Glass House Brands Reports Q1 2026 Financial Results

LONG BEACH – Glass House Brands Inc. released its first-quarter earnings for 2026, showing revenue slightly ahead of internal expectations but down from the year-ago period, with profitability pressured by higher costs and soft wholesale pricing in California.

The vertically-integrated Cannabis company, known for its large-scale greenhouse operations, reported net revenue of $40.5 million, surpassing its own $39 million guidance and demonstrating sequential growth from $38.9 million in Q4 2025. However, this figure falls short of the $44.8 million recorded in the same period a year ago. Adjusted EBITDA turned negative at $4.2 million, compared with a positive $4.4 million in Q1 2025. The net loss widened to about $17.1 million.

Gross profit fell to $10 million, resulting in a 25% margin, down sharply from 45% a year earlier and 34% in the prior quarter. Management attributed the compression to lower average selling prices and higher production costs in the wholesale business. The average selling price per pound landed at $171; above the $167 guidance but sharply below the $193 realized in Q1 2025, as the company continues operating through challenged California pricing conditions.

Biomass production reached 151,531 pounds, ahead of guidance of 138,000 pounds, and the company reiterated its full-year target of approximately one million pounds. Retail segment revenue was $11.9 million, consistent with both the prior-year quarter and Q4 2025, with retail gross margin improving to 50% from 47% in Q4.

To shore up liquidity, the company established an at-the-market equity program allowing sales of up to $50 million of equity shares over time. Full-year revenue guidance remains at $235 to $245 million, though profitability expectations were trimmed. Gross profit margin guidance was cut to the mid-40% range from approximately 48%, and adjusted EBITDA guidance was reduced to the high $30 million range from the high $40 million range.

The more forward-looking development came separately. Glass House submitted applications to register certain California-licensed medical Cannabis operations with the DEA pursuant to the expedited registration pathway established by the recent rescheduling of medical Cannabis to Schedule III under the Controlled Substances Act. The company’s CEO, Kyle Kazan, framed the implications pointedly: potential 280E tax relief and opening up interstate commerce or export to Europe, which would meaningfully increase the addressable market size and unlock greater profit and cash flow generation driven by more favorable pricing dynamics.

Glass House Brands is running two parallel tracks in 2026 – managing a near-term cash and margin squeeze while positioning itself for a federal regulatory shift that could fundamentally rewrite the unit economics of large-scale domestic Cannabis production. The DEA registration is a deliberate early-mover. If S III’s downstream benefits, particularly 280E relief, materialize on the timeline management expects, the cost structure could look very different by year-end. For now, investors are being asked to carry a loss-generating quarter and a revised guidance set, in exchange for a bet that scale and federal positioning pay off.