Vertically integrated California cannabis company Glass House Brands is acquiring three retail locations in the state from Natural Healing Center (NHC) in a deal worth more than $22.6 million.
Two of the NHC locations are already open in Lemoore and Morro Bay, Glass House said in a Thursday news release.
Glass House is paying roughly $22.6 million for those two locations, including $5.7 million in cash and the remainder in shares.
The third location, in Turlock, California, is under construction with plans to open in the third quarter of this year.
Glass House will acquire that store when it opens, paying six times the location’s annualized earnings before interest, taxes, depreciation and amortization during its sixth full quarter of operations.
“We were attracted to these licenses because each of these permits is domiciled in a limited license jurisdiction of California,” Glass House Chair and CEO Kyle Kazan in a statement.
“For example, Lemoore has two licenses total, Morro Bay has two, and Turlock has three. … We do not believe the city governments in these three NHC locations will issue more licenses any time soon.”
Glass House has also amended a credit agreement for an additional $10 million term loan “to fund the cash portion of the acquisition.”
“The company is exploring options for adding additional capital and liquidity to support the above acquisitions and continued growth,” the release noted.
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Glass House Brands, previously Glass House Group, was acquired by special purpose acquisition company Mercer Park Brand Acquisition Corp. in 2021.