A proposed acquisition from a multi-state operator (MSO), which was held pending due to a federal review, has now been canceled.

On Wednesday (November 20), Harvest Health & Recreation (CSE:HARV,OTCQX:HRVSF) confirmed it would no longer acquire the entire CannaPharmacy operation; instead, it has elected to only bring aboard a subsidiary of its intended target for US$26 million.

The subsidiary, called Franklin Labs, operates an all-around cannabis facility in Reading, Pennsylvania. However, when Harvest originally announced the acquisition, it envisioned obtaining cannabis licenses in Pennsylvania, Delaware, New Jersey, and Maryland.


Cannabis - Will The Fortune 500 Join The Party?

Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!

“This revised agreement and attractive funding sources will help us toward achieving our revenue and profitability goals,” Harvest Executive Chairman Jason Vedadi said in a statement.

Arizona-based Harvest told shareholders the total acquisition did not fit with the current operational needs of the company. The original acquisition deal for CannaPharmacy was unveiled back in April.

At the time, Vedadi called the deal a critical addition to the rest of the acquisitions Harvest was in the process of closing.

The deal was put under federal scrutiny as part of a Request for Additional Information and Documentary Materials, also known as a second request, from the Department of Justice (DOJ).

This represented the third deal for which Harvest faced a federal review. In a previous press release issued in September, the MSO had confirmed to have filed all the substantial compliance needed with the regulators to complete its CannaPharmacy transaction.

White said in a statement the company was confident it would complete all its acquisitions held under inspection by the federal second request.

Harvest posts revenue uptick for Q3 2019

Also on Wednesday, the MSO reported a 25 percent increase in its total revenue from its previous quarter for a figure of US$33.2 million.

In its Q3 earnings report, Harvest attributed the growth in revenue to some of its most recently completed retail location acquisitions and the development of its retail and wholesale businesses.

However, the company still posted a net loss of US$39.1 million for the quarter, which Harvest said was due to the spending for its acquisition and expansion plans.

At the end of the quarter, on September 30, the company held 26 retail stores in the US.


Cannabis - Will The Fortune 500 Join The Party?

Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!

Harvest clears federal inspection for other proposed deals

So far this year, Harvest has continued its merger and acquisition (M&A) activity path by pursuing deals to expand its operational presence in the US.

In November, the company passed a federal review in place for its key acquisition plan of Verano Holdings under the Hart-Scott-Rodino Act.

After passing the second request of information, which was originally issued in July by the DOJ, the two companies entered a 30 day waiting period before completing the deal.

“Our commitment to bringing these two great companies together has never been in doubt despite any delays,” said Harvest CEO Steve White said of the deal with Verano.

Harvest projected the two will be able to close the deal after December 4.

Similarly, the company received a second request for its proposed acquisition of Falcon International, a California-based cannabis operator.

These federal reviews have started spreading within the cannabis space in the US, with several MSOs facing delays to critical acquisitions.

While the review has caused speculation towards the security of these deals, in an investor call Charlie Bachtell, CEO of Cresco Labs (CSE:CL,OTCQX:CRLBF), said these inspections represent a clear acknowledgment from the federal authorities of the cannabis industry.

Cresco is nearing completion of its proposed acquisition of Origin House (CSE:OH,OTCQX:ORHOF), which was also held back under federal review after it altered the terms of the original agreement.

Shares of Harvest jumped on Wednesday’s trading session following the announcement of the deal change and the release of its Q3 2019 earnings report.

As of 12:22 p.m. EST, Harvest was up 6.19 percent for a price of C$3.60 after opening at C$3.50 per share.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.


Cannabis - Will The Fortune 500 Join The Party?

Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!

Matica Enterprises Inc. (CSE: MMJ) (FSE: 39N) (OTCQB: MMJFF) (“Matica” or the “Company”) is pleased to announce that, in connection with the previously announced share consolidation on a thirty (30) for one (1) basis (the “Consolidation”), the Company will be changing its name to West Island Brands Inc. (the “Name Change”).

The common shares are scheduled to begin trading on a post-consolidation basis at market open on October 20, 2021 under the stock symbol “WIB”. The new CUSIP number will be 953400108 and the new ISIN number will be CA9534001081. Following the Consolidation, the Company will have approximately 10,712,484 common shares issued and outstanding.

Keep reading... Show less

In the cannabis space this week, a popular beverage maker hired a new executive in hopes of pursuing opportunities in the cannabis drink industry.

Meanwhile, Canopy Growth (NASDAQ:CGC,TSX:WEED) announced a fresh acquisition agreement for a partner designed to boost its presence in a potentially available US adult-use cannabis market.

Keep reading... Show less

Via InvestorWireIBN (“InvestorBrandNetwork”), a multifaceted financial news and publishing company, today announces that it will be collaborating with Microdose Psychedelic Insights for the Psych e delic Capital: October 2021 Conference which is set to be held in an entirely virtual format on Oct. 28, 2021.

The Psychedelic Capital: October Conference is set to be a virtual event, covering the most innovative and cutting-edge companies, latest IPOs, newest opportunities and deepest insights into the global psychedelic industry. From exploring ongoing governmental policy shifts to commercial product breakthroughs, the conference will serve to educate attendees on the potential uses and benefits attached to psychedelics in today’s environment.

Keep reading... Show less

 Adastra Holdings Ltd. (formerly Phyto Extractions Inc.) (CSE: XTRX) (FRA: D2EP) (“Adastra” or the “Company”) today announced positive operational and financial developments as the Company continues to pursue its mission to be a leader in the development and manufacture of pharma-quality, cannabis API and derivative products. These developments include record shipments in September, product portfolio expansion, and continued progress with Health Canada regarding its Controlled Substances Dealers License application.

Record September Shipments
Adastra shipped 68,272 consumer-packaged units and 20,000g of bulk extract in September compared to 41,571 units in September 2020 , a 64% increase year over year.

Keep reading... Show less

Matica Enterprises Inc. (CSE: MMJ) (FSE: 39N) (OTCQB: MMJFF) (“Matica” or the “Company”) is pleased to announce that, pursuant to a director’s resolution, the Company will be consolidating its issued and outstanding share capital on the basis of every thirty (30) old Common Shares being consolidated into one (1) new Common Share (the “Share Consolidation”). Any fractional shares remaining after giving effect to the Share Consolidation will be cancelled.

As a result, the outstanding Common Shares of the Company will be reduced to approximately 10,712,484. The Company has no other securities outstanding.

Keep reading... Show less