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#HBOR, a high quality junior cannabis company is back on our radar after releasing several newsworthy updates since the month of February that we'll cover throughout the upcoming week. As summer approaches and the market softens it's time to seek value companies.
OAKLAND, Calif., March 23, 2021 /PRNewswire/ - Harborside Inc. ("Harborside" or the "Company") (CSE: HBOR) (OTCQX: HBORF), a California-focused, vertically integrated cannabis enterprise, today announced it has entered into a loan financing arrangement with a commercial federally regulated bank (the "Bank"), in the amount of US$12 million (the "Loan") pursuant to a senior secured revolving credit facility (the "Credit Facility") due March 2024.
Harborside expects to use the majority of the Loan proceeds to support the purchase of the Company's 47-acre production campus later this year, which includes 200,000 sq. ft. of licensed cultivation space, including 155,000 sq. ft. of flower canopy space and 45,000 sq. ft. of nursery space in Salinas, California.
"To the best of our knowledge, Harborside is the first cannabis business in the United States to secure a commercial loan of this kind with a traditional lender," said Tom DiGiovanni, Chief Financial Officer of Harborside. "This deal is the culmination of months of effort and reflects the close working relationship and trust that we have developed with our bank. By significantly lowering our cost of capital, we will be able to better serve our customers, provide high-quality products and invest more heavily throughout California."
"We are thrilled to solidify our relationship with our bank as they help support our efforts and growth throughout the state of California," said Matthew Hawkins, Chairman of Harborside. "This Loan is a significant milestone for the entire U.S. cannabis industry and testament to the work that Harborside has done over the last four quarters in an effort to deliver for our customers and shareholders."
Loan Terms
The Credit Facility has a variable interest rate based on the prime rate charged by the Bank plus a premium, with a floor rate of 5.75%, and will be secured by a first-priority security interest on substantially all of the Company's assets. As consideration for the Credit Facility, the Company has agreed to, among other things: (i) deliver a commercial security agreement, an assignment of deposit account, and a security agreement in respect of cash collateral to the Bank; (ii) make an upfront cash payment based on the principal amount of the Credit Facility to the Bank as an original issue discount; and (iii) issue 4,100 warrants (the "Warrants") to the Bank to purchase multiple voting shares ("MVS") of the Company, which subject to certain conditions, are convertible into subordinate voting shares ("SVS") of the Company at a conversion rate of 100 SVS for each MVS converted. Each Warrant will entitle the Bank to purchase one MVS of the Company at a price of C$369, at any time prior to March 19, 2023.
Harborside enters $5 million ‘strategic investment’ with CA marijuana firm
Published March 8, 2021
Harborside said Monday that it has thrown $5 million in investment capital behind Loudpack, another well-known California marijuana business.
According to a news release, Oakland-based Harborside provided the funding for the “strategic investment” through a 15% secured convertible note, on which payment is due in December 2022.
Loudpack CEO Marc Ravner said in the release that the Los Angeles-based company will use the funds for further expansion and to scale up production capacity.
The two companies are also trading services.
Under the agreement:
Loudpack will help Harborside maximize yields at its cannabis cultivation facility in Salinas and also provide manufacturing services at its facilities for Harborside-branded products. Harborside will provide more shelf space in its stores for Loudpack-associated brands such as Dimebag, Kingpen and Smokiez. “Through this capital investment, we … will look to leverage (Loudpack’s) expertise as we explore opportunities to expand our cultivation, production, and distribution capabilities,” Harborside Chair Matthew Hawkins said in the release.
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 OAKLAND LIC# C10-0000463-LIC
HARBORSIDE SAN JOSE LIC# C10-0000435-LIC
HARBORSIDE SAN LEANDRO (Medical Only) LIC# C10-0000681-LIC
HARBORSIDE DESERT HOT SPRINGS LIC# C10-0000396-LIC
Harborside Inc. Reports Third Quarter 2020 Financial Results
11/18/2020 PR Newswire
Generates 21.2% Sequential Revenue Growth, with Record Gross Revenues of $19.6 Million and Continued Positive Adjusted EBITDA (1) of $4.5 million
Reports Strong Combined Gross Margin of 54.7% Driven by Improved Harvest Yields and Higher Wholesale Volumes
Expects Full Year Gross Revenues of Approximately $61 Million - $63 Million with Adjusted EBITDA of 8-10%
OAKLAND, CA and TORONTO, Nov. 18, 2020 /PRNewswire/ - Harborside Inc. ("Harborside" or the "Company") (CSE: HBOR) (OCTQX: HBORF), a California-focused, vertically integrated cannabis enterprise, today reported its financial results for the period ending September 30, 2020 ("Q3 2020"). The Q3 2020 financial report and corresponding management's discussion and analysis (collectively the "Q3 Filings") are available for download from the Company's investor website, investharborside.com, and on the Company's SEDAR profile. Unless otherwise indicated, all dollar amounts in this press release are in U.S. dollars.
Harborside (CNW Group/Harborside Inc.)
Management Commentary
"We've implemented strong operational improvements that have continued our progress towards long-term profitability and sustained growth. Harborside continues to be one of the leaders in the Northern California market," said Peter Bilodeau, Chairman, and interim Chief Executive Officer. "As our production capacity is expected to ramp up in early 2021, following the completion of the planned upgrades at our Salinas greenhouse facility, we expect to be well-positioned to accelerate our growth and continue to gain wholesale market share. I'm thrilled with how far Harborside has come this year and look forward to further growth in 2021."
Q3 2020 Financial Results and Highlights (2)(3)
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Retail Revenues
$10,681,897
$10,940,143
$10,181,471
$9,511,221
Wholesale Revenues(a)
$8,890,723
$5,208,439
$4,456,775
$2,185,701
Total Gross Revenues(a)
$19,572,620
$16,148,582
$14,638,246
$11,696,922
Retail Gross Profit(e)
$5,353,429
$5,601,565
$5,219,890
$4,903,947
Wholesale Gross Profit(a)(e)
$5,360,764
$2,435,952
$787,964
-$1,373,186
Total Gross Profit(a)(e)
$10,714,193
$8,037,517
$6,007,854
$3,530,761
Retail Gross Margin(b)(e)
50.10%
51.20%
51.30%
51.60%
Wholesale Gross Margin(a)(e)
60.30%
46.80%
17.70%
-62.80%
Total Gross Margin(e)
54.70%
49.80%
41.00%
30.20%
G&A/Professional Fees(c)(d)
$6,783,987
$6,764,781
$5,786,573
$7,621,971
Adjusted EBITDA(e)
$4,473,046
$642,025
$431,562
-$2,796,178
NOTES:
a. Not including excise taxes or biological asset adjustments.
b. Retail gross margin in Q1 2020 and Q2 2020 are slightly affected by additional expenditures on personal protective equipment and other safety measures due to the COVID-19 pandemic. Retail gross margin in Q2 2020 and Q3 2020 include additional pay for the Company's front line workers and expenses relating to the impacts of the civil unrest in the Bay Area to certain of the Company's retail stores.
c. Professional Fees for the fourth quarter of 2019 include approximately $953,000 in one-time fees and accruals for legal matters
d. Professional Fees for Q2 2020 and Q3 2020 include approximately $977,000 and $1,115,000, respectively, in one-time costs relating to the audits and restatements of certain of the Company's previous financial statements.
e. This is a non-IFRS reporting measure. For a reconciliation of this to the nearest IFRS measure, see "Use of Non-IFRS Measures" and "Non-IFRS Measures" in the Company's management discussion and analysis for September 30, 2020.
Q3 2020 Financial Summary
During Q3 2020, Harborside generated total gross revenues of approximately $19.6 million. This represented 21.2% sequential growth over the second quarter of 2020 ("Q2 2020") and a 42.9% year-over-year increase when compared to the approximately $13.7 million of gross revenues reported in the period ending September 30, 2019 ("Q3 2019"). Combined gross profit before excise taxes and adjustments for biological assets was approximately $10.7 million, an 85.8% year-over-year increase as compared to the $5.8 million reported in Q3 2019. On a year over year basis, combined gross margins increased from 42.1% in Q3 2019 to 54.7% in Q3 2020(1).
Harborside's wholesale operations reported gross wholesale revenues of approximately $8.9 million, representing 70.7% sequential growth compared to Q2 2020 and a year-over-year increase of 169.4% as compared to the approximately $3.3 million in gross revenues reported for Q3 2019. The year-over-year increase in gross wholesale revenues was primarily due to improved harvest yields and production of premium flower, higher sales volumes, and higher average prices per pound at the Company's 47-acre integrated production campus in Salinas, California (the "Salinas Facility"). As compared to gross wholesale revenues, wholesale gross margins increased from -22.1% in Q3 2019 to 60.3% in Q3 2020(1).
The Company's retail operations generated revenues of approximately $10.7 million, a 2.8% increase as compared to the approximately $10.4 million realized in Q3 2019, with gross margins improving from 48.5% to 50.1% on a year-over-year basis, despite increased costs for safety and staffing related to COVID-19 and inventory losses experienced during the civil unrest that occurred in the Bay Area.(1) The year-over-year increase in retail revenue was driven primarily by the Company's enhanced merchandising and pricing initiatives which resulted in, amongst other things, improved product mix, selected pricing changes and higher sell-through of internally produced products. Across Harborside's retail stores in California, the Company's branded products represented from 9 to 14 of the 25 top-selling SKUs in Q3 2020.
Total operating expenses for Q3 2020 were approximately $7.8 million, including $1.15 million in one-time costs related to the audit and restatement of prior year financials. This was a 7.5% year-over-year decrease when compared to approximately $8.5 million of costs incurred in Q3 2019. The year-over-year decrease in operating expenses is primarily related to a decrease in general and administrative expenses of $1.1 million to $4.1 million as compared to $5.2 million in Q3 2019, a decrease in allowance for credit losses of $0.3 million, and a decrease in write-downs of receivables, investments and advances of $1.3 million, as no impairments were recorded on any of the Company's investments in Q3 2020.
During Q3 2020, the Company also recorded an income tax provision of $1.8 million, compared to $1.3 million in Q3 2019, based on estimated federal income taxes payable at period-end.
Operating Income for Q3 2020 was approximately $0.8 million, compared to an operating loss of approximately $3.6 million for Q3 2019. Net loss and comprehensive loss was $2.4 million, compared to a net loss and comprehensive loss of $1.9 million in Q3 2019, a 24.2% decrease on a year-over-year basis. The year over year decrease was due primarily to additional income tax provisions and related interest expense booked during Q3 2020.
Adjusted EBITDA(1) for Q3 2020 was approximately $4.5 million, compared to a negative EBITDA(1) of approximately $0.9 million for Q3 2019, with the year over year increase being driven largely by improved operating efficiencies and headcount reductions across the Company. See "Non-IFRS Financial Measures, Reconciliation, and Discussion."
Q4 2020 and Full Year Expectations
The Company expects Q4 2020 gross revenues to follow a more historically typical seasonal pattern, with lower flower production and wholesale revenues, resulting in total combined gross revenues of $11 million to $12.5 million for the fourth quarter, with EBITDA(1) for the quarter close to breakeven. For the full year ended December 31, 2020, the Company expects gross revenues in the range of approximately $61 - $63 million, with Adjusted EBITDA(1) for the year in the range of 8 – 10% of revenues.
Liquidity and Cash Balance
As of September 30, 2020, Harborside had approximately $13.3 million in cash. The increase in cash balance since the second quarter of 2020 included a delay in payment of approximately $1.6 million of sales taxes that were due to the state of California. Payment of these taxes was postponed by the state as part of their COVID-19 business relief program and, in accordance with state guidelines, the funds were ultimately remitted at the end of October 2020.
Recent Operational Highlights
Wholesale Operations: Harborside recently announced planned cultivation facility upgrades at the Salinas Facility. The planned upgrades include, among other things, the installation of blackout curtains and supplemental LED grow lights at the Salinas Facility. Following the successful completion of these upgrades, the Company expects an approximately 50% increase in production, an expected approximately 10% increase in bulk wholesale revenue capacity, and an approximately 7% increase in the total productive capacity, on an annualized basis(2)(4). The upgrades are expected to be completed within the first quarter of 2021(2).
In furtherance of its brand strategies, Harborside announced that two of its award-winning in-house brands, Harborside Farms and Key, introduced new product offerings for the market. Key has added 'Key Mini Pre-Rolls', a pack of seven 0.5g strain specific pre-rolls, to its product suite. These mini pre-rolls use flower that is sustainably grown in Harborside's state of the art greenhouses using proprietary techniques. Key also recently offered a new seasonal SKU, 'Limited Edition Skeleton Key Mini Pre-Rolls', a nighttime blend of G4 OG and Gelato 33 packed in seven 0.5g mini pre-rolls. Harborside Farms has also added 'Harborside Farms Quarter Ounces', which offers strain-specific and single-origin flower from Harborside Farms. The Company also recently commenced sales of clones grown at its Salinas Facility at all Harborside branded retail locations, including Desert Hot Springs.
Capital Markets: During Q3 2020, the Company commenced trading on the OTCQX under the ticker symbol of "HBORF" and, subsequent to the quarter-end, Harborside received depository trade clearance (DTC) eligibility.
Acquisitions: Subsequent to Q3 2020, Harborside announced it had executed a definitive agreement with FGW Haight, Inc. ("FGW") to acquire majority ownership FGW, which holds a dispensary license in the historic Haight-Ashbury District of San Francisco, where the Company expects to start operations in the second quarter of 2021(2).
For the latest news, activities, and media coverage, please visit the Harborside corporate website at www.investharborside.com or connect with us on LinkedIn, Facebook, and Twitter.
About Harborside:
Harborside Inc., a vertically integrated enterprise with cannabis licenses covering retail, distribution, cultivation, nursery, and manufacturing, is one of the oldest and most respected cannabis companies in the world. Founded in California in 2006, Harborside was awarded one of the first six medical cannabis licenses granted in the United States. Today, the company operates three 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 an integrated cultivation/production facility in Salinas, California. Harborside continues to play an instrumental role in making cannabis safe and accessible to a broad and diverse community of California and Oregon consumers. Harborside is currently a publicly listed company, trading on the CSE under the ticker symbol "HBOR" and the OTCQX under the ticker symbol "HBORF". Additional information regarding Harborside is available under Harborside's SEDAR profile at www.sedar.com.
I am adding here. Started last fall. Not going to add Big. However I plan to average up couple thousand shares on dips
Why? Because I am a CA resident and have done business with harborside in the past they are a extremely well known and respected company who has done a lot of good for the community and MJ laws over the last 15 years
It seems stagnant amongst other plays,
But Harborside is well estaished. And the float here is tiny.
$CLSH Will do a 30 minute presentation at the Emerging Growth Virtual Conference. I've decided to let $HBOR go after making a significant return over 2 years. $CLSH will be my main #MMJ holding as we see true potential for a $1 SP in the near future.
Over the past week, $HBOR has recovered quite nicely hitting a high of $2.95 on Friday. In the past 2 weeks, $HBOR went as low as $2.20 to find it's way back up. Recently, $HBOR announced a PP of 27 million.
$HBOR Last $2.59... A few pennies above what insiders and big investors are paying for the privilege to be in the private placement. Small investors don't realize who much has to be invested to get that discount & they're selling at great prices. BUY!
#HBOR hit a high of $2.98 today after releasing news of a private placement of $27 million. This is the first private placement since its listing approximately 2 years ago:
After a disappointing close last Friday, #HBOR is back in the green closing up 14 cents or 5.09% WOW. I truly hope this is the beginning of another exciting week. We should be hearing soon regarding the completion of the grow farm expansion. The larger cash crop should increase revenues by 30%, maybe even more.
Tomorrow #HBOR might be offering investors a discount on its SP as it corrected this past Friday as all markets were in the red. The SP went down 18 cents or 6.14% to close at $2.75. On Friday, I bought myself 15,000 shares at $2.85.
Ode to $HBOR, the great portfolio maximizer. This company doesn't disappoint. We're up another 11 cents or 3.9% with a new 52 week high of $3.05 on over 217,000 shares traded incl. ATS to close at $2.93.
What else can be said about this MMJ star... Today we closed up once again, up 10 cents or 3.68% on over 91,000 shares and a new 52 week high of $2.85.
Today #HBOR has no let us down. The fire within is still strong closing up 19 cents or 7.5% to close at $2.72 with a new 52 week high of $2.78 on over 186,000 traded including ATS.
#HBOR hit a new 52 week high of $2.65 today to later close up 10 cents or 4.1% to finish at $2.53. The whole MMJ sector is on fire especially for any MMJ company close to turning a net profit like #HBOR.
During Q3 2020, Harborside generated total gross revenues of approximately $19.6 million. This represented 21.2% sequential growth over the second quarter of 2020 ("Q2 2020") and a 42.9% year-over-year increase when compared to the approximately $13.7 million of gross revenues reported in the period ending September 30, 2019 ("Q3 2019"). Combined gross profit before excise taxes and adjustments for biological assets was approximately $10.7 million, an 85.8% year-over-year increase as compared to the $5.8 million reported in Q3 2019. On a year over year basis, combined gross margins increased from 42.1% in Q3 2019 to 54.7% in Q3 2020(1).
Harborside's wholesale operations reported gross wholesale revenues of approximately $8.9 million, representing 70.7% sequential growth compared to Q2 2020 and a year-over-year increase of 169.4% as compared to the approximately $3.3 million in gross revenues reported for Q3 2019. The year-over-year increase in gross wholesale revenues was primarily due to improved harvest yields and production of premium flower, higher sales volumes, and higher average prices per pound at the Company's 47-acre integrated production campus in Salinas, California (the "Salinas Facility"). As compared to gross wholesale revenues, wholesale gross margins increased from -22.1% in Q3 2019 to 60.3% in Q3 2020(1).
The Company's retail operations generated revenues of approximately $10.7 million, a 2.8% increase as compared to the approximately $10.4 million realized in Q3 2019, with gross margins improving from 48.5% to 50.1% on a year-over-year basis, despite increased costs for safety and staffing related to COVID-19 and inventory losses experienced during the civil unrest that occurred in the Bay Area.(1) The year-over-year increase in retail revenue was driven primarily by the Company's enhanced merchandising and pricing initiatives which resulted in, amongst other things, improved product mix, selected pricing changes and higher sell-through of internally produced products. Across Harborside's retail stores in California, the Company's branded products represented from 9 to 14 of the 25 top-selling SKUs in Q3 2020.
Total operating expenses for Q3 2020 were approximately $7.8 ($6.65) million, including $1.15 million in one-time costs related to the audit and restatement of prior year financials. This was a 7.5% year-over-year decrease when compared to approximately $8.5 million of costs incurred in Q3 2019. The year-over-year decrease in operating expenses is primarily related to a decrease in general and administrative expenses of $1.1 million to $4.1 million as compared to $5.2 million in Q3 2019, a decrease in allowance for credit losses of $0.3 million, and a decrease in write-downs of receivables, investments and advances of $1.3 million, as no impairments were recorded on any of the Company's investments in Q3 2020.
During Q3 2020, the Company also recorded an income tax provision of $1.8 million, compared to $1.3 million in Q3 2019, based on estimated federal income taxes payable at period-end.
Operating Income for Q3 2020 was approximately $0.8 million, compared to an operating loss of approximately $3.6 million for Q3 2019.
Net loss and comprehensive loss was $2.4 ($0.9) million, compared to a net loss and comprehensive loss of $1.9 million in Q3 2019, a 24.2% decrease on a year-over-year basis. The year over year decrease was due primarily to additional income tax provisions and related interest expense booked during Q3 2020.
Adjusted EBITDA(1) for Q3 2020 was approximately $4.5 million, compared to a negative EBITDA(1) of approximately $0.9 million for Q3 2019, with the year over year increase being driven largely by improved operating efficiencies and headcount reductions across the Company. See "Non-IFRS Financial Measures, Reconciliation, and Discussion."
Q4 2020 and Full Year Expectations (2)(4)
The Company expects Q4 2020 gross revenues to follow a more historically typical seasonal pattern, with lower flower production and wholesale revenues, resulting in total combined gross revenues of $11 million to $12.5 million for the fourth quarter, with EBITDA(1) for the quarter close to breakeven.
For the full year ended December 31, 2020, the Company expects gross revenues in the range of approximately $61 - $63 million, with Adjusted EBITDA(1) for the year in the range of 8 – 10% of revenues.
Liquidity and Cash Balance (2)(3)
As of September 30, 2020, Harborside had approximately $13.3 million in cash. The increase in cash balance since the second quarter of 2020 included a delay in payment of approximately $1.6 million of sales taxes that were due to the state of California. Payment of these taxes was postponed by the state as part of their COVID-19 business relief program and, in accordance with state guidelines, the funds were ultimately remitted at the end of October 2020.
Good chart action Great O/S number Positive EBITDA Interesting, recent acquisition(s) On the way to 100M annual revenue Could use more than $13.3M CASH
Considering the price point, and my rule for holding a limited number of stocks in my portfolio, I am taking a pass on Harborside at this time. When they hit $100M in revenue, this stock should be taken seriously.
The company doesn't have many shares outstanding... The only problem now is that as the price goes up the shares will be scarce. Might get hard to load up a position without it doing to $5.
Today #HBOR had its best rally since the middle of last year. The stock closed up 27 cents or 12.5% to finish at $2.43 on over 300,000 shares. The day was lit like a green Xmas tree. The ask is so thin that going over $3 is just around the corner. Nothing can stop this train.
Today #HBOR was still on the move closing up 2 cents or 1% to finish at $2.16 with a new 52 week high of $2.25 on over 200,000 shares traded. Fidelity joined the party today with Merrill Lynch accumulating over the past 2 days.
$HBOR was sizzling hot today closing up 14 cents or 7% on over 350,000 shares closing at $2.14. This comes after "Simply Wall Street" released a story of insider buying.
Who says you can't have Xmas twice... #HBOR founder leaves the company. The dawn of making money is upon us. The days of selling product below cost for the poor is over. Today, after the announcement, the stock flew to close up 11 cents or 5.6%.
#HBOR was hot over the past 2 weeks, giving me a cashed in profit of $68,000CDN. With those funds I placed some cash in my RRSP & TSFA. Also, I managed to buy some #VN, #TRIP & #CLSH shares. Santa was good to me. Happy New Year to you, your family and extended family.
I emailed this to Steve DeAngelo the Founder of HBOR:
You guy's are a take over target with only 22 million shares outstanding and the float is only 11 million. I have 3% of the float now. Tonight, I'll tell everyone that HBOR can't afford to see the SP go up and it's manipulating its own share price. You guy's can't afford to have insiders execute options or warrants. You need to do a financing to have more outstanding shares. Expect to lose your company in the next 12 months.
For the 5th consecutive day, #HBOR is up once again adding another another 10 cents or 5% to the bottom line with over 325,000 shares trading incl. ATS representing 4 times the average daily volume. While closing on the day's high, I'm thinking another 15 cents tomorrow.
#HBOR flying high once again for the 4th consecutive day after releasing news regarding the closure of a deal for a new dispensary. Today, the stock went up 19 cents or 10% on the craziest volume I've seen in a while:
Today $HBOR fly's high for a 3rd consecutive day after releasing news confirming the closing of a deal for a dispensary. Over the past 2 days, the share price has gone up 16 cents or 10%.
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