This acquisition will help to triple the company’s retail footprint in California. With three wholly owned retail stores—operating under the Farmacy brand—Glass House Brands will add these three Natural Healing Center locations, a previously acquired Pottery location and three more Farmacy storefronts set to open later this year.
According to the press release, the two operational NHC dispensaries, in Lemoore and Morro Bay, Calif., “had revenue of $15.3 million from April 2021 through March 2022 with EBITDA margins above 20%.”
The third retail location is in Turlock, south of Modesto.
“This acquisition will advance us further in our goal of becoming one of the largest retailers in the state; provide incremental outlets for flower sales as the SoCal facility comes online; and add further support to our CPG business, including PLUS, our recently acquired and leading cannabis edibles company based in California,” said Kyle Kazan, Glass House Chairman and CEO.
As the state market’s balance between cultivation and retail continues to settle, acquisitions like this are a strategic part of the vertically integrated operator’s growth plans in California. In-state M&A has become one important method for growth, given the relatively slow rollout of additional retail licenses (and additional counties opting in, in the first place, to hosting retail businesses).
“We were attracted to these licenses because each of these permits is domiciled in a limited license jurisdiction of California,” Kazan said. “For example, Lemoore has two licenses total, Morro Bay has two, and Turlock has three. This arrangement has worked well in Santa Barbara where the Farmacy is one of three permits, and also in Berkeley where we possess one of six authorized permits. We do not believe the city governments in these three NHC locations will issue more licenses any time soon.”
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