GHBWF - Glass House Buys Plus Products For $25 Million
Glass House Brands Inc. (OTCQX: GLASF and GHBWF) is buying Plus Products Inc. (CSE: PLUS) (OTCQX: PLPRF) for approximately $25.6 million in a deal expected to close in the first quarter of 2022. The acquisition will be a combination of unsecured convertible debt and equity, plus additional performance-based consideration. Plus recently found itself in trouble when in September when Plus filed for the Canadian version of bankruptcy. According to Plus’ filing, it had secured court protection from its creditors under the Companies Creditors Arrangement Act or “CCAA”, in order to restructure its business and financial affairs. The acquisition is being completed by way of a plan under the CCAA and is subject to the approval of PLUS’ creditors.
“As one of the fastest-growing categories in cannabis, edibles are a key component of the Glass House growth strategy,” said Kyle Kazan, Glass House’s CEO. “PLUS has built a very strong brand in the gummy segment, and in the very competitive California and Nevada markets, no less. PLUS’ diverse and well-recognized line of edibles, including dual-action sleep and strain-specific products, is the ideal complement to our portfolio. Our vertically integrated platform will allow us to expand the distribution of PLUS to the more than 700 stores in our network, as well as to our own retail stores, as we pursue top sales ranking in both flower and edibles categories in the country’s largest market.”
Jake Heimark, PLUS co-founder and CEO, added, “We developed PLUS with the vision of being part of the strongest brand platform in cannabis, and we are realizing that vision by joining Glass House. Our mission to make cannabis safe and approachable, with high-quality products that deliver consistent consumer experiences, is perfectly aligned with Glass House’s reputation for providing outstanding cannabis products, produced sustainably, for the benefit of all. We are looking forward to working with Glass House to continue to pursue this shared goal.”
Plus is a leading edibles brand in California with the No. 4 ranked edibles brand by sales in Q3 2021. 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 category. According to BDS Analytics (“BDSA”), the combined company would be the only company with a top 5 position in both the Flower and Edibles categories in California. Glass House Farms, was the No. 1 ranked flower brand by sales in California in Q3 2021.
Kyle Kazan further stated, “We think there is a long runway for PLUS on the Glass House platform. Based on Headsets November data, PLUS outsells Wana in California, the nation’s largest cannabis market, by a multiple of nearly 10x. With its California presence and activities in other states, we believe Plus has a wide path to playing at a national level at least equal to Wana, which was acquired by Canopy Growth in October at a value in excess of $297.5 million.”