Rationing Demand

Q4 Earnings Review with Glass House Management

One of the worries of being an investor in Glass House (OTC: GLASF) is what if they can’t sell all the flower that they produce? The company is in the midst of turning on an additional 1 million square feet of capacity at their state of the art “Ferrari” of a greenhouse. This is why I have focused on chronicling the plunge in licensed capacity in California and the bounce back in cannabis pricing.

Imagine then my surprise when in the below interview, President Graham Farrar told me that they “are rationing demand,” because they currently can’t keep up with demand for their flower and so they can only give buyers allocations.

Glass House’s stock has been on an epic run from a low of $1.91 per share on December 2022 and now is approximately $8.50 per share. Has the rally gone too far? Is the upside priced in?

Glass House is a fascinating cannabis company because they are doing something very unique to cannabis and something no other company has successfully achieved which is scaled cultivation in a single location at the lowest cost of production. As I have said before, the supply chain for consistent high-quality cannabis is very immature. How do you build brands or loyalty with a consumer with inconsistent products? This gets to why there could be so much value created for shareholders in Glass House and why what the company is doing could be very valuable long-term. They are trying to grow high-quality cannabis in the perfect environment with one of the best greenhouses in the world for the lowest possible price and do it consistently.

And this is why I continue to think it is worthwhile to dive into the details of what they are trying to do every quarter.

I hope you enjoy the Q4 earnings review discussion I had with CEO Kyle Kazan, President Graham Farrar and CFO Mark Vendetti. Here is the youtube link:

Here is the Spotify link to listen to just the audio: