In this market news, Harvest One Cannabis Inc. (TSXV:HVT), one of the Canadian marijuana stocks, said its Q1 revenue soared more than 800% year over year
SmallCapPower | December 13, 2018: Harvest One Cannabis Inc. (TSXV:HVT), one of the Canadian cannabis stocks, announced recently its financial results for the three months ended September 30, 2018 (Q1 2019). Revenues for the first quarter surged 862% YoY, with a 227% increase on a quarterly basis. Revenues came in at $1.68 million for the quarter. The rise in revenues was attributed to Dream Water sales, bulk sales of cannabis to other Licensed Producers, and an initial recreational cannabis sale to the Province of British Columbia.
The Company reported a gross profit of $0.57 million compared to a gross loss of $0.006 million in the corresponding quarter last year. As of September 30, 2018, the Company maintains a strong cash position with $48.3 million in its Treasury. The strong cash balance is indicative that all current expansion plans are fully funded and allows for further acquisitions that support the Company’s brand and product development strategy.
Harvest One Cannabis, however, ended the quarter in the red, posting a net loss of $5.8 million compared to a loss of $1.89 million in the corresponding quarter last year.
Harvest One Cannabis CEO Grant Froese stated, “This has been an exciting and decisive period in the history of Harvest One. Harvest One has undergone important leadership changes as it transitions to the next stage of its development. This quarter was also a pivotal period in the evolution of the Canadian cannabis industry as all stakeholders underwent the unique operational exercise of preparing for full legalization of recreational cannabis in Canada. I am proud to say Harvest One has executed on our roll-out strategy, meeting all provincial obligations and establishing the basis for successful long-term relationships with both public and private retailers. The work we are doing now lays the foundation for a landmark year in 2019 when cannabis companies will be judged on execution and financial performance. This is emphasized by Harvest One’s record revenues this quarter, representing an 862% increase over the same period last year. With revenue forecasts in place for each of our four divisions – licensed producer, retail, medical & nutraceutical, and consumer – Harvest One remains very optimistic for the balance of fiscal 2019.”
On the operational front, Harvest One Cannabis has signed agreements to supply adult-use cannabis to four provinces: British Columbia, Ontario, Manitoba and Saskatchewan and successfully met all provincial load-in obligations. It also acquired a 20% stake in luxury BC-based retail group called Burb Cannabis Corp.
Additionally, the Company received favourable results from Phase 2 clinical trials using its proprietary Satipharm capsules for the treatment of pediatric epilepsy. Harvest One signed a multi-year Extraction Services Agreement with Valens GroWorks Corp. for cannabis extraction and value-added services.
Harvest One Cannabis has started construction on two expansion sites – one in British Columbia and the other in Saskatchewan. In Duncan, BC, the Company’s facility is undergoing a modular expansion that will triple output as the modules come online. The first harvest is scheduled for early 2019. At the Company’s Lucky Lake facility in Saskatchewan, construction is underway on a state-of-the-art indoor cultivation facility, which is expected to produce an estimated ~8,000 kilogram of the Company’s premium-quality dried flower product annually.
Harvest One Cannabis stock trades at a market capitalization of $78.3 million with a price-to-book multiple of 0.71x.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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