Harvest Health & Recreation Inc. (CSE: HARV, OTCQX: HRVSF) is getting a lift in its stock after the company announced the closing of a sale-leaseback transaction with Innovative Industrial Properties, Inc. (NYSE: IIPR) that will bring the company roughly $35 million. Harvest sold an industrial property totaling approximately 292,000 square feet for $23.8 million. The company also noted on Friday that it began adult-use sales in Arizona. The stock rose by over 8% on Friday to lately sell at $3.40.
Along with the sale of the property, Harvest entered into a triple net lease with IIP. Harvest said it plans to continue to operate the property as a licensed cultivation and processing facility and expects to recover up to approximately $10.8 million in tenant improvements from IIP.
“We are pleased to secure real estate financing to support expansion activities at our Alachua cultivation and processing facility,” said Chief Executive Officer Steve White. ” Florida is one of our core markets with a rapidly growing medical patient population. We look forward to opening new retail locations in Florida after additional capacity at Alachua comes online.”
On Friday, Harvest also announced that it had begun its adult sales in Arizona. According to AZCentral, the Joint Legislative Budget Committee said that the 16% excise tax plus the regular sales taxes on recreational marijuana products would generate $250 million in revenue. Another study by Smart and Safe Arizona estimates the figure to be $300 million a year.
“We are thrilled to record the first sale and begin offering access to regulated and legal cannabis products to recreational customers on this historic day in Arizona,” said Chief Executive Officer Steve White. “Initial sales commenced only 80 days from the election and 54 days after the election was certified, representing by far the fastest launch to date in history. The Department of Health Services did an incredible job expediting this process, helping operators like Harvest sell recreationally to Arizonans 21 years of age and older. We look forward to serving both medical patients and recreational customers across the state at our retail stores.”
Harvest currently operates 15 dispensaries in Avondale, Casa Grande, Chandler, Cottonwood, Glendale, Guadalupe, Lake Havasu, Mesa, Peoria, Phoenix, Scottsdale, Tempe, and Tucson supported by cultivation facilities in Camp Verde, El Mirage, Phoenix, and Willcox and processing facilities in Flagstaff and Phoenix.