Harvest Health and Recreation (CNSX-HARV) Soars 48% Since November, Whats Next?


Although the Harvest Health & Recreation, Inc. (CNSX: HARV) (OTCMKTS:HRVSF) arrived in the public market in November 2018, still the stock did well in the market as compared to its peers who are in the market for a much longer time. All this has been achieved by their aggressive expansion and by getting hold of solid leadership positions in the key market. We might say that Harvest is a prime holding for cannabis investors and getting quite a benefit in the US with the legalization of cannabis.

Shares of Harvest Health & Recreation have gained almost 48% from its listing price of $6.98 CAD on November 15th.

Review of 2018 Q4

Harvest Health had released their quarterly results for 2018 Q4 on April 23, after which they get a positive reaction from the market, seeing a rise in its shares by 6% that day. By the end of 2018, Harvest remained a large Arizona-based cannabis company operating a total of 10 dispensaries with 7 of them in Arizona.

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The total revenue stood at $16.90 million, which shows a rise of 52% from the last quarter and 135% from last year’s quarter. Gross profit was $7.2 million representing a gross margin of 43%. They reported a positive adjusted EBITDA of $2.6 million, with an EBITDA margin of 15%.

Recent & Future Plans

2018 Q4 was quite a good quarter for the investors, but the company has changed in the first few months of 2019. Harvest even accounted to acquire Verano for $850 million in an all-stock deal, it will expand its presence in Illinois, Oklahoma, and New Jersey, resulting in more profit. Just like Harvest’s 10 open stores, Verano has 9 stores open.

We are just halfway into 2019 and Harvest Health is acquiring new licenses and setting up branches at a faster pace. Such as investing in product development by acquiring CBx Enterprises and soon will be getting Florida licensee which will allow it to open up to 30 locations in the state. Soon will be acquiring Falcon International along with getting 6 more licensed in its home state to get a strong foothold in the Arizona market. Further to expand in four East Coast States, Harvest announced to acquire privately-owned CannaPharmacy in the near future.

Analyst Still Bullish

Despite the recent rally, Rob Fagan, an analyst at GMP Securities initiated a coverage on Harvest Health’s stock and expects the stock to double. Rob Fagan sets a price of $14 USD, potential upside of 80% from the current market price of $7.72 on the OTC market.

Harvest “is not only an aggressive industry consolidator, but a strong operator as well,” he writes. “Management has one of the most bullish outlooks we’ve encountered.”