The company reported Q2 2019 net revenue of C$3.7 million, an increase of 123% over Q1 2019
() (OTCQX:HRVOF) announced Thursday that its net revenue in the second quarter of 2019 was $3.7 million, a boost of 123% over Q1 2019.
The company said the increase was primarily attributed to initial recreational cannabis load-ins under its supply agreements with British Columbia, Ontario, Manitoba and Saskatchewan.
"We are delighted to announce our second successive quarter of record growth for Harvest One with an increase of 123% in revenue over the previous quarter," said CEO Grant Froese in a statement. "These results reflect a successful roll out of our recreational strategy as we continue to deliver on our agreements with all our provincial and private partners. As we focus on operational excellence and execute on our strategy across all our divisions, we will continue to drive revenue growth for Harvest One throughout 2019".
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Harvest One said it had a Q2 2019 gross margin before fair value adjustments of 47%.
"Included in this, is a gross margin of 53% for United Greeneries which is in line with larger Canadian Licensed Producers," the company said in a statement.
Robust cash position
The company maintains a robust balance sheet, with a cash balance of $41.0 million as of Dec. 31, 2018.
According to the company, Harvest One's cash position means all current expansion plans are fully funded and allows for accretive transactions that support its brand and product development strategy.
Other highlights
The company also pointed to a number of other highlights.
Harvest One has initiated its product development strategy to produce oil-based derivative products, through its extraction agreement with Valens GroWorks Corp ().
Subsidiary Satipharm, which develops cannabis-based health products, launched sales of its reformulated proprietary capsules online in the United Kingdom and in the European Union where local regulations allow. The company said brick and mortar distribution will be available shortly with Canadian distribution to follow.
READ: Harvest One launches Satipharm reformulated CBD capsules in Europe
At its Duncan, British Columbia and Lucky Lake, Saskatchewan facilities, expansion plans are on track as the company is targeting an annual run rate of 20,000 kg premium indoor grown flower by the end of December 2019.
Notably, the company upgraded to the OTCQX under the ticker HRVOF, which has increased its exposure to the US investment community and improving its liquidity for investors both in Canada and the US.
Contact Katie Lewis at [email protected]