RELATED PARTY TRANSACTIONS |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| 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 $70,000 and $77,000 for the three months ended March 31, 2026 and 2025, 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 in each of the three months ended March 31, 2026 and 2025. 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 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 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 $174,000 and $163,000 for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026 and 2025, one of the Company’s majority-owned subsidiaries paid or accrued distributions of $1,995 and $1,785, respectively, to the CEO, who owns a minority equity interest in such subsidiary. The CEO and COO own 5% and 15%, respectively, of the membership units of Mari Holdings Metropolis, LLC, one of the Company's majority-owned subsidiaries. During the three months ended March 31, 2026, this majority-owned subsidiary recorded distributions of $5,000 and $15,000 to the CEO and COO, respectively. During the three months ended March 31, 2025, this majority-owned subsidiary accrued distribution payments of $3,000 and $9,000 to the CEO and COO, respectively. At March 31, 2026 and December 31, 2025, the Company had an outstanding accounts payable balance of approximately $224,000 and $448,000, respectively, primarily in connection with fixed assets purchased from a third-party company in which the CEO has a controlling interest. The Company assumed approximately $35,000 of accounts payable to that company as part of the FSC Acquisition, which is included in the previously described balances. 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, which amount was outstanding at each of March 31, 2026 and December 31, 2025. These assumed liabilities related to cash advances to FSC in periods prior to the FSC Acquisition Date. In addition, the Company had outstanding payables to the CEO aggregating approximately $259,000 and $50,000 at March 31, 2026 and December 31, 2025, respectively, for amounts that the CEO had advanced to the Company for certain operating activities. At March 31, 2026, the Company’s mortgages with Bank of New England and DSB were personally guaranteed by the CEO.
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