Glass House Cannabis Co: Q1 Revenue Spikes 136% YoY, Positive Adjusted EBITDA On Heels Of Closing Deal With Mercer Park

Glass House Brands Inc. GLAS GLAS announced its first-quarter financial results on the heels of closing a business combination with Mercer Park Brand Acquisition Corp. BRND MRCQF and its debut on the NEO Exchange.

The Long Beach, California-based company reported Friday that its net sales spiked 136% year-over-year, reaching $15.2 million in the first three months of 2021.

Moreover, adjusted EBITDA came in positive at $0.6 million, compared to a $2.7 million loss in the first quarter of last year.

"Our Q1 results reflect the underlying strength of our core business as we executed on the opportunity ahead of us in the California market, scaling our cultivation activities and improving the breadth and depth of our product portfolio and retail store network while continuing to generate sustained positive adjusted EBITDA," Kyle Kazan, Glass House's CEO and chairman disclosed.

The previously announced deal with Mercer Park Brand, worth $567 million to create Glass House Brands Inc, the largest California cannabis company to date, was closed late in June.

Derrek Higgins, the company's CFO, explained that the go-public transaction eliminated more than $37 million in debt while it "significantly de-leveraged our balance sheet."

"This has provided us with the flexibility to evaluate and continue conversations with a variety of attractive funding opportunities to fuel our strategic growth initiatives," Higgins added.

Q1 2021 Financial Highlights

• Gross profit amounted to $5.44 million, accounting for 36% of net sales, compared to $1.46 million in the same quarter of last year.
• Total operating expenses amounted to $10.4 million, versus roughly $5.64 million.
• Loss from operations totaled approximately $5 million, while net loss was $13.1 million.
• As of March 31, the company had $11.6 million cash and cash equivalents, compared to $3.6 million in the same period of 2020.

Glass House recently called off its previously announced deal to accept a $50 million strategic investment from TPCO Holding Corp. GRAM GRAMF, which does business as The Parent Company, adding that it will continue to explore future collaboration options once Glass House closes the acquisition and reconstructs its greenhouse cultivation facility in California.

Photo by Avery Meeker on Unsplash