California marijuana and hemp company Glass House Brands finalized its acquisition of a Ventura County greenhouse facility for $93 million in cash – $25 million less cash than the original price – plus stock.
The stock component of the deal includes 6.5 million Glass House shares issued to the unidentified original holder of an option to buy the facility, at a price of $10 per share, subject to a lockup agreement.
A further 3.5 million shares may be issued “upon satisfaction of certain contractual indemnity obligations,” and the option holder could earn up to $75 million worth of earnout shares.
The Southern California facility includes about 5.5 million square feet of canopy across six greenhouses on a 160-acre agricultural property, according to a Wednesday news release.
It also features an on-site well, water-treatment facilities and natural-gas cogeneration to produce power, heat and carbon dioxide.
Glass House plans to retrofit the facility to convert two greenhouses and packaging facility by the first quarter of 2022, “with initial planting expected to follow shortly thereafter, contingent on regulatory approval.”
After those upgrades, the company said the facility “is expected to conservatively produce over 180,000 dry pounds of sellable cannabis.”
“The Southern California facility is an absolute unicorn and will give us the ability to produce the highest quality cannabis at the lowest possible cost,” Graham Farrar, Glass House’s chief cannabis officer and president, in a statement.
“This should allow us to thrive no matter what the competitive environment looks like.”
Glass House is based in Long Beach and has an office in Toronto.
The company, formerly known as Glass House Group, closed its merger with Mercer Park Brand Acquisition Corp., a special purpose acquisition company, in late June.