Harvest Health and Recreation Q4 Revenue Increases 85% to $69.9 Million

Harvest Health & Recreation Inc. Reports Fourth Quarter and Full Year 2020 Financial Results
  • Total revenue increased 98% to $231.5 million in 2020 from $116.8 million in 2019
  • Fourth quarter revenue was $69.9 million, up 85% from the fourth quarter 2019 and 13% sequentially
  • Net loss before non-controlling interest for the full year was $59.6 million compared to $168.8 million in 2019
  • Total adjusted EBITDA was $15.3 million in 2020, compared to negative $43.7 million in 2019
  • 2021 revenue target of $380 million introduced
  • First quarter 2021 revenue target of at least $87 million compared to $45 million in the first quarter 2020

PHOENIX, March 30, 2021 /PRNewswire/ — Harvest Health & Recreation Inc. (“Harvest” or the “Company”) (CSE: HARV,OTCQX: HRVSF), a vertically integrated cannabis company and multi-state operator in the U.S., today reported its financial and operating results for the fourth quarter and year ended 2020. All financial information is provided in U.S. dollars unless otherwise indicated.

Fourth Quarter and Full Year 2020 Financial Results

  • Total revenue in the fourth quarter was $69.9 million, an increase of 85% from $37.8 million in the fourth quarter of 2019, and up 13% compared to $61.6 million in the third quarter of 2020. Full year revenue increased 98% to $231.5 million in 2020 compared to $116.8 million in 2019.
  • Gross profit in the fourth quarter was $31.3 million, compared to $16.6 million in the fourth quarter of 2019, and $28.7 million in the third quarter of 2020. Gross profit for the full year was $101.6 million compared to $41.1 million in 2019.
  • Gross profit margin in the fourth quarter was 44.8%, compared to 43.8% in the fourth quarter of 2019, and 46.6% in the third quarter of 2020. Gross profit margin for the full year was 43.9% compared to 35.2% in 2019.
  • Net loss before non-controlling interest was $7.4 million for the fourth quarter, compared to $85.2 million in the fourth quarter of 2019. Net loss before non-controlling interest for the full year was $59.6 million compared to $168.8 million in 2019.
  • Adjusted EBITDA in the fourth quarter was $9.1 million, compared to ($8.8) million in the fourth quarter of 2019 and $11.5 million in the third quarter of 2020. Adjusted EBITDA for the full year was $15.3 million compared to ($43.7) million in 2019.

Please see the supplemental information regarding the use of Non-GAAP Financial Measures, and a reconciliation of Non-GAAP Financial Measures.

Fourth Quarter 2020 Business Highlights

  • During the fourth quarter of 2020, Harvest opened two new dispensaries in Camp Hill and King of Prussia, Pennsylvania.
  • On October 2, 2020, Harvest terminated the agreement to sell two California retail assets to Hightimes Holdings for $6 million in preferred stock.
  • On October 28, 2020, Harvest completed a bought deal financing raising gross proceeds of approximately $32.4 million including the overallotment option. Units sold in the offering were priced at Cd$2.26 per unit and included one subordinate voting share and one-half warrant. Each warrant has an exercise price of Cd$3.05 and duration of 30 months.
  • On October 30, 2020, Harvest completed the purchase and license transfer of THChocolate, LLC, including cannabis manufacturing licenses in Colorado. The consideration paid was immaterial.
  • On November 2, 2020, Harvest announced a settlement agreement with Devine Holdings. Under the terms of the agreement, Harvest acquired three vertical medical cannabis licenses in Arizona exchange for the repayment by Devine Holdings of an outstanding $10.45 million receivable owed to Harvest concurrently with the license acquisition.
  • On November 3, 2020Arizona voters approved Prop 207, a ballot initiative to allow recreational cannabis consumption in Arizona.
  • On November 13, 2020, Harvest completed the divestiture of its ownership in dispensary and cultivation assets in Arkansas, with net cash proceeds to Harvest of $12.9 million.
  • On November 20, 2020, Harvest announced the settlement of a legal dispute with minority owners of Interurban Capital Group. Harvest canceled a total of 42,378.4 Multiple Voting Shares and received a $12 million secured promissory note with 7.5% interest and five-year maturity. Service agreements and call option agreements for Washington retail locations were cancelled.
  • As of December 31, 2020, Harvest owned, operated, or managed 38 retail locations in six states, including 15 open dispensaries in Arizona.

Full Year 2020 Business Highlights

  • Capital raised for full year included $20 million of real estate backed debt, $21.3 million in senior secured debt, and $91.4 million in equity.
  • Capital expenditures for year totaled $26.9 million.
  • During 2020 Harvest completed the acquisitions of Arizona Natural Selections, Interurban Capital Group, and Franklin Labs.
  • During 2020 Harvest divested a group of select California retail assets and Arkansas retail and cultivation assets.

Recent Developments

  • On January 22, 2021, Harvest recorded the first recreational cannabis sale in the state of Arizona at its Scottsdale location. Harvest began serving adult use customers in addition to medical patients at all 15 of its dispensaries on January 22.
  • On January 25, 2021, Harvest announced the closing of a sale leaseback transaction with Innovative Industrial Properties, Inc. Harvest sold a 292,000 square foot facility for $23.8 million. Harvest will operate the cultivation and processing facility and expects to receive up to $10.8 million in tenant improvements.
  • On February 22, 2021, Harvest announced the divestiture of two medical marijuana dispensaries in Bismarck and Williston, North Dakota for an immaterial amount of cash.
  • On March 15, 2021, Harvest announced the settlement of its dispute with Falcon International, Inc. In accordance with the settlement terms, Harvest now owns a 10% equity stake in Falcon and received a ten year warrant to purchase up to 20% of the company’s shares at an exercise price of $1.91 per share.


Harvest is introducing a full year 2021 revenue target of $380 million, including at least $87 million in revenue expected during the first quarter. We remain focused on improving the profitability of our business and we expect our gross margins will continue to trend upwards overall, with some fluctuations from quarter to quarter.

Management Commentary

Our fourth quarter results and the initial success of recreational sales in Arizona demonstrate the efficacy of our strategy to make targeted investments in our core markets of Arizona, Florida, Maryland, and Pennsylvania.

Chief Executive Officer Steve White

We are focused on continuing to build on this positive momentum as we execute on our plan in 2021.

Conference Call & Webcast

Harvest Health and Recreation Inc. will host a conference call and audio webcast with Chief Executive Officer Steve White and Chief Financial Officer Deborah Keeley, Tuesday March 30, 2021 at 5:00 PM Eastern Time.

Registration for this event is required. Please use this link to register: http://www.directeventreg.com/registration/event/9090211

Following registration, an email confirmation will be sent including dial in details and unique conference call codes. Registration will remain open during the call however we recommend advance registration to access the event.

Fourth quarter results will be available at:

The live conference call webcast and replay will be available at:

Use of Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures as defined by the SEC. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP are included below. This information should be considered as supplemental in nature and not as a substitute for, or superior to, any measure of performance prepared in accordance with GAAP. Our management uses adjusted EBITDA to evaluate our operating performance and trends and make planning decisions. Our management believes adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the items that we exclude. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by our management in its financial and operational decision-making.

Reconciliation of Non-GAAP Financial Measures

The table below reconciles Net income (loss) to Adjusted EBITDA for the periods indicated.

About Harvest Health & Recreation Inc.

Headquartered in Tempe, Arizona, Harvest Health & Recreation Inc. is a vertically integrated cannabis company and multi-state operator. Since 2011, Harvest has been committed to expanding its retail and wholesale presence throughout the U.S., acquiring, manufacturing, and selling cannabis products for patients and consumers in addition to providing services to retail dispensaries. Through organic license wins, service agreements, and targeted acquisitions, Harvest has assembled an operational footprint spanning multiple states in the U.S. Harvest’s mission is to improve lives through the goodness of cannabis. We hope you’ll join us on our journey: https://harvesthoc.com

Facebook: @HarvestHOC
Instagram: @HarvestHOC
Twitter: @HarvestHOC

Original press release

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Published by NCV Newswire
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