Harvest Health & Recreation (HRVSF) and Hightimes Holding are modifying the terms of a recent agreement. Fewer assets are now involved in the deal, and the price is lower. Under the new terms, Harvest will sell 10 currently operational and planned dispensaries in California to Hightimes Holding for up to the equivalent of $67.5 million. No reason or reasons were given for the change.
That $67.5 million will consist of $61.5 million in Hightimes Holding Series A preferred stock, $4.5 million in a one-year promissory note bearing interest of 10%, and as much as $1.5 million in cash.
Previously, as announced in April, Harvest had agreed to sell 13 dispensaries in California to Hightimes Holding, whose core asset is the long-standing marijuana aficionado magazine High Times. The price for that set of assets could have reached as much as $80 million, divided into $67.5 million worth of the preferred stock, $7.5 million for the promissory note, and a maximum of $5 million in cash.
If realized, the new arrangement will see Harvest keeping four currently operational dispensaries in the state -- one in the Los Angeles seaside community of Venice, one in the Central Coast town of Grover Beach, one in Palm Springs, and one in the wine country municipality of Napa.
Harvest said that with the new deal, its revenue guidance for 2020 remains unaffected, at $200 million. The marijuana company reaped almost $155 million in 2019.
On Friday, Harvest stock rose by 2.3%, exceeding the gains of the wider equities market on the day.