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MMJ News 09/03/2020

MMJ Group investment Harvest One makes progress with strategic review

MMJ, a global cannabis investment company with a portfolio of minority investments, aims to invest across the full range of emerging cannabis-related sectors including healthcare, technology, infrastructure, logistics, processing, cultivation, equipment and retail.

Harvest One is making progress with its initiatives to restructure operations

MMJ Group Holdings Ltd (ASX:MMJ) Canadian investment Harvest One Cannabis Inc (CVE:HVT) (OTCMKTS:HRVOF) is progressing its strategic review with financial results for the half-year ending December 31, 2019, indicating progress.

Since November 2019, Harvest One has undertaken several initiatives which are expected to contribute to a 30% reduction in selling, general and administrative (SG&A) expenses on an annualised basis.

These initiatives include:

  • An overall reduction in workforce by over 20%;
  • A comprehensive salary reduction program at the senior management level;
  • The downsizing and consolidation of corporate offices; and
  • The implementation of remote workforce programs.

Decreasing operating overheads

These cost reduction efforts have already positively impacted cash SG&A expenses in the December 2019 quarter.

HVT expects cash operating overheads expenses to continue to decrease throughout the remainder of the 2020 fiscal year.

In February 2020, Harvest One announced the divestment of its 19.99% interest in Burb Cannabis Corp, a private cannabis retailer based in British Columbia, for cash proceeds of C$1.5 million.

Harvest One has also entered into a contract to sell its interest in its 398-acre site in Lillooet, British Columbia a for cash consideration of C$800,000.

The transaction is expected to close on March 31, 2020.

Evaluation of opportunities continuing

Harvest One continues to evaluate opportunities to realise surplus assets and raise additional debt and equity capital which is required to realise its business plan.

The company is in discussions to divest its 50.1% interest in the Greenbelt Greenhouse facility in Hamilton, Ontario, which would provide additional capital and allow HVT to focus on the growth of its core businesses in Cannabis 2.0, product branding and international distribution.

MMJ is holding discussions with HVT on the potential extension of the date of the repayment of the C$2 million secured loan which is currently repayable on March 10, 2020.

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