Glass House Brand Lands $100M Term Loan For Construction Of California Cannabis Grow Facility

Vertically-integrated cannabis company Glass House Brands Inc. GLAS (NEO GLAS.WT.U) GLASF GHBWF is looking to raise up to $100 million through a senior secured term loan agreement with a U.S.-based private credit investment fund.

The company said that the initial draw would amount to $50 million.

The Initial term loan has a variable interest rate currently set at 10% per annum, and in no event shall it be more than 12% per annum.

It would be repayable in monthly installments beginning on December 1, 2023, at an aggregate amount equal to 1.25% of the original principal amount of the Initial Term Loan.

Moreover, the two subsequent draws of $25 million each will be available at future dates provided certain terms and conditions under the loan agreement have been met and shall be repayable in monthly installments beginning on December 1, 2023.

Glass House, based in Long Beach California, said that it plans to use the proceeds to fund the phased retrofit of its roughly 5.5 million square feet cultivation facility currently under renovation in Camarillo, California, as well as for general corporate purposes.

In addition, the company wrapped up the acquisition of the approximately 160-acre SoCal Facility with six on-site greenhouses in September 2021.

SoCal Facility

The facility includes around 125 acres of ultra-high-tech and efficient KUBO Ultra-Clima greenhouses, an on-site well, water treatment facilities, automated roof washing system, supplemental lights and natural gas cogeneration facilities producing power heat and CO2.

The initial phase 1 of the SoCal facility retrofit will include the conversion of two greenhouses, one of which will propagate nursery cuttings or clones to support the entire facility and the other which will have a capacity of 180,000 pounds of biomass per year.

The expansion plans also include a packhouse and a distribution center, which will support the growth of the company’s wholesale biomass business.

“We have a planned total footprint of 6 million square feet and 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 U.S., by a wide margin,” said Kyle Kazan, the company’s chairman and CEO. “With this significant capacity, we will be extremely well-positioned to supply cannabis consumers across the country once that opportunity arises.”

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Photo: Courtesy of Sharon McCutcheon on Unsplash