Glass House Brands Completes Acquisition of PLUS, a Leading California Edibles Brand

LONG BEACH, Calif. and TORONTO, April 29, 2022

LONG BEACH, Calif. and TORONTO, April 29, 2022 /PRNewswire/ -- Glass House Brands Inc. ("Glass House'' or the "Company") (NEO: GLAS.A.U and GLAS.WT.U)(OTCQX: GLASF and GHBWF), one of the fastest- growing, vertically-integrated cannabis companies in the U.S., and Plus Products Inc. ("PLUS") today announced that Glass House has completed the acquisition of the business of PLUS, a leading cannabis edibles company based in California². The Company acquired PLUS for approximately US$25.6 million³ through a combination of unsecured convertible debt⁴ and equity, plus additional performance-based consideration.

"With a mission to create the largest cannabis brand-building platform in California, we are thrilled to announce the closing of our PLUS acquisition, positioning Glass House as the only company with a top 5 position in both the Flower and Edibles segments in the California market," said Kyle Kazan, Glass House's Chairman and Chief Executive Officer. "Edibles are a key component of our growth strategy as we further expand our product portfolio and build stronger brand awareness. We are incredibly excited to begin our work with the PLUS team to expand the presence of their premium products in our own retail stores and across our distribution network. The combination of our existing brand platform with PLUS will result in a substantial increase in our Total Addressable Market ("TAM") opportunity in California and, eventually, across the US. The overlap between Glass House Brands' active accounts and those of PLUS was less than 25% in the first quarter, with Glass House being stronger in Southern California and PLUS stronger in Northern California. Additionally, we aim to grow the PLUS brand nationally, which would expand its TAM by roughly 550% versus operating in California alone⁵."

Mr. Kazan added, "The upside of the current struggle in the California market is that we believe we will find more attractively valued acquisition targets that are win-win propositions for all parties including the consumer. We look forward to entering this new stage of growth by executing on PLUS' and Glass House's shared vision of bringing innovative, high quality cannabis products to consumers."

The Company's house cannabis brand, Glass House Farms, was the No. 1 ranked flower brand by sales in California in Q1 2022⁶. PLUS is a leading edibles brand in California and was the No. 4 ranked edibles brand in California by sales in Q1 2022⁶. Based on top-of-mind brand awareness, a common CPG metric measuring brand strength, PLUS is the No. 1 ranked brand in California in the gummy segment, the largest segment of the edibles category⁷.

Sources:
1.  BDS Analytics
2.  Specifically, the Company acquired the US business assets of Plus Products Inc. by merging wholly-owned subsidiary with Plus Products Holdings Inc., a wholly-owned subsidiary of PLUS.
3.  Based on the trailing 10-day volume-weighted average price ("VWAP") of Glass House Shares on the NEO prior to the date of execution of the definitive acquisition agreement on December 17, 2021 ($4.08 as of 12/16/21 close). Assuming the full vesting of the 1,794,791 RSUs that will be granted as part of the transaction the total purchase price would be approximately $33m.
4.  $20,504,850.96 CAD principal and accrued interest converted at 0.78 CAD:USD
5.  Based on BDSA 2026e Cannabis Market size projections for the US (US$46bn) and for California (US$7.1bn).
6.  BDSA Retail Sales Tracking
7.  Brightfield Consumer Study (N = 1,535 California Edible Consumers)

About PLUS
PLUS is a cannabis and hemp food company focused on using nature to bring balance to consumers' lives. PLUS's mission is to make cannabis safe and approachable – that begins with high-quality products that deliver consistent consumer experiences. PLUS is headquartered in San Mateo, CA.