Glass House Brands Inc.

Second quarter revenue was $47 million, down from $47.6 million in the same period last year; retail revenue was $10 million through the deconsolidation date. Gross profit was $15.8 million and gross margin was 34%, versus 55% in Q2 2025, while adjusted EBITDA was $5.7 million versus $18.1 million a year ago. Production was 246,000 pounds, above the 240,000-pound guide and up from 231,000 pounds last year; average wholesale selling price was $211 per pound versus $206 last year. Management said prior full-year revenue, gross profit and adjusted EBITDA guidance should no longer be relied upon after the retail deconsolidation, but reiterated approximately 1 million pounds of biomass for 2026 and an exit cost of production below $100 per pound, with a long-term target of $95 per pound.

Kyle Kazan’s tone was very optimistic and policy-focused, centered on Schedule III rescheduling as a major industry inflection point. He emphasized that Glass House is already structured to benefit from medical rescheduling, interstate commerce and exports, and said the company is preparing with DEA registrations, regulatory outreach and potential supply agreements outside California. He also framed hemp as an optionality play, saying the company wants flexibility to grow whichever compliant cannabinoid products fetch the best price.

Mark Vendetti focused on the quarter’s adjusted financials and the impact of the retail deconsolidation. He said revenue was $47 million, gross profit $15.8 million, gross margin 34%, adjusted EBITDA $5.7 million and operating cash flow $139,000; cash and restricted cash ended at $22 million, including about a $6 million reduction from the retail spinout and $4.9 million raised through the ATM. He also noted post-quarter proceeds of $10 million from accelerated preferred warrant exercises and $1.6 million from the ATM, and said $30.6 million of warrants were terminated in exchange for 362,000 shares as part of cap table simplification.

Analysts focused mainly on why gross margin underperformed and how quickly costs could improve. Management said the biggest drag was a higher trim mix, which sells far below flower, plus more trim flowing into inventory; they said the issue is largely transient as the business re-plants, retrains workers and brings Greenhouse 2 fully online. Questions also covered hemp, interstate commerce and supply agreements: management said current hemp work is limited to compliant CBD flower with no downside if the hemp ban proceeds, and Kyle said he expects more than one supply agreement before year-end and thinks international shipping may come before domestic interstate shipping.