Glass House Brands Inc · NEO:GLAS.A.U
Glass House Brands — Q2 2024 Earnings Presentation
30 slides from Glass House Brands's earnings presentation, Aug 1, 2024
Slide 1: Q2 2024 Investor Presentation
CBOE CANADA: GLAS.A.U OTCQX: GLAS.F Q2 2024 INVESTOR PRESENTATION
Slide 2: Disclaimers
DISCLAIMERS Cautionary Statements This document is for information purposes only and should not be considered a recommendation to purchase, sell or hold a security. This presentation has been prepared for discussion purposes only and is not , and in no circumstances is to be construed as an advertis
Slide 3: Achievements
ACHIEVEMENTS W E L I ST E D I N J U N E 2 0 2 1 , W H AT H AV E W E ACCO M P L I S H E D S I N C E ? v Acquired the 165-acre SoCal Farm, with 5.5M sq ft of cultivation footprint spread amongst 6 state-of-the-art greenhouses. v Obtained and immediately drew down $50M senior secured loan from Whitehaw
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS LARGEST CULTIVATION A BRAND-BUILDING MACHINE IN THE CALL OPTION ON INTERSTATE FOOTPRINT, UNMATCHED #1 US MARKET COMMERCE CAPACITY HIGH QUALITY, SUN-GROWN CANNABIS STRONGLY POSITIONED TO UP TO 6M SQ. FT. OF BEST-IN- AT SCALE AND PREDICTABLE SUPPLY CARRY LEADING MARKET SHARE CLAS
Slide 5: Glass House Brands: We Aspire to Be the #1 Cannabis Company
GLASS HOUSE BRANDS WE ASPIRE TO BE THE #1 MISSION CANNABIS B E C O M E T H E L A R G E S T A N D M O S T P R O F I TA B L E V E R T I C A L LY- I N T E G R AT E D COMPANY C A N N A B I S C O M PA N Y I N C A L I F O R N I A , D E L I V E R I N G B R A N D S T O C O N S U M E R S IN THE A C R O S S A
Slide 6: California: High Growth & Consolidation Potential
CALIFORNIA: HIGH GROWTH & CONSOLIDATION POTENTIAL >30M > 260M ~4,600 A D U LT S 1 TOURISTS2 C U LT I VATO R S 3 ~1,000 ~1,200 >600 DISTRIBUTORS3 RETAILERS3 BRANDS4 1. Source: https://www.census.gov/quickfacts/CA, the number of adults over 18 years of age. 2. Source: https://industry.visitcalifornia.
Slide 7: Unmatched Capacity and Strategic Retail Footprint
UNMATCHED CAPACITY AND STRATEGIC RETAIL FOOTPRINT Cultivation facility (3) Our retail landscape consists of 10 stores Manufacturing (1) strategically positioned across California, and Wholly-owned Retail (10) includes The Farmacy, NHC and The Pottery Berkeley Turlock • The Farmacy locations: Santa B
Slide 8: Dramatic Expansion in Revenues Already Underway
DRAMATIC EXPANSION IN REVENUES ALREADY UNDERWAY GUIDING FOR A >29% RISE IN REVENUES TO $205M TO $210M IN 20241 $M Retail Waterfall $M CPG Waterfall $M Wholesale Biomass Waterfall 45 3 20 160 43 40 12 18 17 1 140 35 16 (1) 120 14 64 30 27 12 100 25 10 80 20 8 60 15 6 41 10 40 4 5 2 20 - - - 2022A 202
Slide 9: Strong Brands Across Key Market Segments
STRONG BRANDS ACROSS KEY MARKET SEGMENTS Allswell Vapes
Slide 10: Competing in the California Flower Segment
COMPETING IN THE CALIFORNIA FLOWER SEGMENT LAUNCHING ALLSWELL IN Q3 ‘22 HELPED GLASS HOUSE BRANDS QUICKLY ADAPT IN A HIGHLY COMPETITIVE CALIFORNIA FLOWER MARKET 4.0% v The Retail and CPG markets are distressed, and many retailers are % Market Share 3.6% not current on payments, reducing the reliabil
Slide 11: Unmatched Capacity & Low-Cost Production
OPERATIONS: THE SOCAL GREENHOUSE FARM UNMATCHED CAPACITY & LOW-COST PRODUCTION • Q2 2024 production from the newly retrofitted Greenhouse 5 outstripped our expectations in terms of quantity and quality • At this early stage, Greenhouse 5 is already our most efficient greenhouse 5 . 5 M S Q . F T. O
Slide 12: Operations: Expanding Footprint
OPERATIONS:EXPANDING FOOTPRINT UNMATCHED CAPACITY • 165-acre property in Southern California (SoCAL) SoCAL 3.0M SQ FT • Planned 5.5M sq ft of cultivation across Q1 2024 650K Lbs. 6 state-of-the-art greenhouses to be built out in 3 Phases. SoCAL • 1.5M dry pounds of cannabis per 2.0M SQ FT Q1 2022 35
Slide 13: Operations: Unmatched Cost Structure
OPERATIONS: UNMATCHED COST STRUCTURE PRO FORMA WHOLESALE BIOMASS ECONOMICS1 Declining cost of production leads to improving gross margins Cost of Production 2 Cultivation Proforma Economics Weighted Average Selling Price 3,6 $300 $350 $290 $340 $336 $272 $282 $283 $278 70% $300 $250 65% 64% $250 50%
Slide 14: The Farmacy
THE FARMACY THE FARMACY – SANTA BARBARA THE FARMACY – SANTA ANA THE FARMACY SANTA YNEZ THE FARMACY – BERKELEY THE FARMACY ISLA VISTA 14
Slide 15: Natural Healing Center & The Pottery
NATURAL HEALING CENTER & THE POTTERY NHC – GROVER BEACH NHC – MORRO BAY THE POTTERY – LOS ANGELES NHC – LEMOORE NHC – TURLOCK 15
Slide 16: ESG as a Strategic and Competitive Advantage
ESG AS A STRATEGIC AND COMPETITIVE ADVANTAGE • STRATEGICALLY LOCATED IN CALIFORNIA, WHERE GROWING CONDITIONS ARE OPTIMAL • FOCUS ON ENERGY EFFICIENCY WITH SOLAR AND COGENERATION CAPABILITIES • ESG MANDATED U.S. AUM ARE FORECAST TO REACH $53 TRILLION BY 20251 Kg CO2 per kg Flower2 kWh per Sq. Ft. of
Slide 17: Meet the Glass House Team
MEET THE GLASS HOUSE TEAM KYLE KAZAN GRAHAM FARRAR MARK VENDETTI HILAL TABSH BEN VEGA Co-founder, Chairman & CEO Co-founder, President & Board Director Chief Financial Officer Chief Revenue Officer General Counsel & Corporate Secretary JOHN BEN JACQUELINE JENNIFER JOSHUA WILL BREBECK VASQUEZ DE GINE
Slide 18: Historical Financial Data
TN =| GLASS HOUSE BRANDS HISTORICAL FINANCIAL DATA
Slide 19: Revenue and Gross Profit
REVENUE AND GROSS PROFIT REVENUE (in thousands) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 FY 2022 FY 2023 Retail (B2C) $9,373 $10,073 $10,058 $9,574 $9,921 $10,885 $26,731 $39,078 Wholesale CPG (B2B) 3,715 3,954 4,290 4,103 4,253 3,979 16,770 16,062 Wholesale Biomass (B2B) 14,467 30,638 33,839
Slide 20: Wholesale Biomass Metrics
WHOLESALE BIOMASS METRICS WHOLESALE BIOMASS PRODUCTION AND COST PER POUND Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 FY 2022 FY 2023 Equivalent Dry Pounds of Production 48,099 103,336 101,825 103,462 61,334 149,717 193,723 356,722 % Change to Prior Year 188% 282% 36% 37% 28% 45% 100% 84% Cost p
Slide 21: Net Income / Loss
NET INCOME / LOSS (in thousands) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Revenues, Net $27,555 $44,665 $48,187 $40,429 $30,100 $53,938 Cost of Goods Sold 14,981 20,293 22,176 22,417 17,574 25,264 Gross Profit 12,574 24,372 26,011 18,012 12,526 28,674 % of Net Revenue 46% 55% 54% 45% 42% 53%
Slide 22: Adjusted EBITDA
ADJUSTED EBITDA (in thousands) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Net Income (Loss) (GAAP) $(34,783) $(24,952) $(211) $(38,115) $(18,269) $10,039 Depreciation and Amortization 3,836 3,570 3,676 3,545 3,716 3,723 Interest Expense 2,080 2,547 2,159 3,033 2,206 2,593 Income Tax Expense 2,3
Slide 23: Select Balance Sheet Information
SELECT BALANCE SHEET INFORMATION (in thousands) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Cash and Restricted Cash $16,368 $22,690 $37,893 $32,524 $24,408 $25,879 Accounts Receivable, Net 2,527 3,589 4,199 3,979 3,008 7,717 Prepaid Expenses and Other Current Assets 4,387 3,837 3,965 3,873 3,45
Slide 24: Select Cash Flow Information
SELECT CASH FLOW INFORMATION (in thousands) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Net Income (Loss) $(34,783) $(24,952) $(211) $(38,115) $(18,269) $10,039 Depreciation and Amortization 3,836 3,570 3,676 3,545 3,716 3,723 Share-Based Compensation 1,631 1,532 2,565 1,909 3,272 3,621 Impairme
Slide 25: Equity Table
EQUITY TABLE (in thousands, except share price) Q2 2024 Q1 2024 Change Comments Total Equity and Exchangeable Shares 74,370 71,230 3,140 Exercise of RSU's, ISO's NQSO's and bonuses paid in shares Warrants Series D 2,980 3,000 (20) Exercise price of $6.00 with an expiration date of August 2028 Series
Slide 26: Notes Payable and Preferred Equity
NOTES PAYABLE AND PREFERRED EQUITY (in thousands) Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Comments Notes Payable Secured Credit Facility $50,000 $50,000 $49,375 $47,500 $45,625 Maturity is 11/30/26 Series A 11,895 11,895 11,895 \11,895 11,895 8% semi annual interest, cash or shares, higher of 10 day
Slide 27: CBOE CANADA: GLAS.A.U OTCQX: GLAS.F
CBOE CANADA: GLAS.A.U OTCQX: GLAS.F
Slide 28: Board of Directors
BOARD OF DIRECTORS KYLE KAZAN GRAHAM FARRAR • Co-founder, Chairman & CEO of Glass House Group • Co-founder, President & Board Director of Glass House Group • 30+ years of successful Private Equity & investment experience with focus on real estate • 20+ years of serial entrepreneurship, including tak
Slide 29: Board of Directors
BOARD OF DIRECTORS GEORGE RAVELING JOCELYN ROSENWALD • First African American basketball coach in the Pac-8 (now Pac-12); head coach at • Co-founder and Board Director of Glass House Group Washington State, University of Iowa, & USC; assistant coach of medal-winning • Veteran of real estate investme
Slide 30: CBOE CANADA: GLAS.A.U OTCQX: GLAS.F
CBOE CANADA: GLAS.A.U OTCQX: GLAS.F