Glass House Brands Inc · NEO:GLAS.A.U
Glass House Brands — Q2 2023 Earnings Presentation
32 slides from Glass House Brands's earnings presentation, Aug 1, 2023
Slide 1: Q2 2023 Investor Presentation
NEO: GLAS.A.U OTCQX: GLAS.F Q2 2023 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 ~5,600 A D U LT S 1 TOURISTS2 C U LT I VATO R S 3 ~1,150 1,700 ~750 DISTRIBUTORS3 RETAILERS3 BRANDS4 1. Source: https://www.census.gov/quickfacts/CA 2. Source: https://industry.visitcalifornia.com/research/travel-forecast 3. Source: https:
Slide 7: California: Largest Single US Cannabis Market
CALIFORNIA: LARGEST SINGLE US CANNABIS MARKET 2025e 7.8 T H E L E G A L M A R K E T I N T H E I L L E G A L M A R K E T I N Market Size C A L I F O R N I A I S M O R E C A L I F O R N I A I S E S T I M A T E D Projection T H A N T W I C E T H E S I Z E T O B E 2 X - 3 X T H E S I Z E O F (Legal, $B)
Slide 8: The Vertical Advantage
THE VERTICAL ADVANTAGE NEW DISPENSARIES Increased • N H C : G r o v e r B e a c h , cultivation L e m o o r e , M o r r o B a y & utilization Tu r l o c k 1 Increased • T h e Po t t e r y 2 • F a r m a c y : S a n t a Y n e z , wholesale I s l a V i s t a 3 CPG Increased brand sales 1. The NHC - Gro
Slide 9: Unmatched Capacity and Rapidly Expanding Retail Footprint
U N MATCH E D CA PACI TY A N D R A P I D LY E X PA N D I N G R E TA I L F OOT P R I N T We added 7 new dispensaries since September 2022 and now have a total of 10 Cultivation facility (3) Manufacturing (1) • Acquired the remaining equity ownership interests of The Wholly-owned Retail (10) Pottery i
Slide 10: Dramatic Expansion in Revenues Already Underway
DRAMATIC EXPANSION IN REVENUES ALREADY UNDERWAY BUILDING BLOCKS IN PLACE TO REACH $165-$170M ANNUAL REVENUE IN 20231 $M $M $M Retail Waterfall CPG Waterfall Wholesale Biomass Waterfall 45 30 120 13 66 40 26 25 100 35 -3 30 5 20 80 -3 25 22 15 60 20 15 10 19 40 10 22 5 20 5 2021A 2022A Incremental 20
Slide 11: Strong Brands Across All Segments
STRONG BRANDS ACROSS ALL SEGMENTS EXISTING BRANDS COVER >70% OF CANNABIS CATEGORIES G O O D . H O N E S T . C A N N A B I S . F U N C T I O N A L . F L A V O R F U L . C A N N A B I S E D I B L E S . 11
Slide 12: Consistently Amongst the Leaders in California Flower Share
C O N S I S T E N T LY A M O N G S T T H E L E A D E R S I N C A L I F O R N I A F L O W E R S H A R E BY Q4 ’21, OUR FIRST BRAND REACHED THE #1 FLOWER RANKING IN BDSA & #2 RANKING IN HEADSET ANALYTICS AND HAS DEMONSTRATED STEADINESS IN A VOLATILE AND COMPETITIVE MARKET 3.50 % #1 #1 3.00 % #2 #2 #4
Slide 13: Operations: The SoCal Greenhouse Farm
OPERATIONS: THE SOCAL GREENHOUSE FARM UNMATCHED CAPACITY & LOW-COST PRODUCTION • Q4 22 COST OF PRODUCTION HIT A RECORD LOW $127/LB • PROJECTED COST OF PRODUCTION FOR 2H 23 IS $120/LB 5 . 5 M S Q . F T. O F H I G H T E C H , B E S T I N C L A S S , C O N T R O L L E D E N V I R O N M E N T G R E E N
Slide 14: Operations: Expanding Footprint
OPERATIONS:EXPANDING FOOTPRINT NEW, UNMATCHED CAPACITY • 165-acre property in Southern California (SoCAL) SoCAL 3.0M SQ FT • Planned 5.5M sq ft of cultivation across 2023 600K Lbs. 6 state-of-the-art greenhouses to be built out in 3 Phases. • 1.5M dry pounds of cannabis per SoCAL 2022 2.0M SQ FT ann
Slide 15: Operations: Unmatched Cost Structure
OPERATIONS: UNMATCHED COST STRUCTURE PRO FORMA WHOLESALE BIOMASS ECONOMICS1 Declining cost of production leads to improving gross margins 2 Cost of Production Cultivation Proforma Economics Q3 2023 & Q4 2023 Cost of Production are projections based on Glass House official guidance Weighted Average S
Slide 16: Existing Retail at Year-End 2021
EXISTING RETAIL AT YEAR-END 2021 THE FARMACY – SANTA BARBARA Voted Best Local Dispensary 2020 and 2021 DELIVERY THE FARMACY – BERKELEY Best Delivery East Bay 2021 THE FARMACY – SANTA ANA Top 11 Coolest Dispensaries - VenueReport 16
Slide 17: New Retail - Natural Healing Center
NEW RETAIL - NATURAL HEALING CENTER MORRO BAY2 GROVER BEACH1 TURLOCK3 LEMOORE1 1. The NHC - Grover Beach and NHC - Lemoore dispensary acquisitions closed on 7 Sep 2022. For more information, please see here. 2. The NHC – Morro Bay dispensary acquisition closed 15 Sep 2022. For more information, plea
Slide 18: New Retail - Farmacy and The Pottery
NEW RETAIL- FARMACY AND THE POTTERY NEW FARMACY DISPENSARIES IN SANTA BARBARA COUNTY THE FARMACY ISLA VISTA1 THE FARMACY SANTA YNEZ2 THE POTTERY – LOS ANGELES3 Cited by Thrillist, Angeleno and the L.A. Times as one of the Best High-End 1. Farmacy Isla Vista opened in December 2022. For more detail,
Slide 19: 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 20: 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 JENNIFER WILL GERRIT JACQUELINE JOSHUA BREBECK VASQUEZ
Slide 21: Historical Financial Data
TN =| GLASS HOUSE BRANDS HISTORICAL FINANCIAL DATA
Slide 22: Revenue and Gross Profit
REVENUE AND GROSS PROFIT Revenue (000's $) Q122 Q222 Q322 422 Q123 Q223 FY21 FY22 Retail (B2C) $ 4858 $ 4,839 $ 6440 $ 10593 $ 9373 $ 10,073 $ 21,734 $ 26,731 Wholesale CPG (B2B) $ 3,992 $ 4945 $ 7,862 $ 5,989 $ 5,182 $ 3,954 $ 25,543 $ 22,788 Wholesale (Biomass (B2B) $ 5,122 $ 6,689 $ 13,954 $ 15,6
Slide 23: Wholesale Biomass Metrics
WHOLESALE BIOMASS METRICS 23
Slide 24: Net Income/(Loss)
NET INCOME/(LOSS) Net Income / (Loss) (000's) Q2 2022 Q1 2023 Q2 2023 Revenues, net $ 16,473 $ 29,022 $ 44,665 Cost of goods sold $ 16,219 $ 17,066 $ 20,293 Gross profit $ 254 $ 11,956 $ 24,372 % of Net Sales 2% 1% 55% Expenses: General and administrative $ 10,875 $ 11,386 $ 13,054 Sales and marketi
Slide 25: Adjusted EBITDA
ADJUSTED EBITDA Adjusted EBITDA (000's) Q2 2022 Q1 2023 Q2 2023 Net income (loss) $ (14,192) $ (38,785) $ (24,905) Interest $ 1571 $ 2,080 $ 2,547 Depreciation and amortization $ 2,837 $ 3,836 $ 3,569 Taxes $ 1,733 _$ 2,422 $ 5,246 EBITDA (non-GAAP) $ (8,052) $ (30,447) $ (13,544) Share-based Compen
Slide 26: Select Balance Sheet Information
SELECT BALANCE SHEET INFORMATION 26
Slide 27: Select Cash Flow Information
SELECT CASH FLOW INFORMATION 27
Slide 28: Equity Table (Quarter-End Q1 2023)
EQUITY TABLE (QUARTER-END Q1 2023) 28
Slide 29: Appendix
TN =| GLASS HOUSE BRANDS APPENDIX
Slide 30: 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 31: Board of Directors (Cont'd)
BOARD OF DIRECTORS (CONT’D) JOCELYN ROSENWALD GEORGE RAVELING • Co-founder and Board Director of Glass House Group • First African American basketball coach in the Pac-8 (now Pac-12); head coach at • Veteran of real estate investment industry; most recently, successfully managed $500M Washington Sta
Slide 32: NEO: GLAS.A.U OTCQX: GLAS.F
NEO: GLAS.A.U OTCQX: GLAS.F