One stock in the cannabis space that has started to go down a worrying road in terms of its communications strategy is Harvest Health & Recreation Inc (OTCMKTS:HRVSF). Note that we took a bullish view on the stock 9 days (and 20% lower) ago. But now this gives us pause. Imagine someone walking up to you at a cocktail party and saying, “Hi! I’m John, and I’m really smart and good looking and great at tennis and golf, and everyone thinks I’m super cool!” The first thing you would do is vomit and then hate that person forever. Some companies don’t understand this simple dynamic. Several come to mind instantly. And they don’t understand that a press release is about announcing an important development that bears upon the company’s ability to deliver value to its shareholders.
So, we don’t take particularly well to a PR in which a company introduces itself as “a vertically integrated and highly diversified cannabis company with a strong financial and growth profile”. Just say you’re a “vertically integrated cannabis company”, or you come across like John at the cocktail party, and everything else you say after that is stained with the sense of an exaggerated self-promotion coefficient. Why do think MJNA has done so poorly on the open market for so many years? They consistently fail this social intelligence test.
Harvest Health & Recreation Inc (OTCMKTS:HRVSF), in any case, 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 that it has closed its takeover of Verano. The stock is still faring reasonably well, but has started down a path of dangerous reputational strategy whereby its credibility could start to take a hit. They still have a chance to turn it around and regain market credibility. But the time to act is now.
We’ve witnessed 12% added to share values of the stock over the past week of action. Furthermore, the stock has seen interest climb, with an increase in recent trading volume of nearly 110% above its longer-run average levels.
“Expanding our national footprint is paramount at Harvest and allows us to continue on the path to profitable growth for shareholders,” said Jason Vedadi, Executive Chairman of Harvest. “This accretive transaction will improve our position by strategically expanding our operating base to realize the benefits of scale. From day one, both companies focused on consistent revenue and profit growth. We are excited to bring Verano’s premium brands, depth of management and sound operations into Harvest.”
Now commanding a market cap of $2.84B, 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. You can bet we will update this one again as new information comes into view. 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.