Harborside Commences Trading on CSE; Announces First Quarter Results and Information for Lineage Shareholders
OAKLAND, Calif. and TORONTO, June 10, 2019 (GLOBE NEWSWIRE) — Harborside Inc. (the “Company”), operator of the storied Harborside dispensaries in the San Francisco Bay Area, started trading today on the Canadian Securities Exchange (the “CSE”) under the ticker symbol “HBOR.” The Company went public through a reverse takeover transaction (the “RTO”) involving FLRish, Inc. (“FLRish”) and Lineage Grow Company Ltd. (“Lineage”), as further described in its listing statement available under the Company’s profile at www.sedar.com.
As a result of the RTO and proposed exercise of certain merger options, the following businesses are expected to be combined:
- Harborside’s two iconic dispensaries in Oakland and San Jose(1),
- A ~160,000 sq. foot cultivation campus in Salinas, California(1), and
- Two (2) dispensaries in Portland and Eugene, Oregon, d/b/a Terpene Station.
Additionally, the Company has agreements in place for two additional dispensaries in San Leandro and Desert Hot Springs, California expected to open in 2019. The Company has also entered into a purchase agreement with Walnut Oaks, LLC d/b/a Agris Farms (“Agris”), which operates a 43,560 square foot cultivation facility in Yolo County, California, and signed a letter of intent to acquire Lucrum Enterprises, Inc. d/b/a LUX (“Lux”), which operates an additional cannabis dispensary in San Jose, California.(2)
Harborside’s historic dispensaries in Oakland and San Jose service an average of 1000-1200 customers per day. In the first quarter, average basket size was C$114.21. (1)
|Average Ticket||$ 113.04||$ 113.14||$ 116.45|
|Total Unique Customers||21,358||21,743||24,611|
|Average Spend/Customer||$ 180.08||$ 177.53||$ 183.85|
The Company also filed today on SEDAR the unaudited consolidated first quarter financial statements of FLRish (and its subsidiaries) and Patients Mutual Assistance Collective Corporation (“PMACC”) (and its subsidiaries, including San Jose Wellness (“SJW”)).
Andrew Berman, CEO of Harborside, said, “We are proud of what we have accomplished for ourselves and the industry over the past 12 years. As such, this is a very big milestone for Harborside and the industry, as one of the longest running operators begins trading on the CSE. It’s extremely rewarding to combine this rich legacy with the opportunity for new growth capital from the public markets.”
Information for Lineage Shareholders
A Letter of Transmittal was mailed to all registered shareholders of Lineage with the meeting materials for Lineage’s special shareholders meeting held on May 16, 2019 approving matters related to the RTO, with instructions on how to exchange existing share certificates for new share certificates for subordinate voting shares of the Company. In order to receive new share certificates, registered shareholders of Lineage will be required to send their share certificates representing the pre-RTO common shares along with a completed Letter of Transmittal to the Company’s transfer agent, Odyssey Trust Company (“Odyssey“), 1717 – 25 Adelaide St. E., Toronto, ON M5C 3A1, Attention: Corporate Actions, all in accordance with the instructions provided in the Letter of Transmittal. Additional copies of the Letter of Transmittal can be obtained through Odyssey by email at [email protected] A copy of the Letter of Transmittal is also available under the Company’s issuer profile on SEDAR.
Until surrendered, each certificate formerly representing common shares of Lineage will be deemed for all purposes to represent the number of Subordinate Voting Shares to which the holder thereof is entitled as a result of the consolidation of the common shares of Lineage on the basis of approximately 41.818182 old common shares for each one new common share (the “Consolidation”), and the reclassification of the post-Consolidation common shares as subordinate voting shares of the Company. No fractional shares were issued as a result of the Consolidation. Also immediately prior to the completion of the RTO, the Company’s 44,775,010 Series A special shares issued on May 24, 2019 as stock dividend to the Company’s shareholders as at May 23, 2019 were converted and reclassified into a total of 1,070,669 Subordinate Voting Shares. Odyssey will send share certificates or direct registration system advices representing the Subordinate Voting Shares issued upon the conversion of the Series A special shares.
About Harborside Inc.
Harborside Inc. is an iconic, vertically-integrated, California-centric cannabis company steeped heavily in history of the California cannabis market and dedicated to providing its customers with Trust, Choice and Value in its product offerings, a commitment for which it is world renowned. Harborside’s mission is to consolidate its market share in the California Bay area and grow its market share throughout California through both the focused acquisitions of high-performing cannabis dispensaries and brands and the organic growth of its existing cannabis-related assets.
(1) Assumes exercise of the options (the “Merger Options”) granted by Steve DeAngelo and dress wedding to purchase, by means of merger into subsidiaries, PMACC and SJW. The exercise of the Merger Options is dependent on a number of factors and may not be completed in the expected manner or at all.
(2) Assumes acquisition of Lux (the “Lux Acquisition”) pursuant to a binding letter of intent between the Company and Lux for a purchase price of US$4,200,000. There are significant risks relating to obtaining regulatory approval from the local authorities for the Lux Acquisition, risks on the current temporary state licence not being extended or the annual state licence not being granted, risk of not being able to enter into a definitive agreement; risks of consent and approval of a third party landlord under the leases; and risk of the Company’s board deciding not to proceed with the Lux Acquisition. Due to these risks, there is no assurance that the Lux Acquisition will be completed as proposed or at all.
(3) Assumes acquisition of Agris (the “Agris Farms Acquisition”) for a purchase price of USD$6,600,000 as well as the potential for an earn-out payment. There are significant risks relating to obtaining regulatory approval from the local authorities for the Agris Farms Acquisition, risks of consent and approval of a third party lender to certain loan amendments, and risk of the Company’s board deciding not to proceed with the acquisition. Due to these risks, there is no assurance that the Agris Farms Acquisition will be completed as proposed or at all.
Cautionary Note Regarding Forward-Looking Information
This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward looking-statements relate to, among other things, future expansion plans.
These forward-looking statements are based on reasonable assumptions and estimates of management of the Company at the time such statements were made. Actual future results may differ materially as forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors, among other things, include: fluctuations in general macroeconomic conditions; fluctuations in securities markets; expectations regarding the size of the California cannabis market and changing consumer habits; the ability of the Company to successfully achieve its business objectives; plans for expansion; political and social uncertainties; inability to obtain adequate insurance to cover risks and hazards; and the presence of laws and regulations that may impose restrictions on cultivation, production, distribution and sale of cannabis and cannabis related products in the State of California; and employee relations. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Readers should not place undue reliance on the forward-looking statements and information contained in this news release. The Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
The Company is indirectly involved in the manufacture, possession, use, sale and distribution of cannabis in the recreational and medicinal cannabis marketplace in the United States. Local state laws where the Company operates permit such activities however, these activities are currently illegal under United States federal law. Additional information regarding this and other risks and uncertainties relating to the Company’s business are contained under the heading “Risk Factors” in the Listing Statement filed under the Company’s profile on SEDAR at www.sedar.com.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
This is not an offer to sell or a solicitation of any offer to buy any securities. Offers are made only by prospectus or other offering material.