Calif. pot company skyrockets to $1B valuation following Trump action

Southern California mega cannabis grower Glass House Brands has skyrocketed to a valuation of over $1 billion for the first time, a striking turn of fate for a company that was facing existential panic and the prospect of federal charges just a year ago.

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Ironically, both the good news for Glass House today and last year’s panic were caused by the Trump administration. 

Last July, the Trump administration targeted Glass House’s two massive growing facilities in Santa Barbara and Ventura counties with a militarized immigration raid that left one worker dead and over 360 workers arrested. Federal authorities accused Glass House of employing minors, and there was legitimate concern the legal marijuana company’s executives could face criminal charges. The raid tanked the company’s stock price, and Glass House said the military operation cost it $26 million in lost revenue and over 100,000 pounds of lost cannabis. 

But instead of charging the company’s executives, the Trump administration sent Glass House a lifeline. In April, Trump’s attorney general signed an order reclassifying state-licensed medical marijuana from Schedule I to Schedule III, moving it to a far friendlier designation. While the exact impacts are complicated and not certain, it’s likely to cut taxes for companies and could lead to legal interstate sales of medical marijauna. 

Glass House has said that the rescheduling will allow it to ship medical cannabis across state lines and export CBD products internationally, representing potentially huge increases in sales for a company that currently can’t legally sell cannabis outside the state of California.

Rescheduling has also opened the door for Glass House to list its stock on the New York Stock Exchange, a far larger stock exchange than the Canadian market where it’s currently listed. On Thursday, Glass House said the uplisting was approved, opening the door for much more investor cash to flood into the company. 

Taken all together, these developments have more than doubled Glass House’s stock price, moving its valuation from $500 million to over $1 billion in the past year. 

Hirsh Jain, a cannabis consultant and industry expert in Los Angeles, said Glass House’s ability to export cannabis is still unclear and the timing of any exports remains “highly uncertain,” yet investors are still piling into the stock. 

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“Investors increasingly view Glass House as one of the best-positioned cannabis companies if interstate commerce eventually becomes legal, given its large-scale, low-cost California cultivation footprint,” Jain said in an email. 

Glass House did not return a request for comment regarding when it would be able to start exporting cannabis. 

The surging valuation of Glass House could be a sign that optimism is finally returning to California’s beleaguered cannabis market, which has struggled for years, with thousands of companies going out of business. However, Jain said investors are betting more on California companies performing outside the state, rather than the state’s market delivering profits.

“Investors appear to be increasingly rewarding companies with credible growth pathways beyond California rather than simply betting on a recovery of the California market itself,” Jain said.

While Glass House executives are now enjoying a high water market of value in their company, the workers harmed during last July’s raid are still reeling. One worker with a disability at Glass House was deported without any legal representation, while another man was quickly deported to Tijuana, where he knew no one, according to the Ventura County Star. Glass House had publicly promised to provide legal support for the detained workers but apparently never did so. The company has ignored multiple SFGATE requests for documentation showing that it offered any support to its impacted workers.