Quarterly report [Sections 13 or 15(d)]

RELATED PARTY TRANSACTIONS

v3.25.1
RELATED PARTY TRANSACTIONS
3 Months Ended
Mar. 31, 2025
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS
The Company’s corporate offices are leased from an entity in which the Company’s President and Chief Executive Officer (the "CEO") has an investment interest. This lease expires in October 2028 and contains a five-year extension option. Expenses incurred under this lease were approximately $77,000 and $41,000 for the three months ended March 31, 2025 and 2024, respectively.

The Company procures nutrients, lab equipment, cultivation supplies, furniture, and tools from an entity owned by the family of the Company’s Chief Operating Officer (the “COO”). Purchases from this entity totaled $1.4 million and $1.1 million in the three months ended March 31, 2025 and 2024, respectively.

The Company pays royalties on the revenue generated from its Betty’s Eddies product line to an entity owned by the COO and the Chief Commercial Officer (the “CCO") under a royalty agreement. Under this agreement, the royalty percentage on all sales of Betty’s Eddies products is 3.0% if sold directly by the Company and between 1.35% and 2.5% if licensed by the Company for sale by third parties. Future developed products (i.e., ice cream) have a royalty rate of 0.5% if sold directly by the Company and between 0.125% and 0.135% if licensed by the Company for sale by third parties. The aggregate royalties earned by the entity under this agreement were approximately $163,000 and $118,000 for the three months ended March 31, 2025 and 2024.

During the three months ended March 31, 2025 and 2024, one of the Company’s majority-owned subsidiaries paid or accrued distributions of approximately $1,800 and $1,200, respectively, to the CEO, who owns a minority equity interest in such subsidiary.

On June 10, 2024 (the "Membership Unit Purchase Date"), the CEO and COO purchased 5% and 15%, respectively, of the membership units of Mari Holdings Metropolis, LLC, one of the Company's majority-owned subsidiaries. These membership units were purchased from the previous minority interest-holder, and accordingly, the percentage of this majority-owned subsidiary held by noncontrolling interests remains unchanged. During the three months ended March 31, 2025, this majority-owned subsidiary accrued distribution payments of approximately $3,000 and $9,000 to the CEO and COO, respectively. There were no such payments in the three months ended March 31, 2024.
At March 31, 2025 and December 31, 2024, the Company had an outstanding accounts payable balance of approximately $286,000 and $251,000, respectively, primarily in connection with fixed assets purchased from a third-party company in which the CEO has a controlling interest. The March 31, 2025 balance also includes approximately $35,000 of accounts payable to that company assumed by MariMed as part of the FSC Acquisition. The Company also assumed an accounts payable amount of $21,000 from FSC to a second company in which the CEO has a controlling interest. These assumed liabilities related to cash advances to FSC in periods prior to the FSC Acquisition Date.

At March 31, 2025, the Company’s mortgages with Bank of New England and DSB were personally guaranteed by the CEO.