HRVOF stock climbs after international cannabis house of brands Harvest One Cannabis (TSXV:HVT) (OTC:HRVOF) announced today that it has signed a medical cannabis supply agreement with Canadian retail pharmacy chain Shoppers Drug Mart. According to the agreement, Harvest will supply Shoppers Drug Mart with its Satipharm branded medical cannabis products.
This is exciting news for Harvest One, as this deal marks the first time the Satipharm branded cannabis will be available for purchase. This premium, indoor grown cannabis offers a selection of products, that will be color-coded options and range from the high THC of SatiWhite™ to the high CBD of SatiPurple™.
This announcement from HRVOF comes just days after the company provided an update on another one of its wholly owned subsidiary, Dream Water. Dream Water recently entered into supply agreements with major retailers Walmart US and Kroger, adding to existing agreements with Shoppers Drug Mart, Loblaws, Circle K, Canadian Tire, Amazon and Hudson News.
These agreements align with the company’s vision of being a global leader in the cannabis space, with a focus in the health, wellness, and self-care sector, and will put the company in a favorable position when the legalization of cannabis-infused products happens in Canada this fall.
Expanding its Health and Wellness Division
Earlier this month, Harvest One acquired Delivra and its LivRelief™ brand, a company that produces a variety of topicals and creams with existing distribution channels across Canada. This isn’t the first acquisition HRVOF has made to further cement its spot in the health and wellness space.
Late last year, Harvest One also acquired Israeli-based Phytotech Therapeutics Ltd., which will give HRVOF access to advanced patents in favorable jurisdictions, as well as valuable IP and capabilities that will add to its health and wellness strategy and medical offerings.
Growing Presence Adding to Revenue
In its Q2 2019 financial results, HRVOF reported a net revenue of $3.7 million, an increase of over 123% from its previous quarter, which was $1.7 million. The company notes that its spike in revenue came from its supply agreements with British Columbia, Manitoba, Ontario, and Saskatchewan. Harvest One’s Q2 results also showed a gross margin before fair value adjustments of 47%. Included in this is a gross margin of 53% for United Greeneries, which is in line with larger Canadian licensed producers.
These results, along with recent supply deals and production agreements, have boosted Harvest One’s stock price and overall market valuation. However, some believe HBVOF stock is undervalued, trading at 5.2x, while other cannabis operators trade at more than 25x sales.
As of 2:15pm EDT, HRVOF stock is trading at $0.72, up $0.128 (+21.48%) on the OTCQX, while HVT is at $0.95, up $0.16 (+20.25%).
About Harvest One
Harvest One is a global cannabis company that develops and provides innovative lifestyle and wellness products to consumers and patients in regulated markets around the world. The Company’s range of lifestyle solutions is designed to enhance quality of life. Shareholders have significant exposure to the entire cannabis value chain through three wholly-owned subsidiaries: United Greeneries, a Licensed Producer; Satipharm (medical and nutraceutical); and Dream Water (consumer).
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