A Canadian special-purpose acquisition company is buying Glass House Group in a US$567 million deal aimed at creating California’s largest cannabis operator.
Mercer Park Brand (NEO: BRND.A.U) said Thursday that Glass House will be listed on the Canadian NEO Exchange under the ticker symbol GLAS.U after the deal closes.
The transaction is expected to close in the first half of this year.
The deal has a US$1.04 billion equity valuation with an enterprise valuation of around US$691 million.
Glass House is one of the largest players operating in California’s recreational market.
The firm currently operates over 500,000 square feet of cultivation crops and produces almost 50,000 kilograms of dried flower. It also runs four stores and is active in the cannabis wholesale sector.
The company says it generated revenue of US$53 million in 2020, up 185 per cent from the previous year.
“Glass House Group is poised to become the largest, vertically integrated brand-building platform in California,” Mercer Park chair Jonathan Sandelman said in a statement.
Read more: Neglecting legacy cannabis operators is costing California billions a year
Photo via Glass House Group
When Sandelman helped kick off Mercer Park in 2019, he said the team’s chief goal was to launch a major national cannabis brand in the U.S.
Sandelman also is the CEO of Ayr Wellness (CSE:AYR.A), a multi-state operator with offices New York and Toronto.
The deal includes financing for Glass House to complete two acquisitions that it’s close to completing.
Mercer Park says by the first quarter of 2022, Glass House will gain another 17 stores by merging with retailer Element 7.
The weed firm will also add 5.5 million square feet to its cultivation canopy by acquiring Southern California Greenhouse by early 2022.
Over the long term, Glass House says it aims to build its wholesale network to over 700 dispensaries statewide.
Glass House Farms, the company’s flagship flower brand, held a 4 per cent share of the California market at the end of 2020.
The US$567 million cash-and-stock deal will include:
- US$325 million for the acquisition of Glass House Group.
- US$219 million for Southern California Greenhouse.
- US$24 million for 17 store licences owned by Element 7.
Top image via Southern California Greenhouse
jared@mugglehead.com
