Glass House Brands Inc., one of the fastest- growing, vertically-integrated cannabis companies in the U.S., has executed a agreement to acquire Plus Products Inc., a cannabis edibles company in California. Glass House is acquiring PLUS for approximately US$25.6 million1 through a combination of unsecured convertible debt2 and equity, plus additional performance-based consideration.
Glass House is working to create the largest cannabis brand-building platform in California. The Company’s house cannabis brand, Glass House Farms, was the No. 1 ranked flower brand by sales in California in Q3 20213. PLUS is a edibles brand in California with the No. 4 ranked edibles brand by sales in Q3 20213. Based on top-of-mind brand awareness, a common CPG metric measuring brand strength, PLUS is the No. 1 ranked brand in California in the gummy segment, the largest segment of the edibles category4. According to BDS Analytics, the combined company would be the only company with a top 5 position in both the Flower and Edibles categories in California.
“As one of the fastest-growing categories in cannabis, edibles are a key component of the Glass House growth strategy,” said Kyle Kazan, Glass House’s CEO. “PLUS has built a very strong brand in the gummy segment, and in the very competitive California and Nevada markets, no less. PLUS’ diverse and well-recognized line of edibles, including dual-action sleep and strain-specific products, is the ideal complement to our portfolio. Our vertically integrated platform will allow us to expand the distribution of PLUS to the more than 700 stores in our network, as well as to our own retail stores, as we pursue top sales ranking in both flower and edibles categories in the country’s largest market.”
Kyle Kazan further stated, “We think there is a long runway for PLUS on the Glass House platform. Based on Headsets November data, PLUS outsells Wana in California, the nation’s largest cannabis market, by a multiple of nearly 10x. 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, which was acquired by Canopy Growth in October at a value in excess of $297.5 million.”
Jake Heimark, PLUS co-founder and CEO, added, “We developed PLUS with the vision of being part of the strongest brand platform in cannabis, and we are realizing that vision by joining Glass House. Our mission to make cannabis safe and approachable, with high-quality products that deliver consistent consumer experiences, is perfectly aligned with Glass House’s reputation for providing outstanding cannabis products, produced sustainably, for the benefit of all. We are looking forward to working with Glass House to continue to pursue this shared goal.”
The Acquisition, which is expected to close in Q1 2022, is being completed by way of a plan under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (the “CCAA”) and is subject to certain customary closing conditions for transactions of this nature, 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.
| Sources: | |
| 1. | Based on the trailing 10-day volume-weighted average price (“VWAP”) of the Glass House Shares on the NEO prior to the date of this press release ($4.08 as of 12/16/21 close) |
| 2. | $20,504,850.96 CAD principal and accrued interest converted at 0.78 CAD:USD |
| 3. | BDSA Retail Sales Tracking |
| 4. | Brightfield Consumer Study (N = 1,535 California Edible Consumers) |
