RYTHM Reports Q2 2026 Financial Results

ROLLING MEADOWS – RHYTHM, Inc. posted revenue from continuing operations of $23 million in the second quarter of 2026, a 73% sequential increase that cleared management’s own guidance of 65% growth. For context. Total revenue across the same period one year earlier was $2 million – a year-over-year comparison that captures how fundamentally RYTHM’s business has been restructured around licensed IP and consumer-facing THC brands.

The company recorded net income of $1.2 million for the period, against a net loss of $7.4 million in Q2 2025. Adjusted EBITDA came in at $6.4 million, up from approximately breakeven in the prior quarter. Cash on hand grew to $41.9 million, driven by $8.7 million in operating cash flow.

Two factors shaped the results. The first was the restructured licensing agreement with Green Thumb Industries Inc., effective April 1, 2026, under which Green Thumb pays RYTHM a fixed annual cash fee of $70 million [indexed to inflation], covering brand IP across RYTHM, incredibles, Beboe, Dogwalkers, Doctor Solomon’s, &Shine, and Good Green. Q2 marked the first full quarter operating under those terms.

The second driver was THC beverage performance. Hemp-derived product revenue increased 67% sequentially, and depletion figures [distributor shipments to retailers counted in 24-can case equivalents] reached a record of approximately 25,000 cases across 18 states in June 2026, compared to roughly 7,000 in June 2025. Señorita and RYTHM beverages now sit on shelves in liquor, convenience, and grocery outlets, a distribution footprint that state-licensed Cannabis operators have never been able to replicate.

The quarter also produced a string of venue partnerships. Señorita was named the official THC beverage partner of Lollapalooza and Opry Entertainment Group venues, while RYTHM secured the same designation at Chicago’s Navy Pier. For a brand portfolio building its presence outside dispensary channels, major live events are among the highest-density consumer moments in the country.

On guidance, RYTHM disclosed none for Q3 2026. The company cited uncertainty tied to pending changes in federal law affecting hemp-derived THC products, scheduled to take effect November 12, 2026. The Continuing Appropriations and Extensions Act of 2026, passed November 12, 2025, includes a provision that would effectively prohibit the commercially sold hemp-derived THC products currently at the core of RYTHM’s consumer business. Congressional efforts to repeal, replace, or delay the provision until December 11, 2026, are ongoing, but the outcome remains uncertain.

Chairman and Interim CEO Ben Kovler described the company’s long-term conviction in the THC beverage category as unshaken, telling investors the company remained focused on “executing with discipline and continuing to build iconic brands that consumers trust.”

RYTHM’s Q2 2026 financial results illustrate what can happen when brand equity, structured royalty income, and rapid consumer adoption converge in the same quarter. The Green Thumb licensing arrangement has given the company a durable financial anchor. The beverage business, however, [its fastest-growing engine], is pressing toward a statutory deadline that only Congress can move. If legislators do not act before mid-November, a category that nearly quadrupled its case volume in twelve months could face prohibition before year-end. That tension is now the central variable for anyone following RYTHM, and for the hemp-derived THC space at large.