Glass House Brands (NEO: GLAS.A.U) this morning indicated it has finally acquired the greenhouse that it has positioned its story around. While it did not come cheap, the firm managed to reduce the original agreed upon purchase price of the facility.
The facility itself, located in southern California within Ventura County, measures in at a total 5.5 million square feet. While currently in need of retrofitting to be suitable for cannabis, once completed, the facility is expected to be one of the largest cannabis cultivation facilities in the US, in terms of indoor cannabis.
The property, 160 acres in size, consists of a total of 125 acres of greenhouse space via a total of six separate greenhouses. Under the current phase 1 plan for the facility, the first retrofit is to consist of a two greenhouses, totaling 1.7 million square feet in size, with completion slated for sometime in the first quarter of 2021. The retrofit is expected to produce 180,000 pounds per year of cannabis, including trim.
Consideration for the facility was reduced dramatically from the initial agreement put in place. First pegged at $118 million in cash, the property was ultimately acquired for $93 million in cash, plus stock consideration of 6.5 million subordinate shares to the original option holder of the property.
An additional 3.5 million in shares are subject to certain obligations being met, while for some reason the original option holder can earn up to US$75.0 million in even more shares under an earn-out arrangement – not bad for simply selling their option to acquire a property that needs millions in retrofit expenses completed.
Glass House Brands last traded at $4.50 on the Neo.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
