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Related Parties
 9 Months Ended
Sep. 30, 2025
Related Parties [Abstract]  
Related Parties

Note 17 — Related Parties

 

Some of the current and former officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities that become available. Ben Kovler, RYTHM’s Chairman and Interim Chief Executive Officer also serves as Green Thumb’s Chairman and Chief Executive Officer. RYTHM’s Chief Financial Officer is a Green Thumb employee and provides services under a shared services agreement. Including Mr. Kovler, two of RYTHM’s seven directors are affiliated with Green Thumb. Additional details regarding the shared services arrangement, convertible notes, and intellectual property and licensing agreements are provided in the sections below. 

 

The following table describes the net activity with entities identified as related parties to the Company:

 

   Three months ended
September 30,		   Nine months ended
September 30,		 
(In thousands)  2025   2024   2025   2024 
Green Thumb Industries  $3,831   $
—
   $8,757   $
—
 

 

The net activity of $3.8 million during the three months ended September 30, 2025 consists of $2.8 million of support services performed by Green Thumb on behalf of the Company, $1.4 million interest charges for the Convertible Notes, and $201 thousand non-licensing chargeback expense, offset by $500 thousand Licensing Revenue from Green Thumb. The $500 thousand of Licensing Revenue represents a net amount and includes $32 thousand of licensing costs. The $201 thousand of non-licensing chargeback expense represents a net amount and includes a $40 thousand inventory purchase from Green Thumb.

 

The net activity of $8.8 million during the nine months ended September 30, 2025 consists of $7.0 million of support services performed by Green Thumb on behalf of the Company, which is comprised of $6.5 million in salary charges, $562 thousand in non-salary charges, $2.2 million interest charges, and $383 thousand non-licensing chargeback expense, offset by $80 thousand of equipment sales and beverage sales and $745 thousand Licensing Revenue from the Company to Green Thumb. The $745 thousand of Licensing Revenue represents a net amount and includes $32 thousand of licensing costs. The $383 thousand of non-licensing chargeback expense represents a net amount and includes a $283 thousand hemp-derived inventory purchase from Green Thumb.

 

The following table summarizes the net related party payable as of September 30, 2025 and December 31, 2024:

 

   September 30,   December 31, 
(In thousands)  2025   2024 
Green Thumb Industries  $86,440   $10,487 

 

The net related party payable of $86.4 million as of September 30, 2025, consists of $4.1 million service charge payable, $82.0 million convertible notes payable, $521 thousand accrued interest payable, $40 thousand non-licensing chargeback payable, offset by $182 thousand receivable from Licensing Revenue.

 

Related Party Licensing Revenue

 

On May 20, 2025, and August 27, 2025, the Company acquired intellectual property rights to the incredibles brand and the Acquired Brands, as part of the related party acquisition of MC Brands and VCP, respectively. In connection with the acquisitions, the Company also licensed incredibles and the Acquired Brands brand back to a Green Thumb affiliate under a license arrangement and recognized related party Licensing Revenue. For further discussion on the acquisition and Licensing Revenue, refer to Note 7 and Note 2 included elsewhere in the notes to the unaudited condensed consolidated financial statements.

 

Convertible Notes

 

On November 5, 2024, the Company issued the November 2024 Note with an original principal amount of $10.0 million to RSLGH, an indirect wholly-owned subsidiary of Green Thumb, a related party. On May 22, 2025, the Company issued a May 2025 Note with an original principal amount of $27.0 million to RSLGH. On August 25, 2025, the Company issued an August 2025 Note with an original principal amount of $45.0 million to RSLGH. For further discussion on these notes, refer to Note 9 included elsewhere in the notes to the unaudited condensed consolidated financial statements.

Support Services Agreement

 

On May 20, 2025, the Company entered into an Amended and Restated Shared Services Agreement (the “Services Agreement”) with Vision Management Services, LLC (“VMS”), an indirect wholly-owned subsidiary of Green Thumb, a related party. Under the Services Agreement, VMS will provide certain administrative, supply chain, operations management, sales and marketing, and technical services to the Company and its subsidiaries. As consideration for those services, the Company pays VMS service fees equal to (i) 125% of the costs incurred by VMS in connection with any services provided by non-dedicated personnel and (ii) 100% of such costs incurred by VMS in connection with services provided by dedicated personnel and any third-party costs incurred in connection with the services. The service fees are payable in cash or, upon mutual agreement of the Company and VMS and to the extent permitted under applicable Nasdaq listing rules, in Common Stock or in pre-funded warrants, with the value per share of Common Stock or pre-funded warrant being equal to $26.68, the most recent closing price of the Company’s Common Stock on the Nasdaq Capital Market as of the time the Services Agreement was executed. The maximum cost for services provided by non-dedicated personnel during the one-year term of the Services Agreement may not exceed $3.0 million unless the parties otherwise agree in writing.