Overview

• US cannabis producer's Q1 revenue fell 10% yr/yr, driven by lower prices and production

• Company announced warrant redemption notice and launched $50 mln at-the-market equity program

• Management reiterated 2026 production and cost targets, expects revenue growth in coming quarters

Outlook

• Company reiterates 2026 wholesale cannabis biomass production forecast of about 1 mln pounds

• Glass House targets $95 per pound annual production cost on a quarterly basis in H2 2026

Result Drivers

• LOWER WHOLESALE PRICES - Co said revenue and gross margin declines were driven by lower average selling prices in the wholesale business amid challenging California market conditions

• HIGHER PRODUCTION COSTS - Co said cost per pound rose due to transitory inflated production costs as it built up cultivation scale

• STABLE RETAIL SEGMENT - Retail revenue and gross margin remained steady, offsetting some wholesale weakness

Company press release: ID:nGNXb1dg1W

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the drug retailers peer group is "buy"

• Wall Street's median 12-month price target for Glass House Brands Inc is $10.50, about 13.9% above its May 12 closing price of $9.22

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