One of the strongest cannabis companies when it comes to operating profitably has released it’s Q4 and fiscal financial results today. Harvest Health & Recreation (CSE: HARV) revealed its financial figures on Tuesday, which has largely impressed Wall Street analysts and investors.
Overall revenues increased by 135 percent for the recent fourth quarter, while fiscal year revenues increased by 106 percent in comparison to the previous year. One strong selling point going for the company is that it has always operated profitability, something very few other cannabis companies can boast.
Many businesses that have reported revenue figures far superior to Harvest have seen their stock prices decline as investors move away from preferring just growth at the expense of profitability.
“2018 continued to set records for Harvest’s growth and momentum across the United States,” said Chief Executive Officer Steve White. “Three key initiatives dictated our decisions throughout the year and will continue to be our focus in 2019: aggressively expanding our retail and wholesale footprint across the U.S., building, acquiring and expanding our suite of brands across our footprint and continuing to operate in a financially disciplined way, while also fueling the revenue growth of the company.”
Total revenues were at $16.9 million, as opposed to the $7.2 million reported in Q4 2017. Gross profit was at $7.2 million, which is an impressive 342 percent increase from $1.6 million back in Q4 2017.
Other financial hallmarks mentioned in the report include Harvest Health raising around $300 million in a private placement round, one of the rare times the company has ever taken on debt, which will be used to fuel rapid expansion. Investors are excited about what the company can do with these funds since they’ve succeeded at growing and operating profitably up until this point without much outside funding.
The company also announced today that it had signed an agreement to acquire Verano Holdings, adding a number of additional facilities to the company’s asset portfolio. The combination would create a company with a national footprint of over 200 facilities across 17 states and territories. Overall, the transaction is estimated at costing around $850 million, which will include a variety of additional pipeline acquisitions valued at up to $36 million.
“Expanding our national footprint is paramount at Harvest and allows us to continue on the path to profitable growth for shareholders,” added Jason Vedadi, Executive Chairman of Harvest. “This accretive transaction will improve our position by strategically expanding our operating base to realize the benefits of scale. From day one, both companies focused on consistent revenue and profit growth. We are excited to bring Verano’s premium brands, depth of management and sound operations into Harvest.”
In response to the news, shares of Harvest Health jumped six percent in today’s trading session. Shares have been steadily rising over the past couple of months, increasing from C$7.09 at the start of 2019 to its current level of C$13.51 per share.
Overall, stock prices for Harvest have been higher then they’ve ever been, and with the company having a market cap of only $800 million, is extremely well placed to expand exponential over the coming years.