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"New California Bill Proposes an End to the Cannabis Cultivation Tax": February 17, 2022
Introduced Feb. 15, Senate Bill 1074 suggests an end to the flat-rate cannabis cultivation tax in the state of California. If passed, the dry-weight tax on growers’ yields would fall off the books July 1.
The current tax rate is $10.08 per dry-weight ounce for flower and $3 per dry-weight ounce for leaves.
First enacted as part of the Medicinal and Adult Use of Cannabis Regulation and Safety Act (MAUCRSA) in the wake of 2016’s Prop. 64 vote, the cultivation tax has been the target of cannabis growers’ ire. It’s been seen by many as a hurdle for those growers interested in leaving the traditional market and finding a home in the newly regulated and licensed cannabis marketplace—one more financial burden.
State Sen. Mike McGuire, a North Coast Democrat, hopes to put an end to that tax.
However: “The bill would increase, from July 1, 2025, until July 1, 2026, the excise tax by an additional percentage that the Department of Finance estimates will generate half the amount of revenue that would have been collected pursuant to the cultivation tax, and would, beginning July 1, 2026, instead increase the excise tax by an additional percentage estimated by the department to generate the full amount of revenue that would have been collected pursuant to the cultivation tax.”
In other words, some of the financial losses the state will cede, in the event this bill passes, will be recouped by shifting the tax assessments over to the retail segment. As things stand now, the excise tax rate sits at 15%.
During the first three quarters of 2021, the combined cultivation and excise taxes brought in almost $1 billion. A good portion of that money—$400 million in the current state budget—is bracketed for child care and prevention services aimed primarily at California children living in poverty.
“That’s why these Prop 64 dollars are so critical,” Marianna Hernandez, a prevention manager at Community Coalition, an advocacy and social justice group based in South Los Angeles, told NBC News. “Any cuts to cannabis tax rates will result in cuts to child care for mostly children of color living in poverty who need that access now more than ever.”
And it’s not just at the state level that the industry is seeing tax reform materialize in legislation: Monterey County is also considering cutting its various tiers of flat-rate cultivation tax.
With the price of cannabis flower dropping precipitously, and particularly for outdoor growers along the West Coast, the flat-rate cultivation tax model exasperates financial pressures that have dogged licensed growers since MAUCRSA was first passed. Alongside inflationary adjustments, “[the tax] goes up as a percentage as prices compress, and [it] hits outdoor farmers the hardest,” Glass House Brands President and Co-Founder Graham Farrar told us last month as Gov. Gavin Newsom called for this very reforms.
Every shareholder who bought on the high sh!t themselves and sold their shares and then other weak hands got spooked and sold it down even more. There's no shares available for sale unless the price goes up another 50 cents.
$HBOR Harborside Inc - Down 1 penny and the gap is filled. Also, currently only 24,000 shares available all the way up to $4.74. Current price 73 cents.
To kind of answer your question...Fully diluted market cap at current price of around .57 is like $58mil, which is slightly less than the prior year's revs of $60mil. However, all of that will change with the merger. That being said, at .57, we are currently well below the book value of .88...
Financials (09/30/21) Cash on hand: $14.0 million Fixed Investment: $23.8 million Shareholders’ Equity: $75.1 million Revenues – Last Quarter: $17.4 million Adj. Gross Margin : 48.3% EPS : $0.03
Capital Structure (12/13/21) Last Financing: 13.88 million units at C$2.55 Shares: 82.1 million Warrants: 15.3 million Options: 4.9 million Diluted Shares: 102.4 million
"NOTICE OF SPECIAL MEETING AND MANAGEMENT INFORMATION CIRCULAR FOR THE SPECIAL MEETING OF SHAREHOLDERS OF HARBORSIDE INC. TO BE HELD ON FEBRUARY 22, 2022 ": DATED AS OF JANUARY 18, 2022
Looks great. I keep accumulating, so I'm happy either way it goes in the short term. I just can't believe the volume is so low when the long term looks so good here.
All The volume is on the CSE (Canada) Don't worry about the gap we're heading over $1 CDN and fast. Maybe $1.50 CDN by the end of March when the merger is done.
$HBOR $HBORF Harborside Inc - Over the past 6 business days the company is up 52%. The company is near the closing of a merger that is expected to be done by end of March. Annual revenues will go from 70 million to 250 million.
$HBORF made a daily gap around .40 about a week ago and has moved up on almost no volume over the last week. I'd like to see it drop to fill the gap before really taking off, RSI around 77 now, but who knows, it could just keep going...
$HBOR $HBORF Harborside Inc - This week the company is up 37% as we get closer to getting 4th quarter & year-end results and the closing of the expected merger that will see annual revenues go from 70 million to 250 million. Here's an Agoracom Twit:
The TSX Index is up over 580 points over the past 3 days signaling an influx of cash flow in Canadian markets and $HBOR $HBORF (Harborside Inc) is up 28% this week. Recently the company announced M&A plans to increased annual revenues from 70 million to 250 million.
$HBORF $HBOR Harborside Announces Business Combination with Urbn Leaf and Loudpack Creating StateHouse Holdings, a Leading California Cannabis Company:
Management believes that StateHouse, which is expected to trade under a new symbol (CSE: STHZ), will be the largest and most developed cannabis platform in the state of California with superior retail, brands, processing, manufacturing, distribution and cultivation. Management believes that StateHouse will have the highest estimated annual revenue and brand market share among its current publicly-listed California peers1, providing the Company with a strong platform for growth as a consolidator of California's cannabis industry. Through the first nine months of 2021, Harborside, on a pro-forma basis including revenue of Sublimation Inc. ("Sublime") for the entire period, had gross revenue of US$57.8 million2, while Urbn Leaf and Loudpack had revenue of US$45.9 million and US$61.4 million, respectively. Therefore, on a pro forma basis, management estimates that StateHouse would have generated gross revenue of approximately US$165 million for the same period.
In connection with the Transactions, management has entered into a letter of intent with Pelorus Equity Group to complete the Real Estate Financing (as defined below) of US$77.3 million of non-dilutive real estate debt financing, which unlocks significant value from the StateHouse real estate portfolio and provides significant growth capital for the business. See "Concurrent Financing" below for further details.
These unaudited condensed interim consolidated financial statements incorporate the accounts of the Company and its wholly-owned subsidiaries as follows:
Name Jurisdiction Purpose Percentage Owned (%) September 30, 2021 Percentage Owned (%) December 31, 2020
Harborside Inc. Ontario, Canada Parent 100 100 FLRish Farms Cultivation 2, LLC California, U.S. Operating Company 100 100 Patients Mutual Assistance Collective Corporation California, U.S. Operating Company 100 100 San Jose Wellness Solutions Corp. California, U.S. Operating Company 100 100 San Leandro Wellness Solutions Inc. California, U.S. Operating Company 100 100 LGC LOR DIS 2, LLC Oregon, U.S. Operating Company 100 100 FGW Haight Inc. California, U.S. Operating Company 21 21 LGC LOR DIS 1, LLC Oregon, U.S. Operating Company 100 100 Encinal Productions RE, LLC California, U.S. Operating Company 100 - Savature Inc. California, U.S. Operating Company 100 100 Sublime Machining Inc. California, U.S. Operating Company 100 - Accucanna RE, LLC California, U.S. Operating Company 100 - Accucanna LLC California, U.S. Operating Company 100 - FLRish, Inc. California, U.S. Management Company 100 100 FLRish Retail Management & Security Services, LLC California, U.S. Management Company 100 100 FLRish Farms Management & Security Services, LLC California, U.S. Management Company 100 100 FFC1, LLC California, U.S. Holding Company 100 100 FLRish Farms Cultivation 7, LLC California, U.S. Holding Company 100 100 FLRish Flagship Enterprises, Inc. California, U.S. Holding Company 100 100 FLRish IP, LLC California, U.S. Holding Company 100 100 FLRish Retail, LLC California, U.S. Holding Company 100 100 FLRish Retail Affiliates, LLC California, U.S. Holding Company 100 100 FLRish Retail JV, LLC California, U.S. Holding Company 100 100 Haight Acquisition Corporation Delaware, U.S. Holding Company 100 100 LGC Holdings USA, Inc. Nevada, U.S. Holding Company 100 100 LGC Real Estate Holdings, LLC Nevada, U.S. Holding Company - 100 LGC Real Estate (Colorado), LLC Nevada, U.S. Holding Company - 100 LGC Operations, LLC Nevada, U.S. Holding Company 100 100 Lineage GCL Oregon Corporation Oregon, U.S. Holding Company 100 100 Lineage GCL California, LLC California, U.S. Holding Company 100 100 Unite Capital Corp. Ontario, Canada Holding Company 100 100 SaVaCa, LLC California, U.S. Holding Company 100 100 Sublimation Inc. Delaware, U.S. Holding Company 100 - Oakland Machining Supply SLB LLC California, U.S. Holding Company 100 - Accucanna Holdings Inc. California, U.S. Holding Company 100 -
OAKLAND, Calif., Sept. 27, 2021 /PRNewswire/ - Harborside Inc. ("Harborside" or the "Company") (CSE: HBOR) (OTCQX: HBORF) a California-focused, vertically integrated cannabis enterprise, today announced that, subject to shareholder approval, it intends to amend its articles (the "Amendment") to remove conversion restrictions placed on the Company's multiple voting shares ("MVS"). The Company anticipates that this change will eventually result in more than 50% of the Company's issued and outstanding subordinate voting shares ("SVS") being directly or indirectly owned by shareholders of record domiciled in the United States ("U.S."), which will have the effect of the Company no longer meeting the definition of "foreign private issuer" under U.S. securities laws and the Company will be required to register under the Securities Exchange Act of 1934, as amended (the "Transition").
If and when the Transition is completed, the Company will be subject to the U.S. Securities and Exchange Commission's ("SEC") reporting requirements applicable to U.S. domestic companies. The SEC's reporting requirements will require, among other things, Harborside's financial statements and financial data to be presented under U.S. GAAP. The Company expects to seek shareholder approval for the Amendment by the end of the 2021 calendar year and has established a task force of internal and external resources to manage the Transition.
Although the Company will become a U.S. registrant with the SEC, it will continue to be an Ontario corporation. Harborside's shareholders will not be required to take any action as a result of the Company's Transition, if and when the Transition is approved and completed, other than officers, directors, and holders of 5% or more of the Company's shares of SVS. Harborside's SVS will continue to be listed on the Canadian Securities Exchange ("CSE") under the symbol "HBOR" and on the OTCQX Best Market under the symbol "HBORF".
For the latest news, activities, and media coverage, please visit the Harborside corporate website at www.investharborside.com or connect with us on LinkedIn, and Twitter.
About Harborside:
Harborside Inc. is one of the oldest and most respected cannabis retailers in California, operating three of the major dispensaries in the San Francisco Bay Area, a dispensary in the Palm Springs area outfitted with Southern California's only cannabis drive-thru window, a dispensary in Oregon and a cultivation/production facility in Salinas, California. Harborside has played an instrumental role in making cannabis safe and accessible to a broad and diverse community of California consumers since 2006, when it was awarded one of the first six medical cannabis licenses granted in the United States. Today, the Company holds cannabis licenses for retail, distribution, cultivation, nursery, and manufacturing. Harborside is a publicly listed company on the CSE trading under the ticker symbol "HBOR" and on the OTCQX Best Market under the ticker symbol "HBORF". Additional information regarding Harborside is available under Harborside's SEDAR profile at www.sedar.com.
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