Glass House falls 23% as a director resigns

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What happened: Glass House reported preliminary third-quarter results Monday and disclosed that director John “Jay” Nichols Jr. has resigned from its board, without giving a reason.

The company also said it turned off its at-the-market share program. 

Revenue rose to $56.8 million from $47.0 million in the second quarter. But the average selling price fell to $150 a pound from $211, and gross margin dropped to 26% from 34%.

The stock closed down 23% at $2.46 after touching $1.67 during the day. It’s down 69% over the past month.

What they’re saying: “We believe we are sufficiently capitalized to optimize the farms and become cash flow positive,” said Glass House CEO Kyle Kazan.

Marc Cohodes, the veteran short-seller who was one of the stock’s loudest boosters, accused Kazan on X of related-party dealings that are “far greater than people know,” and said they’re probably why Nichols resigned. 

In other replies, Cohodes said the stock is where it is because “the CEO at best is an idiot” and called Kazan “a disaster.” Still, he went out of his way to praise Glass House President Graham Farrar.

Why it matters: In June, Glass House bifurcated its recreational business into a separate subsidiary controlled by a third-party investor so it could follow Trulieve onto the NYSE.

The bigger stage was ostensibly to look attractive to deeper pools of long-term capital. But the stock is down about 70% since then.

What’s next: Glass House says about $39 million in the bank will cover its remaining farm upgrades and get it to positive cash flow.

It’s also betting on exports, with last week’s GACP certifications as the first step. $GLAS ( ▼ 4.07% )

-JB

Editor’s note: We have not independently confirmed Cohodes’ allegations. If you have information and would like to reach out, just reply to this email.

“We are not here to decry the legalization of cannabis,” a group of doctors and researchers wrote in The Commonwealth Beacon, a Massachusetts newspaper. “But as responsible members of the medical community, we are ringing alarms that the expanding commercialization of cannabis without protective regulation and robust public education.”

Mass voters will decide on Question 8, which will repeal cannabis sales in the state if passed, on November 3. On Wednesday, we’ll have Ryan Dominguez, Executive Director of the Massachusetts Cannabis Coalition, the group leading the No on 8 campaign. Tune in Wednesday at 10 am Eastern »

Cronos Group CEO Mike Gorenstein joined us on Monday’s Cultivated Live, from a coffee shop in the Netherlands. Probably the coolest place a publicly traded CEO has ever joined our show.

Mike talked about closing the CanAdelaar acquisition, how he’s thinking about Europe and beyond, and why Cronos isn’t going to be white knight for Aurora yet…

While other states watched wholesale prices collapse, Missouri held steady, anchored by canopy caps, vertical integration, and a fiercely loyal regional consumer base.

It’s also one of the toughest markets in the country for MSOs to crack.

Lit Alerts’ new look at Missouri’s Challenger Brands shows who is pushing into the Top 10.

This is just the start.

Lit Alerts will release the full Missouri report at Pot Policy Politics on November 12th, at the second Midwest Cannabis Forum event at 2nd Shift Brewing in St. Louis. Find out more and get your tickets today »

See the Missouri Challenger Brands breakdown on Lit Alerts »

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