Company: VREOF
Filing Date: 2025-03-21
Form Type: DEFM14C
Source: 0001140361-25-009815
Chunk: 348

Company: Vireo Growth Inc.
Filing Date: 2025-03-21
Form: DEFM14C
Chunk 348
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 or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control. Related parties may be individuals or corporate entities. A transaction is considered to be a related party when there is a transfer of resources or obligations between related parties. The Company entered into transactions with DRN Properties LP (“DRN”), which is a related party due to common ownership. The Company leases its cultivation and production facility, along with one of its dispensary and office spaces from DRN. The Company paid $1,991,575 and $1,933,568 for rent for the years ended December 31, 2024 and 2023, respectively. The lease expense totaled $2,116,468 of which $959,436 was included in the cost of goods sold and $1,157,032 was included in the general and administrative expenses in the consolidated statements of income for the years ended December 31, 2024 and 2023, respectively. No amounts were due to or due from DRN, LLC as of December 31, 2024. Related party operating lease right-of-use assets and operating lease liabilities totaled $10,372,474 and $10,919,485, respectively as of December 31, 2024. Related party operating lease right-of-use assets and operating lease liabilities totaled $11,791,216 and $15,365,177, respectively as of December 31, 2023. The weighted average remaining lease term for related party leases was approximately three years.

| 14. | CONCENTRATIONS |

Financial instruments which potentially subject the Company to concentration of credit risks include cash in financial institutions, which under U.S. federal law, money obtained from activities related to the marijuana industry cannot be federal insured. As of December 31, 2024, the Company had a balance of $16,066,753.

B-19

TABLE OF CONTENTS

| 15. | LOYALTY OBLIGATIONS |

The Company has customer loyalty programs where retail customers accumulate points for each dollar of spending, net of tax. These points are recorded as a contractual liability until customers redeem their points for discount on eligible products as part of an in-store sales transaction. In addition, the Company records a performance obligation as a reduction of revenue based on the estimated probability of point obligation incurred. The Company offers a customer loyalty rewards program that allows members to earn discounts on future purchases. Unused discounts earned by loyalty rewards