Glass House Brands Inc. (“Glass House” or the “Company”) (NEO: GLAS.A.U) (NEO: GLAS.WT.U) (OTCQX: GLASF) (OTCQX: GHBWF), one of the fastest-growing, vertically integrated cannabis companies in the U.S., today announced that its subsidiary GH Group Inc. (“GH Group”) has filed suit in Superior Court for the County of Los Angeles, Central District (Case No. 21STCV40401) against Element 7 CA, LLC (“E7 LLC”) and its principals and owners Josh Black and Robert “Bobby” DiVito (together “Element 7”) for a variety of claims arising from Element 7’s conduct incident to the Merger and Exchange Agreement (the “Merger Agreement”) entered into between GH Group Inc. (“GH Group”) and E7 LLC dated as of February 23, 2021. In addition, GH Group has also given notice to E7 LLC that it is terminating the License Development Consulting Agreement between the parties dated as of February 23, 2021, for cause.
To date, E7 LLC has fully transferred three retail licenses located in Dunsmuir, Hesperia, and Eureka, California (the “Transferred Locations”) out of a total of seventeen licenses that were contractually committed to be transferred under the terms of the Merger Agreement. The Company expects to prevail in the suit and to be able to enforce the transfer of the remaining fourteen retail licenses.
Developing a robust retail footprint across the state of California is a key pillar of Glass House’s vertical integration strategy and is amongst the Company’s top priorities. In addition to bringing on the Transferred Locations, the Company is building out two new dispensaries for which licenses were recently approved in Santa Barbara. The Company is actively working to secure several more locations, in addition to the remaining contractually committed E7 LLC licenses, and will provide an update on its progress as they are confirmed.
