California cannabis business Glass House borrowing up to $100 million

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Vertically integrated California cannabis company Glass House Brands is borrowing up to $100 million to retrofit its recently acquired California greenhouse and more.

Under the senior secured term loan, Glass House initially will borrow $50 million from an unspecified “U.S.-based private credit investment fund,” according to a news release issued Monday.

Further loans of $25 million will be available under certain conditions.

The loans, repayable beginning in December 2023, will carry a variable interest rate of 10%-12% annually.

Glass House will issue 2 million new warrants to the lender, with each warrant exercisable to acquire a Glass House share until June 2026.

The capital “will be used to fund the phased retrofit of (Glass House’s) approximately 5.5 million square feet cultivation facility currently under renovation in Camarillo, California” as well as for general corporate purposes, the company said.

Glass House acquired the property for $93 million in September.

The Long Beach-based firm said its initial facility retrofit will include converting two greenhouses, as well as creating a packhouse and a distribution center” to support Glass House’s biomass business.

“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,” Glass House CEO Kyle Kazan said in a statement.

“With this significant capacity we will be extremely well-positioned to supply cannabis consumers across the country, once that opportunity arises.”

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Glass House Brands was created after special purpose acquisition company Mercer Park Brand Acquisition Corp. acquired Glass House Group in April.

Glass House shares trade as GLAS on the NEO Exchange in Canada and as GLASF on the U.S. over-the-counter markets.