Harvest Health stock is taking a hit this morning after Harvest Health & Recreation Inc (CSE:HARV) (OTCQX:HRVSF) announced a $20.6 million net loss for the second quarter.
After having gone through an extremely difficult phase over the past few months, marijuana companies are making a comeback, and many of those have managed to deliver highly impressive Q2 2019 results amid heightened anxiety about the industry. Today, cannabis company Harvest Health & Recreation announced its quarterly results and in an important development, the company managed to generate a total of $16.2 million in gross profits in the quarter. That’s a year-on-year rise of a hefty 39% and double of what the company generated in the first quarter.
However, it is necessary to point out that ultimately, Harvest Health generated a net loss of $20.6 million. The company stated that its efforts in building infrastructure and also a hiring spree contributed to the losses.
At the time of writing, Harvest Health stock is down about 7% in afternoon trading and now selling at $4.86 on the OTC market. On the CSE, HARV stock is up 6.77% at $6.47.
Acquired Grover Beach
Yesterday, the company made another important announcement when it revealed that it had acquired Grover Beach, which operates a dispensary in California. It is a significant development since it gives Harvest Health & Recreation a bigger footprint in California, which remains the most lucrative market in the cannabis industry. The dispensary is situated on Highland Way and is going to be open throughout the week.
The Executive Chairman of the company, Jason Vedadi, said, “California is the largest cannabis market in the world, and with the acquisition of 805 Beach Breaks, we’re thrilled to be expanding our presence and industry-leading operational and vertical integration standards across the state.” The deal was completed in both cash and stock, but the financial details have not been revealed.
Harvest Health has managed to grow rapidly over the course of the past year, and much of its growth has been fuelled by borrowed money. An investment fund is responsible for the money that has been given to the company. However, analysts believe that the fact that the loans are backed by the company’s assets adds an extra layer of risk.
Harvest Health stock has corrected 60% from its 52-weak peak price of $10.85 USD.
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