Race for Pot Licenses Highlights the Market’s Most Exciting Opportunity in the Last 50 Years

With Consistent Profits and Vertical Integration, a Fully Funded Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) is Taking Over the US, One State at a Time

Continued legalization of pot (both medical and recreational) is changing the legal landscape of the United States. The first full year of legalized purchases, the addition of the massive new market in California and a country-wide haul of $10.4 billion has made for a banner year in 2018¹ —and 2019 could likely be industry’s best year yet².

Given that only a few years ago the legal market was practically non-existent this surge in revenues is remarkable. Wall Street’s No. 1 pot analyst Vivien Azer already projected the overall pot market to one day be worth $500 billion³.

We’re now witnessing what could easily be dubbed the Most Exciting Opportunity of the Last 50 Years.

However, for a space that’s quickly becoming crowded, it’ll be the established companies with an early-mover advantage who will see the biggest returns. As the US markets open up it’s going to come down to which companies can obtain each state’s limited and coveted licenses.

Already with a footprint spanning 12 states and counting, Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) is one such company successfully running a profitable operation. Through diligent organic growth on a small budget, the company has recently made a series of moves that has positioned it for an explosive 2019.

After raising almost $290 million USD ⁴, Harvest has a fully-stocked war chest with available for expansion and potential acquisitions, Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) is gunning to be the nation’s largest multistate operator (MSO).

Fully vertically integrated with cultivation, processing, and retail operations across the country, Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) has built its company through smart and timely license applications, always in the right place at the right time.

Profitable. Established. Ahead of the Curve.

While several companies arrive on the scene each month, Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) has already accrued years of experience beginning in 2011 in its home state of Arizona. Over that tenure, the company has successfully built a conglomerate across 12 states (and growing), while also earning a reputation of always being prepared and worthy of gaining license application approvals.

Unmatched License Approval Pedigree

To date, Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) has amassed a whopping 56 licenses across 10 US states—a number of which puts the company in the highest tier.  So far, the company has applied for (and won) licenses in 12 states, and has a track record of winning in every category, including vertical, retail cultivation, and processing licenses.

Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) recently announced the acquisition of San Felasco Nurseries, Inc. (“San Felasco”), a holder of a medical pot dispensary license and authorization to operate as a Medical Marijuana Treatment Center in the state of Florida that can produce, process and dispense medical pot and pot products. Each treatment center is allowed to operate up to 25 dispensaries in the State of Florida.

At the moment, the company has ongoing operations in Arizona, Maryland, Florida, California, and Colorado. There are also plans in the pipeline to build in major markets in Nevada (Las Vegas), and California (Los Angeles). So far, there are a total of 22 retail, 4 cultivation, and 6 processing licenses in the pipeline.

Strategic Advantages That Make Harvest Health & Recreation a Premiere Multi-State Operator

In 2018, approximately 90% of Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) revenues came from within its home state of Arizona. However, the company’s 2019 projected revenues will be a lot more balanced across multiple states.

Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) received one of only two licenses to operate a dispensary in Santa Monica, California⁵ — successfully getting a strong foothold in the California market that’s expected to reach $5-10 billion on its own.

Arizona has a population of 7 million people, and currently has over 184,000⁶ medical pot card holding patients, making it the third largest medical pot state in the country. Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) has a distinct advantage in the state, as it has only issued 130 licenses state wide. The company is currently operating 9 stores in the state, with a goal of 20 in the future.

There’s significant blue sky for the company in the state of Arizona, given that transition from a medical to recreational market is practically inevitable⁷. Such a transition could jump the company’s per-dispensary revenue from $3 million to upwards of $10 million, taking Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) state-wide revenue to over $200 million, with the flick of a pen.

The present and future success of Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) can be attributed to five strategic advantages. These five advantages put Harvest into a league of its own, among multistate operators (MSOs), giving the company the potential to become the undisputed largest provider of pot across the largest US footprint.

Established Early-Mover Advantage

Having cut its teeth in the Arizona market, with industry experience that dates back to the company’s founding in 2011, Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) has accomplished what many of its competitors have not—profitability.

It accomplished this feat, by a series of prudent growth-driven decisions, and an organic approach to increasing its footprint.

That footprint has grown each year, to what is now a team of more than 425 employees with proven experience that benefits the company for each new market it enters.

Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) has effectively grown to become one of the largest multi-state pot operators in the United States.

With its early jump into the market, Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) now can boast it is already generating profitable revenue, through an effective vertically-integrated strategy.

Already Profitable, as a Vertically-Integrated, Multi-State Operator

Founded in 2011, Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) has a head start of up to 8 years over some of its current competition. Over that time, the company has built itself to be a profitable, vertically-integrated, fully-funded multi-state operator.

The company’s growth trajectory has been spurred on by a winning combination of quality, creativity, and operational efficiencies.

Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) is built to be a low-risk, high-profit operation, with a vertically integrated supply chain— among the products sold in Harvest Dispensaries, 60% are owned and made by Harvest.

It’s this vertical integration strategy that has afforded Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) control over each and every segment of the pot supply chain:

• Retail: Harvest is committed to providing the best customer service, having meticulously invested in all areas that may contribute to a customer’s experience.
• Cultivation: They grow their own high-quality flower, used to process and create the finest pot consumer goods.
• Processing & Manufacturing: The company processes its flower, and goes on to package and brand the products, made ready to be distributed to all of its dispensaries.

Compared to its peers, Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) has the largest US national footprint among its peers.

Across the country, Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) has a large retail footprint.

Stocked within the company’s retail environment is a full suite of diverse premium brands that cater to every customer need, including its award-winning vape cartridges, oils, and topical products through the Evolab brand⁸ that was acquired through the acquisition of CBx. Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) also is selling its Refined Performance (micro-dose protein bars)⁹, Peace of Mind (upscale high-THC products: distillate syringes, caviar and concentrates), Dream Steam (vaporizer pens and cartridges)¹⁰, and BioMed (medical product line of CO2 extracted oils and raw flower capsules).

Thanks to exposure through its vast dispensaries, Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) has also secured access to several third-party brands sold on the company’s retail shelves. Harvest has collaborated with a leading California cultivator and processor to expand a brand called CRU across the country.

Fully Funded with a War Chest for Acquisitions and Growth

"We have built our footprint with a tenth of the capital of any comparable company. - Harvest CEO, Steve White"

The Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) balance sheet is right now in a prime position for the company to make some major moves.

“The company is forecasted to generate EBITDA of $47 million in 2019, which is projected to shoot up to $266 million in 2020.”

Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) growing footprint is set for further expansion, with plans to span across 14 states. With the licenses it has in place, the company can have 100 retail stores by 2020.

The company’s projected trajectory is like a rocketship, with significant revenue and EBITDA growth—with a 3-year CAGR of ~230% and ~310%, respectively.

Stacked Team of PROVEN Industry Leaders

Much of the success of Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) can be attributed to its team of smart, creative, and tenacious industry leaders. At the top of the corporation are Jason Vedadi, Steve Gutterman, and Steve White.

However, the team goes far beyond the trio at the top, as the brain trust for the company just gets better as it branches out into specializations.

The company has also brought on two new faces to the team at the beginning of 2019.

How Other Multi-State Operators Stack Up

While there are multiple major pot companies in the market with much larger valuations at present, Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) stands apart from the pack for its ability to successfully obtain licenses in each of the markets it has applied for. The company has the national footprint, expertise, and a team with the requisite skills to really expand quickly.

There are only a handful of companies that fit the criteria needed to be successful in this current window. Here now are some other pot comparables that have a chance for success:

MedMen Enterprises Inc. (OTC:MMNFF) (CSE:MMEN)

Market Cap: $1.442 billion

Recent Headline: MedMen says revenue rose to $29.9 million in Q2, up 40% versus Q1¹¹

Founded over a decade ago, MedMen is one of the largest pot retailers in the world. However, it wasn’t until recently that the self-professed “Apple Store of pot” opened its first retail stores in California after the state legalized pot for adult use. MedMen’s 2019 Revenue is projected to be $259 million, whereas Harvest Health & Recreation Inc.’s (OTC:HTHHF) (CSE:HARV) projection for the same year is just shy at $257 million. However, Harvest is set to leapfrog over MedMen in 2020, with $559 million, compared to MedMen’s $510 million projection. Where Harvest already is topping MedMen is in its 2019 EBITDA, where Harvest is projected to be at $47 million, where MedMen is just over half that at $26 million.

iAnthus Capital Holdings, Inc. (OTC:ITHUF) (CSE:IAN)

Market Cap: $343.734 million

Recent Headline: iAnthus Opens Flagship Citiva Dispensary in Brooklyn, First Dispensary Serving Borough of 2.6 Million People¹²

Having just come off its arrangement to acquire MPX Bioceutical Corporation, iAnthus is making headlines, especially with its early-mover advantage of becoming the first to open a regulated dispensary in Brooklyn, New York. With its 10 states coverage, iAnthus falls short of Harvest Health & Recreation Inc.’s (OTC:HTHHF) (CSE:HARV) 12-state footprint (including local approval for Massachusetts). By combining the expected 2019 Revenue of both iAnthus and MPX, the newly formed conglomerate is set to total approximately $234 million, compared to Harvest’s expected $257 million for 2019. By 2020, the growth pattern for Harvest far exceeds the iAnthus/MPX combination of approximately $331 million, compared to Harvest’s whopping $559 million projection.

Green Thumb Industries Inc. (OTC:GTBIF) (CSE:GTII)

Market Cap: $2.008 billion

Recent Headline: Green Thumb Industries (GTI) Enters Connecticut Market with Acquisition of Advanced Grow Labs LLC¹³

With licenses spanning 8 states, Green Thumb Industries is expanding. Among multi-state operators in the US, GTI is projected to have a 2019 Revenue, with $184 million—behind Harvest Health & Recreation Inc.’s (OTC:HTHHF) (CSE:HARV) projected $257 million. However, the gap between the two companies is expected to widen significantly by 2020, when Harvest is projected to surge to $559 million, where GTI is projected to be $374 million. By 2020, GTI’s EBITDA is expected to reach $125 million, behind Harvest’s whopping projected $226 million.

Curaleaf Holdings, Inc. (OTC:CURLF) (CSE:CURA)

Market Cap: $2.586 billion

Recent Headline: Curaleaf Wins Ohio Processing License¹⁴

Through a series of rapid expansions, Curaleaf Holdings has built its empire to include licenses spanning 11 different states, including Maryland, and Ohio. Arguably one of the largest multistate operators in the pot space, Curaleaf’s market valuation at over $2.5 billion reflects the size of the company’s footprint. However, Harvest Health & Recreation Inc. (OTC:HTHHF) (CSE:HARV) also has potential in states such as Florida, and Maryland. In Florida, Harvest already has a dispensary open, with 2 dispensaries under construction in Kissimmee, and an additional 22 dispensaries in the state to be opened. Harvest also has a footprint in Maryland, with a cultivation facility already in operation, as well as a processing facility under construction in Hancock, and a dispensary already open. Harvest has a footprint in 12 states, and is poised to expand upon that number in the next couple years.

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