Harvest One Ensures Cannabis Supply with Greenbelt Acquisition
April 9th, 2019
Exclusive, News, Top News
Vertical integration has become kind of a buzzword in the cannabis industry over the last few years. Many companies claim it as a goal, with the intent of controlling the whole supply chain for their products from seed-to-sale. Getting to that level of control can prove difficult, however, as the resources, equipment, and expertise required are vast in order to achieve full integration at scale.
Harvest One Cannabis Inc. (TSX-V: HVT) (OTCQX: HRVOF) recently announced the acquisition of a majority interest in a 152,000 sq. ft. greenhouse operation in Ontario. Greenbelt Greenhouse is in the late stages of its Health Canada application process, and the marriage of the two companies should only help speed that along. The acquisition complements Harvest One’s existing production facilities and expansions planned for 2019, ensuring adequate supply of both premium cannabis flower as well as raw material for extracted and derived products intended for medical, nutraceutical, and recreational markets. The deal marks a major step toward full integration as Harvest One executes its plan to sell its existing cannabis brands across the world.
Diverse Production Capacity to Meet Variety of Needs
Harvest One is not trying to become the largest scale producer, or anything close to that. Instead, the company is strategically building diverse production assets to meet the different needs of its medical, recreational, and nutraceutical product lines. The company’s flagship production facility, the indoor United Greeneries operation on Vancouver Island, is largely responsible for providing premium BC craft cannabis for both medical and recreational use. The company has two established premium brands, Royal High and Captains Choice, and has supply agreements with British Columbia, Saskatchewan, Manitoba, and Ontario and most recently Shoppers Drug Mart, Canadas largest pharmacy chain.
United Greeneries also has an indoor facility in Saskatchewan under construction, currently in the late stages of the Health Canada licensing process. Called the Lucky Lake Facility, it sits on 18 acres of wholly-owned land in the middle of a prolific Canadian hemp growing region. The initial focus is on licensing the building for cultivation, adding significantly to the company’s overall production capacity. Down the road, should there be a need, Harvest One is considering the possibility of a hemp farm on their current property and surrounding lands. Should this occur, it would turn into a crucial supply center for the company’s existing and future CBD-derived wellness and nutraceutical products.
The latest acquisition, a 52% interest in the 152,000 sf Greenbelt Greenhouse operation in Ontario, is interesting not only for its cultivation capacity but for its location and processing/extraction potential. Harvest One is earmarking its share of the cannabis grown here to supply cannabis-infused products under its entire house of brands including Satipharm and Dream Water. The company is also in the process of acquiring Delivra Corp., makers and distributors of LivRelief™ branded topicals and creams designed to help control pain.
As of now, Harvest One has an extraction and product development agreement with Valens GroWorks. The company is eyeing the conversion of a separate 42,000 sf building on the Greenbelt property into a processing and extraction facility, a move that would bring those functions in-house and allow Harvest One to achieve total vertical integration. An additional feature of the Ontario location is, well, its location. Ontario is home to nearly 40% of Canadians and is fairly centrally located, making it a perfect fit for both domestic and international distribution.
Harvest One’s Puzzle Pieces
Here is a bullet list of Harvest One’s assets:
- Premium and diverse in-house cannabis production
- Fully funded expansions to reach 20,000 kg annual production by end of 2019
- Established cannabis distribution channels throughout Canada
- Established health, wellness, and nutraceutical brands
- Established distribution networks for these products throughout North America/Europe
- Clinically proven delivery technology for oral and transdermal applications
- Extraction agreement with potential to bring processing in-house
- Existing revenues with a solid plan to increase rapidly
- Executive team with long history of CPG, Retail and distribution
Put it all together and what do you have? It looks like all the ingredients for a comprehensive and powerful international house of cannabis brands. 2019 promises to be an eventful year as Harvest One continues to assemble the jigsaw puzzle of vertical integration while executing on its aggressive sales and marketing plan.
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