John Schroyer
California-based Glass House Brands (Cboe: GLAS.A.U) (OTCQX: GLASF) posted an impressive sequential and year-over-year revenue increase to $44.6 million in the most recent quarter ended June 30, but the company still lost $24.9 million for the period.
Although revenue was up 171% year-over-year from $16.5 million a year ago, and up 54% from the first quarter of 2023, that wasn’t enough for one of California’s leading brands to break even. But it was enough for a revenue forecast adjustment; Glass House changed its current fiscal year revenue outlook to $165 million-$170 million, up from $160 million, “due to higher than projected wholesale biomass production.”
As Glass House’s wholesale business has improved, so has its production capacity and cost efficiency. In the second quarter, the company cranked out more than 103,336 pounds of cannabis, a 311% year-over-year increase, but the cost per pound was $139, a 12% decrease from a year prior and a 29% decrease from Q1, Glass House reported.
Average wholesale price per pound increased 43% year-over-year, Glass House reported, to $340 per pound. And wholesale biomass sales for Glass House were up 358% year-over-year to $30.6 million for the quarter, a likely result of the shrinking number of cultivation competitors the company has in California.
“The second quarter of 2023 was the best in our history,” CEO Kyle Kazan said in a statement. “Our position as a vertically integrated California cannabis company with a competitive core competency in the cost-efficient cultivation of premium flower is the reason why we’ve been able to persevere in this difficult market environment.”
Kazan bullishly predicted that the company’s current momentum will carry it through the rest of the year, though when it will become profitable – after losing $35.6 million in 2022 – remains unclear.
Also this past quarter, Glass House closed on the acquisition of storefront retail chain Natural Healing Center Dispensary for $5.7 million in cash and another $16.9 million in stock.
Glass House Board Member Hector de la Torre also resigned last month, citing his appointment to the Gateway Cities Council of Governments.
The company is also the target of a lawsuit filed in June by retail competitor Catalyst Cannabis Co., which alleged that Glass House is illegally diverting cannabis to the underground market and out of state. Glass House denied the allegations and called them “entirely manufactured and unsubstantiated” in a countersuit of its own.
