Glass House Brands To Acquire California Cannabis Edibles Manufacturer For $25.6M

Vertically-integrated cannabis company Glass House Brands Inc. GLAS GLAS GLASF GHBWF is acquiring California-based cannabis edibles company Plus Products Inc.

The Deal Details

The Long Beach-based company agreed to buy Plus Products for roughly $25.6 million through a combination of unsecured convertible debt and equity, plus additional performance-based consideration.

The acquisition is expected to close in the first three months of 2021 and is being completed by way of a plan under the companies' Creditors Arrangement Act.

In addition, the deal is subject to certain customary closing conditions, including, among others, the approval of PLUS' creditors, approval of the Supreme Court of British Columbia in the context of the CCAA proceedings, and the approval of the Neo Exchange.

What It Means For Glass House Brands

The company said the deal will create California's largest cannabis brand-building platform.

Moreover, Glass House disclosed that the combined entity would be the only company with a top-five position in California's flower and edibles categories.

"PLUS' diverse and well-recognized line of edibles, including dual-action sleep and strain-specific products, is the ideal complement to our portfolio," said Kyle Kazan, the company's CEO, adding that "edibles are a key component of the Glass House growth strategy."

Glass House's vertically integrated platform will enable the expansion of the distribution of PLUS to the more than 700 stores in its network, in addition to its proprietary retail locations.

What's Next?

Kazan thinks there is a "long runway for PLUS on the Glass House platform."

He said that PLUS outsold Wana in California by a multiple of nearly 10x, citing Headsets November data.

"With its California presence and activities in other states, we believe PLUS has a wide path to playing at a national level at least equal to Wana," Kazan added.

Canopy Growth Corp CGC announced in October that it has acquired the rights to buy Wana Brands, at a value in excess of $297.5 million.

More recent news from Glass House Brands:

• Glass House Brand Lands $100M Term Loan For Construction Of California Cannabis Grow Facility
• Cannabis Earnings: Glass House Brands Reports Third Quarter 2021 Financial Results
• Cash From Cannabis Companies Support Charities And Help Groups Free Pot Prisoners
• Glass House Brands Closes $93M Acquisition Of Huge Southern California Greenhouse Facility

GLASF Price Action:

Glass House Brands' shares traded 1.54% higher at $3.86 per share at the time of writing on Monday morning.

Photo: Courtesy of Margo Amala on Unsplash