Glass House Brands Completes Acquisition of Morro Bay Natural Healing Center Dispensary


– All regulatory approvals have been granted for the acquisition of Morro Bay Natural Healing Center Dispensary by Glass House Brands, and the transaction is officially closed

– Consolidation of Morro Bay the store’s financial results in Glass House Brands’ financial statements will begin, effective immediately

– Glass House plans to close the Turlock transaction before the end of this year

LONG BEACH, California and TORONTO, September 15, 2022 /CNW/ – Glass House Brands Inc. (“Glass House” or the “Company”) (NEO: GLAS.AU) (NEO: GLAS.WT.U) (OTCQX: GLASF) (QTCQX: GHBWF), one of the fastest growing, vertically integrated cannabis companies in the United States, today announced that all local regulatory approvals have been granted for Glass House’s acquisition of the Natural Healing Center (NHC) dispensary located in Morro Bay, California, and the transaction is officially closed. Consolidation of the financial results of the Morro Bay storing in Glass House finances will begin immediately. With the closing of the Morro Bay dispensary transaction, Glass House will end the third quarter with 7 retail dispensaries.

Glass House Brands Inc. Logo (CNW Group/GH Group, Inc.)

On May 12, 2022Glass House announced that it has entered into definitive agreements (the “Agreements”) to acquire 100% equity interests in three retail assets of the Natural Healing Center: two operating retail dispensaries (Lemoore and Morro Bay) and a retail dispensary (Turlock) which is scheduled to open in the fourth quarter of 2022. For more details, please visit here. This was followed by the announcement of the August 11, 2022 that Glass House had reached an agreement to buy the flagship product from NHC Grover’s Beach dispensary (see here) and by an announcement on September 7, 2022 that Glass House had closed the NHC Grover Beach and Lemoore dispensary acquisitions (see here).

“I warmly welcome the staff of NHC Morro Bay to the Glass House family,” said Kyle Kazan, Chairman and CEO of Glass House Brands. “While the grand opening of the Turlock store is approaching with the closing of this transaction, I can’t help but think back to the many months of due diligence and discussions with Valnette Garcia and her team that convinced me that they had built a very special chain of retail stores. . The fact that Val and I are teammates at another store makes closing the Morro Bay dispensary (the 3rd store to be transferred) particularly special. Turlock1 store before the end of the fourth quarter of 2022. As we indicated when announcing the signing of definitive agreements for the NHC transaction, this acquisition will further advance us in our goal of becoming one of the largest retailers in the world. state of californiaprovides additional support to our recently acquired PLUS edibles business (please see here) and provides additional outlets for CPG sales as the SoCal farm continues to ramp up production. Given NHC’s positioning in limited licensing markets and strong customer base, we are excited to add these 4 dispensaries to our retail portfolio. The NHC transaction should be immediately accretive to Glass House, both in terms of revenue and EBITDA2.3 base.”

Valnette Garcia, CEO of NHC, said: “I am delighted to see the Morro Bay transaction completed and we look forward to sharing best practices to improve operational efficiency, amplify purchasing bargaining power and increase profitability, while still providing our customers with a world-class experience and the highest quality cannabis. at an affordable price. »

Additional NHC Transaction Details

Upon closing of the acquisition of each NHC dispensary, Glass House will purchase the businesses or assets of such dispensaries and enter into a 5-year lease at each location with three renewal options for a total term of up to 20 years.

Closure of the Turlock store, the remaining NHC dispensary transaction, is subject to the approval of the transfer of ownership by local regulatory authorities and is further subject to certain closing conditions customary for transactions of this nature, including the approval of the NEO Exchange.

Glass House expects to issue at closing an aggregate of approximately 2.0 million New Equity Shares in connection with the closing of the Morro Bay acquisition. These shares will all be issued to US$4.41 per capital share, the 25-day VWAP for Glass House Brands capital shares traded on the NEO Exchange calculated from the May 12, 2022, the date on which the definitive agreements were signed. Up to an additional 0.5 million shares may be payable to NHC sellers subject to certain contractual lock-ups and escrow holdbacks and will generally be paid over two years if all shares are released after lock-up periods have expired and restraint. . They are also subject to certain contractual early release triggers.

Footnotes and sources:

1.

The calculation and payment of consideration for the acquisition of Turlock will occur at the end of its sixth full quarter of operations, at 6x its annualized EBITDA for that quarter. Consideration will be paid 80% in new shares at the 25-day volume-weighted average (VWAP) price of Glass House shares at the end of this quarter and 20% in the form of a note unsecured promissory note bearing interest at 8% annually and maturing after the fourth anniversary of the closing date.

2.

Based on financial statements prepared by the unaudited management of the seller.

3.

EBITDA is a non-GAAP financial measure comprised of earnings before interest, taxes, depreciation and amortization. This non-GAAP measure is not a standardized financial measure used in the preparation of Glass House’s financial statements in accordance with US GAAP and may not be comparable to similar financial measures disclosed by other companies. For further information regarding the use of this non-GAAP financial measure and a reconciliation to the nearest GAAP measure, readers are referred to the section titled “Non-GAAP Financial Measures” in the Company’s Q2 2022 management report available at www.sedar.comwhich is incorporated herein by reference.

About Glass House Brands Inc.

Glass House Brands Inc. is one of the fastest growing vertically integrated cannabis companies in the United States, with a particular focus on the California market and build leading and sustainable brands to serve consumers in 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 co-founds Kyle Kazanchairman and chief executive officer, and Graham Farr, member of the board of directors and president, instilled at the start. Through its brand portfolio, which includes glass trusses, Forbidden Flowers and Mama Sue Wellness, Glass House Brands Inc. 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/.

Forward-looking statements

Certain information contained in this press release contains “forward-looking information” within the meaning of applicable securities laws. Such forward-looking information includes, but is not limited to, information regarding Glass House’s objectives and strategies to achieve those objectives, as well as information regarding its beliefs, plans, expectations, anticipations, forecasts, estimates and intentions. Such forward-looking information is identified by the use of words and phrases such as “will”, “may”, “would”, “should”, “could”, “expect”, “intend to “, “estimates”, “anticipates”, “plans”, “forecasts”, “believes” or “continues”, the negative of these terms and similar terminology, including references to assumptions, although all forward-looking information do not contain such terms and expressions. In particular, and without limiting the generality of the foregoing, the forward-looking information contained in this press release includes statements relating to: Turlock dispensary scheduled to open in the fourth quarter of 2022; NHC’s acquisitions advance Glass House in its goal of becoming one of the largest retailers in the state of california, adding further support to its recently acquired PLUS edibles business and providing additional opportunities for CPG sales as the SoCal Farm continues to ramp up production; the NHC transaction being immediately accretive to Glass House on a revenue and EBITDA basis; and with respect to the details of the transaction and the timing of the closing and issuance of shares. Forward-looking information involves known and unknown risks and uncertainties, many of which are beyond the control of the Company, which could cause actual results to differ materially from those disclosed or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, the closing of Turlock the acquisition not being on schedule or not at all; the integration and synergies of the NHC acquisitions into the Company’s business did not proceed as expected; and potential changes to the terms of the transaction, among other risk factors described in the Company’s Annual Information Form for the year ended December 31, 2021. Although the Company has attempted to identify key risk factors that could cause actual results to differ materially from those contained in the forward-looking information, there may be other risk factors that are not currently known to the Company or that it currently believes to be immaterial and that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. Accordingly, all forward-looking information contained in this press release is qualified by the foregoing cautionary statements, and there can be no assurance that the results or developments the Company anticipates will occur or, even if largely realize, that they will come true. have the expected consequences or effects on the Company’s business, financial condition or results of operations.

SOURCEGH Group, Inc.

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