Harvest Health Decline Takes SOL Global With It

 SOL Global Investments Corp. (CSE: SOL) (OTCPK: SOLCF) reported a loss of $43.5 million for the first fiscal quarter versus a loss of $2.9 million for the same period in 2018.  The loss came to 81 cents per share for the quarter. The company attributed the loss to a devaluation of cannabis stocks totaling $33.5 million and expenses, with total expenses coming to $10.9 million for the quarter.

The main culprit was Sol Global’s investment in Verano Holdings, which is set to be acquired by Harvest Health & Recreation. As such, the Verano share price is linked to Harvest’s share price which has decreased significantly. In just that quarter the company experienced an unrealized loss of $55.9 million.

“It was a tough quarter for the Cannabis sector and that’s the primary reason for our unrealized loss.  The positive is that’s exactly what it was, unrealized. Brady continues to execute with tremendous success on CannCure and its transformation to Bluma Wellness while strategically building out his operational team and The Bluma Board. Paul Norman has built the foundation of an executive team and board that is simply unprecedented in this newly pioneered sector and their execution is what you would expect from a team of this caliber.” said SOL Global’s Chief Investment Officer Andrew DeFrancesco. “The investment team and I continue to provide the financing for growth while continuing to provide guidance toward strategy and execution for those core holdings. ”

The downturn hasn’t slowed the company. Last month, SOL Global bought 42% of Heavenly Rx Ltd. at a price of approximately $0.40 per share. The company also signed an agreement to acquire ECD, Inc., which operates as Humboldt County’s Northern Emeralds for $120 million payable in common shares. Northern Emeralds is expected to operate under Bluma Wellness.

SOL Global also plans to buy the Michigan-based MCP Wellness Inc. for a total of $35 million in cash and $115 million in common shock. MCP Wellness is presently operating three dispensaries in the Detroit area, is opening a fourth dispensary in Ann Arbor, and is finalizing plans to construct a cultivation facility.

In addition to that acquisition, SOL Global has signed a binding LOI to acquire six licensed cannabis dispensary companies and all One Plant intellectual property in California for $17 million, payable by $5 million in cash and $12 million in common shares, from Three Habitat Consulting Holdco Inc. that will subsequently operate under the nationally recognized “One Plant” brand. One Plant is expected to be the brand name of all of Bluma Wellnesses anticipated 49 retail stores spread throughout Florida, Michigan and California.

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.

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