The market has finally received an update from Harvest Health (CSE: HARV) on its proposed business combination with that of Verano Holdings, and simply, the result at this point in unsurprising. This morning the two firms announced the mutual termination of the agreement that was entered into nearly a year ago on April 22, 2019.
The termination of the business combination agreement comes as a result of continued regulatory hurdles to consummate the arrangement. However, the list provided by the two firms appeared more as a laundry list to try and place blame anywhere else. Stated justifications for the termination include obstacles from state and local regulatory authorities to have the transfer of ownership occur, the poor state of cannabis capital markets, and a challenging market for asset sales.
Other factors blamed include the HSR Act review, as well as the recent COVID-19 pandemic which has slowed operations at numerous regulatory offices that must provide approval for the transaction.
As a result of the mutual termination, no break-up fees or other considerations are to be paid by either party.
Given the persistent challenges in consummating this deal and current market conditions both companies felt it was prudent to move forward separately at this time. We remain focused on continued development of assets in our core markets including Arizona, Florida, Maryland, and Pennsylvania. Recent capital raising efforts have afforded the company sufficient resources to continue to invest in strategic projects while moving toward profitability.
Steve White, Harvest CEO
Harvest Health last traded at $1.62 on the CSE.
Information for this briefing was found via Sedar, Falcon International and Harvest Health and Recreation. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
