21:49:04 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



Glass House Brands Inc
Symbol GLAS
Shares Issued 40,250,000
Close 2023-04-24 C$ 2.88
Market Cap C$ 115,920,000
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Glass House closes acquisition of NHC dispensary

2023-04-25 12:41 ET - News Release

Mr. Kyle Kazan reports

GLASS HOUSE BRANDS CLOSES TURLOCK NATURAL HEALING CENTER DISPENSARY ACQUISITION

All local regulatory requirements have been fulfilled for Glass House Brands Inc.'s acquisition of the Natural Healing Center (NHC) dispensary located in Turlock, Calif., and the transaction has officially closed. Consolidation of the financial results of the Turlock store into Glass House's financials will begin effective immediately. The store will begin serving customers by the end of April and the grand opening ribbon-cutting ceremony is scheduled for Friday, May 19, 2023, at 10 a.m. PT.

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 at a future date. 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, followed by an announcement on Sept. 7, 2022, that Glass House had closed the NHC Grover Beach and Lemoore dispensary acquisitions and an announcement on Sept. 15, 2022, that Glass House had closed the Morro Bay acquisition.

"Closing the Turlock acquisition is another major milestone for Glass House," said Kyle Kazan, co-founder, chairman and chief executive officer of Glass House Brands. "Turlock is the newest location in the NHC portfolio and well positioned for success as one of only three dispensary licences in a city with a large California State University campus. Valnette Garcia and the rest of the NHC team have done an outstanding job building a retail brand consistently recognized for its world-class customer experience. In 2021, the other stores we acquired from NHC -- Grover Beach, Morro Bay and Lemoore -- were all named best cannabis dispensary in their respective areas by Weedmaps.

"Vertical integration is a core strength of our model, a key point of differentiation, and we've made significant progress expanding our retail presence in a short period of time. We entered 2022 with just three locations, purchased the remaining 50-per-cent interest in The Pottery dispensary in July, closed on the four NHC locations starting in mid-August, opened the Farmacy Isla Vista in December and the Farmacy Santa Ynez in January. We now have a total of 10 retail locations and are well on our way toward our goal of becoming one of the largest cannabis retailers in the state of California. Our expanding footprint provides significant head room for growing our CPG sales and further improving profitability as we leverage the power of our vertical model."

Hilal Tabsh, chief revenue officer of Glass House Brands, commented: "Our newest retail store in Turlock is our third opening in the space of four months. Glass House now fully operates four NHC branded dispensaries in central and northern California, providing us with a strategic geographic advantage. We look forward to providing Turlock customers a world-class shopping experience and the highest-quality cannabis at an affordable price "

Located at 3401 W Monte Vista Ave. in Turlock, Calif., the new Natural Healing Center dispensary is in the primary business district just off the Golden State Highway and minutes from Cal State University Stanislaus. The store offers a convenient shopping environment, knowledgeable staff, and carefully curated selection of high-quality recreational and medicinal cannabis products, including premium flower, vaporizers, beverages, edibles and concentrates.

Additional NHC transaction details

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

Calculation and payment of consideration for the acquisition of Turlock will occur at the end of its sixth full calendar quarter of operations, at six times its annualized EBITDA (earnings before interest, taxes, depreciation and amortization) in that quarter. The consideration will be paid 80 per cent in new equity shares priced at the 25-day volume-weighted average price (VWAP) of Glass House equity shares as of the day before the date that the Turlock earnout payment is finally determined, and 20 per cent in the form of an unsecured promissory note bearing interest of 8 per cent annually and maturing after the four-year anniversary of the closing date. The equity shares that may be payable to the NHC sellers as part of the Turlock acquisition are subject to certain escrow holdbacks and generally will be paid out over four years following the closing date if all equity shares are released after the holdback periods expire.

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 Mr. Kazan, chairman and CEO, and Graham Farrar, board member and president, instilled at the outset. Through its portfolio of brands, which includes Glass House Farms, Plus Products, Allswell, 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.

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