjusted EBITDA
subtotal for the year ended December 31, 2022.
•If litigation funding is not included in your Adjusted EBITDA subtotal, tell us which
line item in your Adjusted EBITDA reconciliation includes the adjustment to remove
this amount; and
•If the litigation funding is not included, please explain to us why you did not include
this funding in your measure.
4.We note your response to prior comment 4 and please address the following related to
your Adjusted EBITDA reconciliation:

•Tell us how the $7.4 million Employee Retention Tax Credit disclosed on pages 38
and F-37 is accounted for in your adjusted EBITDA presentation.  If this amount is
included in your Adjusted EBITDA, tell us how you considered the guidance of
Question 100.03 of the C&DIs for Non-GAAP Financial Measures.
•Explain why you are including bad debt expense within your Adjustments for
acquisition, transaction, and other non-cash costs line item. Explain to us in more
detail the nature of this item and tell us how you considered Question 100.01 of the
C&DIs for Non-GAAP Financial Measures.
5.We note within your Form 8-K filed on November 23, 2023 that you present non-GAAP
financial measures, but you do not present the most directly comparable GAAP measures
with equal or greater prominence. For each non-GAAP financial measure you present,
including within your press release headlines, please present the most directly comparable
GAAP measure with equal or greater prominence as required by Item 10(e)(1)(i)(A) of
Regulation S-K.

 FirstName LastNameAndrew  Thut
 Comapany Name4Front Ventures Corp.
 February 28, 2024 Page 3
 FirstName LastName
Andrew  Thut
4Front Ventures Corp.
February 28, 2024
Page 3
            Please contact Eric Atallah at 202-551-3663 or Tara Harkins at 202-551-3639 if you have
questions regarding comments on the financial statements and related matters.
Sincerely,
Division of Corporation Finance
Office of Life Sciences