Glass House Brands Reports Record Second Quarter 2023 Financial Results

LOS ANGELES– Glass House Brands Inc., a vertically integrated cannabis companies in the U.S., reported its financial results for Q2 2023, ending June 30. The figures reveal a record-breaking quarter for the company, with revenue growth, increased gross margins, and a notable improvement in operating cash flow.

Financial Highlights

• Cash Position: The company’s cash increased to $22.7 million, up from $16.4 million in Q1 2023, marking a 39% increase.
• Operating Cash Flow: Operating cash flow reached a record $8.3 million.
• EBITDA: Adjusted EBITDA turned positive at $9.5 million, compared to a $0.1 million loss in Q1 2023.
• Revenue Growth: Revenue rose to $44.7 million, a 54% increase sequentially and a 171% rise year-over-year.
• Gross Margin: A significant increase in gross margin was noted, standing at 55% compared to 41% in Q1 2023, and 2% in the prior year.
• Biomass Production: Q2 biomass production and revenue soared by 311% and 358% year-on-year, respectively.
• Cost Efficiency: The cost per equivalent dry pound of production was $139 per pound, down 12% versus Q2 2022.
• Selling Price: The average selling price increased to $340 per pound, up 43% versus last year, and 17% versus Q1 2023.

Key Statements

“The second quarter of 2023 was the best in our history. We achieved record levels of operating cash flow, exceeded Q2 guidance across several operating metrics, and marked our first quarter of positive adjusted EBITDA,” stated Kyle Kazan, Co-Founder, Chairman, and CEO of Glass House.

Kazan expressed confidence in the momentum continuing through 2023, citing the company’s vertical integration and cost-efficient cultivation as reasons for its resilience in the challenging market environment.

Operational Developments

Several strategic moves and announcements were made during and after Q2:

• Personnel: Luke Scarmazzo joined as Lead Brand Ambassador for NorCal, and the resignation of Board Member Hector De La Torre was announced.
• Acquisitions: The company closed the acquisition of Turlock Natural Healing Center Dispensary.
• New Brand: Weldon Angelos, a Criminal Justice Reform Advocate & Music Producer, launched his first exclusive cannabis brand – REEFORM.

2023 Outlook

The company’s guidance for 2023 reflects confidence in ongoing strength:

• Q3 2023: Revenue expected between $45 million and $47 million. Gross margin expected to remain flat or rise slightly.
• 2023 Fiscal Year: Revenue guidance has been raised to $165 to $170 million due to higher than projected wholesale biomass production.
• Expansion Plans: Retrofit of Greenhouse 5 is in progress, expected to add significant cultivation capacity by early 2024.

Glass House Brands’ robust performance in Q2 2023 demonstrates its ability to grow both top-line and bottom-line figures, even amidst market challenges. With sound strategies in place and new expansions on the horizon, the future appears promising for this vertically integrated cannabis company.

Financial results and analyses are available on the Company’s website and SEDAR+.