Glass House Brands Report Revenue and Profits

LOS ANGELES- In a notable financial turnaround, Glass House Brands, a California-based cannabis producer and retailer, reported significant growth in its fourth-quarter earnings, leading to a record revenue of $160.8 million for the fiscal year 2023. This represents an impressive increase, bolstering the company’s position in the competitive cannabis market.

During a comprehensive earnings call with analysts on Thursday, Glass House executives unveiled a 35% year-over-year revenue increase for the fourth quarter, amounting to $40.4 million. The Long Beach-based firm attributed this surge primarily to its flourishing wholesale business, which witnessed a 71% increase in revenue, reaching $26.8 million.

Despite the company’s wholesale success, Glass House’s retail sector faced challenges, with revenue dipping to $9.6 million, a 5% decrease from the previous year. This downturn was largely due to aggressive product discounts and promotions that eroded sales margins.

However, Glass House’s financial health significantly improved, as evidenced by a gross profit of $18 million in the fourth quarter, marking a 96% increase from the prior year. The company’s gross margin also expanded to 45%, up from 31% in the fourth quarter of 2022.

For the year, Glass House celebrated an 89% jump in revenue from 2022, driven by its robust wholesale production. Additionally, the company’s adjusted earnings for 2023 showcased a remarkable recovery to $24.5 million, a stark contrast to the $22.3 million loss recorded in 2022.

Entering 2024 with a solid financial foundation, Glass House reported $32.5 million in cash reserves, more than double the $14.1 million from the year before. The company’s forward-looking guidance anticipates first-quarter revenue between $28 million and $29 million, with full-year revenue projected to reach between $215 million and $220 million.

CEO Kyle Kazan shared insights into operational expansions, including the commencement of cultivation at a new 700,000 square foot greenhouse in Camarillo, promising an initial harvest and revenue generation by mid-April. Kazan also introduced Allswell, a competitively priced cannabis brand aimed at undercutting California’s rampant unlicensed market, promising affordability without compromising quality.

In strategic adjustments, Glass House decided to discontinue its Forbidden Flowers and Field brands, citing insufficient market acceptance and economic performance. Despite these shifts, Glass House celebrated a notable increase in wholesale cannabis sales and a significant improvement in operating cash flow, signaling a strong recovery and optimistic outlook for the future.

Shares of Glass House (GLAS on the Cboe Canada exchange and GLASF on the U.S. over-the-counter markets) reflected investor confidence, rising 3.2% to $8 in midday trading following the earnings announcement. This financial resurgence underscores Glass House Brands’ strategic realignment and expansion efforts, positioning it for sustained growth in the burgeoning cannabis market.