Glass House Brands completes acquisition of PLUS, a leading California edibles brand
Acquisition Makes Glass House the Only Company to Top 5 in California’s Flowers and Edibles Categories¹
LONG BEACH, Calif. and TORONTO, April 28, 2022 /CNW/ – Glass House Brands Inc. (“Glass House” or the “Company”) (NEO: GLAS.AU) and (NEO: GLAS.WT.U)(OTCQX: GLASF) and (OTCQX: GHBWF), a one of the fastest growing vertically integrated cannabis companies in the United States, and Plus Products Inc. (“PLUS”) today announced that Glass House has completed the acquisition of the business of PLUS, a leading cannabis edibles company based in California2. The Company acquired PLUS for approximately $25.6 million3 by a combination of unsecured convertible debt4 and equity, plus an additional performance-based consideration.
With a mission to create the largest cannabis brand building platform in the Californiawe are delighted to announce the closing of our PLUS acquisition, positioning Glass House as the only company to achieve top 5 rankings in the flower and edibles segments in the California market.
Kyle KazanChairman and CEO of Glass House
Edibles are a key part of our growth strategy as we further expand our product portfolio and build brand awareness. We are incredibly excited to begin our work with the PLUS team to expand the presence of their premium products in our own retail stores and through our distribution network.
Kazan added: “Combining our existing brand platform with PLUS will result in a substantial increase in our Total Addressable Market (“TAM”) opportunity in California and eventually across the United States. The overlap between active Glass House Brands and PLUS accounts was less than 25% in the first quarter, with Glass House stronger in Southern California and MORE louder in Northern California. Additionally, we are aiming to expand the PLUS brand nationwide, which would increase its MPR by approximately 550% compared to operating in California only5.”
Mr. Kazan added: “The positive side of the current struggle in the California market is that we believe we will find more attractive acquisition targets that are win-win propositions for all parties, including the consumer. We look forward to entering this next stage of growth by delivering on PLUS and Glass House’s shared vision of bringing innovative, high-quality cannabis products to consumers.
The company’s homegrown cannabis brand, Glass House Farms, was the #1 ranked flower brand in terms of sales in California in Q1 20226. PLUS is a leading edibles brand in California and was the #4 ranked edibles brand in California by sales in Q1 20226. Based on brand awareness, a common CPG metric measuring brand strength, PLUS is the #1 ranked brand in California in the gummy segment, the largest segment in the edible category7.
- BDS Analysis
- Specifically, the Company acquired the US business assets of Plus Products Inc. by merging a wholly owned subsidiary with Plus Products Holdings Inc., a wholly owned subsidiary of PLUS.
- Based on the 10-day volume-weighted average (“VWAP”) price of Glass House shares on NEO prior to the execution date of the definitive acquisition agreement on December 17, 2021 ($4.08 at 16/12/21 closing). Assuming full vesting of the 1,794,791 RSUs that will be granted under the transaction, the total purchase price would be approximately $33 million.
- Principal of CA$20,504,850.96 and accrued interest converted at 0.78 CAD:USD
- Based on BDSA 2026e cannabis market size projections for the United States (US$46 billion) and California (US$7.1 billion).
- BDSA Retail Sales Tracking
- Brightfield Consumer Study (N=1,535 California edible consumers)
PLUS is a cannabis and hemp food company focused on using nature to balance consumers’ lives. PLUS’ mission is to make cannabis safe and accessible – it starts with high-quality products that deliver consistent consumer experiences. PLUS is headquartered in San Mateo, California.
About Glass House Brands
Glass House Brands is one of the fastest growing vertically integrated cannabis companies in the United States, with a particular focus on the California market and building leading, enduring brands to serve consumers across all segments. From its greenhouse operations to its manufacturing practices, from brand building to retail, the company’s efforts are rooted in respect for people, the environment and the community that the co-founders Kyle Kazan, President and CEO, and Graham Farrar, Board Member and President, instilled initially. Through its portfolio of brands, which includes Glass House Farms, Forbidden Flowers and Mama Sue Wellness, Glass House Brands is committed to achieving its vision of excellence: exceptional cannabis products, produced sustainably, for the benefit of all. For more information and company updates, visit www.glasshousebrands.com and https://ir.glasshousebrands.com/contact/email-alerts/.
original press release
Note: The “Sources” section of this press release has been revised after the company issued a correction on 04/29/22 at 10:36 p.m. ET.
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