One major Canadian cannabis company has announced a significant expansion into the east coast of the U.S. Harvest Health & Recreation (CSE: HARV) announced today that through the acquisition of CannaPharmacy, they would be operating in a number of eastern states across America.
Harvest Health will be acquiring a collection of assets in Pennsylvania, Maryland, Delaware, and New Jersey pending the conclusion of the acquisition and regulatory approval. The company already has one of the country’s largest network of cannabis licenses and facilities across 17 states in the U.S. This transaction would see Harvest’s total number of assets in its portfolio climb up to 213 facilities with 130 retail dispensaries.
“All of our efforts back up our three core objectives; to expand and deepen our retail and wholesale footprint, build national brands and continue our path to profitable growth, and this CannaPharmacy deal is no different. Harvest has led the cannabis market in the Western United states for years, and this acquisition will similarly widen and extend our U.S. foothold to the East Coast,” said Harvest CEO Jason Vedadi. “When you add that to our existing dominant position in the Pennsylvania and Maryland markets, acquisition of CBX and its suite of brands, as well as our pending acquisitions of Falcon and Verano, with its holdings throughout the eastern seaboard and brands and infrastructure to leverage, we are looking at Harvest becoming a household name throughout the region in a matter of months.”
Most of these states have extremely promising cannabis markets. Pennsylvania has around 116,000 likened medical cannabis patients as of February 2019, a figure that has been growing around 10 percent every month consistently. New Jersey is another state that has a strong patient population. Currently at around 42,000 medical patients, that figure has grown over 60 percent since last year. Delaware, despite having only 7,100 medical patients, is still seeing significant growth due to having one of the most liberal lists for qualifying patients for cannabis usage in the country.
“We’re seeing significant M&A activity across our industry, but the most important factors are the price on pays for an acquisition, strength of the assets relative to the market size and synergies between the companies. Harvest was already fully funded to build out our entire footprint, inclusive of the significant assets that come with the Verano Acquisition,” added CEO Steve White. “Our recent $500 million financing, secured in $100 million traunches for new accretive acquisitions like CannaPharmacy, continues to solidify Harvest’s position as the leading company in the cannabis industry in reach, brands, infrastructure, assets and footprint.”
Seeming indifferent to today’s news announcement, shares of Harvest Health dropped around 3.5 today. Over the past few months, stock prices for the company have been steadily rising, surging above the C$6.98 per share it was at back on November 15th to its current price level of C$11.75 per share right now. Despite the company’s strong retail presence and asset portfolio, it’s market cap still remains quite small at around $121 million, with the company well poised for exponential growth in the future as investors keep their eyes open for the next big company in the sector.