Glass House Brands Inc. (OTCQX: GLASF) (OTCQX: GHBWF) has entered into a senior secured term loan agreement with a US-based private credit investment fund for up to $100 million, with an initial circulation of $50 million. Glass House said the initial term loan has a variable interest rate currently set at 10% per annum, and in no event will it exceed 12% per annum. The money will be used to fund the phased modernization of the company’s approximately 5.5 million square foot grow facility currently being renovated at Camarillo, California and for general corporate purposes.
“Since our inception, our vision has been to become the largest cannabis brand building platform in California and this loan agreement provides us with a non-dilutive capital injection to fund the complete renovation of our SoCal facility as we continue to pursue this goal,” said Kyle Kazan, Chairman and CEO of Glass House. “With growing support across the country for cannabis regulatory reform, now is the time for us to improve the availability of our high-quality, sustainably grown product. California cannabis while significantly reducing our COGS through scale and automation. We have a total projected footprint of 6 million square feet and total projected biomass production of approximately 1.7 million pounds, which we believe would make Glass House Brands the largest and most effective in the United States, with a wide margin. With this significant capacity, we will be extremely well positioned to supply cannabis consumers across the country, once this opportunity arises.
Glass House recently completed the acquisition of the approximately 160-acre SoCal facility with six onsite greenhouses at September 2021. The SoCal facility includes approximately 125 acres of ultra-modern and efficient KUBO Ultra-Clima greenhouses, an on-site well, water treatment facilities, an automated roof washing system, additional lights and cogeneration facilities natural gas producing electricity, heat and CO2. The company said it planned the initial Phase 1 upgrade of the SoCal facility to include the conversion of two greenhouses, one of which will propagate cuttings or nursery clones to support the entire facility. and the other that will have a capacity of 180,000 pounds of biomass. per year. The Phase I expansion will also include a packing station and distribution center that will support the growth of the company’s wholesale biomass business.
In August, Glass House reported cash and cash equivalents of $134.3 million from June 30, 2021 against fair $4.5 million from June 30, 2020. During the quarter, Glass House reported eliminating $38.3 million of debt through the completion of a preferred stock offering exchanging both principal and accrued interest to participating investors and issued preferred stock and warrants of both companies, which triggered the conversion into shares of all outstanding convertible promissory notes of the company.
The company posted a video of the installation on the website, which you can see here.