Glass House Brands shares fall 30% after weaker price outlook

what happened

Shares of Glass House Brands dropped 30.4% to $2.22 on Monday after the cannabis producer warned that its average selling price would fall. Dow Jones Newswires reports the stock is down 73.6% so far this year. In preliminary results, the company projected an average price of $150 per pound for the quarter ended September 30, versus $211 in the prior quarter and $155 a year earlier.

Revenue is expected at $56.8 million, above the $52.8 million FactSet analysts had forecast. Management kept its full-year output target near one million pounds and said fourth-quarter production costs should match the third quarter. CEO Kyle Kazan said seasonal price weakness and a sales mix heavier in trim weighed on margins, though higher volume kept gross profit close to the second-quarter level.

why it matters

For cannabis producers, lower realized prices squeeze margins even when volumes rise, so pricing trends matter more to investors than output alone. The sharp selloff shows how sensitive the stock is to per-pound pricing expectations. Similar signals can also weigh on competitors selling into the same market.

market impact

Cannabis stocks: lower per-pound pricing pressures margins at Glass House Brands and sector peers

tags

instruments