07:50:48 EDT Fri 29 Mar 2024
Enter Symbol
or Name
USA
CA



Glass House Brands Inc
Symbol GLAS
Shares Issued 40,250,000
Close 2022-09-15 C$ 2.49
Market Cap C$ 100,222,500
Recent Sedar Documents

Glass House closes acquisition of Morro Bay dispensary

2022-09-15 14:00 ET - News Release

Mr. Kyle Kazan reports

GLASS HOUSE BRANDS CLOSES MORRO BAY NATURAL HEALING CENTER DISPENSARY ACQUISITION

All local regulatory approvals have been granted for Glass House Brands Inc.'s acquisition of the Natural Healing Center (NHC) dispensary located in Morro Bay, Calif., and the transaction has officially closed. Consolidation of the financial results of the Morro Bay store into Glass House's financials will begin effective immediately. With the closing of the Morro Bay dispensary transaction, Glass House will finish Q3 with seven retail dispensaries.

On May 12, 2022, Glass House announced that it had executed definitive agreements to acquire 100 per cent of the equity interests in three Natural Healing Center retail assets: two operating retail dispensaries (Lemoore and Morro Bay) and one retail dispensary (Turlock) scheduled to open in Q4 2022. This was followed by the announcement on Aug. 11, 2022, that Glass House had entered into an agreement to buy NHC's flagship Grover Beach dispensary and by an announcement on Sept. 7, 2022, that Glass House had closed the NHC Grover Beach and Lemoore dispensary acquisitions.

"I'd like to warmly welcome the staff at NHC Morro Bay into the Glass House family," stated Kyle Kazan, chairman and chief executive officer of Glass House Brands. "As the grand opening of the Turlock store nears, along with the closing of that transaction, I can't help but think back to the many months of due diligence and discussions with Valnette Garcia and her team, which convinced me that they have built a very special retail chain. The fact that Val and I are teammates on yet another store makes the closing of the Morro Bay dispensary (the third store to transfer) particularly special." Mr. Kazan further related: "We expect to close the acquisition of the Turlock store before the end of Q4 2022. As we stated when announcing the execution of definitive agreements for the NHC transaction, this acquisition will advance us further in our goal of becoming one of the largest retailers in the state of California, adds further support to our recently acquired Plus edibles business and provides incremental outlets for CPG [consumer packaged goods] sales as the SoCal farm continues to expand its output. Given NHC's positioning in limited-licence markets and its strong consumer following, we are excited to be adding these four dispensaries to our retail portfolio. The NHC transaction is expected to be immediately accretive to Glass House on both a revenue and EBITDA [earnings before interest, taxes, depreciation and amortization] basis."

Valnette Garcia, chief executive officer of NHC, commented, "I am excited to see the Morro Bay transaction finalized and look forward to sharing best practices to drive operating efficiencies, amplify purchasing bargaining power and heighten profitability while always providing our customers with a world-class experience and the highest-quality cannabis at an affordable price."

Additional NHC transaction details

At the close of each NHC dispensary acquisition, Glass House will be purchasing the businesses or assets of these dispensaries and will enter into a five-year lease at each location, with three renewal options for a total term of up to 20 years.

Closing of the Turlock store, the remaining NHC dispensary transaction, is contingent upon the transfer of ownership being approved by local regulators and is further subject to certain customary closing conditions for transactions of this nature, including the approval of the NEO Exchange.

Glass House expects to issue on closing a total of approximately two million new equity shares in conjunction with the closing of the Morro Bay acquisition. These shares will all be issued at $4.41 (U.S.) per equity share, the 25-day VWAP (volume-weighted average price) for Glass House Brands equity shares trading on the NEO Exchange calculated as of May 12, 2022, the date upon which definitive agreements were signed. Up to an additional 500,000 equity shares may be payable to the NHC sellers subject to certain contractual lockups and escrow holdbacks and generally will be paid out over two years if all equity shares are released after the lockup and holdback periods expire. They are also subject to certain contractual early-release triggers.

About Glass House Brands Inc.

Glass House Brands is one of the fastest-growing, vertically integrated cannabis companies in the United States with a dedicated focus on the California market and building leading, lasting brands to serve consumers across all segments. From its greenhouse cultivation operations to its manufacturing practices, from brand building to retailing, the company's efforts are rooted in the respect for people, the environment and the community that co-founders Kyle Kazan, chairman and chief executive officer, and Graham Farrar, board member and president, instilled at the outset. Through its portfolio of brands, which includes Glass House Farms, Forbidden Flowers and Mama Sue Wellness, Glass House Brands is committed to realizing its vision of excellence: outstanding cannabis products, produced sustainably, for the benefit of all.

We seek Safe Harbor.

© 2024 Canjex Publishing Ltd. All rights reserved.