Glass House Brands Reports Second Quarter 2021 Financial Results

–Net Revenue Increased 62% Year-over-Year

–Generates Sustained Positive Adjusted EBITDA

–Conference Call to be Held August 17, 2021 at 8:00 a.m. EDT

LONG BEACH, Calif. and TORONTO, Aug. 16, 2021 /CNW/ – Glass House Brands Inc. (“Glass House” or the “Company”) (NEO: GLAS.A.U) (NEO: GLAS.WT.U), one of the fastest-growing, vertically integrated cannabis and hemp companies in the U.S. today reported financial results for its second quarter ending June 30, 2021 (“Q2 2021”).

Second Quarter 2021 Financial Highlights
(Unless otherwise stated, all results are in U.S. dollars)

  • Net Sales increased 62% to $18.7 million from $11.6 million in Q2 2020. 
  • Gross Profit increased 56% to $8.6 million from $5.5 million in Q2 2020. 
  • Gross Margin of 46% compared to 48% in Q2 2020. 
  • Adjusted EBITDA increased 100% to $2.2 million from $1.1 million in Q2 2020. 
  • Adjusted EBITDA Margin was 12% compared to 9% in Q2 2020. 
  • Cash balance of $134.3 million at quarter-end to support future growth initiatives.

Management Commentary

“We have continued to build on the substantial forward momentum we developed coming out of our qualifying transaction by executing on our expansion strategies and scaling our operations,” said Kyle Kazan, Glass House Chairman, and CEO. “While our results are strong and show consistent growth for both the top and bottom lines, we did face a few challenges at our Padaro farm coupled with a softer California wholesale flower market that have negatively impacted some of our yields and our COGS. “With our strong balance sheet, a team of proven operators, and significant growth projects ahead of us, we remain confident that we are exceptionally well-positioned to take on the significant opportunities ahead of us in the world’s largest cannabis market. We are on track to close the acquisition of our 5.5 million square foot cultivation facility later this month and are looking forward to accelerating the rollout of our retail network upon closing a number of these transactions under the merger and exchange agreement later this year.”

Mr. Kazan concluded, “We have built a solid foundation and our business is uniquely prepared to lead our industry by providing sustainably grown, craft cannabis to meet the growing national demand for innovative, high-quality products.”

Derrek Higgins, Chief Financial Officer, added, “Our second-quarter results reflect the topline revenue growth and cost efficiencies we can drive through scaling up our cultivation and retail footprint. We are well funded to execute on our expansion plans and we are actively evaluating non-dilutive sources of capital to fuel our future strategic objectives.”

Second Quarter 2021 Operational Highlights

Subsequent Events

Revenue for the three months ended June 30, 2021, was $18.7 million, representing an increase of $7.1 million or 62% from $11.6 million for the three months ended June 30, 2020 (“Q2 2020”). The increase in revenue was primarily due to an increase in cannabis production from the Company’s second greenhouse cultivation facility, which commenced operations in Q1 2020. The expansion of the cultivation facility was increased from 113,000 square feet during 2020 to over 390,000 square feet by the end of 2020. In Q2 2021 the Company’s wholesale and wholesale CPG revenue increased by $4.3 million or 54% compared to Q2 2020. The Company’s cannabis retail dispensaries also contributed consistent revenue growth, increasing $2.8 million, or 77%, in Q2 2021 compared to Q2 2020.

Cost of goods sold in Q2 2021 was $10.0 million, an increase of $4.0 million, or 67%, compared with $6.0 million in Q2 2020. Q2 2021 gross profit was $8.6 million, representing a gross margin of 46%, compared with a gross profit of $5.5 million, representing a gross margin of 48% in Q2 2020. The decrease in gross margin was driven by increased product, labor, and overhead costs associated with the Company’s cultivation expansion.

Total operating expenses in Q2 2021 were $9.6 million, an increase of $3.4 million, or 56%, compared to total expenses of $6.2 million in Q2 2020. General and administrative expenses Q2 2021 and Q2 2020 were $5.9 million and $4.6 million, respectively, an increase of $1.3 million, or 28%. The increase in general and administrative expenses is primarily attributed to the Company’s initiatives of operational expansion and used to support corporate, cultivation, and retail operations. Professional fees Q2 2021 and Q2 2020 were $1.9 million and $0.5 million, respectively, an increase of $1.4 million, or 288% related to the RTO transaction and other initiatives that occurred during the second quarter of 2021. Sales and marketing expenses in Q2 2021 and Q2 2020 were $1.0 million and $0.4 million, respectively, an increase of $0.6 million, or 136%. The increase in sales and marketing expenses is primarily attributed to the increase in the Company’s efforts related to digital media and marketing research and royalty expenses.

Q2 2021 adjusted EBITDA, a non-GAAP measure that excludes depreciation and amortization, interest expense, income taxes, share-based compensation, (income) loss on equity method investments, (gain) loss on change in fair value of derivative liabilities, acquisition-related professional fees, and loss on disposition of subsidiary was $2.2 millioncompared to $1.1 million in Q2 2020. The $1.1 million increase in adjusted EBITDA is due to higher gross profit partially offset by higher operating expenses.

Cash and cash equivalents, were $134.3 million as of June 30, 2021, compared to $4.5 million as of June 30, 2020. During the quarter, the Company eliminated $38.3M of debt through the completion of a Preferred Stock offering exchanging both principal and interest accrued to participating investors and issued both Company Preferred Stock and warrants, which triggered the equity conversion of all of the Company’s outstanding Convertible Promissory Notes.

Financial results and analyses are available on the Company’s investor relations website ( and SEDAR (

Conference Call
The Company will host a conference call to discuss the results on Tuesday, August 17th, at 8:00 a.m. Eastern Time.

Date:August 17, 2021
Time:8:00 a.m. EDT
Webcast:Click Here
Dial-In Number:1-(888)-664-6392
Conference ID:93174702
Replay Code: 174702 #
Available until 12:00 midnight Eastern Time Tuesday, August 24, 2021
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