Perfect Timing? Harvest Health Adds 3 Ariz. Medical Cannabis Licenses As State Considers Vote
Harvest Health & Recreation Inc. (OTCQX:HRVSF) adds three more medical marijuana licenses in the state of Arizona to its portfolio possibly anticipating a favorable outcome of today’s voting on the legalization of adult-use in the state.
In the case of adult-use legalization, it is reasonable to assume that existing cannabis companies in the state will be prioritized.
"What we've seen across the country is when a state has a fairly robust medical marijuana market and the public is accustomed to having cannabis commerce in their communities, they are more open to voting for full legalization," Kris Krane, founder at 4Front Ventures, said in a recent episode of the Benzinga Cannabis Hour. "In fact, Arizona is now the largest medical-only market in the United States — you can't drive through Phoenix without seeing billboards for dispensaries and medical cannabis products."
What’s more, BDS Analytics predicts that with legalization, the state could be earning an extra $711 million in adult use spending by 2024.
In 2016, just about 52% of Arizona voters opposed a rec vote in 2016, keeping it medicinal only.
The new license additions boost the number of the Harvest medical marijuana licenses in the state to 18. They came through the final settlement of its dispute with Devine Hunter and its affiliates.
In February last year, the company reported an agreement to purchase six licenses in Arizona from Devine, and then in March 2020, it had to commence litigation proceedings against Devine to push for the closing of the acquisition.
The settlement is now resolved with Devine Holdings having to repay $10.45 million to Harvest, and Harvest acquiring three vertical medical cannabis licenses, whilst also gaining a right of first refusal for four additional licenses in Arizona.
"We are pleased to settle this dispute without payment of any additional capital and we are very excited to focus on bringing three new locations online as soon as practicable," Harvest CEO Steve White said. "We look forward to expanding our retail presence and reaching more patients in our home state of Arizona."
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