Harvest Health & Recreation Inc (OTCMKTS: HRVSF) has been running up the charts in recent weeks since recently announcing an agreement to acquire Verano Holdings, LLC, one of the largest privately held multi-state, vertically integrated licensed operator of cannabis facilities, in an all-stock transaction for an estimated purchase price of approximately USD $850,000,000
Upon completion of the transaction and regulatory approval, Harvest will hold licenses that will allow it to operate up to 200 facilities in 16 states and territories across the country, including 123 retail dispensaries.
Harvest Health & Recreation Inc., trading as HARV in Canada and HRVSF in the US is one of the first consistently profitable, vertically integrated cannabis companies with one of the largest footprints in the U.S. Harvest’s complete vertical solution includes industry-leading cultivation, manufacturing, and retail facilities, construction, real estate, technology, operational, and brand building expertise — leveraging in-house legal, HR and marketing teams, along with proven experts in writing and winning state-based applications. The company has more than 680 employees with proven experience, expertise and knowledge of in-house best practices that are drawn upon whenever Harvest enters new markets. Harvest’s executive team is comprised of leaders in finance, compliance, real estate and operations. Since its founding in 2011, Harvest has grown its footprint every year, has been ranked as the third largest cultivator in the U.S. and currently owns licenses for more than 140 facilities across the U.S. Harvest shares timely updates and releases as part of its regular course of business with the media and the interested public.
Last month Harvest Health & Recreation entered into a binding agreement to acquire Verano Holdings, LLC an arm’s length third party, one of the largest privately held multi-state, vertically integrated licensed operator of cannabis facilities, in an all-stock transaction for an estimated purchase price of approximately USD $850,000,000 based on a share price of CND $8.79. The combined company will be one of the largest multi-state operators in the U.S., as measured by licenses held and facilities permitted. Upon completion of the transaction and regulatory approval, Harvest will hold licenses that will allow it to operate up to 200 facilities in 16 states and territories across the country, including 123 retail dispensaries.
Harvest’s planned acquisition of Verano will include: Licenses and operations in 11 states and territories, including seven cultivation licenses, 37 retail licenses and potential to reach 150+ million Americans; Vertically integrated, cash-flow positive operations; Proven executive team with retail, manufacturing, branding, logistics and operational experience and 300 employees. Hiring for approximately 300 new positions in 2019 with a focus on hiring minorities, women and veterans; Game changing ethanol extraction technology at pharmaceutical grade levels providing new market opportunities for cannabis biotech, food and beverage verticals; Portfolio of premium proprietary brands with 150 + product SKUs sold in 150 + retail locations; Total cultivation expansion capacity of 900,000 sq. ft in Illinois, Nevada & Maryland; Ownership of an interest in nine Zen Leaf™ dispensaries with average annual revenues 2.5x higher than retail cannabis industry averages.
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Following completion of the transaction, the combined company is expected to be operating 30 dispensaries, eight cultivation facilities and seven manufacturing facilities, with expected further aggressive operational expansion. By the end of 2019, Harvest expects to have over 70 dispensaries, 13 cultivation facilities and 13 manufacturing facilities in operation. The company expects continued growth in 2020.
George Archos, Verano Co-founder and CEO
“Verano has been creating a brighter way for cannabis production, products and health and wellness by assembling a stellar team of experts drawn from the cannabis industry and the top echelons of Fortune 500 corporations,” noted Sam Dorf, Verano Co-founder and Chief Growth Officer. “We are excited to join forces with Harvest to leverage each of our strengths to share the benefits of cannabis in innovative new ways with an ever-increasing customer base. Verano and Harvest independently have always focused on business fundamentals to drive year over year growth in both revenue and EBITDA. Together, we expect to accelerate that momentum and raise the bar even higher for the industry.”
Pursuant to the binding agreement entered into between Harvest and Verano on March 10, 2019, the parties agreed to enter into a definitive agreement within the next 30 days. Upon closing, Verano shareholders will receive, in the aggregate, a combination of Harvest subordinate voting shares and Harvest multiple voting shares as mutually agreed between the parties, acting reasonably, for a total estimated purchase price of USD $850,000,000 based on a CSE share price of CND $8.79. It is anticipated that the acquisition will close in the first half of 2019.
Closing is subject to the negotiation and execution of a Definitive Agreement, applicable shareholder or unitholder approval, approval of the Canadian Securities Exchange, as well as any other approvals for that are customary for a transaction of this nature. There can be no assurances that the transaction will be completed as proposed or at all. Harvest and Verano have agreed to a mutual termination fee in the amount of US $20 million in the event either party fails to enter into the Definitive Agreement within 30 days from the date of this agreement.
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Currently trading at a $691 million market valuation Harvest Health & Recreation Inc is one of the first consistently profitable, vertically integrated cannabis companies with one of the largest footprints in the U.S. The Verano acquisition is expected to close soon at approximately USD $850,000,000 will result in a newly combined Company operating 30 dispensaries, eight cultivation facilities and seven manufacturing facilities, with expected further aggressive operational expansion. By the end of 2019, Harvest expects to have over 70 dispensaries, 13 cultivation facilities and 13 manufacturing facilities in operation. The company expects continued growth in 2020. We will be updating on Harvest Health & Recreation when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with Harvest Health & Recreation.
Disclosure: we hold no position in Harvest Health & Recreation either long or short and we have not been compensated for this article.