Glass House Brands Inc. (OTCQX: GLASF) (OTCQX: GHBWF) has entered into a senior secured term loan agreement with a U.S.-based private credit investment fund for up to $100 million, with an initial draw of $50 million. Glass House said that the initial term loan has a variable interest rate currently set at 10% per annum, and in no event shall be more than 12% per annum. The money will be used to fund the phased retrofit of the company’s approximately 5.5 million square feet cultivation facility currently under renovation in Camarillo, California and for general corporate purposes.
“Since our inception, it has been our vision to become the largest cannabis brand-building platform in California and this loan agreement provides us with a non-dilutive infusion of capital to fund the complete retrofit of our SoCal Facility as we continue to pursue this goal,” said Kyle Kazan, Chairman and Chief Executive Officer of Glass House. “With support building across the country for cannabis regulatory reform, now is the right time for us to improve availability of our high-quality, sustainably grown California cannabis while significantly lowering our COGS through scale and automation. We have a planned total footprint of 6 million square feet and projected total biomass production of approximately 1.7 million pounds, which we believe would make Glass House Brands the largest and most efficient cannabis supplier in the U.S., by a wide margin. With this significant capacity, we will be extremely well-positioned to supply cannabis consumers across the country, once that opportunity arises.”
Glass House recently completed the acquisition of the approximately 160-acre SoCal Facility with six on-site greenhouses in September 2021. The SoCal Facility includes approximately 125 acres of ultra-high-tech and efficient KUBO Ultra-Clima greenhouses, on-site well, water treatment facilities, automated roof washing system, supplemental lights, and natural gas cogeneration facilities producing power, heat, and CO2. The company said it had planned the initial phase 1 of the SoCal Facility retrofit to include the conversion of two greenhouses, one of which will propagate nursery cuttings or clones to support the entire facility and the other which will have a capacity of 180,000 pounds of biomass per year. Phase I expansion will also include a packhouse and a distribution center which will support the growth of the Company’s wholesale biomass business.
In August Glass House reported cash and cash equivalents of $134.3 million as of June 30, 2021 versus just $4.5 million as of June 30, 2020. During the quarter, Glass House said it eliminated $38.3 million of debt through the completion of a Preferred Stock offering exchanging both principal and interest accrued to participating investors and issued both companies Preferred Stock and warrants, which triggered the equity conversion of all of the company’s outstanding Convertible Promissory Notes.
The company posted a video of the facility on the website which can be seen here.