Glass House Brands Secures $ 100 Million Senior Secured Term Loan

Non-dilutive capital to fund the gradual retrofit of a 5.5 million square foot cultivation facility

LONG BEACH, Calif. And TORONTO, Dec. 13, 2021 / CNW / – Glass House Brands Inc. (“Glass House” or the “Company”) (NEO: GLAS.AU) (NEO: GLAS.WT.U) (OTCQX: GLASF) (OTCQX: GHBWF), one of the fastest growing vertically integrated cannabis companies in the United States, today announced that it has up to $ 100 million with a US-based personal loan mutual fund (the “Lender”) (the “Loan”) with an initial drawing of $ 50 million (the “Initial Loan”). The loan with an initial term has a variable interest rate of currently 10% per year and may in no case be more than 12% per year. The gross proceeds of the loan will be used to fund the gradual refurbishment of the Company’s approximately 5.5 million square foot facility currently under renovation in Camarillo, California (the “SoCal Facility”) and for general corporate purposes.

As previously announced, the company completed the acquisition of the 160-hectare SoCal facility with six on-site greenhouses in September 2021. Wells, water treatment systems, automatic roof washing system, additional lighting and natural gas, combined heat and power systems for generating electricity, heat and CO2. The company has planned that the first Phase 1 of the SoCal facility retrofit will include the conversion of two greenhouses, one to propagate nursery cuttings or clones to support the entire facility and the other to have a capacity of 180,000 pounds of biomass per year will have. The Phase I expansion also includes a packing house and distribution center that will support the growth of the company’s biomass wholesale business.

To view an updated video on the construction progress of the SoCal facility, please visit https://ir.glasshousebrands.com/socal-greenhouse/.

Since our inception, our vision has been to become the largest cannabis branding platform in California, and this loan agreement provides us with a non-dilutive capital injection to fund the full refit of our SoCal facility while we continue to pursue that goal. With support for cannabis regulation reform emerging across the country, now is the time for us to improve the availability of our high quality, sustainably grown California cannabis while significantly lowering our COGS through scaling and automation.

Kyle Kazan, Chairman and Chief Executive Officer of Glass House

We have a total planned area of ​​6 million square feet and a projected total biomass production of approximately 1.7 million pounds, which we believe would make Glass House Brands the largest and most efficient cannabis supplier in the United States by a wide margin. With this significant capacity, we will be very well positioned to cater to cannabis users across the country when this opportunity presents itself.

Mr. Kazan added, “I would like to thank our team for working tirelessly on this agreement. I am very proud of your efforts. “

The Initial Loan is payable starting December 1, 2023 in monthly installments totaling 1.25% of the original nominal amount of the Initial Loan. Two consecutive drawings of $ 25 million each (the “Delayed Drawing Loans“) will be available on future dates subject to certain conditions under the loan agreement and will expire on December 1, 2023. to repay in monthly installments a total of 1.25% of the original nominal amount of the delayed-drawing fixed-term loan. The terms of the loan agreement include the creation and issuance of the Company’s 2,000,000 new warrants that will be freely tradable in Canada under the same CUSIP / ISIN as the Company’s existing publicly traded warrants (NEO: GLAS.WT.U; OTCQX: GHBWF ), and delivered to the lender upon completion, with each warrant at an exercise price of US $ 11.50 for the purchase of one subordinated voting share, one share with limited voting rights or one share with limited voting rights (NEO: GLAS.AU) by April 26 June 2026 is exercisable, subject to acceleration or redemption as stipulated in the terms of the Warrant Brokerage Agreement for the Warrants.

About glass house brands

Glass House Brands is one of the fastest growing vertically integrated cannabis companies in the US with a particular focus on the California market and building leading, enduring brands to serve consumers in all segments. From its greenhouse cultivation to its manufacturing practices, from branding to retail, the company’s endeavors are rooted in respect for people, the environment and the community of Co-Founders Kyle Kazan, Chairman and CEO, and Graham Farrar, Board Member and President, at the outset instilled. Through its portfolio of brands that include Glass House Farms, Forbidden Flowers and Mama Sue Wellness, Glass House Brands is committed to realizing its vision of excellence: great cannabis products that are sustainably produced for the benefit of all. For more information and company updates, visit www.glasshousebrands.com and https://ir.glasshousebrands.com/contact/email-alerts/.

Original press release

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