GLASF - Earnings call transcript Q1 2022

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Operator

Good afternoon. Thank you for standing by. Welcome to the Glass House Brands First Quarter 2022 Investors Call. And I would like to hand the conference over to Mr. John Brebeck, Glass House Brands’ Vice President of Investor Relations. sir. ahead, go Please

John Brebeck

certain those is The detailed I’d may from Quarter like welcome the are anticipated periodic These factors may to that Glass performance. in Kyle future or House XXXX XX, Kazan, House reminded ending via Sylvie. to and Glass of answers House that call today’s House be today, forward-looking I X-month to that Brands. Brands statements. to these filings asked are recorded March Kyle? that And XXXX. Actual constitute Officer I’d call are Thursday, and risk Listeners First the results may Chairman business Mr. registration Conference database. now XX, XXXX. discussed like you, statements. in everyone conference forward-looking differ documents given to affect brands Brands Glass remind period like matters introduce be and or the Glass Thank Call would everyone materially being Chief results Executive questions that risks to in could statements subject accessed to relating could SEDAR uncertainties May financial for this

Kyle Kazan

have clearance an to and facility to will foot a our municipality, at from to SoCal Barba, today’s of X then, take zoning business would our an County. and forward have results business the quarter licenses with Officer, the been in planting flowering and thank X.X Graham Cannabis Since like Early Mark Santa including harvest the a first of California before to look XX positioning clones located of commence moved June, has and for of update from from for Thanks, afternoon, Mark the major March provide the your detail, with second of operate Camarillo, facility, harvest. the House financial in Glass then licenses SoCal results cultivation in our in cultivation overview review We facility State on and Ventura and our the California. retrofit. facilities. receipt I’d John. upcoming questions. expanded on discuss an square in Vendetti, months we’ve nearby license cannabis California. we end roughly reached Officer, minutes Good will good, bachelor quarter operations everyone, our Receipt activities our and internal nursery, from like milestone for of a cultivation to the the enabled and the an I the and the necessary cannabis million immediately start all the all section which joining after enjoying call. approximately President the local Chief us Greenhouse SoCal for few a facility, into plants transfer which, Farrar, of you included Chief company’s nursery license X start the take processing for XX,XXX our I several to strategic and facility following update the Financial priorities first give

The Phase much This up only and Greenhouse SoCal ramped We Phase ramp-up is it are have site time, third the planted that fully we after is that our long-term perceived base. to we X over supply at our becoming of dry expansion regular At us pounds us to are amongst footprint footprint SoCal we X it also Glass Casitas produce approaching to the buyers cannabis, months and of facility terms acquisition X.X harvest. acquired More feet, and X will in expect House full to discuss an dividends facility’s by site, and/or took brands how tripling us is is get more months to to million square our cultivation customer greenhouse second Padaro X increase of additional our relationships. paying facility. The Padaro. enable licensing, XXX,XXX planting we by time. developed, have expected better already getting current greenhouse approximately which the at over XX and from

Our facility cost significantly fully million of production. increase capacity of is is of increase out The when its biomass. while cultivation long-term goal potential competitive this to reducing built pounds our X.X advantage our to to quality

previously, lower cost of stated goal per goods to our As our to pound. eventual sold is $XXX

reducing the SoCal planet that our continue will both per-unit we bolster good announced to portfolio developments that and end, quarter facility us product operations. which and we is to our Subsequent consumption emissions, X and for certainly Additionally, retail energy the carbon allow important expect for good business.

The in according XX% the market, than the of for brand the edibles ranked recognition Historically, offerings our with the which flower associated have overlap company quarter, impact by sold truly with goods million could have with California was we than between margins. Farms California business CPG Northern loyalty. favorable California, accounts PLUS sales run of active $XX less enjoys our which #X top only stronger and in Glass XXXX is growing the total Headset the first currently edibles existing of to The in about completion California. on our synergistic XX% included rate, those quarter in incremental state. platform of market The Edibles on we’ll By in represents the not of business significant market of segments a while stronger edible and plus overall PLUS synergies market, and in of California Based Glass for market. brand overall addressable to and substantially accounts Combining customer accounts cost and PLUS’ PLUS the revenue untapped to the data market. and is was position is faster first comparison, House while Southern X.X% brand in plus the California Products, XX% approximately they’ve the amount so opportunity the our lower acquisition increase House annually, is combination. expect in there both edibles, flower makes cannabis the potential. market of a first our California brand PLUS, the XXXX, This X both been strong a

excited across incredibly the are PLUS and retail to working distribution of to our presence with network. the We be their products stores expand in premium our team

Venice binding to letter The second in equity property development remaining Pottery L.A., our ownership The intent acquire the on and of dispensary Boulevard. located interest is

Weekly, L.A. Times year, one Pottery the the and by past Southern cited the as as best being several Angeleno been The has Over L.A. dispensaries of in publications high-end such Thrillist, California.

designed eager in ownership and and experience. We the to which acquire known stake dispensary, for interactive ideally situated elevated its are retail is remaining beautifully this

currently operating extends X location fourth The and quarter financial open in our to Isla are Santa The as heart the first Emerald quarter the XXXX. results annualized dispensaries Eureka incremental Eureka quarter. and of providing award-winning rate, moating in the locations Ynez Given retail X a properties we what Pottery’s limited regulatory advantage Pottery, retail $X.X experience well of and are Triangle. Including are single and we Ynez existing will to reach expect both the the pharmacy prime Vista location Santa license, forward our million potential in our Vista revenue during run same its in we as look as locations consolidating with areas, performance to offer to our branded expect in third in stores. which into of as All will customer these be be markets. robust our the Isla

after X- revenue and We these to to approximately a annually expect are average. extremely up, on about we XX-month $X ramp stores, excited million reach the

includes attributed or be dispensaries Bay The Healing NHC experience the Currently, in NHC success of selection to incredibly and of Lemoore and performers Glass acquire products offers location in California. dispensaries Finally, X% Brands and careful limited which are definitive it represent we X world-class announced these NHC, a about to revenue. customers. Turlock, markets. NHC’s agreement license dispensaries top These loyal its House Natural Center, can Morro

acquisition, PLUS retail opportunity represents agreement drive gross and significant this the growth expand So with to as our margin profile. our revenue

Turlock currently one to of be University, generating X it in All X Stanislaus. grossing city, which State as location open licenses positive of open is to only expected EBITDA. highest dispensary is locations of its the are California is dispensary home NHC’s of NHC’s soon also

much are closing We looking very this forward transaction. to

Finally, I the current California. in flower remain. address challenges bottomed prices will market Wholesale significant November conditions in but

is as still commoditization destructive we some As as would We industries they wholesale remains fourth described all come although environment slightly, as it difficult. we the has natural point have And these call. improved quarter in in mentioned, expect our pricing conditions it extremely at mature.

of flower effect to the of shelf is prices distress operators. in brands market the X the decline for and approaching in the for space. steep are and real year for last We X began dispensaries cumulative prices is many the licensed the There competing over too since months too much creating many number X low

seeking as are set in eventually facility, operators pricing this environment was and we help SoCal part to our combinations. able We our out being for precisely us on strategy. business troubled to was for increasingly survive why difficult Knowing of seeing purchase coming reaching sights the

slowly levels survive saw will not most goal pricing we to rebound, not will forward. to persevere pre thrive growers expect only I and to the but the and efficient flat Our that commoditization. is going be but

experiencing not as a strong. that remain continues are demand very clarity, issue For we to

In of success. if other push ranked over is first brand to to both review ranking and margins SoCal, and another a when quarter. at our also grow continues I Glass facility to for even expect data, expand Our to Glass above phase our now should have BDSA, the the of expansion call words, first at is House by Farms or the as quarter position and by can. pricing us will Headset XXXX, that, fully will #X end year. allow Since based turn we for new Headset we lean ensure financials the continued a on else of into strength transition Mark this #X The top period. this positive prolonged almost we were low for this the a profitably of Mark? factor have to With House nobody our that Brands X us in early maintained BDSA

Mark Vendetti

Kyle, Thanks, good and everyone. afternoon,

versus These in are demonstrating. million. today our for quarter results the decline sharing and a greenhouse X% quarter, year GAAP. seasonal XXXX the Total In wholesale the first order for our to MD&A, is recall pattern it statements our represent results in be results be decline to found which was and $XX is a As reminder, U.S. reported financial U.S. important of prepared XX% an the last in will QX. understand dollars versus can and revenue I

equivalent and of for additional sunlight weight our year demand a compared in wholesale year-over-year. It decreased would is of quarter produced QX the year, QX. in the remained a pricing XX% XX% from The pricing, Compared we associated increase revenue flower away experienced from sold more year, primarily to our million hadn’t XX% XX%. last available would but the quarter our last was production sell year have first sold smalls in this The due lower of our year, of wholesale particularly XX% much output higher, highest-cost dry much decreased for pricing worse if in CPG. our a trim sale lowest wholesale year. prices, smalls. and decrease last $X.X to available percentage to in been by also therefore, improved product. Wholesale low-value dry flower weight production which QX increase in in We equivalent XX% sales toward pricing lower-than-anticipated XX%. versus revenue high-valued Average has indicating quarter. than and increased intensity weight was production, a versus last than for million declined and last XX% improvement $X.X XX% did wholesale been We see representing quarter last skews in strong to because a driven and revenue than increase constant have wintertime X% in an higher more decrease this quarter. continued to weight The an this as flower greenhouses last flower year Sequentially, and year, slight

year assuming versus did allow lower weather, high-value full last mix Padaro unfavorable of sold Casitas similar progresses. extent greenhouses per year and production, This to However, the their we expect in average the selling and mix cost pound prices. flower, the increase us decreased the in wholesale Consistent this increase in of the mix will our and flower not as enjoy with year help QX improve QX. which improve price of to

retail State decline flower on cannabis want in and category. years. flower versus the Headset using Before contracted which businesses, market have the new prefer, the the I data I rate lifted, X X% Headset X% BDSA in the flower and cannabis decline data a the and to Sequentially, provide XXXX. and a measures in in growth stimulus QX QX in market no of reported data analytics highest of cannabis California, Regardless of in of both and the data. reported the we California during total X% discuss the category. of sequential BDSA our and a cannabis CPG QX for market decline total rates of market year, COVID you inflation XXXX and dramatically slowed Also saw this majority of indicated

a late Ukraine. noticed we marked the war into and addition, February March overall the inflation in market in as in accelerated slowdown by In

of these wallets put their discretionary on our consumers’ pressure reduced likely and All spending.

to for the Moving on retail quarter.

consisted first market geographies XXXX. continued peers outperforming footprint our Retail Santa in sales $X.X by X quarter, first the year-on-year X of indicates with Berkeley. X% following are their performance one least retail have steady market at and sequentially sequentially. data quarter dispensaries, the beginning each from percentage to comparable million Treez difficult Santa X Despite from Our overall X% the of Ana revenue X since All in opened the anywhere points Barbara, points. of located percentage been and dispensaries in conditions,

which we and continue to gross consumer, a almost growth will market constrained believe may challenged or negative quarter, second revenue there program note, included a margin declining. be Looking true-up, keep second the Also during improved from $X retail million. into effects the XXXX which sales quarter quarter loyalty by

our XX% by the business sequentially. turning to in XX% QX declines is The XXXX in CPG flower cannabis impacted the is year and Revenue previously to of category business. and decreased the our discussed. Lastly, CPG market last majority being

percentage In execute too had expected others. not addition, for did And some of properly quarter of our not of did We our We much in sell-through of points which need inventory and of much sales. not within aged proper the well. we strains, have X resulted too retail, did by strains enough gross inventory the to balance quarter. our increase we which in not level not achieve resulted did the the discounting in and manage

we their think the X% started by and sold With average to, size distributors dispensaries On the difficult the has a do of decline the saw our impact in in We to cash. sequential side, order macro inventory to environment dispensaries state. across dispensaries X% the dispensaries. an decline watching conserve these closely number seeking

status, an experienced their in with that also increase which to place limits ability restricted the of credit distributor. percentage orders our We dispensaries are

steps We to are taking issues. actively address these

on de from from market. when Ginestet, to leverage the these sales PLUS. changing hired added the Jacqueline strain cultivation ensuring act We’ve working team of more company factor determining PLUS agile continually and are to closer VP processes the of addition marketing will to a We the more who increase who sales us have Glass Sales and PLUS the with market when changed selection inventory believe consumer. connection responding across Canndescent, begins joins House a to management be quickly make will We also and new and to Sales, Brands inventory age. newly now to our input

improve will will difficult second to the remain the adjustments our the quarter high persist challenged. remain and inventory. quarter CPG we second we needed sales However, sales expect the through Discounting as make environment to throughout

as into sales quarter. we third to move to see expect at a year our ago levels We rebound

begun note gross our gross this Now quarterly margin moving by have report, margin. Please in to line. we reporting business

margin Our QX inventory QX margin fourth impact negatively $X.X $X year our gross minus gross inventory X versus comparing included as or by quarter last the year points. inventory reserves the year difference QX of first last QX or gross margin million versus XXXX. in The was recall for to for margin, XX% of the first primary live million last of XXXX QX and QX quarter XX our in When is gross margin of prices that XX% between XXXX our XXXX quarter wholesale the decline of impacted slow-moving our obsolete in year revaluation the margin in plants quarters. between as well this percentage X%

Adjusting tax to is $X.X the note tax, XXXX mentioned included in million Within points QX we As expensed This cultivation per wholesale, decline worth margin not during $X.X for is price $XX caused Within of is earlier, this the cultivation decrease in QX and $X.X wholesale Please QX million revenue. quarter. increases $X.X for gross XXXX million period XX%. tax production. our pound margin million our CPG. was impact, included cost in the is a the this in in XX sold. margin,

are in our particularly are quarter, revenue becomes part increasingly quarter. We begins legislation in and hopeful large will facility closely to in This see tax as up beginning third the wholesale SoCal the ramp to important our an watching of and be third release revenue. California

cost pounds a pound, quarter of pound, cost Our of in the This per compared equivalent number was dry to a per in X% per X% the reduction with QX production XXXX. increase pounds represents XX,XXX for produced produced. pound $XXX

new earnings Almost million adjusted decrease for inventory million define flow taxes, other as down added into restructuring by QX, by dispensary $X.X bad costs, $X.X the in million account in reduction in of in expenses difference. expenses million debt the to fourth and before QX driven $X.X audit and first cash, was facility a XXXX. inventory amortization reduction usage improvement decrease primarily opening. part from negative inventory million CapEx compared spending million for $X.X a $X with QX $X.X Increased $X $X.X our start-up million audit. including last marketing a Depreciation and changes related only with XXXX. cash this million transaction EBITDA Sales in flat Padaro which compared of XXXX. results from mostly ‘XX that expenses a share-based Casitas. restricted in $X.X as from trade of flow ‘XX QX This costs. $X.X nonoperational XXXX. of for ‘XX depreciation We greenhouses include was quarter’s capital operating of and caused service. to in in million in improved reserve $XX.X The the million $X.X adjusted in during $X increased was million QX a gross little XXXX. loss We This increase million and EBITDA year. to decrease General QX as of XXXX to QX $XX Professional $X.X ‘XX working first the million to was $XX.X $X quarter to in and primarily incurred to of negative QX promotions. million for the compared $X.X depleted million, in noncash quarter admin essentially attributable year cash. million quarter. cash were year-end helped in was QX the $X.X related of the which QX at $X primarily is established from to Operating fees XX% in by and the in the quarter interest, million were the as X% a XXXX, SoCal expenses QX to of is million were our quarter quarter in the and QX compared marketing The We placed very costs, ended compensation loss and million $XX.X a quarter negative decrease entire million Adjusted million, fourth of margin, to

million Additionally, the share cash lion’s net in fourth was $X $XX than SoCal. CapEx spend during loss quarter. million spending quarter at greater the was the with

adding CapEx the pay complete we we quarters slow to liquidity NHC down as exploring back Phase the growth spending, Phase for spending acquisition and build-out is rate of the I. as on The CapEx next options California capital loan of over and forward well market. additional expect the continued the the company support bridge Looking as initiatives to in X X

in be feel for environment we operating compelling additional difficult at the may acquisitions there California, valuations. With opportunities

Kyle, on months assumptions in guidance operations Before want it over XXXX. for confirm are X I I to from prices turn cash results. our prior generating early line with to XXXX, by wholesale our After actual back trending positive in flow

our track, put are We the on back taking the think impact quarter business we the to which a positively in of the will CPG third year. necessary steps business growth

on our to the With excited new extremely operating facility and of The that, are When Pottery. is PLUS SoCal new acquisitions will cash about with planned are flow X company and call combined to We the deliver dispensaries, NHC, these Kyle. back goals. I our path its turn

Kyle Kazan

you, Thank Mark.

cannabis-friendly It harm we best are we ends current and a thrive. like locations, to making regulations a where as are thrive. can industry market it illicit provide In out win-win to for while Graham for point it many hurts investments operators. from institutional, wide farmers where to of We’ve within brands, a and maintaining value in overtaxation, players toll be to due they businesses farmers regulators we of companies I with do take contact looking the of regulatory want and the and Q&A, retail at and market believe are the regime, this unfriendly regulatory of environment. market having continues small, possible, and regulators the that our In is owners both positive taken impact, move and growers that expect see the been with not I’d a solutions. and our types make shareholders. of We continue to tax The sake market create go the are industry are state moments shareholders more for close eliminated distress is retail alleviate reaching having state. on pain and poorly friends a we due variety federal to help watch few trouble the communication Before their our help all has to cases, a shrink. products sizes business to meet retail us all cannabis and cultivation anyone all that large within out a their to will the to structured We to having to to for the of and of painful the California-based discuss The on level to year. regions and a

passionate Additionally, the release working about nonviolent of states I’m gain elimination in of still to legal. the where cannabis very drug excessively is offenders for not and working practices sentencing punitive

We this. will continue advocating for

We minimize also to environmental our continue work to impact.

Our to build goal ESG-friendly is an compatible business. and

over continue every day. to I With that, to that John turn call will We towards Brebeck. the work

John Brebeck

Thank and Kyle meeting At Graham, on investors held point, to with and for tours to of farm Q&A first of Investors us like I’d our a.m. include join be June welcome food this Annual Glass a come warm and the at extend to The all House XX It merchandise. shareholders’ with event our you, Kyle. will will Session. XX

at event go where have information, &Events page the more For ir.glasshousebrands.com/investorseshXXXX, web tab we News Investor Relations our posted of details. to

over Now, call. Sylvie, the portion you. turning I’ll of over operator to to turn the the the question-and-answer begin call to

Operator

[Operator Hatfield your from SVA. will be at question And Instructions] first Sloan

Sloan Hatfield

of be cash relevant flow on Kyle, or from to it path to might positive? capital valuing the EBITDA equity, that business Is My definition cash So those flow XXXX. cash or going the is more like from after what in quoted even something operations maintain forward? operations saying become positive required both like company that here flow subtracting specifically early positive certain as positive expenditures, flow releases your you in is to question cash today, something were is, positive

Kyle Kazan

the for you thank So question.

clear. Let me it make just

right growth We business now. are a

So EBITDA, EBITDA, those are nomenclature. adjusted common

Our goal cash positive. flow is

we everything Just black. are we I where is else, subtracted everything said, in as actually after the -- and

Operator

question be at [Operator Instructions] Howard Hedgeye. will from Penney next And your

Howard Penney

strains just not having to if issues not I -- I into or describe and I different strains you the apologize had having don’t around the dig wanted that right the and this the the properly strains. --

in you consumer for how described kind Sorry, avoid remembering but of insights it, I have not can to misstep apologize of future? have exactly kind do what you or that you the

Kyle Kazan

your you going ask question. my Graham to So I’m Howard, thank to address Farrar, for that. co-founder,

Graham Farrar

Howard, for question. thanks the

So forms. comes think in it a couple of I

we’ve to the which So real call strain would honed solution what on management. I bit in life it, a is cycle

transition COVID sell we things where the kind the strain that we world of went we of and post-COVID particularly strains the were to one was put situation on kind the a that found from would we of shelf that in in world, and So any discovered the where at phenomenon a when degraded it month a do month. a planned illustrative And units frankly new of number purposes, X,XXX rate were we selling time, didn’t a we’re of to somewhat because over really XXX in that. they cannabis what selling was units a is correctly for

equate consumption that fashion then hot. life kind die peak a like kind are forecasting rates of They’re and They excited. they of it to So producing a of cycle natural rather I -- a historical things on based we almost than very kept have have off.

and changes aged is pushing month the you’re one became doing through production which of consumption making units. units off over inventory, it through And so made of that one the working when now because things X,XXX that has we’re dropped a time to and we’ve XXX

And up desirable. and so time gets the less older over inventory built

doing So also forward. getting looking cycle historical system. and forecasting but that now a that and But at for out instead we’re assuming planning of than better rather trends, we’re just not pushing job that the through of

so the it. production ramp going off taper going you’re months, that taper strain a do you and you’re X,XXX it predict with and to match to X to that next going to it’s take X,XXX to and and up is So going to over assume off going the you’re

across COVID an one could that’s learning. on It’s certainly was was it I have anomaly better the the of a board there think chains. done new a and out So industry, and supply things we

I a better think doing that will So planning for be helpful.

on leaders The stuff, of a like older Seed Kush I salient of are call picked from because the have strains. seeing in with that better And we that up newer We’ve that strains of now, and the when almost more got inventory they doubled immediately, strain more out, of, trend. great or production the number them sold much we even new things it second menu. and issue a which we’re just is kind actually those people Jealousy, Mints, there the sat lots strains of Junky, exacerbated bunch just coming put kind

our So of lot give a is a think better and the to going menu, on cycle CPG management better I results life business. us

Howard Penney

the Can said I answer just question. pick the to up on to something you

-- brands strains introduced you do element strains? is -- And existing are and but that fashionable? becomes are love, strains there’s core but a you’ve business know people more then have an and your fashionable, that strain this to an than So meaning popular that

Kyle Kazan

Yes.

of right? like the So carries And there’s I right? could mean use one sit so a brand for very is there’s but there, it, hour whoever something even from -- X to of joint. on of down its where own that House strain, produced Seed Junky. things. weight, brand, There’s But much yes. almost pontificate is I And over short think an and this out Glass the we sometimes Their also the that point ones the answer right? really strains I’ll the that combination Farms those the X the it’s Jealousy was brands

next to show at and Nordstroms passes same digest there Like then Fifth the in of down the then about that, Fashion They’re understand people from trends I new comes they Bergdorf And new thing of And Saks it. next value. exclusive very they’re gets Avenue. does the that the there’s and Paris, up can’t at like is H&M eventually, it, they’re stuff. at the means. Goodmans. then and fashion, right? where have which show they’re illicit I in equivalent available it, almost think runway excited And there’s found after it’s So in kind widely in Everyone at And level, the up there pike. much then through But to very cannabis you thing don’t in is at us Rothy’s. -- It it’s that oftentimes, few driving. of market many Paris, the it some best the analogy know what the out happen they right? that -- wouldn’t Week

the that there’s I’ve been set is also years have kind we a cut strain. the the so strains. selling We’ve that So best one got perennials, trend? of in, our of constantly growing XX Silver great It’s for then Glue. is Gorilla where Super churn and our And of dual strain there a of Haze

the doing is have on menu. a which of the that overlay out, of as to and Those CBD. handful high of to a trends with we lead of kind trends fast those -- kind World top we the not least a We follower of year-round out and in Jelly of always so be work that And the Nordstrom’s keep Sachs, are the Fish our ourselves on can then stay they closer get here Bergdorf we’re world first market. Rothy’s H&M Goodman come and and at follower that new strain, kind or the in

Graham Farrar

very we we’re things one have say very would that And the a robust to -- Howard of is have business. lucky here to wholesale just I

So to miss there. the trying always things, we step, of turn plenty which wholesale new just over the we possible tracks is always can demand and when you’re if there’s

So in run single hit while every we home -- play. little business. to frustrated, a do obviously, the try and We we have have time we the were go we a optionality

And so that really helped.

hope show more tasting touch you’ll go because it’s Sesh nose, Investor different off California enjoys one a -- point. walk you’ll consumer and we a and the and I you’ll of down sell and different what some we few one our rows then right completely it leads you this. that’s And it. was smell see when almost like at you’ll and strains, question different wine where the Your you’ll try

Howard Penney

One you Awesome. facility. I opening for seeing your forward to it. look just thank up question. -- And last

I you’re the think how will out And me. more be there telling it significant given the edibles it growth in is in important to market that in component that’s your California? for future, a

Kyle Kazan

of how tell facility. I -- that?" the you, of the and forward SoCal you. our big positive, into are at to flow a going questions do farm, cash in we’re Howard, looking And our CapEx the going this, to one we’ve get you meeting thank people already would you, lot and to would saying, I are "Hey, plowed you’re quarter numbers to I say look

of gummy, gives but PLUS enjoy on So excited want we’re area don’t that lot to smoke. want us that. another cannabis about super people shelf. The A that to the

And coming. for so had to the we opportunity us, PLUS buy knew we We a that when was selected long time And years. and they them super were excited.

this another to factor. form to So cannabis us -- to allows in just us, introduce

Graham Farrar

brands are stores, significant historically is that, right, as currently as sales well we the almost or we stores that about right? House before the the that doing are Natural basis So the construction products, component daily but which of market. to Centers with as sell that of edible in shelf. we addition increasing we Healing and X have our on here we of of under XX% on are Yes. sales And a to nothing just see is Glass what PLUS, on Edibles a growing XX% that the reminder acquisition too, add

So kind the drive synergy our with between of addition brands. of our PLUS stores allows multiplied us that to to continue

we stores, valuable; So stores more brands have that as brands, add makes our valuable. more makes our we as more more it

consumer continue products X. edible X, years And has X X every with saying any that or have the synergistic is of in top about some brand out every X stores nationally a the something one in of PLUS, historically top goals with category And in in a and It’s history highest that in product things multiple is the recognition so our to brand of top category strive to the I California, brand the top driving in, it’s likes. it’s what there. XX relationship one of X we the for. think that is of

PLUS partnership stores, expanded that with be that further. and and take well able to our expectation So that’s our drive going our reach expanded to the we’re and is already doing even

Operator

from Hatfield. follow-up a is Sloan Next

Sloan Hatfield

questions, if please. other could, I Two

SoCal that every X question gummies. thought would to The products for what’s outside you cultivation environment you sell be have second like something recently first facility, regulatory you flower? the read duration for And other renew on California, So plans right, annually appreciated. that the just sort California. you or the to duration is, the what’s Is that? the that of acquired license then that? of one years? is what’s Or any it sell of of PLUS the I if that? had that that’s Can And I those color outside on not

Kyle Kazan

follow-up. you Sloan, cultivation license? talk you do thank So the want Graham, about the to for

Graham Farrar

Yes.

of license license. thanks the is it’s combination couple the So a One of municipal question, -- for Sloan. is Cultivation things. a really

the and license is a clearance entitlement license. use combination the So cultivation, And municipality. business of perpetuity zoning zoning county which California, from State the that’s the from cannabis, second the are piece cultivate then the in clearance entitlement approval the land and a cetera. of which is the for The nursery, and land use of from state et licenses the and is

to the state all of need is tens pay licenses just low keep one this approve expansion, So for going At that’s are license and we them than area. other kind thousands of back which annually of they level, in will done, and least consider we But kind at first the phase. it that dollars nothing do of the do fee, we’ll the to expanded come annual. a When to range. there’s that business

jump of reapproved get for And so year’s your to at end don’t year to need of the the that through. that kind or It’s license you renewing next fee no just the hoop so in there’s the you annual be license. paying it

has California, are SoCal we you have aren’t annual It including what means we that compliance. which, upgrade even lucky is is there, on entitlement by from been in weaponized need those facility. checked to, know have license gone at that And folks most the licenses, licenses for box issues, and hurdles all California is. the provisional an every single SoCal prevent CEQA with through don’t cultivators off an that to and CEQA Environmental who absolute development our It and familiar of Act those you which you’re Quality it have. All some that is cases,

could need and are future. to do So really going that nothing pay is up renewal our trip be there’s licenses us fees the perpetuity. in to left we All

Kyle Kazan

for question, right regarding had laid And they now, Nevada. PLUS groundwork already your some

to another make As you’re can’t currently state because that law. it federal we one in probably would state we deliver violate aware, product

bring So in quality every have you yes, basically the country. around ahead that, tell single there. it’s to go make formula the gummies I well and would and state, the to known control we

hash we Florida yet. have take like couldn’t things that. look we Florida, that. the like at and is a So that to sell not there But all expect states again, water products like just some we here

be it licensing state. if a brand choose move that’s little we Farms we complex of more When to to a agreement House flower other brands to one doing it’s but bit of Glass and a anticipate we’ll try So be that out that. and or tapestry, going of of comes QC

Graham Farrar

brand, Yes. there, think for licensable PLUS clarity And That’s very I is just extensible. that’s an something imminently right?

ways licensee other e-mailed to the be done by over and Formulas manufacture state. a in easily to that can be

they optimistic ability time can the license to we’re PLUS areas that interstate that made So is one states such until about other comers. into it in the of shipped be and with

Operator

questions. we Mr. have time, Brebeck, this Please at further no And proceed.

John Brebeck

welcome mid-August. call, concludes for join Glass to earnings will QX our much, House in very Brands an Keep the This announcement. XXXX which you on again us be eye for you held Sylvie. all. results That’s Thank you. We call. Thank QX

Operator

thank sir. Ladies you gentlemen, indeed this at your Thank for attending. call and your that does conclude disconnect time, you, ask today. lines. we And for you please again, conference this Once do

Glass House Brands (GLASF) 14 May 222022 Q1 Earnings call transcript