Green mushrooms have decent regeneration per ounce (600s/oz), but they are far inferior to store-bought Brown Mushrooms. For the amount green mushrooms sell, you could buy 2640 seconds of regeneration from brown mushrooms (vs. 60 from green mushrooms). In addition to the cost inefficiency, their regeneration per oz is lower than half of brown mushrooms': 600s/oz vs. 1320s/oz. In this way, one could think of green mushrooms to be compared to creature products: they weigh next to nothing, sell high, and are stackable. It is not recommended to use these as a source of food unless it is the only food available.
Can be found at daily spawns around Green Claw Swamp. There's one here and there's also one right next to the tree which you open to get the Blood Herb. One green mushroom is required during a mission for The Shattered Isles Quest to gain access to Talahu.