A special purpose acquisition company is acquiring one of California’s top cannabis brands.
Mercer Park Brand Acquisition Group (BRND) has entered into a definitive agreement to acquire Glass House Group and all related assets for US$567 million.
Glass House Group’s brand portfolio includes Glass House Farms, Mama Sue, and Bella Thorne’s Forbidden Flowers.
Expanding the Future
Carpenteria-based Glass House currently grows on over half a million square feet of cultivation space, producing more than 110,000 pounds of cannabis flower each year.
Glass House has entered into an agreement with Southern California Greenhouse to acquire an additional 5.5 million square feet of state-of-the-art cultivation space.
Glass House expects the additional capacity to increase the company’s footprint to approximately 2.5 million square feet by 2023.
The expanded cultivation capacity has the potential to be able to supply the entire country with California cannabis, once federally legal.
“We are pleased to partner with the BRND team as we build an even more efficient, expansive platform for our brands,” says Glass House co-founder and CEO Kyle Kazan. “Our inaugural flower brand launch last year was a tremendous success, with our BDS ranking increasing from #63 in the state to #2 by year-end 2020. Further, we have established a strong retail and wholesale network and best-in-class cultivation processes, all anchored by a scaled and highly efficient cost structure. I am incredibly proud of the robust operation we have built over the past five years, and we look forward to augmenting these strengths to further capitalize on the growing statewide and national CPG opportunity.”
After the close of the transactions, Kazan is expected to continue to serve as Glass House CEO along with current President Graham Farrar.
Once the acquisition is complete, Glass House plans to continue focusing on growth through expanded brand visibility in dispensaries, expanding statewide wholesale distribution, and improving the efficiency and productivity of cultivation and retail operations.
Chairman Jonathan Sandelman says BRND was formed to create a platform that could launch the first national brands in the U.S.
“We view successful cannabis brand-building as a combination of four factors: the ability to control quality biomass at large scale; produce at the most competitive costs; offer the highest quality products; and deliver the best value proposition to consumers,” says Sandelman. “This took us to California with its ideal growing climate and community of talented and experienced growers, and ultimately to Glass House Group and this incredible portfolio of assets and talent.”
Sandelman says that Glass House’s track record of excellence across all four factors has established the company as one of the top-ranked cannabis flower brands in a highly competitive market.
“Combined with the proposed combination with the Southern California Greenhouse asset and 17 proposed Element 7 retail licenses,” says Sandelman. “Glass House Group is poised to become the largest, vertically-integrated brand-building platform in California, the world’s largest cannabis market.”
With four dispensaries currently in operation, Glass House plans to merge with 17 in-process retail licenses from Element 7.
The additional licenses would bring the company’s retail outlets to 21 locations by the end of the first quarter of 2022.
In 2020, Glass House added 250 retail outlets to its CPG distribution network, with plans to grow its statewide wholesale network to over 700 dispensaries in the future.