California cannabis producer and retailer Glass House Brands reported fourth-quarter improvements in gross profits and margins for the fourth quarter of 2023, leading to record revenue of $160.8 million for the full year.
Revenue in the fourth quarter hit $40.4 million, up 35% from the same period a year ago, Glass House executives said during a Thursday earnings call with analysts.
The Long Beach-based company’s wholesale business drove the gains, bringing in revenue of $26.8 million, up 71% year-over-year.
Glass House’s retail business, which includes 10 California stores, saw revenue slide to $9.6 million, down 5% as product discounts and promotions cut into sales.
The company posted a gross profit of $18 million in the fourth quarter, up 96% from a year earlier.
Its gross margin was 45%, up from 31% from the fourth quarter of 2022.
For the full year, Glass House’s record revenue was up 89% from 2022, primarily driven by wholesale production.
The company said adjusted earnings in 2023 reached $24.5 million, compared with a $22.3 million loss a year ago.
Glass House ended 2023 with $32.5 million in cash, up from $14.1 million in 2022.
The company provided first-quarter and full-year guidance for 2024, projecting revenue of $28 million-$29 million and $215 million-$220 million, respectively.
CEO Kyle Kazan said during the call that Glass House’s latest greenhouse expansion in Camarillo, which includes 700,000 square feet of marijuana plants, began cultivation Jan. 22, with its first harvest on March 18.
“We expect to begin generating revenue in the second week of April,” he said.
In an effort to combat California’s thriving unlicensed market, Kazan introduced the company’s newest brand Allswell, which will sell for less than $10 per eighth, taxes included, at its network of stores before April 20, typically the busiest days for marijuana retailers.
“The best way to take share from the illicit market is to provide tested, safe cannabis of higher quality and at a lower price than the illegal market,” he said.
The company also shuttered its Forbidden Flowers and Field brands, Kazan said during the call.
“These were high-quality products that nonetheless have not achieved the marketplace acceptance and economics required to merit continued promotion and production,” he added.
Other Glass House highlights in 2023 included:
- Selling 339,000 pounds of wholesale cannabis, up 97% from 172,400 pounds in 2022.
- An average price per pound of $312, up 43% from 2022.
- Operating cash flow of $23.2 million, compared with a loss of $40.8 million in 2022.
Glass House shares – which trade as GLAS on the Cboe Canada exchange and GLASF on the U.S. over-the-counter markets – were up 3.2% to $8 in midday trading Thursday.
Chris Casacchia can be reached at chris.casacchia@mjbizdaily.com.
