Harvest Health & Recreation Inc. (CSE: HARV)(OTCQX: HRVSF) announced the execution of a definitive merger agreement of the previously announced acquisition of Interurban Capital Group, Inc. (ICG), the resignation of Jason Vedadi from his role as Executive Chairman of the Board of Directors. Current independent Board member Mark Barnard will assume duties as Chairman of the Board. He brings significant leadership experience gained through executive roles with Diageo PLC and Unilever, among others.
Harvest has said it would acquire ICG for consideration of approximately $85.8 million payable by issuance of 309,452 multiple voting shares, assumption of approximately $19.1 million of debt convertible into 205,594 multiple voting shares and payment of an additional $9.3 million upon exercise of a call option agreement to acquire controlling interests in five Washington cannabis dispensaries or alternatively $12.4 million to acquire substantially all of the assets of these dispensaries. ICG’s assets include direct and indirect licenses and rights to acquire entities with licenses in California, Iowa, and Washington. In addition, ICG is a service provider to these entities.
“We are excited to welcome the Have a Heart dispensaries into the Harvest family,” said Harvest Chief Executive Officer Steve White. “The merger provides access to capital and a new set of shareholders that will provide Harvest with greater financial flexibility and resources to invest further in key markets such as Arizona, Florida, Maryland, and Pennsylvania.”
ICG will add to Harvest’s existing retail footprint with three open retail locations and seven potential retail licenses in California, five open retail locations in Washington state and two open retail locations in Iowa.
As of February 29, 2020, Harvest had US$50.9 million in cash and equivalents. Harvest expects to report fourth-quarter and full-year 2019 financial results during the week of April 6, 2020.
In addition to Vedadi leaving the board, Scott Atkison will be appointed to the Board. The company said that Atkison has decades of executive experience in the timber and cannabis industries and brings valuable expertise, networks and fundraising skills to Harvest