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Harvest One 27/02/2020

Harvest One announces sale of non-core assets

MMJ Group Holdings Limited (ASX:MMJ) (“MMJ”), an Australian-listed company that specialises in managing a portfolio of investments along the cannabis value-chain, advises that Harvest One Cannabis Inc. (“HVT” or “the Company”) (TSX-V: HVT; OTCQX: HRVOF) has announced that it has entered into definitive agreements to sell its interest in Burb Cannabis Corp. (“Burb”), a cannabis retailer located in British Columbia (the “BurbTransaction”), as well as its interest in the 398-acre site (the “Lillooet Property”) in Lillooet, British Columbia (the “Lillooet Transaction”) for total proceeds of CAD2.3m.

MMJ is the largest shareholder holding 26%1 of HVT which is one of the largest investments within the MMJ cannabis and hemp portfolio.

The sale of the assets by HVT followed the announcement on 13 February 2020 that HVT was undertaking a strategic review of the business.

“The sales of our equity interest in Burb and the Lillooet Property are part of our ongoing review of non-core assets, which we initiated as part of a broader enhanced strategic plan announced in November 2019,” said the CEO of HVT, Mr. Froese and “cash proceeds from these transactions will have an immediate positive impact on our financial position and will support our continued branding and distribution efforts related to Cannabis 2.0.”

“We believe Harvest One is significantly undervalued given its substantial cultivation and Cannabis 2.0 assets“, said MMJ Non Executive Chairman, Peter Wall, ”and we are committed to working closely with Harvest One to realise that intrinsic value”.

MMJ holds two investments in HVT:

  1. MMJ is the largest shareholder holding 26% of HVT which is one of the largest investments within the MMJ cannabis and hemp portfolio.
  2. CAD2m secured loan. The Loan bears interest at a rate of 15% per annum and the principal and accrued interest on the Loan is payable in arrears within 60 days of the advance date, subject to certain exceptions. MMJ has first ranking security interest in all current and after acquired property of HVT and its subsidiaries, subject to certain permitted liens.

Mr Peter Wall, Chairman of MMJ, is a non-executive director of HVT.

MMJ is holding discussions with HVT on the potential extension of the date of the repayment of the CAD2m secured loan which is currently repayable on 10 March 2020.

Harvest One is a global cannabis company that develops and provides innovative lifestyle and wellness products to consumers and patients in regulated markets around the world.

A copy of the HVT announcement is available here.

1 MMJ holds 55,557,994 HVT shares as at 27 February 2020

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