The interesting question now for those watching the action in Harvest Health & Recreation Inc (OTCMKTS:HRVSF) is whether or not this pullback finally offers a strong opportunity to participate in what has been a difficult juggernaut to catch. The stock has pulled back to nearly test its rapidly rising 50-day simple moving average. To further flesh out the story, the company just announced it has entered into a binding, definitive agreement to acquire CannaPharmacy, Inc., subject to satisfaction of customary closing conditions, including receipt of regulatory approvals in the relevant states.
According to the release, “CannaPharmacy owns or operates (through management companies) cannabis licenses in Pennsylvania, Delaware, New Jersey, and Maryland and holds a minority interest in a pending licensee in Colombia. Harvest expects that the transaction will be accretive to Harvest’s 2020 revenue and EBITDA.”
Harvest Health & Recreation Inc (OTCMKTS:HRVSF) bills itself as Harvest Health & Recreation Inc. cultivates, manufactures, and retails cannabis in the United States. The company is headquartered in Vancouver, Canada.
Harvest Health & Recreation Inc. is one of the first consistently profitable, vertically integrated cannabis companies with one of the largest footprints in the U.S. Harvest’s complete vertical solution includes industry-leading cultivation, manufacturing, and retail facilities, construction, real estate, technology, operational, and brand building expertise — leveraging in-house legal, HR and marketing teams, along with proven experts in writing and winning state-based applications.
The company has more than 525 employees with proven experience, expertise and knowledge of in-house best practices that are drawn upon whenever Harvest enters new markets. Harvest’s executive team is comprised of leaders in finance, compliance, real estate and operations.
Since its founding in 2011, Harvest has grown its footprint every year, has been ranked as the third largest cultivator in the U.S. and currently owns licenses for more than 130 facilities across the U.S. Harvest shares timely updates and releases as part of its regular course of business with the media and the interested public.
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As noted above, HRVSF just announced it has entered into a binding, definitive agreement to acquire CannaPharmacy, Inc., subject to satisfaction of customary closing conditions, including receipt of regulatory approvals in the relevant states.
Recent action has seen 22% tacked on to share pricing for the listing in the past month. Moreover, the name has registered increased average transaction volume recently, with the past month seeing 53% over what the stock has registered over the longer term. This should not be overlooked with the stock trading on a float that is tiny at just 241K shares.
“All of our efforts back up our three core objectives; to expand and deepen our retail and wholesale footprint, build national brands and continue our path to profitable growth, and this CannaPharmacy deal is no different,” said Jason Vedadi, Executive Chairman of Harvest. “Harvest has led the cannabis market in the Western United States for years, and this acquisition will similarly widen and extend our U.S. foothold to the East Coast. When you add that to our existing dominant position in the Pennsylvania and Maryland markets, acquisition of CBx and its suite of brands, as well as our pending acquisitions of Falcon and Verano, with its holdings throughout the eastern seaboard and brands and infrastructure to leverage, we are looking at Harvest becoming a household name throughout the region in a matter of months.”
At this time, carrying a capital value in the market of $2.51B, HRVSF has about $1.1M in cash currently on the books, which must be weighed relative to about $8.6M in total current liabilities. The company has pulled in about $11.6M in total trailing 12-month revenues. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $HRVSF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $HRVSF, either long or short, and we have not been compensated for this article.