NEWS BRIEF

California cannabis firm Glass House Group to be bought in $567M deal

California cannabis company Glass House Group is set to be acquired by a 2-year-old special acquisition company (SPAC) in a blockbuster $567 million deal aimed at creating California’s largest vertically integrated marijuana business.

According to a news release, Glass House Group will be listed on the Canadian NEO Exchange under the ticker symbol GLAS.U after the deal closes, which is expected to be in the first half of this year.

The transaction has a $1 billion equity valuation.

The deal also includes financing for the acquisition of two Glass House competitors: Retailer Element 7 and cultivator Southern California Greenhouse.

The new owner of Glass House Group will be Toronto-based Mercer Park Brand Acquisition Corp., a SPAC founded in 2019 with the goal of establishing a national marijuana brand.

By the first quarter of 2022, according to the release, Glass House is poised to gain another 17 retail locations by merging with Element 7 and will add to its cultivation footprint by another 5.5 million square feet by acquiring Southern California Greenhouse.

Mercer Park Chair Jonathan Sandelman said in the release that, as a result, “Glass House Group is poised to become the largest, vertically integrated brand-building platform in California.”

Sandelman also is CEO of Ayr Wellness, a multistate marijuana operator with offices in New York and Toronto.

The acquisition is the latest example of the newfound power of SPACs at work in the marijuana industry, which have become drivers of mergers and acquisition deals.

Glass House already runs more than 500,000 square feet of cultivation canopy and controls four retail shops.

The company plans to expand its wholesale cannabis business and is aiming to have products in roughly 700 California MJ stores.

The $567 million deal will include:

  • $325 million for the acquisition of Glass House Group.
  • $219 million for Southern California Greenhouse.
  • $24 million for the 17 store licenses from Element 7.

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