Canadians Mercer Park Brand Acquisition Corp. acquired California’s rising star Glass House Group and announced plans to create one of the biggest weed entities in the state with a focus on brand building.
Glass House Group was one of the stars of 2020. The $35 MSRP eighths from their namesake farm were a smashing success. According to the data from BDS Analytics, Glass House Farms owned a 4% market share by the end of the year. In the process, the farm jumped from #63 to #2 on BDS’ statewide rankings. The deal would see them hit the gas even harder in the years ahead to bump that 4% share and prepare for the possibilities of interstate commerce.
The Toronto-based Mercer Park Brand Acquisition Corp. [Mercer Park BRND] was formed in 2019 to build brands south of the border. On their website, they call Glass House the cornerstone acquisition of their two years in business. The Canadians bought Glass House for $567 million USD.
“When we formed Mercer Park BRND, we aimed to create a platform that could launch the first national cannabis brands in the United States,” said BRND Chairman Jonathan Sandelman. “We view successful cannabis brand-building as a combination of four factors: the ability to control quality biomass at a large scale; produce at the most competitive costs; offer the highest quality products; and deliver the best value proposition to consumers. This took us to California with its ideal growing climate and community of talented and experienced growers, and ultimately to Glass House Group and this incredible portfolio of assets and talent.”
Sandelman believes Glass House has successfully positioned the company for the road ahead.
“Glass House has a track record of excellence across all four of these drivers and has established a top-ranked flower brand in one of the most competitive cannabis markets in the world,” Sandelman said. “Glass House Group is poised to become the largest, vertically integrated brand-building platform in California, the world’s largest cannabis market.”
Sandelman certainly is not exaggerating. The infrastructure Glass House put together to fuel last year’s climb was substantial. Their farms currently have a cultivation footprint of over 500,000 square feet. To help put that space in perspective, a football field is 57,600 square feet. Glass House is currently producing 110,000 pounds of dry flower biomass per year. While not all usable weight, hence the biomass moniker, it’s still 55 tons of pot. And as the shelves prove, there was a lot of good pot that came out of the effort.
The new deal will see Glass House bump its production space by five times by 2023. The expected additional capacity will grow their footprint up to approximately 2.5 million square feet in the first phase. But that’s just the start.
While it doesn’t make sense to flood the California market with more than a million pounds of your own biomass, Glass House does have further plans for after 2023, and whatever the marketplace looks like beyond California’s borders. The final phase of the plans would see Glass House with a total of 6 million square feet of cultivation space. If the yields scale up similarly to where they’re at now, you’re talking about over 1.3 million pounds of weed biomass coming out of one entity per year – at that point grown across over 104.1 football fields worth of garden. The mental visual is fairly stunning.
Glass House is expected to have up to 21 locations open by next summer and is already on 250 other dispensary shelves in California. That’s a lot of weed. Even if they get into the 700 total dispensaries they are targeting by year’s end, they still have plenty of time until they need to worry about hitting that final production goal.
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