Editor-in-Chief

Debra BorchardtMay 17, 2021
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4min2760

Curaleaf

Curaleaf Holdings, Inc. (OTCQX: CURLF) is buying the largest outdoor grow in Colorado known as Los Sueños Farms in a deal valued at $67 million. The transaction is a mix of cash and stock. Curaleaf said this will significantly expand its Colorado presence, vertically integrating within the state. The proposed acquisition includes three Pueblo, Colorado outdoor cannabis grow facilities covering 66 acres of cultivation capacity, including land, equipment, and licensed operating entities, 1,800 plant indoor grow and two retail cannabis dispensary locations serving adult-use customers. An additional contingent consideration of up to $8 million in stock will be paid based upon operating cash flow-based targets for 2022.

Boris Jordan, Executive Chairman of Curaleaf, stated, “The acquisition of Los Sueños provides Curaleaf with outdoor cannabis cultivation expertise at commercial scale and establishes our foothold in the $2.2 billion Colorado market. This deal furthers our strategy of constructing low-cost supply chains that will secure healthy margins and position us for interstate commerce when it comes. Ultimately, our goal is to cultivate cannabis at less than $100 per pound, and this acquisition is a significant step in the right direction.”

The acquisition will complement Curaleaf’s existing Colorado presence through its Select brand. Joseph Bayern, CEO of Curaleaf added, “The acquisition of Los Sueños will add over 50,000 pounds per year of low-cost wholesale capacity to Curaleaf’s footprint in Colorado , which we intend to double to over 100,000 pounds, representing a significant market share. As the largest producer of biomass in the state, this facility will also fuel the further deployment of our Select product line, which can already be found in 230 independent dispensaries in the state.”

Hexo

HEXO Corp. (NYSE: HEXO) announced it is buying 48North Cannabis Corp  (TSX-V: NRTH) in an all-stock deal valued at approximately $50 million on an enterprise value basis. 48North is a brand-led, consumer-centric licensed cannabis producer with an expansive portfolio of high-quality, accessibly-priced products available across the country. The company brands include Trail Mix, an accessibly priced brand formulated with taste and aroma-first flavor profiles and Latitude, a next-generation lifestyle platform and premium, natural cannabis collection focused on wellness, beauty, and beyond. 48North operates two indoor-licensed cannabis production sites in Ontario.

“As we continue down our path towards achieving a top two position in Canada by adult-use sales, we are looking forward to welcoming the 48North team into the HEXO family.” said Sebastien St-Louis, CEO and co-founder of HEXO Corp. “48North’s innovative product portfolio complements HEXO’s existing brands which, combined with their additional market penetration, will further strengthen HEXO’s position in the Canadian market. We expect the deal could offer up to $12 million worth of accretive synergies within one year following the close and ideally position HEXO to continue executing on our domestic and international growth strategy.”

Assuming this deal closes and the previously announced transaction with Zenabis Global Inc., which is expected to close on June 1, 2021, the combined organization would be among the leading licensed producers in terms of combined Canadian recreational sales, based on their most recent financial statements and results.

 


Debra BorchardtMay 17, 2021
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15min1740

Columbia Care Inc.  (OTCQX: CCHWF) reported financial and operating results for the first quarter ended March 31, 2021, with revenue increasing 220% to $92.5 million year-over-year and growing by 13% over the previous quarter. Columbia Care missed the Yahoo Finance average analyst estimate for revenue of $94.1 million.

The net losses were trimmed to $15.3 million from last year’s $20.6 million for the same time period. The earnings per share also improved to ($0.05) from last year’s ($0.09.), however, it wasn’t enough to meet the average analyst estimate for ($0.04) per share. Analysts give the stock a price target of $11.65 on average. Shares have been in an overall uptrend over the past six months and were lately selling at $6.17.

“We sustained our record 2020 momentum into the first quarter of 2021, with significant growth across both the top and bottom line,” said Nicholas Vita, CEO of Columbia Care. “Our combined revenue results reflect organic growth and further integration progress on key California and Colorado acquisitions. We continue to build scale and leverage in our existing markets, leading to positive trendlines for growth and profitability. The sequential increase in combined revenue and Adjusted EBITDA more than offset expected seasonality in Colorado and recently lifted COVID restrictions in California and was driven by substantial growth in Florida, Arizona, Illinois, and Ohio. Legacy Columbia Care’s same-store sales increased 60 percent year over year.

Indeed, in Arizona, same-store sales increased approximately 70% from the same period last year, driven largely by the accelerated statewide roll-out of adult-use sales in January. In Ohio, Columbia Care said that same-store sales were up more than 3x YoY and with wholesale relationships with more than 85% of dispensaries in the state. In Florida, the company said that revenue rose 58% sequentially and experienced significant same-store sales expansion, due to dispensary-level supply chain improvements and flower availability. California also saw its sales jump towards the end of the quarter as pandemic restrictions began lifting. The company noted that there was sequential revenue growth of nearly 3x with addition of acquisitions, increasing wholesale momentum throughout the first quarter.

In Colorado, revenue improved 27% over last year, but sequential results slowed in the first quarter due to expected seasonality and decision to partially take off-line and upgrade largest indoor grow in preparation for ‘100 days of heat’ during the second quarter and third quarter leading to accelerated GM and EBITDA expansion in the second quarter and back half of 2021.

Vita added, “Recognizing the tremendous opportunity we have before us, we continue to deepen our state, regional and national footprint by adding scale to capitalize on additional upside in rapidly expanding medical programs and, in particular, in markets transitioning to adult-use across the country. Significant strategic investments in markets such as New York, New Jersey and Virginia will enable us to be the most efficient and scaled leaders in those markets and will cement our position as the industry leader on the east coast.”

In New Jersey, retail sales growth outperformed expectations year-over-year and doubled sequentially. There was a significant drag on overall gross margin due to accelerated development of cultivation and manufacturing fixed assets; however, the first significant harvest from the legacy Vineland facility expected in the third quarter. Plus, two additional dispensaries will open in 2021 and become new Cannabist stores. In New York, revenue rose +60% over last years and was due in part to the wholesale business and strong home delivery program.

Cannabist Launch

The company recently rebranded its stores as the Cannabist. The first location to launch under the Cannabist brand is the recently opened dispensary in Springville, Utah, which had its first sale Friday, April 30. By the end of May, three existing Columbia Care locations, in Tempe, Arizona, Villa Park, Illinois, and San Diego, California, will become Cannabist branded retail locations, with a pipeline of more than 80 new and existing locations to follow over the next 24 months.

Columbia Care said it reaffirms guidance for the 2021 combined revenue of $500 – $530 million and Adjusted EBITDA guidance of $95 – $105 million as the Green Leaf Acquisition remains on track for closing at beginning of the third quarter.


Debra BorchardtMay 14, 2021
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5min5880

Vireo Health International, Inc. (CSE: VREO)(OTCQX: VREOF) reported financial results for its first quarter ended March 31, 2021 . Total revenue increased 8.8% to $13.2 million over last year’s $12.1 million and includes the former subsidiaries in Pennsylvania. This beat analyst estimates from Yahoo Finance for revenue of $12.4 million. Vireo trimmed its net losses slightly to $7.0 million versus a net loss of $7.5 million in the 2020 first quarter. The company said that the improvement in net loss was primarily the result of the gain on the divestiture of its former affiliate, Ohio Medical Solutions, Inc.

“Our first-quarter results are consistent with the trends from last quarter. We continued to see double-digit sequential revenue growth excluding our former Pennsylvania subsidiaries, and substantial improvement in our gross margin due to our focus on operational efficiencies,” said Chairman and Chief Executive Officer, Kyle Kingsley , M.D. “Wholesale performance in Maryland was temporarily impacted by the move to our recently-completed 110,000 square foot cultivation facility in Massey , but our increased scale in this market will drive stronger revenue growth and profitability in the second half of the year.”

Vireo said that excluding contributions from Pennsylvania, revenue would have increased 29.8%. Retail revenue excluding Pennsylvania increased 33.7% to $10.4 million in the firat quarter and reflected growth in each of its retail markets. Wholesale revenue, excluding Pennsylvania increased by 17.4% to $2.8 million, driven by strong growth in the Arizona market.

Dr. Kingsley continued, “The phase two expansion projects we discussed last quarter in Arizona and Maryland are underway, and our teams are now aggressively focused on finalizing our expansion plans in New York . The recent passage of adult-use legislation in New York and New Mexico has improved our outlook for both of these markets, and further potential for regulatory change at local and federal levels could meaningfully impact the trajectory of our performance. We are excited by all the growth opportunity we see across our core markets, and look forward to sharing more details on our long-term outlook at our upcoming Investor Day events which we plan to announce in the coming weeks.”

After The Quarter Ended

On April 14 , the company finished its planned expansion of its cultivation and processing facility in New Mexico, which is now operating following the receipt of regulatory approval. The company also announced that two recently completed retail dispensaries in Albuquerque and Las Cruces are ready to open, pending regulatory approval. Once approved, Vireo will have four operating dispensaries in the state of New Mexico .

On April 29 , launched medical cannabis flower in the state of New York . The ground flower line is being sold in 3.5-gram and 7-gram jars and will be expanded to feature indica, sativa, and hybrid strains such as Killer Kush, Wedding Cake, and a Kosher-approved Tangie Kush. The new line of ground flower will be available at all four of the Company’s dispensaries in New York and via Home Delivery.


Debra BorchardtMay 13, 2021
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4min4360

After the close on Wednesday, The Green Organic Dutchman Holdings Ltd.  (TSX: TGOD) (US: TGODF) reported its unaudited interim financial results for the first quarter ending March 31, 2021. TGOD said its revenue increased 194% year over year to $8.98 million. However revenues decreased 18% sequentially to $10.92 million. The stock was falling by almost 5% to lately sell at 27 cents. 

The company blamed the decline on store restrictions and stay-at-home orders related to COVID-19, combined with some provincial listing mandates being revised at the start of the year. TGOD said it expects growth to rebound for the remainder of 2021 with restrictions anticipated to be lifted as vaccination rates increase and retail stores reopen.

TGOD went on to say that the decrease appears to be within the range of what has been observed and reported by many peer companies to date in 2021. The company still delivered a net income of $12.46 million for the quarter versus a loss of $73.44 million for the same period during the prior year, comprised primarily of the reversal of impairment, and a loss from operations of $5.89 million. On a per-share basis, TGOD recorded a net income of $0.02 compared to a loss of $(0.23) for Q1-2020 and $(0.05) for Q4-2020.

“This quarter’s improving financials demonstrate how we are strengthening TGOD’s foundations by executing our turnaround plan. From monetizing under-utilized assets to streamlining our organizational structure and strengthening our balance sheet, our new leadership team is making great strides towards completing the transformation of TGOD into a profitable and agile organic cannabis producer that stands to benefit from accelerated growth in Canada and abroad with opportunities in GermanyMexicoAustralia, and the United States,” commented Sean Bovingdon, TGOD’s CEO and Interim CFO. “The achievement of net income reflects the positive outlook for our cashflows in relation to our right-sized operations. We look forward to the potential lifting of COVID restrictions as vaccinations increase, which will allow for better access for consumers to our organically grown quality products, that are now consistently achieving THC levels greater than 20%.”

While the company seems to be turning a corner as revenues have mostly risen over last year, the company is still restructuring as it sells assets. On April 29, TGOD provided an update on the potential sale of its Valleyfield Quebec Facility, stating that it had received multiple viable bids. Management said it is currently working through the details of the bids and anticipate  closing by the end of June 2021. The company also recorded a net non-cash reversal of previous impairment of $21.81 million triggered by its Quebec Facility being classified as assets held for sale.

TGOD has also said it may sell or spin-off for an Initial Public Offering of HemPoland, its wholly owned subsidiary, for which it has retained Canaccord Genuity as an advisor, and the potential for mergers and acquisitions in the Canadian cannabis LP sector.


Debra BorchardtMay 13, 2021
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3min4590

Trulieve Cannabis Corp. (OTCQX: TCNNF) announced its results for the quarter ended March 31, 2021, as revenues increased 102% year over year to $193.8 million and increased sequentially by 15% from the fourth quarter’s $168.4 million. This beat the Yahoo Finance average analyst estimate for revenues of $189 million. 

Net income grew 27% year over year to $30.1 million from $23.6 million. The net income really spiked sequentially from the fourth quarter by 889% from just $3 million. While Trulieve released a press release for its first quarter, the actual filing wasn’t available at this writing. The company said it was hosting a conference call at 8:30am est to discuss the earnings. 

“During Q1 we continued to execute on growth in Florida as well as our national hub expansions. Our record revenue and industry-leading EBITDA margins demonstrate our continued focus on execution,” stated Kim Rivers, Trulieve CEO. “The pending acquisition of Harvest will be transformative and will build on our profitability, expanding our runway for growth.”

Operating expenses grew 97% year over year to $57.3 million, but this was only a 10% increase sequentially. The company said it had $60.4 million in cash flows from operations for the quarter.

Rivers added, “Our continued strength in our home state of Florida, as well as the build-out of our northeast hub, with progress in PennsylvaniaMassachusetts, and West Virginia, has generated momentum for an exciting remainder of the year. We expect many positive catalysts in the months ahead, which align well with the current political environment and heightened focus on cannabis in this country.”

The company became a U.S. reporting company effective February 4, 2021.  Trulieve also highlighted its recent acquisition of Harvest Health & Recreation, noting that Harvest reported its first quarter revenue of $88.8 million and Adjusted EBITDA of $26.9 million. Trulieve said it was buying Harvest for $1.2 billion.  The combined businesses will have operations in 11 states, comprised of 22 cultivation and processing facilities with a total capacity of 3.1 million square feet, and 126 dispensaries serving both the medical and adult-use recreational cannabis markets.


Debra BorchardtMay 12, 2021
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5min4740

Columbia Care Inc. (OTCQX: CCHWF) launched its new retail brand, Cannabist. The company said that Cannabist will serve as the intersection for medical and recreational cannabis users to provide a higher experience built on one of the largest customer data repositories, passion, technology innovation, community commitment and product standards.

“Since the Company’s founding in 2013, we have been listening to and learning about the communities, customers and stakeholders we serve. Over and over again, the market has been searching for expertise and trust – consumers wanted a Cannabist to help guide them through their journey. Cannabist was developed to redefine the existing dispensary concept. This new storefront brand represents the next step in the evolution of the dispensary model and will become a national standard in the years to come. For nearly ten years, Columbia Care has been synonymous with patient-centered service and the highest quality cannabis products on the market. This heritage, coupled with the passion each and every employee brings to building the company, are at the core of our continuous growth year over year,” said Nicholas Vita, CEO of Columbia Care. “The rate at which the cannabis industry is growing, and at which states are legalizing cannabis use, has meant that we’ve had to evolve as a company. We’ve recognized the need for a retail brand that reflects who we are as a company as well as addresses the diversity of the patients, customers and communities we serve, while remaining true to what has made us so successful.”

The first location to launch under the Cannabist brand is the recently opened dispensary in Springville, Utah, which had its first sale Friday, April 30. By the end of May, three existing Columbia Care locations, in Tempe, Arizona, Villa Park, Illinois, and San Diego, California, will become Cannabist branded retail locations, with a pipeline of more than 80 new and existing locations to follow over the next 24 months.

Improving Shopping Experience

2104-16 1230 Columbia Care Cannabist Stocked Space
April 29, 2021
© 2021 / Meagan Larsen

Columbia Care said that the Cannabist retail experience is centered on making shopping for cannabis as simple and approachable as possible, accommodating the vast range of experience levels patients and customers may have when they walk through the doors. Merchandising set-ups and store layouts have been organized to help customers move through the space with intent and become more comfortable in the process. Additionally, the space is designed to encourage employees and customers to engage in conversations that enhance the shopping experience, whether through product recommendations or general education.

“Cannabist is not only a reflection of where we are now, and all of the markets we serve, but it is also a commitment to where we are going. We believe Cannabist will become a hub for all those who incorporate cannabis into their lives – regardless of what brought them to us. The Cannabist brand can grow with an ever-changing industry, continue to meet the needs of our patients and customers and serve as the platform for continuous innovation,” said Jesse Channon, Chief Growth Officer of Columbia Care. “By investing in this transition now, we will provide a new experience for our existing community and look forward to welcoming new customers who will come to see cannabis in a whole new light. The days of a transactional dispensary are nearing an end. As we see cannabis use continue to normalize, we will see the emergence of a more sophisticated, yet approachable dispensary model – starting with Cannabist.”

The Cannabist brand is supported by a team of national partners — Atlanta-based creative agency, 22Squared; New York-based architectural firm, METHOD Architects; Columbus-based visual merchandising firm, ZenGenius; and Massachusetts-based signage firm, Poyant Signs.


Debra BorchardtMay 11, 2021
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3min3850

Verano Holdings Corp. (OTCQX: VRNOF) amended its credit agreement for its senior secured term loan of $130 million. The Restated Credit Agreement which has a maturity date of May 30, 2023, now provides for additional, non-dilutive funding of $100 million, with an annual interest rate of 9.75% for the incremental amount.

“This upsized credit facility was strategically planned to provide additional coverage of recently announced M&A activity, to enhance our overall financial position, and create flexibility for us to pursue opportunities that could drive further growth and margin expansion,” said George Archos, Verano Co-Founder, and CEO. “We very much appreciate the support of Chicago Atlantic, and the improved terms of the new facility. Being able to secure one of industry’s leading rates signals the growth in acceptance of the cannabis industry as it continues to evolve and mature.”

In making the announcement, John Mazarakis, Partner of Chicago Atlantic, noted, “We are excited to see Verano execute on its growth plan and we are looking forward to expanding our partnership. The terms of the upsized loan reflect Verano’s impressive operating performance, which resulted in this credit facility carrying one of the lowest cost of capital to-date in the industry. Verano is a clear leader in the cannabis space, and the company’s consistent focus on profitable growth is what attracted us to this opportunity.”

The company said it will release financial results for the first quarter of 2021, before the market opens on Tuesday, May 18, 2021.

New Stores

Last week, Verano opened Zen Leaf West Loop, the first Zen Leaf to open within the City of Chicago. The new flagship dispensary is located in an iconic Chicago neighborhood renowned for its dynamic dining and hospitality destinations. The area, which has experienced tremendous commercial and residential growth over the last several years, is home to some of Chicago’s best restaurants and boutique hotels.

“We’re excited to open the doors on Zen Leaf’s first dispensary in Chicago, and to be able to create jobs and generate retail activity in the West Loop,” said George Archos, Co-Founder, and CEO of Verano. “Illinois’ cannabis market continues to experience significant growth as the economy reopens. We’re hopeful that Zen Leaf West Loop will be a retail destination that helps drive foot traffic to assist the neighborhood’s hospitality industry bouncing back after a very challenging year.”

Last month, the company opened its newest MÜV Dispensary located in St. Augustine, Florida.  It’s the 32nd dispensary in the state and the company is now positioned as having the fourth largest retail footprint in Florida.


Debra BorchardtMay 11, 2021
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4min3871

Charlotte’s Web Holdings, Inc. (OTCQX: CWBHF) reported financial results for the first quarter ended March 31, 2021, as revenue increased 9.1% to $23.4 million. This missed the average analyst estimate for $27 million from Yahoo Finance. Charlotte’s Web said DTC eCommerce net sales increased 14.5% reflecting increased marketing, targeted promotions as well as incremental demand for the company’s new topical and THC-free ingestible products.

The net losses increased to $13.9 million over last year’s $11.5 million for the same time period. The net loss per share was $0.10, which was also higher than the average analyst estimate for an net loss per share of ($0.05).

“Despite reduced retail activity due to the pandemic, our directly comparable B2B retail sales showed year-over-year growth. Our B2B retail sales and velocities further strengthened in March and April as US vaccination programs support reopening of the economy, and our DTC sales continued to grow demonstrating long-term secular strength for our products in the e-commerce channel,” said Deanie Elsner, CEO of Charlotte’s Web. “We continued to expand our leading market position with quarterly market share gains across all of our channels. Internationally we have made our first moves into Israel and Canada with initial product sales planned for early 2022. We are pleased with our progress and believe that Charlotte’s Web is well-positioned to drive continued growth in the US and new growth in key international markets as we expand outside of the US.”

Expenses Rise

The company also reported its operating expenses rose 2.9% to $24.0 million over last year’s $23.3 million. the company said that in response to lower B2B retail sales during the pandemic, management took actions in the fourth quarter to better align operating expenses through an expense optimization program targeting reductions of more than 10% of the Q3-2020 consolidated expense run rate. First-quarter operating expenses were 15.2% lower compared to the third quarter of 2020, ahead of plan, and were achieved despite the additional expenses in the quarter from the CW Labs R&D division and the acquisition of Abacus Health, which were not present for the full quarter in Q1-2020.

Adjusted EBITDA for the quarter was negative $4.7 million, or (19.9)% of consolidated revenue, compared to negative EBITDA of $5.7 million, or (26.5)% of revenue, for the first quarter of 2020.

Cash Burn

Charlotte’s Web cash and working capital at the end of the quarter was $35.0 million down from last year’s $52.8 million for the same time period. The company said it used $7.7 million of cash in operations during the first quarter of 2021 compared to $14.9 million of cash used in operations during the first quarter of 2020. So it spent less and still has a cushion of cash.  During the quarter the company paid total consideration of $8.0 million cash for an Option Purchase Agreement with Stanley Brothers USA Holdings, Inc. providing the optionality to acquire or own warrants Stanley Brothers USA upon federal legalization of cannabis in the United States.


Debra BorchardtMay 10, 2021
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3min4180

Harvest Health & Recreation Inc.  (OTCQX: HRVSF)  reported its financial and operating results for the first quarter of 2021 with revenue rising 101% to $88.8 million from $44.2 million in the first quarter of 2020. Revenue also rose sequentially by 27% from $69.9 million in the fourth quarter of 2020. This beat the average analyst estimate from Yahoo Finance for revenue of $87 million in the quarter. However, the company missed the estimate for the earnings loss which came in at ($0.06) per share while the estimate was for ($0.01.) per share.

The net loss before non-controlling interest was $23.0 million for the first quarter, compared to $7.4 million in the fourth quarter of 2020. The adjusted EBITDA in the first quarter was $26.9 million, compared to $9.1 million in the fourth quarter of 2020.

Harvest is raising its full-year 2021 revenue target to at least $400 million. The reported gross margins are expected to be at or above 50% and will likely continue to fluctuate from quarter to quarter.

“Our first-quarter results show the benefits of reaching impactful milestones such as the launch of recreational sales in Arizona,” said Chief Executive Officer Steve White. “We are focused on our key operational and financial priorities in 2021 as we continue to build on this positive momentum.”

Of course, the big news on Monday wasn’t Harvest’s Health earnings but the announcement that Trulieve would buy the company in a deal valued at $2.1 billion.  It’s been a busy month for the company. In addition to today’s acquisition announcement, Harvest noted that it opened two new medical retail dispensaries in Florida on May 5 th and May 6 th in Olympia Heights and West Palm Beach. On May 7, 2021, the company announced that a settlement was reached regarding the grower/processor permittee AGRiMED Industries of PA, LLC.

The company said in its earnings that it has a cash position of $$106 million, but the company’s total liabilities are $554 million. As of March 31, 2021 , Harvest owned, operated, or managed 37 retail locations in six states, including 15 open dispensaries in Arizona.

 


Debra BorchardtMay 10, 2021
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5min7640

Trulieve Cannabis Corp.  (OTC: TCNNF) is buying  Harvest Health & Recreation Inc.  (OTCQX: HRVSF) in a deal valued at approximately $2.1 billion based on the closing price of the Trulieve Shares on May 7, 2021. The combined businesses will have operations in 11 states, comprised of 22 cultivation and processing facilities with a total capacity of 3.1 million square feet, and 126 dispensaries serving both the medical and adult-use recreational cannabis markets.

“Today’s announcement is the largest and most exciting acquisition so far in our industry, creating the most profitable public multi-state operator.  Importantly, our companies share similar customer values with a focus on going deep in core markets. This combination offers us the opportunity to leverage our respective strong foundations and propel us forward with an unparalleled platform for future growth,” stated Kim Rivers, Chief Executive Officer of Trulieve. “Harvest provides us with an immediate and significant presence in new and established markets and accelerates our entry into the adult-use space in Arizona.  Trulieve and Harvest are leaders in our markets, recognized for our innovation, brands, and operational expertise with true depth and scale in our businesses. We look forward to providing best-in-class service to patients and customers on a broader national scale as we create an iconic US cannabis brand.”

The most directly comparable GAAP financial measure for Adjusted EBITDA is Net Income (loss), which on a combined basis for Trulieve and Harvest for the fiscal year ended December 31, 2020, was $3.4 million. The combined adjusted EBITDA for 2020 would be $250 million. 

Terms of the Deal

Trulieve will acquire all of the issued and outstanding Harvest Shares, with each Harvest Shareholder receiving 0.1170 of a Trulieve Share for each Harvest Share, implying a price per Harvest Share of US$4.79, which represents a 34% premium to the May 7, 2021 closing price of the Harvest Shares. Harvest Shareholders will hold approximately 26.7% of the issued and outstanding pro forma Trulieve Shares (on a fully diluted basis). There is a $100 million reciprocal termination fee under certain circumstances and reciprocal expense reimbursement provisions under certain circumstances.

Harvest Health 

“We are thrilled to be joining Trulieve, a company that has achieved unrivaled success and scale in its home state of Florida,” said Steve White, Chief Executive Officer of Harvest.  “As one of the oldest multi-state operators, we believe our track record of identifying and developing attractive market opportunities combined with our recent successful launch of adult-use sales in Arizona will add tremendous value to the combined organization as it continues to expand and grow in the coming years.”

Trulieve has been delivering a steady flow of earnings and has been methodically expanding its reach beyond Florida. Harvest Health, however, has had a string of acquisitions, some of which closed, while others were terminated or resold. While the companies revenues had been increasing, so has its debt. Harvest ended the third quarter of 2020 with approximately $63 million in cash and $294 million in debt. The company said it had sufficient capital to service its debt in 2020 and 2021. On October 28, Harvest completed a bought deal financing, raising gross proceeds of approximately $34.5 million. Debt service for the remainder of the year is approximately $15.2 million and the company extended the debt maturity of $6.5 million due in October 2020, by one year to October 2021.


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