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California Cannabis Retailer Reports 20% Q2 Retail Jump

Jon Brown Jon Brown, Stockhouse
0 Comments| September 5, 2019

One of the most established cannabis retailers in California, Harborside Inc. (CSE: HBOR, OTC:HSDEF, Forum) reported that its Q2 2019 revenue increased to $12.7 million, a nearly 20% year-over-year jump.

This was thanks in large part to a 6.5% growth in retail revenue and a massive 208% growth in wholesale revenue.

Harborside CEO Andrew Berman hailed Q2 as a milestone quarter for the Company:

“On June 10, we listed on the CSE after completing the RTO and raising capital. I am pleased that in our first quarter as a public company, we reported solid revenue growth and were profitable on an Adjusted EBITDA basis, and that we now rank among the top 20 US listed cannabis companies by revenue.”

(Image via Harborside.)

Since becoming public, the Company’s leadership stated that they wanted to see a more robust market capitalization. Harborside boasts an installed base of revenue and solid growth prospects, which can be seen as a bargain for investors while the overall market is down.

“We think we are significantly undervalued, and to demonstrate that firm belief, today we also announced that we are implementing a normal course normal course issuer bid under which we expect to buy up to 5% of our subordinate shares.”

The Bid is expected to commence no sooner than September 9th, 2019.

For investors unfamiliar with a normal course issuer bid, this is when a Canadian company would repurchase its own stock from the public in order to reduce the number of shares outstanding. It is essentially supply versus demand and could add value to the shares that still remain. Usually between 5%-10% of a company’s own stock will be repurchased over a set period of time. This allows a business to strategically repurchase shares when its stock is favourably priced.

Along with advancing this issuer bid, CEO Berman also noted that the Company has scored a number of other highlights:

  • Engaging secondary liquidity providers
  • Seeking research coverage of our company
  • Executing our California-centric growth plan
  • Working towards rightsizing operating expenses with a goal of achieving no more than 35% of revenue

Looking ahead to the remainder of 2019, Harborside’s management team is working to enhance the Company’s investment opportunity to make it even more attractive. The plan is to target $55 to $57 million in revenue with a goal to achieve positive Adjusted EBITDA. The strategy is to combine solid top-line growth and margin expansion for a cannabis asset trading at one and a half times revenue.

One of the first legal cannabis retailers in the United States, Harborside was quick to enter the market once California allowed medical cannabis sales back in 1996. The Company operates two major dispensaries in the San Francisco Bay Area, two dispensaries in Oregon and a cultivation facility in Salinas, California. Since January 2018, it has also been able to sell cannabis to recreational consumers and the combined user base has grown California into the world’s largest legal cannabis market.

FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.

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