Harvest Health & Recreation Inc. (OTCMKTS:HRVSF) has announced that it is planning to divest some of its Californian retail assets to Hightimes Holding Corp. the companies entered a definitive agreement for Hightimes Holding to acquire 13 operational and planned Harvest dispensaries in California.
Divesting of assets part of Harvest Health’s restructuring
The stock-based deal once complete will see Harvest and Its associates sell various assets and equity for a total consideration of around $5 million which will be in cash plus a one-year promissory note of $7,5 million with an interest of 10% as well as $67.5 million in High Times’ Preferred Series A stock. Harvest is planning to retain some of its retail dispensaries as well as licenses for planned retail outlets in the state after finalizing the transaction.
The CEO of Harvest Health Steve White indicated the divestment of its assets in California will allow the company to focus on enhancing its operations as well as the expansion of assets in its main markets such as Pennsylvania, Maryland, Arizona, and Florida. White indicated that going forward, the company will continue re-evaluating the strategic value of its assets as well as reorganizing operations in the path towards profitability.
Deal to give Hightimes access to the retail cannabis market
On the other hand, this will be an opportunity for Hightimes Holdings to venture into the retail market and help the company in becoming among the biggest cannabis brands in the state of California. The company will revamp the current design as well as rebrand the dispensaries to fit its aesthetic experience with branding using the popular High Times logo.
Adam Levin, the executive Chairman of Hightimes Holding, indicated that the company has been supporting Harvest Health as well as other marijuana retail pioneers in the push for the change in legislation, political stigma, and insurmountable licensing charges. He added that they are looking forward to ushering in a new generation cannabis business in California.
The deal will be finalized by June 30, 2020, subject to regulatory approval and other closing conditions.