Glass House Brands Inc. (GLASF, GHBWF) is exploring a strategic shift into the hemp sector, according to reports. The company’s leadership revealed plans to diversify its business during the second-quarter earnings call, following a record-breaking quarter with revenue reaching $53.9 million, a 21% year-over-year increase.
CEO Kyle Kazan, co-founder and chairman, shared the company’s vision for hemp cultivation. “We are actively having meetings with large distributors of hemp-derived cannabis, and we are considering DTC, or direct-to-consumer products, shipped from our farm in Southern California directly to people in the states which legally allow it,” Kazan stated.
The move comes as the California cannabis industry faces significant challenges due to over-taxation, leading to a decline in prices and an increase in illicit operations. This situation has created an unsustainable environment for legal growers, with CFO Mark Vendetti noting that current flower pricing levels are “approaching an economically unsustainable level for many growers.”
Glass House owns multiple greenhouses, some of which are currently unused. The company plans to repurpose one of these greenhouses, previously used by a tomato farmer, for either marijuana or hemp cultivation.
Kazan believes that Glass House’s presence in both the cannabis and hemp markets will be beneficial. “What we would do in the greenhouse in terms of retrofit or operations is no different between the two markets. It’s really just a different set of regulatory standards,” he explained. “What we’re looking at here would give us basically maximum optionality with minimal increased cost so that we can be potentially in both markets at the same time.”
Glass House’s interest in hemp aligns with a broader trend in the cannabis industry. Other major players, such as Curaleaf Holdings (CURLF), have already launched hemp-focused platforms, recognizing the economic potential of hemp-derived products. This move reflects a growing divide in the industry, with some companies embracing the legal framework of the 2018 Farm Bill to capitalize on hemp opportunities, while others advocate for banning hemp-derived products due to concerns over consumer safety and accessibility for minors.
