Property, equipment, and leasehold improvements, net consists of the following:

Depreciation expense related to property, equipment and leasehold improvements for the years ended December 31, 2019 and 2018 was $7.21 million and $4.71 million, respectively.

Assets Divested

On July 6, 2018, MediFarm LLC, a wholly-owned subsidiary of the Company, entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Exhale Brands Nevada III, LLC (the “Purchaser”) pursuant to which the Company agreed to sell and the Purchaser agreed to purchase substantially all of the assets of the Company related to the Company’s dispensary located at 1921 Western Ave., Las Vegas, NV 89102 (“Western”). The total consideration was $6.25 million in cash plus the value of the inventory on the closing date. The transaction closed on October 22, 2018 upon receiving approval from the Nevada Department of Taxation.

Management has concluded that the Western asset purchase agreement does not meet the definition of the sale of a business. Therefore, the relevant guidance is ASC 610-20 “Other Income.”The Company recognized a gain upon sale of the assets equal to the difference between the consideration paid and the book value of the assets as of the disposition date, less direct costs to sell.

The following table summarizes the transaction:

On July 31, 2019, MediFarm I Real Estate LLC entered into a purchase agreement to sell real property in Reno, NV to Green Wagon Reno LLC, an unaffiliated third party, for total cash consideration of $1.50 million.