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Harvest One Moves to Acquire ACMPR Licensed Producer

Ryan Allway

May 3rd, 2017

News, Top News

Canada’s cannabis industry could be worth more than $11 billion in just three years, according to Echelon Wealth, as regulators move to implement recreational cannabis laws. With just 40 licensed producers, there’s a significant opportunity for investors to capitalize on supplying the market, with at least one LP already surpassing $1 billion in value. The market for CBD-related products also appears to be on the rise as their medical use has become increasingly accepted.

In this article, we will take a look at Harvest One’s (TSX-V: HVST) move into the cannabis industry and what investors can look for over the coming months.

Becoming the Latest Canadian LP

Harvest One announced a private placement of 33,334,000 subscription receipts at a price of $0.75 a piece for gross proceeds of about $25 million earlier this year. In conjunction with the private placement, the company agreed to acquire 100% of Satipharm AG and United Greeneries Holdings Ltd. from MMJ Phytotech Inc. (ASX: MMJ) for 53,333,333 shares at $0.75 per share and $2 million cash for a deemed purchase price of $42 million.

United Greeneries is one of just 40 licensed producers under Canada’s Access to Cannabis for Medical Purposes Regulations (“ACMPR”) with a focus on large-scale horticulture operations for the upcoming recreational cannabis market. Satipharm AG is an international medical cannabis brand with a focus on oral delivery technologies for strategy entry in emerging medical cannabis markets and existing markets located in Canada.

The company will rename itself to Harvest One Cannabis Inc. and assume the Board of Directors and management team from the two acquired companies. In particular, MMJ Phytotech Managing Director Andreas Gedeon will become the new entity’s CEO and Director alongside a highly-qualified Board of Directors and Chief Financial Officer. The team has years of experience in the cannabis industry and related fields of engineering and finance.

Recreational & Medical Focus

Harvest One Cannabis will have a dual focus on Canada’s upcoming recreational and existing medical marijuana markets through its two businesses.

United Greeneries represents the company’s horticulture arm and recreational brand. The company’s Duncan Facility is a state-of-the-art cannabis cultivation operation with about 10,000 sqft of cultivation space and high compliance items like a Level 8 Narcotics Vault and full-service in-house biochemical and analytical laboratory. The facility is capable of processing about 1,000 kilograms per year and has the ability to expand to an estimated 51,000 kilograms by 2020.

The company’s Lucky Lake Facility is a 62,000 sqft modern, concrete agricultural facility that’s sitting on over 18 acres of land that’s 100% owned. The facility was the subject of a March 2015 MMPR application and is currently in the security clearance stage of review. Once licensed, the facility has an estimated capacity of up to 11,700 kilograms of cannabis per year, which would make it one of the largest licensed producers in the country.

Satipharm AG is a Switzerland-based commercial-stage pharmaceutical, nutraceutical, and cosmeceutical company that is developing dietary supplements with a focus on legally accessible cannabidiol (CBD). The company also has exclusive worldwide rights to the Gelpell(R) Microgel process for cannabis applications. These gel microcapsules offer a controlled delivery system with enhanced oral bioavailability.

Recently, the company announced that it has entered into two separate interim agreements with PanCann Streaming Corp. to finance the construction of its Lucky Lake facility and a new additional facility that is yet to be identified in consideration for equity participation. These agreements, if funded, would enable the company to substantially increase its production capacity without any capital outlay or further dilution for its shareholders.

Looking Ahead

Harvest One (TSX-V: HVST) is well-positioned to become Canada’s next publicly-traded licensed producer with a presence in both the recreational and medical marijuana segments of the market. With an existing revenue-generating CBD brand and significant expansion potential, investors may want to take a closer look at the company as it wraps up its private placement and acquisition and moves towards its new area of focus.

For more information, visit the company’s website or contact info@harvestone.com.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

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