After a record second quarter, Glass House Brands is considering adding hemp-derived THC to its cultivation mix so it can further expand.
“We are planning our next expansion in Greenhouse 2 and to that end, we gave a formal notice to vacate to the tomato and cucumber farmers who have been leasing it. With the federal legalization of ‘hemp-derived cannabis’ in the 2018 Farm Bill, we are considering growing ‘hemp-derived cannabis’ compliantly in Greenhouse 2 which would allow us to ship directly to consumers in the many states outside of California where it is legally permitted. As the capital improvements are nearly identical for cultivating ‘hemp-derived cannabis’ and cannabis, we are taking the time to calculate the best ROI before making a formal decision," said Kyle Kazan, co-founder, chairman and CEO of Glass House.
Glass House said its net revenue increased 21% year over year and 79% sequentially to a record high $54 million, hitting the high end of previously provided guidance. The company produced approximately 150,000 pounds of biomass and sold 138,000 pounds, driving wholesale revenue to a record high $39.1 million and wholesale biomass gross profit to a record high $22.6 million.
The previous period was the first full quarter of product for the company's Greenhouse 5 and Glass House said the quality and yields all outperformed its original expectations.
"As our results show, many of the improvements we have made at Greenhouse 5 have been successful, and at this early stage, Greenhouse 5 is already our most efficient greenhouse. As a result, we have made plans to backport a number of the modifications made in Greenhouse 5 into Greenhouse 6 over the next 6 to 12 months," said Kazan.
With the third quarter underway and Greenhouse 5 still ramping up production, the company said it expects Q3 revenue to reach a new record of $65 million to $67 million, which would represent a 37% increase year over year. The company said biomass production for the third quarter could reach 185,000 to 195,000 pounds.
Still, Glass House reduced its full-year 2024 revenue outlook slightly due to the current wholesale biomass pricing environment.
