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Prior to the RTO, Harvest and RockBridge conducted a private placement offering of subscription receipts in which they raised $217.15 million. Benzinga talked to Harvest CEO Steve White about going public, the state of the American cannabis industry and the company's plans for the future.
Doing More With Less
Harvest was founded in 2011 and has expanded to one of the largest footprints in the U.S. The company has operations across 10 states, including licenses in Massachusetts, and reported revenue of $29 million in 2017. The company has $18 million in investments and 40 permits and licenses across the US.
"As a lawyer and CEO, being part of a community that is working to overturn failed laws while taking our company public has simply been incredible," White said. "Harvest Health & Recreation has been a part of that change and we’ve worked hard to better educate regulators, decision makers, patients and consumers, so laws and lives change for the better."
Harvest's management team managed to build this presence in the U.S. with much less capital than other companies, the CEO said.
"We have built our footprint with a tenth of the capital of any comparable company."
Harvest is profitable — unlike many industry peers, White said.
"We have been and will be a profitable company; we have demonstrated that we can operate profitably across multiple states. We've been able to do that because we have the people and infrastructure to successfully scale."
Domestic M&A In Lieu Of International Expansion
Similar to most other vertically integrated U.S. cannabis companies such as iAnthus Capital Holdings Inc (OTC: ITHUF) and Curaleaf Holdings Inc (OTC: CURLF), Harvest Health & Recreation is betting on its presence in the states. The company takes a diverse approach to each market in which it operates in based on consumer trends.
"We are committed to approaching each market individually and ensuring our offering is robust, relevant and compliant," White said.
Harvest has no immediate plans for international expansion, similar to many of its peers.
"The world’s biggest cannabis market is the U.S. and it is ripe with opportunities. We are focused on capitalizing on a host of opportunities in the states, driving value for our shareholders and are on pace to become the largest cannabis company in the world."
One way Harvest plans to pursue opportunities in the U.S. is through acquisitions. Soon after it went public, Harvest announced the acquisition of Colorado-based CBx Enterprises, a producer of cannabis products and technologies for extraction and processing.
States 'Lead The Charge'
Even though a lot of progress is being made toward legalization in the U.S. White doesn't expect any significant movement at the federal level in the near future.
Instead, states will continue to progress — and as more states legalize marijuana, more voters will change their mind about the plant, which could have an impact on a federal level, he said.
"As more states come online, the amount of voters and constituents that have been or will be touched by the cannabis industry in some way will reach a critical mass. That’s when I believe we’ll see some serious shifts happen at the federal level. Until then, I believe the states will continue the lead the charge."
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