After the market closed on Monday, Glass House Brands Inc. (OTC: GLASF) (OTC: GHBWF)reported financial results for its second quarter ending June 30, 2021. Glass House‘s revenue increased 62% for the quarter to $18.7 million from last year’s $11.6 million. Glass House said the increase in revenue was primarily due to an increase in cannabis production from its second greenhouse cultivation facility, which began operations in the first quarter of 2020. The net loss increased to $4.7 million from last year’s $3.6 million.
“We have continued to build on the substantial forward momentum we developed coming out of our qualifying transaction by executing on our expansion strategies and scaling our operations,” said Kyle Kazan, Glass House Chairman, and CEO. “While our results are strong and show consistent growth for both the top and bottom lines, we did face a few challenges at our Padaro farm coupled with a softer California wholesale flower market that have negatively impacted some of our yields and our COGS. “With our strong balance sheet, a team of proven operators, and significant growth projects ahead of us, we remain confident that we are exceptionally well-positioned to take on the significant opportunities ahead of us in the world’s largest cannabis market. We are on track to close the acquisition of our 5.5 million square foot cultivation facility later this month and are looking forward to accelerating the rollout of our retail network upon closing a number of these transactions under the merger and exchange agreement later this year.”
Glass House noted that the expansion of the cultivation facility had increased from 113,000 square feet during 2020 to over 390,000 square feet by the end of 2020. In the second quarter, wholesale and wholesale CPG revenue increased by $4.3 million or 54% compared to last year. The company’s cannabis retail dispensaries also contributed consistent revenue growth, increasing $2.8 million, or 77%.
Total operating expenses rose 56% to $9.6 million versus last year’s total expenses of $6.2 million. The company said that general and administrative expenses for Q2 2021 and Q2 2020 were $5.9 million and $4.6 million, respectively, an increase of $1.3 million, or 28%. The increase in general and administrative expenses is primarily attributed to the Company’s initiatives of operational expansion and used to support corporate, cultivation, and retail operations. Professional fees Q2 2021 and Q2 2020 were $1.9 million and $0.5 million, respectively, an increase of $1.4 million, or 288% related to the RTO transaction and other initiatives that occurred during the second quarter of 2021.
Glass House is sitting comfortably with 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.