- Mixture Creates the Most Expansive, Absolutely Built-in Hashish Enterprise within the World’s Largest Hashish Market
- Lengthy-term Cultivation Growth to six Million ft2 of State-of-the-Artwork Greenhouse Represents by Far the Largest Capability of Any Hashish Operator in California
- Retail Footprint Anticipated to Attain 21 Operational Dispensaries by Q1 2022, Extra Than Double the Subsequent Largest Retail Operator
- Present Model Portfolio Consists of Glass Home Farms – the #2 Ranked Flower Model in California (YE2020 per BDS Analytics), in addition to Forbidden Flowers and Mama Sue
- Whole Buy Value Consideration of US$567 Million Represents a 2022E Income and Adjusted EBITDA A number of of 1.7x and 5.5x, Respectively
- Buyers Decide to US$85 Million Non-public Placement; Mixed Public Firm Anticipated to Have as much as $US355 Money Steadiness at Closing
- Joint Convention Name to Talk about the Proposed Transaction Tomorrow at 8:30 a.m. Japanese Time
TORONTO, April 08, 2021 (GLOBE NEWSWIRE) — Mercer Park Model Acquisition Corp. (NEO: BRND.A.U; OTCQX: MRCQF) (“BRND”), a Particular Objective Acquisition Firm (SPAC) with the intent to deal with branded product companies in hashish and/or cannabis-adjacent industries, has entered right into a definitive settlement to amass Glass Home Group (“Glass Home” or “GH Group” or the “Firm”), a vertically built-in, California-based hashish firm, and all associated belongings for whole consideration of roughly US$567 million.
It’s a situation of closing the enterprise mixture that the ensuing firm’s shares will likely be listed on the NEO Trade (underneath the ticker image GLAS.U). Topic to the satisfaction of all required situations, the transaction is predicted to shut within the first half of 2021.
“Once we fashioned Mercer Park BRND, we aimed to create a platform that might launch the primary nationwide hashish manufacturers in the USA,” mentioned BRND Chairman Jonathan Sandelman. “We view profitable hashish brand-building as a mix of 4 elements: the power to manage high quality biomass at a big scale; produce on the best prices; provide the best high quality merchandise; and ship one of the best worth proposition to customers. This took us to California with its ultimate rising local weather and neighborhood of gifted and skilled growers, and in the end to Glass Home Group and this unimaginable portfolio of belongings and expertise. Glass Home has a monitor file of excellence throughout all 4 of those drivers and has established a prime ranked flower model in one of the aggressive hashish markets on the earth. Mixed with the proposed mixture with the Southern California Greenhouse asset and 17 proposed Component 7 retail licenses, Glass Home Group is poised to grow to be the biggest, vertically built-in brand-building platform in California, the world’s largest hashish market.”
Glass Home Group Transaction Highlights
- Expansive cultivation, retail and wholesale footprint:
- Cultivation: Glass Home presently operates a cultivation footprint of over 500,000 ft2, producing over 110,000 lbs. of dry flower biomass per yr. Glass Home additionally has an settlement to amass a further 5.5 million ft2 state-of-the-art Southern California Greenhouse, an agricultural producer that may transition in phases to hashish cultivation. This extra capability is predicted to extend Glass Home’s present footprint to as much as roughly 2.5 million ft2 by 2023. The Firm’s whole, focused long-term footprint of 6 million ft2 is predicted to be by far the biggest cultivation capability in California.
- Retail: Throughout the 4 award-winning dispensaries it presently operates in California, Glass Home generated 365,000 transactions, a median in-store ticket of US$65 and a median supply ticket of US$101 in 2020. Along with its present footprint, Glass Home has entered into an settlement to merge with 17 in-process retail licenses from Component 7, a California firm specializing in acquiring meting out licenses. These licenses are anticipated to deliver the Firm’s retail footprint to a complete of 21 open areas by the top of the primary quarter 2022, representing the best statewide retailer rely of any single California hashish operator.
- Wholesale: Since starting its CPG enterprise in early 2020, Glass Home added 250 retail doorways to its CPG distribution, reaching a US$50 million annualized income run fee for its wholesale enterprise at year-end. Over the long run, the Firm goals to construct its wholesale community to over 700 dispensaries statewide.
- Rising, differentiated model portfolio:
- Glass Home Farms: The corporate’s flagship flower model for the on a regular basis hashish shopper launched in early 2020, reaching 4% market share and rising from #63 to #2 on BDS’ statewide rating by year-end 2020.
- Forbidden Flowers: Bella Thorne’s feminine Millennial- and Gen-Z-targeted model, spanning THC flower, hemp flower, and shortly, vape merchandise.
- Mama Sue: Effectively-known trade activist Sue Taylor’s model affords wellness-focused tincture and topical merchandise to focus on customers aged 35 and older.
- Sturdy monetary profile:
- Robust momentum: In 2020, Glass Home grew income 185% year-over-year to US$53 million and generated constructive adjusted EBITDA, pushed by its expanded cultivation and distribution footprint, improved provide chain and manufacturing efficiencies, and enhanced shopper model profile. Together with the belongings of the Southern California Greenhouses and proposed Component 7 retail licenses, the mixed firm expects to generate full yr 2022 income and adjusted EBITDA of roughly US$326 million and US$104 million, respectively.
- Accelerating price efficiencies: Glass Home will buy the extra Southern California Greenhouse capability nicely under substitute price at US$40 per ft2, or US$55 per ft2 on an all-in foundation, together with capital expenditures required to transform the ability to hashish cultivation. As its expanded greenhouse amenities ramp over time, Glass Home expects to scale back manufacturing prices from the present fee of roughly US$150/lb. of dry flower to US$100/lb.
- Free money circulation constructive and absolutely funded build-out: Glass Home Group expects to be free money circulation constructive from operations in 2022. Capital expenditures of US$80-90 million over the course of 2021 to 2023 to construct to 2.5 million ft2 are anticipated to be funded from working money circulation and stability sheet money. The Firm is predicted to have as much as US$355 million of money on the stability sheet at closing, assuming no redemptions.
Commenting on the acquisition, Glass Home’s co-founder and CEO, Kyle Kazan, acknowledged: “We’re happy to associate with the BRND group as we construct an much more environment friendly, expansive platform for our manufacturers. Our inaugural flower model launch final yr was an amazing success, with our BDS rating growing from #63 within the state to #2 by year-end 2020. Additional, we now have established a robust retail and wholesale community and best-in-class cultivation processes, all anchored by a scaled and extremely environment friendly price construction. I’m extremely happy with the strong operation we now have constructed over the previous 5 years, and we sit up for augmenting these strengths to additional capitalize on the rising statewide and nationwide CPG alternative.”
Transaction Phrases & Financing
Whole consideration for all belongings within the mixture is roughly US$567 million, representing a 2022 income and adjusted EBITDA a number of of 1.7x and 5.5x, respectively, and a respective 2023 income and adjusted EBITDA a number of of <1.0x and <2.5x. The complete consideration quantity consists of US$325 million for Glass Home, US$219 million1 for the Southern California Greenhouse and US$24 million for the 17 Component 7 retail licenses.
BRND shareholders and the administration groups of Glass Home, Southern California Greenhouse, and Component 7 will roll 100% of their present possession into Glass Home Group inventory. Assuming no redemptions and together with the US$85 million personal placement, the mixed firm expects to have as much as US$355 million of money out there following the closing of those transactions and to stay well-capitalized to fund its long-term progress goals.
The transactions are anticipated to shut within the first half of 2021, with Glass Home founders retaining over 50% of the voting curiosity.
Following the shut of the transactions, Glass Home co-founders Kyle Kazan and Graham Farrar are anticipated to proceed to function CEO and President, respectively. As well as, the next people are anticipated to represent the board of administrators:
- Kyle Kazan – Co-Founder, Chairman & CEO of Glass Home Group brings greater than 30 years of profitable Non-public Fairness and funding expertise with a deal with business actual property globally
- Graham Farrar – Co-Founder and President of Glass Home Group brings his dedication to the hashish plant and over 20 years of entrepreneurial expertise, together with being a part of the unique founding groups at Software program.com and Sonos
- Jamie Mendola – Head of Technique and M&A at Mercer Park LP, has over 20 years of expertise as a non-public and public fairness investor; founder and CEO of Pacific Grove Capital which launched one of many earliest devoted SPAC funds within the US
- Humble Lukanga – Founding father of Life Line Monetary Group, a premiere wealth administration agency servicing the leisure and sports activities trade
- Jocelyn Rosenwald – Co-Founder Glass Home Group, is a veteran of the true property funding and administration trade
- Hector De La Torre – Member of the California State Meeting (LA 2004-2010), present Chair of LA Care, the biggest public well being plan within the US, and a trustee of Occidental School
- George Raveling – First African American basketball coach within the Pac 12, head basketball coach at Washington State, College of Iowa and USC; assistant coach US Olympic groups in 1984 and 1988, former Director of Worldwide Basketball at Nike, and member of the Naismith Memorial Basketball Corridor of Fame
- Bob Hoban –12-year veteran of the hashish trade and Founding father of Hoban Regulation Group, a number one business hashish regulation agency and co-founder of Gateway Confirmed Methods, a world hashish consulting agency
Following the completion of the enterprise mixture, Glass Home intends to stay targeted on driving progress by growing the penetration of its branded merchandise in owned dispensaries, increasing wholesale distribution all through California, specializing in higher-margin CPG product line extensions and enhancing the effectivity and productiveness of each its cultivation and in-store operations. Pushed by these strategic priorities, the mixed firm expects to generate full yr 2022 income and adjusted EBITDA of roughly US$326 million and US$104 million, respectively. In 2023, the corporate expects progress to proceed to roughly US$601 million in income and US$240 million in adjusted EBITDA.
This forecast assumes, amongst different issues, the opening and full operation of 21 retail dispensaries by the primary quarter of 2022 and the completion of Glass Home’s deliberate cultivation enlargement to 2.5 million ft2. in 2023. These initiatives are anticipated to require roughly US$80-90 million in whole capital expenditures to execute in full. As well as, these expectations assume that Glass Home’s long-term cultivation facility enlargement will likely be solely half full by 2023.
1 US$100M in shares and US$119M in money, this represents the one use of money within the qualifying transaction, excluding bills.
BRND and Glass Home administration will host a convention name tomorrow, adopted by a query and reply session.
Convention Name Date: Friday, April 9, 2021
Time: 8:30 a.m. Japanese time
Toll-free dial-in quantity: (800) 319-4610
Worldwide dial-in quantity: (604) 638-5340
A presentation highlighting particulars of the enterprise mixture may be discovered on the BRND web site at www.mercerparkbrand.com.
The convention name will likely be broadcast stay and out there for replay here. A telephonic replay of the convention name may even be out there by April 23, 2021.
Toll-free replay quantity: (855) 669-9658
Worldwide replay quantity: (412) 317-0088
Replay ID: 6547
About Glass Home Group
Glass Home Group is a quickly rising, vertically built-in, California-focused group that strives day-after-day to understand its imaginative and prescient of excellence: compelling hashish manufacturers, produced sustainably, for the advantage of all. Led by a group of knowledgeable operators, confirmed businesspeople, and passionate plant lovers, it’s devoted to delivering wealthy hashish experiences with respect for individuals, for the setting, and for the neighborhood, and an abiding dedication to justice, social fairness, and sustainability.
About Mercer Park Model Acquisition Corp.
Mercer Park Model (“BRND”) is a particular goal acquisition company launched in Might 2019 to create the main branded hashish firm within the U.S. For extra details about BRND, please go to the BRND web site at www.mercerparkbrand.com.
Investor Relations Contact:
Sean Mansouri, CFA or Cody Slach
Gateway Investor Relations
T: (949) 574-3860
E mail: IR_BRND@mercerparklp.com
Noah Bethke and Melanie Trecha
E mail: email@example.com
Sure data on this press launch accommodates “ahead wanting data” throughout the that means of relevant securities legal guidelines. Such ahead wanting data consists of, however shouldn’t be restricted to, data with respect to BRND’s and GH Group’s goals and the methods to attain these goals, in addition to data with respect to their beliefs, plans, expectations, anticipations, forecasts, estimates and intentions. This forward-looking data is recognized by means of phrases and phrases equivalent to “will”, “might”, “would”, “ought to”, “may”, “anticipate”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “consider”, or “proceed”, the adverse of those phrases and comparable terminology, together with references to assumptions, though not all forward-looking data accommodates these phrases and phrases. Particularly, and with out limiting the generality of the foregoing, ahead wanting data on this press launch consists of statements associated to: the completion of the proposed transaction between BRND and GH Group, associated transaction bills and stage of associated share redemptions; the completion and estimated measurement of the associated personal placement; the completion and success of the proposed acquisitions of the SoCal Greenhouse and the 17 Component 7 license purposes;; GH Group’s enterprise plans and techniques; GH Group’s aggressive place; GH Group’s potential to develop merchandise, scale manufacturing and distribute merchandise; and the proposed use of BRND’s escrowed funds and proceeds from the proposed personal placement. As well as, the monetary forecasts and estimates contained on this press launch, together with forecasted income and adjusted EBITDA, represent “ahead wanting data” and a “monetary outlook” throughout the that means of relevant securities legal guidelines. Such data is being offered to reveal the potential advantages of the proposed transaction and might not be acceptable for different functions, and shouldn’t be relied upon as essentially being indicative of future monetary outcomes. Ahead wanting data entails recognized and unknown dangers and uncertainties, lots of that are past our management, that might trigger precise outcomes to vary materially from these which can be disclosed in or implied by such ahead wanting data. These dangers and uncertainties embrace, however aren’t restricted to, these described underneath “Danger Elements” within the prospectus to be filed on SEDAR later this month. Though GH Group and BRND have tried to determine the primary threat elements that might trigger precise outcomes to vary materially from these contained in ahead wanting data, there could also be different threat elements not presently recognized to BRND and GH Group or that they presently consider aren’t materials that might additionally trigger precise outcomes or future occasions to vary materially from these expressed in such forward-looking data. Consequently, all the forward-looking data contained on this press launch is certified by the foregoing cautionary statements, and there may be no assure that the outcomes or developments that BRND and GH Group anticipate will likely be realized or, even when considerably realized, that they’ll have the anticipated penalties or results on our enterprise, monetary situation or outcomes of operation.
Extra detailed assumptions concerning the projections contained herein are anticipated to be described within the prospectus anticipated to be filed with Canadian securities regulatory authorities later in April, 2021.
This funding alternative entails a excessive diploma of threat. You need to rigorously take into account the dangers and uncertainties described underneath “Danger Elements” within the prospectus to be filed on SEDAR later this month. If any of the dangers and uncertainties described thereunder really happen, alone or along with extra dangers and uncertainties not presently recognized to BRND or GH Group, or that they presently don’t deem materials, BRND’s and GH Group’s enterprise, monetary situation, outcomes of operations and prospects could also be materially adversely affected. If this had been to happen, the worth of the provided securities might decline and you might lose all or a part of your funding.
No securities fee or comparable authority in Canada, the USA or elsewhere has reviewed or in any approach handed upon this presentation or the deserves of the securities described herein and any illustration on the contrary is an offence.
This press launch makes reference to sure non-U.S. GAAP measures, equivalent to adjusted EBITDA and free money circulation. These measures aren’t acknowledged underneath U.S. GAAP and do not need a standardized that means prescribed by U.S. GAAP. Slightly, these measures are offered as extra data to enhance U.S. GAAP measures by offering additional understanding of GH Group’s outcomes of operations from administration’s perspective. Market contributors steadily use non-U.S. GAAP measures within the analysis of issuers. Adjusted EBITDA is outlined as adjusted [for non-recurring, normalizing or one-time items] earnings earlier than curiosity, taxes, depreciation and amortization, and free money circulation is outlined as money flows associated to working actions much less additions to property, plant and tools and internet improve or lower in finite life intangible belongings. GH Group and BRND consider these non-U.S. GAAP measures of economic outcomes present helpful data to administration and traders concerning sure monetary and enterprise traits regarding GH Group’s monetary situation, efficiency and outcomes of operations. GH Group’s administration makes use of these non-GAAP measures for pattern analyses and for budgeting and planning functions. GH Group and BRND consider that the usage of these non-U.S. GAAP monetary measures gives a further device for traders to make use of in evaluating projected working outcomes and traits in and in evaluating GH Group’s monetary measures with different comparable corporations, lots of which current comparable non-U.S. GAAP monetary measures to traders. Administration of GH Group and BRND don’t take into account these non-U.S, GAAP measures in isolation or as an alternative choice to monetary measures decided in accordance with U.S. GAAP. The principal limitation of those non-U.S. GAAP monetary measures is that they exclude vital bills and earnings which can be required by U.S. GAAP to be recorded in GH Group’s monetary statements. As well as, they’re topic to inherent limitations as they replicate the workout routines of judgments by administration about which expense and earnings are excluded or included in figuring out these non-U.S. GAAP monetary measures. You need to evaluate GH Group’s audited monetary statements, which will likely be offered within the prospectus proposed to be filed with Canadian securities regulators in reference to the proposed transaction, and never depend on any single monetary measure to guage GH Group’s enterprise. A reconciliation of those non-U.S. GAAP measure to U.S. GAAP figures will likely be included in that prospectus.
Further Info Concerning the Proposed Enterprise Mixture and The place to Discover It
In reference to the transaction, BRND is predicted to file a prospectus and data round with Canadian securities regulators. BRND and GH Group urge traders, stockholders and different individuals to learn, when out there, the paperwork (together with the prospectus and data round) anticipated to be filed with Canadian securities regulatory authorities in reference to the transaction, as these supplies will include essential details about BRND, GH Group, the ensuing firm and the transaction.