GLAS
Glass House Brands Inc.
stock NYSE

Well… I was initially long this for the DEA judge final ruling which was expected in the next few days at most to confirm the schedule 3 recommendation. And with GLAS and TRLV being the only big board listed companies in the US it would be natural these would catch an algo explosion up….the pattern of news and rip in this sick sector is well known.
The judge announced a 2 week stay yesterday and blood bath ensued.
Then I chased the dip, a few times. And now I find myself more of an investoooorrr….
In hindsight it should have all went to Trlv for the recovery but…. You know

Ooooof, rough day for GLAS. I have no conviction in the company either, so averaging down doesn't really compute at this point. Will be looking for an exit, or a roll out to buy a bit of time.

There are really good reasons its night and day with Trulieve.

Trulieve has net cash and last quarter $98M EBITDA. They trade at a TTM EV/EBITDA of 5.6x. But if you include the UTP than they have net debt of $562M and EV/EBITDA of 7.1x
GLAS has net debt of $144M and ttm EBITDA is negative. If you give them the benefit of the doubt and use last quarter - the only quarter of positive EBITDA...it still trades at 40x EV/EBITDA!
Strategically:
Trulieve is highly profitable and has a moat based on the regs today. If regs change they still should be a dominant retailer in Florida even if interstate commerce comes although it does create uncertainty for others to come in on brand side. And it seems that Kim has more influence on federal regs than any other cannabis company.
GLAS - there is very strong and pretty justified speculation that their product is being sold out of state (which is illegal), they got raided by ICE and lot of questions around child labor. Lots of regulatory risk. The only way their market cap is justified is if interstate commerce or export comes AND they end up a winner in those markets. But there will be a ton of competition there and it's unclear what advantage they have (they may be competitive they may not). They may be the only large greenhouse growing cannabis in the US today, but that will not stay the same with interstate commerce. Lots of traditional farmer/ag guys will enter. The big MSOs like Cura and GTI probably build bigger facilities. VFF has facilities in texas. CRON just did an investor day and talked about building in the US when its ready. Other big tobacco. Etc etc.
Would much rather go long GTI for their uplisting or consolidation with Rythm or ride TRUL than Glas. They are all still way way cheaper than glas. Even the Canadian LPs are way cheaper than GLAS today

Bought incr at 5.30ish, and then doubled down at 5.10. I'll likely add a final lot if it falls a bit further. I also sold a few GLAS Oct $10 puts recently that are now in the red a bit. Will likely look to exit that one sooner than later.
Other than that, just selling some TRLV calls and closing some TRLV puts.
Nice to see some volatility coming back. Plenty of cash ready for opportunity.