Harvest Health Files Second Quarter Financial Statements

Harvest Health and Recreation (CSE: HARV) filed its second quarter interim financials late last night, posting revenues of US$26.6 million, an increase of 38.21% on a quarter over quarter basis. While the financials were filed last night, revenue details were press released by the firm back on August 15. The reason for the delay in relation to the full filings is unknown at this point in time.

While revenues grew at a strong clip, costs of goods sold grew even quicker, from $11.33 million last quarter to $19.91 million in the current quarter, an increase of 75.69%. Further compounding this issue is that despite revenue growth, Harvest Health posted a gross profit of $6.68 million, a decrease of 15.48% over the previous quarter. While Harvest Health officially states a gross profit margin of 64%, this is based on unrealized changes in the fair value of biological assets. Without this adjustment, gross profit margin is closer to 25.12% for the quarter, compared to that of 70.93% in the prior quarter.

Expenses for the quarter were up a comparable 35.28% relative to the previous quarter, however general and administrative costs grew marginally by 18.37% in comparison. Salaries over the period accounted for $11.12 million of these G&A expenses, posting an increase of 35.32%, relatively inline with that of revenue growth. Professional fees accounted for the second largest cut of the expense category at $5.89 million, which was actually down 27.73% from the previous quarter.. The largest growth in overall expenses was that of share based compensation which grew 145.05% to $8.09 million. Total expenses for the three month period ended June 30 came in at $33.51 million.

Operating cash flow consumption increased to $26.05 million over the quarter, with Harvest Health now burning through approximately $8.68 million per month. Despite conducting a financing during the quarter, the firms overall cash position fell from $116.26 million to that of $89.91 million, largely in part to several new notes issued by the firm to certain acquisition targets. Harvest Health has since announced several sources of funding since the end of the period to assist with their heavy acquisition focus.

Harvest Health is currently trading at $5.38, down 8.81% on the day, and down 22.74% since the day prior to announcing its financial results for the quarter.


Information for this briefing was found via Sedar 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.

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