Cannabis Earnings: Glass House Brands Reports Third Quarter 2021 Financial Results

Glass House Brands Inc. GLAS GLAS GLASF GHBWF, a vertically integrated cannabis company, reported its financial results Thursday afternoon for the third-quarter ending September 30, 2021.

Third Quarter 2021 Highlights

• Net Sales increased 29% to $17.2 million from $13.3 million in Q3 2020 and declined 8% sequentially from $18.7 million in Q2 2021.
• Equivalent Dry Pound Production was a record high 28,268 pounds in Q3 2021, up 30% year-over-year and 22% sequentially.
• Cost per Equivalent Dry Pound of Production fell 7% sequentially to $179.
• Gross Profit was $2.3 million compared to $4.9 million in Q3 2020 and $8.6 million in Q2 2021.
• Gross Margin of 14% compared to 37% in Q3 2020 and 46% in Q2 2021.
• Adjusted EBITDA of $5.4 million compared to $0.2 million in Q3 2020 and $2.2 million from Q2 2021.
• Adjusted EBITDA Margin was 31% compared to 2% in Q3 2020 and 12% in Q2 2021.
• YTD Q3 2021 Net Sales grew 63% to $51.1 million from 31.3 million in Q3 2020.
• YTD Q3 2021 Adjusted EBITDA was $2.6 million from 1.4 million in Q3 2020.
• Cash balance was $28.9 million at quarter-end.

"The California market is now in the long-awaited process of commoditization, and this will be difficult for all who have operations in the Golden State. It is a necessary step in the maturation of the market and similar to what happened in Colorado, Washington and Oregon,” Kyle Kazan, Glass House chairman and CEO stated in a press release.

“We are leaning into this period by focusing on significantly lowering our COGS through scale and automation at our newly purchased (...) as we believe that highest quality at the lowest production costs in California will be the big winner,” Kazan added.

He also noted that “challenging environments offer the most compelling acquisition opportunities” and the platform is positioned in California “to be a value add and, in many cases, a savior for struggling companies."

"We recently closed on our 5.5 million square foot SoCal cultivation facility, which provides us with the size and scale necessary to grow the highest quality craft cannabis with the lowest cost of production, and to do so in a sustainable, environmentally friendly manner,” added the CEO. "Our Glass House Farms brand was the top-selling cannabis flower brand in California in Q3 2021 according to BDSA. All in all, this was a solid quarter for us in almost every aspect, but the temporary and very difficult market conditions dragged on our revenue, margins and EBITDA," Kazan concluded.

Price Action

Glass House stocks were trading higher at 0.52% at $5.82 per share, at the time of writing, Thursday night.
Photo By Richard T On Unsplash