Harvest One Cannabis Inc () () is a global cannabis company that develops and provides innovative lifestyle and wellness products to consumers and patients in regulated markets around the world.
The Vancouver-based company aims to add a portfolio of strategic investments within favourable jurisdictions to take advantage of the advancement of cannabis regulations globally.
It currently serves as an umbrella over three wholly-owned subsidiaries: Satipharm, which develops cannabis-based health products; Dream Water, which offers consumer sleep aids; and it has a controlling interest in cultivator Greenbelt Greenhouse.
Its products are sold in major retail distribution points around the globe, including, Walmart US, CVS, Kroger, Shoppers Drug Mart, , Holland & Barrett, and Boots.
The firm is focusing on growing its core businesses in Cannabis 2.0, product branding and international distribution, and is transitioning more into the consumer packaged goods space.
So far in 2020, Harvest One has been very active in the restructuring of its business.
In February 2020, Harvest One announced the sale of its 19.99% interest in Burb Cannabis Corp, a private cannabis retailer based in British Columbia, for cash proceeds of C$1.5 million.
The company also sold its interest in a 398-acre site in Lillooet, British Columbia for a cash consideration of C$800,000.
Then on June 26, Harvest One announced the sale of its United Greeneries cannabis cultivation and processing business in Duncan, British Columbia in an C$8.2 million deal with Costa Canna Production LLP and 626875 BC Ltd.
The parties also plan to ink a license agreement, which will see Harvest One’s subsidiaries provide Costa with licensed intellectual property to produce and distribute Cannabis 2.0 products in Canada. In exchange, Harvest One will receive a 95% royalty and distribution of its products.
Harvest One is continuing its strategic review, the results of which could possibly include the sale of its 50.1% interest in Greenbelt Greenhouse and the Lucky Lake facility.
The United Greeneries disposal news accompanied the release of Harvest One’s fiscal third-quarter results which showed improved revenue and a consumer division only moderately affected by the coronavirus (COVID-19) pandemic.
Revenue for the three months ended March 31, 2020, came in at C$3.3 million, up 10% from C$3 million in the same period last year. On a quarter-over-quarter basis, revenue jumped 88% due to higher recreational cannabis and bulk cannabis sales.
Harvest One’s quarterly net loss was C$35 million, or C$0.16 per share, which was due primarily to C$27.5 million in non-cash goodwill impairment charges and C$1.5 million in non-cash inventory write-downs. A year earlier, that figure was C$5.1 million, or $0.03 per share.
On the financing front, along with the transaction, Harvest One also secured a C$1.5 million bridge financing facility from Costa which will become available once the deal is signed.
On January 9, Harvest One said it had entered into a $2 million secured loan agreement with (), the company’s largest shareholder, holding approximately 26% of the share capital. The MMJ loan carries an interest rate of 15% per annum.
At the start of June, MMJ agreed to defer the repayment of the secured loan until July 17.
Sweeping management changes
Harvest One has also been having a clear-out on the boardroom front as it refocuses its business.
Back on March 20, Harvest One announced the immediate appointment of Andy Bayfield, then the company’s chief commercial officer, as its interim CEO, replacing Grant Froese who had resigned.
The company said that while it had accepted the resignation of Froese as CEO, in order to create a seamless transition, he would continue to support Bayfield on “a consulting basis.”
At the same time as Bayfield’s move upwards, the group said it had also appointed board chairman Frank Holler to the position of executive chairman.
And at the end of June, Harvest One announced the appointment of Marc Tran as its interim chief financial officer with effect from the beginning of July.
The group noted that Tran has over 20 years of public company financial leadership experience and has successfully closed over $100 million in financings for small to midsized projects, and is experienced in transforming and scaling growth staged companies.
It said that Aaron Wong would resign as the group's chief financial officer (CFO) effective June 30, to pursue other interests.
In addition, the group said Andrew Kain would transition from his roles as chief operating officer and general counsel with effect from the end of June. Kain will remain with Harvest One in a contractual capacity, advising Bayfield and the special committee of the board in the completion of its ongoing strategic review, the firm added.
Further disposals, possibly including sale of its 50.1% interest in Greenbelt Greenhouse and the Lucky Lake facility Continued growth in recreational cannabis and bulk cannabis sales More financing and cost-cutting newsAnnouncing the United Greeneries disposal at the end of June, Harvest One interim CEO, Andy Bayfield said: “We are continuing to take necessary and decisive measures to streamline our operations, lower our cost structure and reduce our cash burn.
“I am confident we are on the right path and this transaction serves to further reinforce the company's plan to become cash flow positive in fiscal 2021."
