# GLAS Diligence — Verification Pass & Plan of Action
## Glass House Brands Inc. (NYSE American: GLAS) — independent verification of the July 9, 2026 deliverables, primary-source confirmations, corrections, and prioritized next steps

**Date:** July 9, 2026
**Scope:** This document (a) records an independent verification pass over the four prior deliverables
(`glas_diligence_report.md`, `glas_related_party_ledger.md`, `glas_retail_research.md`,
`glas_foia_pra_templates.md`), (b) reports the primary-source confirmations executed today, (c) lists every
correction, (d) states the two legally-operative theories in their defensible (adversarially-tested) form, and
(e) gives a prioritized action plan.

**Method:** 16-agent verification/diligence workflow (primary + mirror sources) followed by direct SEC EDGAR
retrieval. NOTE: `sec.gov` returns HTTP 403 to the default automated fetch tool, but permits programmatic
access when a User-Agent with contact info is supplied; the figures below marked "CONFIRMED (EDGAR)" were read
directly from the filed exhibits today via that compliant method.

> **Bottom line:** The factual spine of the prior reports is **solid and now primary-sourced**. Roughly 20
> refinements/corrections are catalogued below (none were fabrications). Three findings carry the most weight:
> (1) **NSJB Investments** is a 2-day-old shell run by two plaintiff's-side litigators with a **seller-financed**
> purchase, and its principal **Jared Beilke co-appears with Kyle Kazan on a verified 2011–2012 community
> donor list** (§3.1) — reframing the deconsolidation's independence question and making it a discovery target;
> (2) **Ex 99.5's own $(11.4M) "loss on deconsolidation" appears to misapply ASC 810-10-40-5** (gross-for-net
> assets) — correctly computed it is a **~$13.6M GAIN**, a ~$25M swing (§2.1); and (3) the founders' voting-power
> figure is **~76%**, not 77.3%. The two legal theories both ultimately turn on a small set of **non-public
> documents** (the Purchase Note's recourse/security; the DCC ownership filings) — the highest-value targets (§7–§8).

---

## 1. VERIFICATION SCORECARD

| # | Report claim | Verdict | Primary source |
|---|---|---|---|
| 1 | Deconsolidation 6-K exists (acc. 0001104659-26-074968); NSJB 100 Class A (10%/100% voting), GHB Usub 900 Exchangeable (90%/0%), $2.5M | **CONFIRMED** | EDGAR 6-K Ex 99.2/99.3; press release |
| 2 | Six pro-forma accounting figures ($11.4M loss; $19.8M retained; $29.9M net assets; $10.7M intangibles; $315.2M assets; $(39.9M) FY25 net loss) | **CONFIRMED as transcribed (EDGAR)** — BUT the $(11.4M) loss is an **ASC 810 error**: correct math = **+$13.6M gain** (§2.1) | EDGAR Ex 99.5 |
| 3 | Material weakness root cause = ITGCs at 3rd-party providers (ERP + retail rev/inventory; no SOC 1 Type II) | **CONFIRMED (EDGAR)** verbatim | EDGAR FY2025 MD&A (Ex 99.2) |
| 4 | DCC citation exists (CCL21-0005116; eff. 05/15/2026; §17800/§15042/§26160) | **CONFIRMED** | DCC compliance-action portal |
| 5 | "$21,000 fine / underage-worker age-verification" framing | **PARTIAL** — press-only; DCC record shows premises-access/records, no $ amount | Forbes 06/25/26 (secondary) vs DCC portal |
| 6 | Founders hold **77.3%** of voting power | **CORRECTED → ~76% non-diluted / ~64.6% diluted** | EDGAR FY2025 AIF (Ex 99.3) |
| 7 | Uplist timeline (June 25 approval; 8-A12B June 26 acc. …078090; GLAS first trade June 30); price ~$11.49 July 8 | **CONFIRMED** (price ≈ $11.5) | EDGAR 8-A12B; press; market data |
| 8 | "July 3, 2026 SEDAR+ 51-102F3 material change report" | **UNVERIFIED / likely non-existent** — only June 16/17 report found | SEDAR+/OTC Markets |
| 9 | ICE raid facts (July 10 2025; 9 GH employees; Alanis death; $26M loss) | **CONFIRMED** with figure refinements | GLAS 8/4/25 release; Forbes; DHS |
| 10 | Financial controls: material weakness + FCCR covenant breach + restatement | **CONFIRMED** with scope fixes (below) | EDGAR MD&A / interim FS |
| 11 | Related-party lease/consulting/insurance dollar figures | **CONFIRMED** verbatim (Note 18) | FY2025 & Q1 2026 Note 18 |
| 12 | Melendez $305K settlement; OSHA $5K §342(A) citation | **CONFIRMED** with attribution fix (below) | Law360; OSHA IMIS |
| 13 | Purchase Note terms & CSA fee cap not in any public filing | **CONFIRMED (EDGAR)** — absent from Ex 99.3 | EDGAR Ex 99.3 |
| 14 | AIF risk-factor changes FY2024→FY2025 (§7.3a list) | **CORRECTED** — see §4 (three "removed" items still present) | EDGAR FY2024 & FY2025 AIF |
| 15 | NSJB is a genuine independent third party | **DOUBTFUL / UNRESOLVED** — 2-day-old shell; JML Law principals; seller-financed; **verified PEF donor-list tie between Beilke & Kazan**; ASC 810 status still turns on non-public docs | CA SoS; JML Law; CalBar; PEF donor list |

---

## 2. PRIMARY-SOURCE CONFIRMATIONS EXECUTED TODAY (converts prior "UNVERIFIABLE" items to verified)

All read directly from the filed exhibits (accession **0001104659-26-074968** for the 6-K; **0001848731-26-000015**
for the FY2025 40-F).

### 2.1 The six deconsolidation figures — ALL CONFIRMED (Exhibit 99.5, in $000s)
From the pro forma balance sheet (as of 3/31/2026) and the note (f) loss computation:

| Line | As reported | Deconsolidation adj. | Pro forma |
|---|---|---|---|
| **TOTAL ASSETS** | $325,353 | −$29,935 / +$19,800 | **$315,218** ✓ ($315.2M) |
| Investment in Glass House Retail (retained, note b) | — | +$19,800 | **$19,800** ✓ ($19.8M) |
| Intangible Assets, Net | $11,626 | −$10,677 | $949 → **$10,677 removed** ✓ ($10.7M) |
| **Loss on Deconsolidation Transaction (note f)** | — | +$11,415 | **$(11,415)** ✓ ($11.4M) |

Note (f) loss computation (verbatim): Fair value of investment in GHR **$19,800** − carrying value of net
assets disposed **$29,935** − direct transaction costs **$1,280** = **pre-tax loss $(11,415)**; estimated tax
benefit $0; after-tax loss **$(11,415)**.

Pro-forma statements of operations:
- **FY2025:** Net Loss $(28,952) → **$(39,942)** ✓ ($(39.9M)); Net Loss Attributable to the Company $(29,659) → $(40,649). Revenue $181,984 → **$133,741** ✓.
- **Q1 2026:** Net Loss $(17,006) → $(16,920); Net Loss Attributable to the Company $(17,132) → $(17,046). Revenue $40.5M → $28.6M.

**Result:** Every accounting figure the prior report presented is **correctly transcribed from Ex 99.5 and now
primary-sourced.** They may be represented as source-verified *as the figures GLAS filed*.

**BUT — the "loss" itself appears to be an ASC 810-10-40-5 ERROR (independently re-confirmed today):** Note (f)
computes the loss as fair value of investment **$19,800** − "**carrying value of net assets disposed $29,935**" −
transaction costs **$1,280** = **$(11,415)**. The **$29,935 figure is GROSS assets, not net assets.** The same
deconsolidation column that removes **$29,935 of total assets** also removes **$25,016 of total liabilities** — so
GHR's true **net** assets disposed = **$29,935 − $25,016 = $4,919** (and the exhibit confirms this: shareholders'
equity attributable to the Company falls by exactly **$(4,919)** in that column). Plugging the correct net-asset
figure into the same formula: **$19,800 − $4,919 − $1,280 = +$13,601 GAIN**, not an $(11,415) loss. Two internal
corroborations: (i) the pro-forma **Accumulated Deficit improves** from $(237,207) to $(167,133) — a ~$70M *favorable*
swing that is inconsistent with booking a real ~$11M loss; and (ii) the note's own error is on the document's face
(gross-for-net). **Net effect: the transaction that Ex 99.5 presents as an ~$11.4M loss is, on a correct ASC 810
computation, an ~$13.6M gain — a ~$25M swing and a mischaracterization of the transaction's nature.** Represent this
as: "GLAS's filed figures are accurately transcribed, but Ex 99.5's note (f) misapplies ASC 810-10-40-5 by using
gross rather than net assets; corrected, the result is a gain." Watch the **Q2 2026 6-K (~Aug 2026)** for the actual
booked figure at closing.

### 2.2 Material-weakness root cause — CONFIRMED verbatim (FY2025 MD&A, Ex 99.2)
> "…management identified a material weakness related to information technology general controls ('ITGC's),
> specifically pertaining to the Company's reliance on certain third-party service providers supporting its
> primary enterprise resource planning ('ERP') system and retail revenue and inventory management system. The
> third-party service organizations that host and support these systems notified the Company that they would not
> be issuing Service Organization Control ('SOC') 1 Type II reports… management did not have sufficient evidence
> regarding the design and operating effectiveness of ITGCs at these service organizations. Management notes this
> material weakness is pervasive in nature as it relates to the effectiveness of the Company's ERP system…
> compensating review controls… were not fully implemented or consistently evidenced during the period."

ICFR **not effective** at 12/31/2025; DCP **not effective** at 12/31/2025 (and 3/31/2026 per Q1 6-K); remediation
ongoing. The prior report's characterization is confirmed.

### 2.3 Founders' voting power — CORRECTED (FY2025 AIF, Ex 99.3)
> "As of December 31, 2025, the Company Founders hold approximately **76%** of the voting power in the Company on
> a non-diluted basis, and approximately **64.6%** on a diluted basis…"
> "As of March 12, 2026, the Equity Shares represent approximately 24.6% of the voting rights… and the Multiple
> Voting Shares represent approximately **75.4%** of the voting rights…"

The prior "**77.3%**" figure is **incorrect** and should be replaced everywhere with **~76% non-diluted / ~64.6%
diluted.** The 77.46% figure is GLAS's control of **MPB Acquisition Corp.** (an exchangeable-share vehicle) — a
different metric that was conflated. The governance point (50:1 super-voting control → related-party transactions
effectively self-approved) is unchanged and, if anything, cleaner: MVS = ~75.4% of votes on a small share count.

### 2.4 Schedule III language — CONFIRMED present in FY2025 AIF (Ex 99.3)
The AIF (dated March 24, 2026) states it **"cannot be known whether the appropriate federal bodies will indeed
reclassify cannabis as a Schedule III controlled substance, whether such classification will be finalized or
when…"** and that **"cannabis remains a Schedule I controlled substance under U.S. federal law as of the date of
this filing."** That was accurate on March 24 but became **stale on April 28, 2026** (the medical-only Schedule
III final order — §5.2), and the newest comprehensive risk disclosure was never refreshed post-uplist (§3.4).

### 2.5 Purchase Note & the offset mechanic — CONFIRMED from the Purchase Agreement (Ex 99.3)
- The note's substantive terms are **absent**: "The Investor shall issue a promissory note (the 'Purchase Note')…
  in the form agreed to between the Company and the Investor, in the original principal amount of the Investment
  Amount." No interest rate, maturity, security, or recourse is in the filed exhibit. **Confirmed discovery target.**
- **Offset mechanic (verbatim):** "The Company shall offset any amounts owed under the Purchase Note, including
  all accrued interest, when paying the Repurchase/Put Price. At such closing, the Class A Units shall Transfer to
  the Company (or its designee), free and clear of all Encumbrances…" On a Call/Put, NSJB's unpaid, seller-financed
  note is **netted** against the repurchase price. This circularity (buyer never funds cash; on exit the note is
  offset) is the primary-source hook for the ASC 810 "substantive-equity-at-risk" question in §6.
- Closing was conditioned on the **senior-secured lender's consent** to the change-of-control — a records/discovery
  item (was consent obtained?).

### 2.6 AIF risk-factor diff FY2024 → FY2025 — CORRECTS the report's §7.3a
Direct comparison of both AIF texts:
- **Genuinely NEW in FY2025:** Section 16 reporting; July-2025 immigration/ICE-enforcement exposure; Teamsters/LPA.
- **Report wrongly listed as "removed in FY2025" — all THREE remain present:** Canadian bank refusal, USRPHC tax
  classification, and NOL/§382 limitation. Do **not** assert these were removed.
- **Report listed as "added" but already present in FY2024** (so at most *expanded*, not added): hemp risks, DEA
  rescheduling/NPRM, Trump-administration references, FDA workforce-disruption risk.

---

## 3. NEW FINDINGS

### 3.1 NSJB Investments — the deconsolidation linchpin (HIGH confidence on public facts)
- **NSJB Investments LLC** = California LLC **#B20260273635**, registered **June 10, 2026** — **two days before**
  the June 12 transaction. Registered agent **Nicholas Wayne Sarris**; principal address **5855 Topanga Canyon
  Blvd, Ste 300, Woodland Hills, CA 91367**. (Pull from `bizfileonline.sos.ca.gov` directly for a court exhibit;
  the date/entity number are from a SoS mirror.)
- **That address is the headquarters of JML Law, APLC**, a plaintiff-side employment/PI firm. NSJB is housed
  inside a law firm, not at any Glass House / Beach Front / cannabis premises.
- **Jared Beilke** (CA Bar #195698) and **Nicholas Sarris** (CA Bar #242011) are JML Law managing partners
  (employment / PI / class-action litigators) with **no cannabis, investment, or Glass-House-family background**.
  "**N-S-J-B**" = **N**icholas **S**arris + **J**ared **B**eilke.
- **The $2.5M was not cash** — it was **seller-financed by Glass House Retail via the Purchase Note** (§2.5). In
  substance, **Glass House financed its own "independent" 10%-voting buyer.**
- **Community tie — VERIFIED (this supersedes the workflow's "no public tie" line):** Kyle Kazan (GLAS CEO) and a
  **Jared Beilke** (with spouse **Michele**) **both appear as donors on the Peninsula Education Foundation's
  2011–2012 donor list** — Kazan at the **Bronze Major-Donor level ($2,500–$4,999)**, "Michele and Jared Beilke" at
  the **Friend level ($250–$499)** — confirmed today by reading the published donor list itself (Yumpu doc 15207067).
  Kazan's Palos Verdes Peninsula roots are independently public. A separate subagent work-up
  (`glas_actionable_findings.md`) additionally reports Beilke and Kazan as **Rolling Hills** (pop. ~1,500) co-residents
  at specific street addresses — **those addresses are UNVERIFIED; do not publish or assert them** without
  property-record confirmation (privacy + accuracy).
- **What the community tie proves and doesn't:** it establishes a **pre-existing same-small-community connection**
  between GLAS's CEO and NSJB's principal — a strong basis to **question NSJB's arm's-length independence and to
  pursue discovery**. It does **not**, by itself, establish that Beilke is Kazan's agent or that NSJB is a related
  party under ASC 810 (a 14-year-old co-donor listing at different tiers is a lead, not proof). It converts "no public
  tie" into **"a documented community tie that warrants the ownership/independence inquiry."** Use "**Investor
  Manager**" (the filing's term), not "CEO," for Beilke's GHR role.
- **Companion raw file:** `glas_actionable_findings.md` (a subagent work-product) holds fuller NSJB/Beilke/Sarris
  detail plus a Rosenwald Capital Management Form ADV extract (Rosenwald Partners LP with GP = RCM; Beach Front
  I–IV LLCs with GP = Beach Front Properties LLC) and a federal-court-records inventory from the July 2025 raid.
  **Verified from it:** the PEF donor-list co-appearance (✓ above) and the JML Law / CalBar identities (✓ §3.1).
  **Treat as unverified pending confirmation:** the specific home addresses, NSJB's full membership, and the
  stale (2011) Form ADV AUM figure.

### 3.2 Federal rescheduling — the listing predicate is NARROW and under active challenge (HIGH)
- A **FINAL order** (Acting AG Todd Blanche; announced ~Apr 22–23; **effective April 28, 2026**; Fed. Reg. docs
  2026-08176 / 2026-08177) rescheduled to Schedule III **only** (1) FDA-approved marijuana drug products and (2)
  **state-licensed MEDICAL marijuana.** **Recreational stays Schedule I.** This medical-only order is the predicate
  for GLAS's June 30 uplist — Kazan's "not possible prior to the recent reclassification" statement is accurate.
- **The final order is under active D.C. Circuit challenge** — dockets confirmed via CourtListener:
  **No. 26-1106, SAM, Inc. v. DOJ (filed May 4, 2026)** and **No. 26-1130, State of Nebraska v. DOJ (filed May 22,
  2026)**; a related district-court matter, *Smart Approaches to Marijuana v. Kennedy*, **D.D.C. 1:26-cv-01081**
  (filed March 30, 2026), is on appeal at **D.C. Cir. 26-5205 (filed June 8, 2026)**. Petitioners sought a **stay
  pending review; DOJ's response was due July 2, 2026** — ruling not confirmed as of the reporting reviewed.
  **This is the single highest-impact external contingency to GLAS's listing.**
- The **broader** rescheduling (incl. recreational) is still only a **proposed rule** in an expedited DEA ALJ
  hearing (**June 29 – July 15, 2026**), with all seven selected participants **opposed**.

### 3.3 Related-party landlords trace to a Kazan / Rosenwald-Capital bridge (HIGH)
- **Beach Front Properties LLC** (CA #199716410008, formed 6/13/1997) has **two managers: Kyle Kazan and Rosenwald
  Capital Management, Inc.** — the documentary bridge tying the landlord network to **both** the Kazan side and the
  Rosenwald side. (This, not a "director of Beach Front" characterization, is the supportable link to Rosenwald.)
- **Beach-Front / Kazan-managed landlords:** 3645 Long Beach LLC (HQ), Neo Street Partners LLC (Lompoc), Isla Vista
  GHG LLC.
- **Two entities are GLAS corporate/subsidiary vehicles — NOT insider landlords:** 5042 Real Estate Investment LLC
  (manager GH RE Manager LLC → GHB Usub) and 2000 De La Vina LLC (manager GH Group, Inc.). Do not treat these as
  Kazan/Beach-Front insider landlords; the De La Vina related-party-lease characterization is unverified.
- **Member equity percentages are not public** (CA SoS shows managers/agents, not member splits) → subpoena target.

### 3.4 Post-uplist sweep (July 3–9, 2026) (MEDIUM)
- **No SEC filing dated July 3–9.** Only post-July-3 item is a **July 7, 2026 press release** (first international
  sale of smokeable CBD biomass to Europe) — no mention of the citation, GHR, NSJB, or the deconsolidation.
- **The DCC citation was never disclosed to investors** in any located GLAS SEC filing through July 9, 2026.
- **DCC license search returns 0 results** for "Glass House Retail" and "NSJB Investments" → retail-license
  transfers not yet completed (DCC ownership approval still pending).
- **Vireo Growth CA retail JV** (announced ~April 13, 2026) **not closed** ("has not commenced operations").

---

## 4. CORRECTIONS TO THE PRIOR DELIVERABLES
Apply these; none is a fabrication — all are refinements/scope/attribution fixes. (Items resolved to primary
source in §2 are marked ✓ VERIFIED.)

1. **Founders voting power:** 77.3% → **~76% non-diluted / ~64.6% diluted** (FY2025 AIF). ✓ VERIFIED. Fix in
   `glas_diligence_report.md` (3×) and `glas_related_party_ledger.md` (4×). `glas_retail_research.md` already says ~76%.
2. **Six deconsolidation figures:** now ✓ VERIFIED against Ex 99.5 (were flagged unverifiable). Keep as stated.
3. **Material-weakness root cause:** now ✓ VERIFIED against MD&A (was flagged unverifiable). Keep as stated.
4. **DCC citation framing:** "$21,000 / underage-worker age-verification" is **press-sourced (Forbes)**; the
   **primary DCC record** lists premises-access/records violations (§17800/§15042/§26160) and shows **no dollar
   penalty** and **no appeal asterisk.** Attribute the $ and age-verification framing to press; do not state the
   appeal is "docketed at DCC." It was publicly reported **June 24** (a day *before* the June 25 uplist announcement),
   not "the same day."
5. **"July 3, 2026 SEDAR+ 51-102F3":** unverified / likely non-existent — only the June 16/17 report was located.
   Remove or flag as unverified.
6. **ICE raid figures:** "~360 detained" → DHS revised **"at least 361 individuals and 14 children."** Attribute
   minors by source (Glass House said ~11 alleged; **CBP said 10, 8 unaccompanied**; DHS later said 14). "ages 14–17"
   is secondary. **Drop "U.S. Marshals"** (uncorroborated). Alanis Garcia died **July 12** (fell July 10).
7. **Credit facility maturity:** "January 31, 2030" → **February 28, 2030.** The Dec-31-2025 default was **FCCR
   non-compliance PLUS technical events of default**, and a **separate Lompoc Term Loan DSCR** covenant was also
   breached and waived.
8. **Restatement scope:** "FY2022" → **FY2021 AND FY2022** (and interim Q1 2023).
9. **OSHA attribution (do not conflate):** the **$5,000 / §342(A) / contested 12/02/2025 / OPEN** citation is
   **"Glass House Farm, LLC" (Insp. 1837925.015), a SAFETY inspection** — not the fatality. The **fatality (Fat/Cat)
   inspection is the separate "Art's Labor Service, Inc." (Insp. 1837914.015), CLOSED 10/28/2025.**
10. **Melendez:** original complaint filed **Dec 19, 2023** (not Feb 20, 2024; Feb 2024 may be an amendment/PAGA);
    settlement order **Nov 25, 2025**; "**no admission of liability**" is **not stated** in accessible sources — do
    not assert.
11. **DOL/WHD "concluded with no findings":** **UNVERIFIABLE** — no source located. Do not assert.
12. **Jon A. Neu Insurance parent:** named inconsistently across filings — **Beach Front Property Management Inc.**
    (FY2025 FS) vs **Beach Front Properties LLC** (Q1 2026 FS). Note the inconsistency; do not pick one silently.
13. **"James B. Rosenwald III is a director of Beach Front":** not supported by Note 18. The supportable bridge is
    **Rosenwald Capital Management, Inc. as co-manager of Beach Front Properties LLC** (with Kazan) — use that.
14. **AIF risk-factor §7.3a:** three "removed" items (Canadian bank refusal, USRPHC, NOL/§382) are **still present**
    in FY2025; several "added" items were already in FY2024. Only **Section 16, immigration-enforcement, and
    Teamsters** are clearly new (§2.6).
15. **"Purchase Note" vs "purchase price":** $2,500,000 is the Class A Unit **purchase price**; the **Purchase Note**
    is the instrument that *finances* it. Keep the two concepts distinct.

---

## 5. VERIFIED FACT BASE (confirmed; safe to rely on, subject to §4)

- **Deconsolidation & accounting** (§2.1): closed June 12, 2026; three-class unit structure; all six pro-forma
  figures ✓; $25K/mo distribution cap; cost-plus-5% MSA. (EDGAR 6-K acc. 0001104659-26-074968)
- **DCC citation:** CCL21-0005116, "Citation and Fine," effective 05/15/2026, §§17800/15042/26160; no asterisk; not
  on Final Decisions; $21K + age-verification per Forbes; company publicly says it appealed/requested a hearing.
- **Uplist:** NYSE approval announced June 25; **8-A12B acc. 0001104659-26-078090, dated June 26**; GLASF ceased
  June 29; **GLAS first trade June 30, 2026**; price ≈ $11.5 (July 8). Cboe Canada GLAS.A.U continues.
- **ICE raid & labor:** July 10, 2025 (Camarillo + Carpinteria); CBP (lead), ICE, National Guard, FBI (post-raid);
  9 GH employees detained; **Jaime Alanis Garcia** died July 12; **George Retes** (US citizen/vet) detained ~3 days,
  filed FTCA suit Feb 2026; FBI $50K reward; **$26M** lost revenue / **100,000-lb** harvest reduction (Nov 12, 2025
  disclosure). **Criminal investigation OPEN; warrant sealed; no charges** as of mid-2026.
- **Financial controls & covenants:** material weakness (§2.2); **$50M senior secured facility** — FCCR (≥1.25×)
  breach at 12/31/2025 + technical defaults; **First Amendment & Waiver March 16, 2026**; **FCCR testing suspended
  Q1–Q3 2026, resumes Q4 2026**; maturity **Feb 28, 2030**; parallel Lompoc DSCR breach waived. **FY2021–FY2022
  restatement** (April 1, 2024; unqualified opinion, Macias Gini & O'Connell).
- **Related-party ledger (Note 18, ✓ verbatim):** Beach Front consulting **$140K/yr** ($53K Q1'26); Jon A. Neu
  Insurance **$298K FY2025** ($82K Q1'26); leases 3645 Long Beach ($93K renewed), 5042 ($222K), Isla Vista GHG
  ($144K), Kazan Trust ($36K), 2000 De La Vina ($60K + $180K; first terminated 2025), Neo Street ($243K; remaining
  76% acquired **Aug 18, 2025**). MVS 50:1; ~4.75M MVS outstanding; sunset extended to **June 29, 2027**.
- **Litigation/OSHA:** Melendez **$305,000** (order Nov 25, 2025); OSHA per §4(9). Expired **SEATU LPA** (signed Oct
  16, 2023; expired Oct 2024) with 25-permit renewals on an attestation; new **Teamsters LPA** post-raid.

---

## 6. THE TWO LEGALLY-OPERATIVE THEORIES — ADVERSARIALLY-ADJUSTED (use only these framings)

### Theory 1 — "Failure to disclose the $21K DCC citation" — **DOES NOT HOLD as a standalone claim (low)**
Fails on three independent grounds: (a) GLAS is a **foreign private issuer** — no Form 8-K duty; Form 6-K is
reactive; a $21K state administrative citation triggers neither NI 51-102 "material change" nor a 6-K; the 8-A12B
is a listing/registration form, not an event-disclosure vehicle. (b) **Immateriality** — $21K is ≈0.01% of ~$182M
revenue. (c) The **underlying risk was already disclosed** (FY2025 AIF warns the July-2025 investigation could
yield "fines, penalties"; the citation post-dates the AIF) and GLAS publicly acknowledged the citation and its
appeal. **Defensible reframing:** treat the citation as **one data point in a qualitative labor-compliance trend**
(age-verification citation + ICE-raid fatality + Melendez + expired-LPA/attestation) bearing on **disclosure
adequacy of an aggregate trend** — while conceding (i) quantitative immateriality, (ii) the FPI reactive-6-K
regime, and (iii) that the underlying risk was disclosed. **First** confirm from the interim FS whether the
citation was booked as an IAS 37 loss contingency (if so, the omission theory is dead). *The stronger, separate
angle is §3.4 / §2.4 staleness: the newest comprehensive risk disclosure predates the deconsolidation, NYSE
approval, and first trade, and still treats Schedule III as prospective — a "disclosure staleness/adequacy"
argument, kept distinct from the "concealed the fine" argument.*

### Theory 2 — "ASC 810 reconsolidation of GHR (de facto control)" — the strong version is targeted (medium)
The "27 consent categories + cost-plus-5% MSA + Kazan's board seat = de facto control" framing **does not survive**
ASC 810: those are **protective rights** (never confer power); the structure deliberately **strips Kazan of the
participating rights that matter** (during the Interim Period the Holdings Manager cannot vote on the budget or on
officer appointment/removal/compensation — the "activities most significant to economic performance"); NSJB holds
100% of voting units and 2 of 3 board seats; a **cost-plus-5% MSA terminable on 90 days' notice** is a paradigm
service arrangement; and an auditor concurred. **Defensible reframing (use only this):** GLAS **plainly satisfies
the economics prong** (~90% economics + a call-like exchange feature), so deconsolidation **rests entirely on GLAS
having genuinely surrendered POWER to an independent NSJB** — which is real **only if** (a) **NSJB has substantive
equity at risk**, which the **seller-financed Purchase Note + the §2.5 offset mechanic may negate** (issuer-provided
financing / de-facto-agent trigger under ASC 810-10-25, collapsing the "sale" into a financing and restoring GLAS's
power), and (b) **NSJB is not a de-facto agent of Glass House insiders** — where the **verified PEF donor-list tie between
Beilke and Kazan (§3.1)** is now a concrete, documented lead cutting against arm's-length independence (though not,
by itself, proof of agency). Linchpin (a) remains non-public; linchpin (b) is **partly evidenced and worth
developing in discovery.** Characterize the deconsolidation as **"facially supportable but resting on two linchpins —
one non-public (the Purchase Note's recourse/security), one now partly evidenced (NSJB's independence) — framed as a
targeted document demand, not a present conclusion."**

---

## 7. WHAT REMAINS NON-PUBLIC (the highest-value targets)

1. **NSJB Purchase Note — full terms** (rate, maturity, **recourse vs. non-recourse, whether the Class A Units are
   pledged**, prepayment, acceleration, any GLAS call/reacquire right). Decides Theory 2 linchpin (a). *Not in any
   public filing.*
2. **DCC ownership / financial-interest filings** for the GHR retail licenses and for NSJB's principals — the best
   quasi-public test of overlapping beneficial interests (Theory 2 linchpin (b)). *PRA target.*
3. **GLAS's ASC 810 consolidation / primary-beneficiary / related-party memo + auditor concurrence work papers**
   (Macias Gini & O'Connell). The definitive independence determination. *Subpoena/records target.*
4. **CSA/MSA fee CAP amount**, scope, term. *Discovery target.*
5. **NSJB actual membership/beneficial ownership** — public Articles list no members; **NSJB's LLC-12 Statement of
   Information is due ~Sept 8, 2026** (a future public window).
6. **DCC citation PDF + assessed penalty** — reconcile "$21,000"/age-verification vs. the portal's premises-access
   framing (one action or two?). *PRA target.*
7. **Beach Front Properties LLC member equity percentages** (Kazan vs. Rosenwald Capital vs. Farrar). *Subpoena.*
8. **Senior-secured lender consent** to the GHR change-of-control (was it obtained?). *Discovery.*
9. **D.C. Circuit stay ruling** on the April 2026 medical-only final order (DOJ response due July 2, 2026). Docket
   numbers now confirmed — **26-1106 (SAM v. DOJ)**, **26-1130 (Nebraska v. DOJ)**, appeal **26-5205**; monitor for
   the stay decision via *CourtListener/PACER.*

---

## 8. PRIORITIZED ACTION PLAN (status as of 2026-07-09)

### (i) Public-record verification — **DONE TODAY**
- ✔ Confirmed the six Ex 99.5 deconsolidation figures directly from EDGAR (§2.1).
- ✔ Confirmed the material-weakness root cause from the FY2025 MD&A (§2.2).
- ✔ Corrected the founders' voting-power figure to ~76% / ~64.6% from the FY2025 AIF (§2.3).
- ✔ Confirmed the Schedule III "cannot be known" language and its post-April-28 staleness (§2.4).
- ✔ Confirmed the Purchase Note terms are absent from the public exhibit and captured the offset mechanic (§2.5).
- ✔ Ran the FY2024→FY2025 AIF risk-factor diff; corrected §7.3a (§2.6).
- ✔ Established NSJB's character (2-day shell; JML Law litigators; seller-financed) (§3.1).

### (ii) Quick public-record follow-ups (low effort — do next)
- **Re-pull NSJB from `bizfileonline.sos.ca.gov`** directly (not the mirror) for a clean court exhibit; **calendar
  the NSJB LLC-12** (~Sept 8, 2026).
- ✔ **CourtListener pull DONE** — D.C. Circuit petitions identified: **26-1106 (SAM, Inc. v. DOJ, May 4, 2026)**,
  **26-1130 (State of Nebraska v. DOJ, May 22, 2026)**, and appeal **26-5205** (from D.D.C. 1:26-cv-01081). Remaining
  step: monitor for the **stay ruling** (DOJ response due July 2, 2026) — the highest-impact external contingency to
  the listing predicate. *(NSJB re-pull from `bizfileonline` still pending — the SoS API is bot-shielded; needs a
  real browser.)*
- **Confirm whether the DCC citation was booked as an IAS 37 loss contingency** in the interim FS (settles Theory 1).

### (iii) Records requests — FOIA / PRA (templates in `glas_foia_pra_templates.md`; refine per §4 before filing)
- **CA DCC PRA** (single most valuable non-litigation request): (a) the **CCL21-0005116 citation PDF + assessed
  penalty**; (b) **ownership / financial-interest filings for the GHR licenses and NSJB's principals** (Theory 2
  linchpin (b)); (c) the **SEATU LPA renewal/attestation file.**
- **Cal/OSHA / Fed-OSHA** request for **Insp. 1837925.015** (Glass House Farm §342(A), OPEN) and **1837914.015**
  (Art's Labor Service fatality, CLOSED) — use the corrected inspection numbers.
- **DOL/WHD FOIA** to confirm-or-refute the claimed wage "no findings" (currently unverifiable; do not assert until
  resolved).

### (iv) Litigation-discovery / subpoena targets (highest value on the core thesis; case-vehicle only)
- **RFP / subpoena for the executed Purchase Note** — recourse, security/pledge of the Class A Units, maturity,
  call/reacquire rights (Theory 2 linchpin (a)).
- **RFP / subpoena for the executed CSA/MSA** — fee cap, scope, term.
- **Subpoena to GLAS** for its **ASC 810 memo + Macias Gini consolidation work papers.**
- **Subpoena to Beach Front Properties LLC and Rosenwald Capital Management, Inc.** for operating agreements / cap
  tables establishing member equity percentages in Beach Front Properties LLC and the three landlord LLCs.

**Litigation relevance (Rosenwald matters):** GLAS is family-controlled through James B. Rosenwald III /
Rosenwald Capital Management (co-manager of Beach Front Properties LLC). The verified Kazan↔Rosenwald-Capital
documentary bridge (§3.3), the RCM-as-co-manager fact, and the NSJB seller-financing (§3.1) are consistent with —
and strengthen — the existing single-enterprise / RCM-subpoena theory. Keep assertions to the **documented**
findings above; treat NSJB independence as an **open question for discovery**, not an accusation.

### (v) Monitoring
- Next GLAS 6-K / any 40-F amendment; the D.C. Circuit stay ruling; DCC license-search status for GHR/NSJB (still 0
  results); the Vireo JV / GHR license-transfer closings.

---

## 9. SOURCE APPENDIX (primary filings read today)

| Doc | Accession / URL |
|---|---|
| 6-K deconsolidation (Ex 99.3 Purchase Agreement, Ex 99.4 Protection Agreement, Ex 99.5 Pro Forma) | 0001104659-26-074968 — `sec.gov/Archives/edgar/data/1848731/000110465926074968/` |
| FY2025 40-F (Ex 99.2 MD&A `glas-20251231xex992.htm`; Ex 99.3 AIF `…xex993.htm`) | 0001848731-26-000015 |
| FY2024 40-F (Ex 99.3 AIF `glas-20241231xex993.htm`) | 0001848731-25-000007 |
| Form 8-A12B (NYSE registration) | 0001104659-26-078090 |
| DCC compliance-action portal | `cannabis.ca.gov/cannabis-laws/compliance-action-records/` |
| OSHA IMIS (Insp. 1837925.015; 1837914.015) | `osha.gov` establishment search |

*Note: EDGAR figures above were read directly from the filed exhibits on 2026-07-09 using a compliant User-Agent.
Court/regulatory filings should cite the EDGAR accession + exhibit, not this memo.*

---

*Prepared July 9, 2026. Supersedes the "do not represent as source-verified" cautions in the prior deliverables for
every item marked ✓ VERIFIED above; all other corrections in §4 apply.*