🔖 What This Document Is

This is an 8-K filing—a report public companies use to announce major events. It contains two key exhibits: an amendment to a key brand licensing agreement and a press release explaining the change. The core news is a shift in how Green Thumb pays to use major cannabis brands.

🏢 Who Is Involved

Green Thumb Industries (GTBIF) is a major U.S. cannabis company that makes products and owns "RISE Dispensaries." They license several popular brand names to sell their products.

RYTHM, Inc. (RYM) is a separate, publicly-traded cannabis company that owns the brand intellectual property (IP). Green Thumb is a significant shareholder in RYTHM.

👉 In simple terms: Green Thumb pays RYTHM for the right to use brands like RYTHM and incredibles on its products. This agreement changes how those payments work.

💰 The Financial Shift: From Variable to Fixed

The big change is moving from revenue-based licensing fees to fixed annual fees. This creates more predictable costs for Green Thumb.

New Annual Fee: Starting April 1, 2026, Green Thumb will pay a fixed $70 million per year collectively for all the licensed brands. This is payable in monthly installments of about $5.83 million.
Annual Increases: Each year on January 1, the fee will increase. The increase is calculated as two times the U.S. Consumer Price Index (CPI) inflation rate. There's a cap: the annual increase can never exceed 10%.
Example Given: If inflation (CPI) is 2.4% in 2027, the fee would jump by 4.8% (2x CPI), adding $3.07 million to make the 2027 total $67.07 million.

👉 Why it matters: Green Thumb is locking in its costs. This protects it if its sales of these brands grow faster than expected (since fees won't rise with revenue) but also means it must pay the full amount even if sales dip. For RYTHM, it guarantees a large, predictable cash flow.

📜 The Brands Under Deal

This fixed fee covers the licensing rights to a portfolio of well-known cannabis brands:

RYTHM Premium Cannabis
incredibles
Beboe
Dogwalkers
Doctor Solomon's
&Shine
Good Green

🔮 Why Make This Change Now?

The press release gives two key reasons from Green Thumb's CEO, Ben Kovler:

Aligned Shareholder Interests: As a "significant shareholder in RYTHM," Green Thumb believes its own shareholders will ultimately benefit from RYTHM's growth and value creation. A big, stable fee payment supports RYTHM's financials.
Long-Term Commitment: Green Thumb states it has "grown and scaled these brands for more than a decade" and remains committed to expanding them. Switching to a fixed fee signals a long-term partnership focus.

⚖️ Big Picture: Strengths & Risks

👍 Strengths (Predictability): Green Thumb gains clear, forecastable costs for its key brands, which simplifies budgeting and financial planning. The partnership with a major shareholder is reinforced.
⚠️ Risks (Fixed Obligation): The company is now obligated to pay $70 million+ annually, regardless of business conditions or sales performance for these brands. This is a significant fixed cost on its income statement.

🧠 The Analogy

Imagine you're a restaurant owner renting a prime location. Instead of paying the landlord a percentage of your sales (which could skyrocket or plummet), you negotiate a fixed monthly rent that increases slightly with inflation each year. You get cost certainty, and the landlord gets a guaranteed income stream. That's essentially what Green Thumb and RYTHM have done here with their brand "rent."

📇 Key Contacts & People

Ben Kovler: Founder, Chairman and Chief Executive Officer of Green Thumb.
Brad Asher: Authorized Signatory for Licensor (VCP IP Holdings, LLC, a RYTHM subsidiary).
Anthony Georgiadis: Authorized Signatory for Licensee (GTI Core, LLC, a Green Thumb subsidiary).
Andy Grossman: EVP, Capital Markets & Investor Relations. Contact: [email protected], 310-622-8257
Media Contact: [email protected]

🧩 Final Takeaway

Green Thumb Industries is shifting its brand licensing costs to a predictable, fixed fee of $70 million per year, with built-in inflation adjustments. This simplifies its financial planning and deepens its strategic financial ties with brand owner RYTHM, where it is also a major investor.

Green Thumb Industries Inc. — 8-K Filing