Harvest Health & Recreation (HRVSF) reported second-quarter results on Aug. 15. The vertically integrated marijuana dispensary saw revenue rise 39% sequentially to $26.6 million.
Harvest Health & Recreation opened three new retail locations in Florida during the second quarter, bringing its total store count to 16 at the end of the period. This number should grow substantially in the quarters ahead, as Harvest Health is making aggressive moves to rapidly expand its retail footprint. The cannabis company is in the process of acquiring privately held Verano Holdings for $850 million in stock. Harvest Health also recently announced its acquisition of privately held CannaPharmacy. These and other deals have given the U.S. marijuana dispensary king the rights to more than 200 cannabis facilities, including 135 retail locations, in 18 states and territories.
The hard-charging company's growth investments, however, are weighing on its profitability. Harvest Health generated a net loss of $20.6 million in the second quarter.
Still, the company is keeping its foot on the gas in terms of expansion. Harvest Health already opened an additional six retail locations so far in the third quarter, and more openings are planned in the second half of the year. "Significant expansion of cultivation, manufacturing, and retail locations is expected to occur for the remainder of 2019," the company said in a press release.
To help fund its expansion initiatives, Harvest Health said it obtained a secured term loan for as much as $225 million from private investment firm Torian Capital.
Harvest Health & Recreation also recently struck a deal with the Asian American Trade Associations Council to distribute its cannabidiol (CBD) products to more than 10,000 convenience stores and gas stations within the AATAC retailer network. Cannabidiol is a nonpsychoactive component of cannabis that's becoming increasingly popular for its perceived health benefits. Analysts at Brightfield Group estimate that CBD sales in the U.S. will grow to nearly $24 billion by 2023, up from about $620 million in 2018.