Glass House Brands Stock GLASF GLAS, a leading U.S. vertically integrated cannabis company, recently finalized a $15 million Series D preferred stock offering. This sum includes about $4.1 million in new capital on top of the initial $10.9 million.
The investment will expedite the retrofitting of Greenhouse 5 at the SoCal Farm and strengthen the company’s financial foundation.
Investor Benefits
Investors in the Series D are entitled to a 15% annual cash dividend for the first five years, increasing to 20% thereafter. Each $1,000 face value share comes with 200 warrants. These warrants allow the purchase of company equity shares at $6.00 each for five years, with potential acceleration conditions based on share price performance.
Insider Participation
A noteworthy aspect of the offering’s second closing is the participation of company insiders. Directors, officers and major shareholders subscribed to 70 shares of Series D preferred stock, receive 14,000 Warrants. Despite being a related party transaction, the company leveraged exemptions under Canadian securities laws, keeping the transaction within 25% of its market capitalization.
CEO’s Vision
Kyle Kazan, co-founder and CEO, emphasized the importance of this self-managed capital raise. “Saving cash on brokerage fees and investing it in our business has been a proud achievement,” Kazan stated. He also highlighted the substantial operating cash flow of nearly $22 million generated in 2023’s first three quarters.
This capital influx will fast-track the Greenhouse 5 retrofit, with planting expected in Q1 2024 and product sales by Q2 2024. Kazan anticipates this will enhance Glass House‘s competitiveness and significantly boost cash flow.
Strategic Use of Proceeds
The net proceeds, approximately $15 million, are earmarked for the Greenhouse 5 retrofit and Greenhouse 1 nursery expansion. The remaining funds will support working capital and general corporate purposes.
GLASF Price Action
GLASF's shares were trading 1.74% higher at $4.69 per share at the time of this writing around 11:30 PM ET Wednesday.
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