Cannabis company Glass House is going public in a $567 million SPAC deal

• Glass House is set to be acquired by Mercer Park Brand for $567 million.
• The cannabis company is one of the biggest weed growers and sellers in California.
• The SPAC deal includes funding for two additional acquisitions.

California cannabis company Glass House has agreed to go public in a $567 million deal. It will be acquired by Mercer Park Brand, a Canadian special-purpose acquisition vehicle (SPAC), likely in the first half of this year.

Glass House is one of the largest cannabis companies in California. It currently oversees more than 500,000 square feet of cultivation crops and produces more than 110,000 pounds of dried flowers. Additionally, it runs four dispensaries and is active in the cannabis wholesale sector. Year-on-year revenue grew by 185% to $53 million in 2020.

Following the sale, "Glass House Group is poised to become the largest, vertically integrated brand-building platform in California," Jonathan Sandelman, the chairman of Mercer Park, said in a statement.

"When we formed Mercer Park BRND, we aimed to create a platform that could launch the first national cannabis brands in the United States," he continued.

The acquisition of Glass House includes all of its brands: Glass House Farms, Forbidden Flowers, and Mama Sue. Glass House Farms had a 4% market share at the end of 2020 and is aimed at the average, everyday cannabis consumer. Forbidden Flowers and Mama Sue have more targeted demographics and other product offerings, including THC flower, hemp flower, and tinctures.

The deal extends to two other players in California's cannabis industry, Retailer Element 7 and Southern California Greenhouse. Glass House will merge with both of these companies within the next year, according to the deal.

Glass House itself is valued at $325 million in the deal. Retailer Element 7 and Southern California Greenhouse are priced at $24 million and $219 million respectively.

Retailer Element 7 will provide an additional 17 dispensary locations in addition to the existing 4. Through the merger with Southern California Greenhouse, Glass House will gain 5.5 million square feet of cultivation space.

"This additional capacity is expected to increase Glass House's current footprint to up to approximately 2.5 million square feet by 2023. The Company's total, targeted long-term footprint of 6 million square feet is expected to be by far the largest cultivation capacity in California," said the joint statement by Mercer Park and Glass House.