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Home / Press Releases  / Harborside Inc. Completes Restatement of 2017 and 2018 Annual Financial Statements and Files 2019 Annual Financial Statements

Second Quarter 2020 Preliminary Results Demonstrate Continued Strong Performance

Company reaffirms positive adjusted EBITDA expectations for Q1 2020

Q1 2020 Financial Results to be completed by end of August 2020

Company expects Cash Position of approximately $13.4 million at June 30, 2020


OAKLAND, CA and TORONTO, Ontario; August 10, 2020– Harborside Inc. (“Harborside” or the “Company”) (CSE: HBOR), a California-focused, vertically integrated cannabis enterprise, today announced the filing of the Company’s audited annual financial statements and corresponding management’s discussion and analysis for the year ended December 31, 2019 (collectively, the “Annual Filings”) and the restated annual financial statements for years ended December 31, 2017 and 2018 (the “Restated Financial Statements”). The Restated Financial Statements and Annual Filings are available for download from the Company’s investor website,, and on the Company’s SEDAR profile.


The Company also announced that it intends to file the interim financial statements and corresponding management’s discussion and analysis for the period ended March 31, 2020 (collectively, the “Q1 Filings”) before the end of August 2020. However, no assurance can be given that the anticipated timing of filing will be met due to the unprecedented impact of the COVID-19 pandemic on the Company and its employees, the need for management to complete their work, and the Company’s ability to rely on timely information in relation to its financial reporting obligations, among other things. Harborside expects that upon completion of the Q1 Filings, it will apply to have the previously-disclosed cease trade order (the “CTO”) revoked.(2) Trading is expected to resume on the Canadian Securities Exchange (“CSE”) shortly after the revocation of the CTO.(2)  


The Company also provided an update regarding preliminary unaudited results for its second quarter ended June 30, 2020 (“Q2 2020”). All dollar amounts in this press release are in U.S. dollars.


Management Commentary


“The 2019-year end audit and the restatement of prior periods has been an extensive process primarily due to the complexity of historical accounting prior to our RTO listing. This was both a significant and very important undertaking to complete and I’d like to thank our team and our auditors for their work to get this over the finish line,” said Peter Bilodeau, Chairman and Interim CEO. “In the net result of the 2017-2018 restatement, the changes are accounting treatments to previously disclosed transactions. The 2019 audited financial statements include the impacts of three acquisitions which have been accounted for in accordance with IFRS 3.  The impacts include increasing the provision for an uncertain tax position related to IRC Section 280E.(4) Despite the increased 280E tax reserve, Harborside is actively appealing to the Ninth Circuit Court of Appeals and it is management’s and litigation counsel’s view that significantly less is expected to be owed.”(2) 

Mr. Bilodeau continued, “With the audit process firmly behind us, our focus continues to be on the very bright future that Harborside has as one of the most well established, vertically integrated cannabis companies in the lucrative California market. I am very pleased with the significant performance improvements we have made throughout the first half of 2020, in particular our preliminary Q2 2020 top-line revenue and adjusted EBITDA(1) showing continued profitable growth.”(2)

Mr. Bilodeau added, “As we look ahead to the remainder of this year, we remain on track to achieve our goals of further cementing our position as a leader in the California cannabis market, while expanding the reach of our high-quality brands and products to consumers across the state.” (2)


Update and Preliminary 2020 Results and Highlights(2)(3)



Reported Fiscal    

2019 Results

Actual Fiscal 2019 Results Preliminary

First Quarter

2020 Results



Second Quarter

2020 Results


Gross Revenue


$50 million


$50 million*



$14 million



$16 million

Adjusted EBITDA(1) negative    negative    positive    positive

* As at December 31, 2019, the Company recorded approximately $410,000 related to loyalty programs, which reduced gross revenue from $49.9 million to $49.45 million. Please see the Annual Filings for further discussion of the Company’s loyalty program.


The Company reaffirms its expectations for its first quarter ended March 31, 2020, as previously announced on April 23, 2020. Revenue for Q2 2020 is expected to increase approximately 28% year-over-year to approximately $16 million, before adjustments for cultivation excise taxes. The year over year increase was driven by approximately 4% growth in retail revenue and approximately 244% growth in wholesale revenue. The continued growth in retail reflects the Company’s enhanced merchandising and pricing initiatives which resulted in, amongst other things, improved product mix, selected pricing changes and higher sell-through of internally-produced products. Across Harborside’s retail stores in California, the Company’s branded products represented seven to nine of the 20 top-selling SKUs in Q2 2020.


Wholesale growth was primarily driven by improved harvest yields and higher sales volumes at the Company’s farm operation in Salinas, California, benefiting in part by the Company’s new state-of-the art 44,000 square foot Dutch Venlo greenhouse cultivation facility.


Adjusted EBITDA(1) is expected to be positive, driven largely by improved operating efficiencies and headcount reductions across the Company. For the Company’s retail operations, gross margin(1) improved from 2019 to year to date 2020.


Liquidity and Cash Balance (2)(3)


As of June 30, 2020, Harborside expects to show that it had approximately $13.4 million in cash. The projected increase in cash balance since the first quarter of 2020 included a delay in payment of approximately $1.6 million of sales taxes that are due to the state of California. Payment of these taxes was postponed by the state as part of their COVID-19 business relief program and the funds are now expected to be remitted by the end of October 2020.


These preliminary and unaudited operating metrics and financial results are subject to the Company’s customary annual and interim financial statement closing procedures by the Company and its auditors. Actual results could be affected by subsequent events or determinations. While the Company believes there is a reasonable basis for these preliminary financial results, the results involve known and unknown risks and uncertainties that may cause actual results to differ materially. These preliminary fiscal results represent forward-looking information. See “Cautionary Note Regarding Forward-Looking Information” below.


Conference Call Information

Harborside will host a conference call Friday, August 14, 2020, to discuss the filings of the Restated Financial Statements and Annual Filings. Peter Bilodeau, Interim Chief Executive Officer, and Tom DiGiovanni, Chief Financial Officer will host the call starting at 4:00 p.m. Eastern time. A question and answer session will follow management’s presentation.

Date: Friday, August 14, 2020
Time: 4:00 p.m. Eastern Time
Dial-In Number: 1 (888) 664-6392
Conference ID: 54919638
Webcast: Click Here to Access
Replay: (855) 859-2056 or (404) 537-3406
Available until 11:30 p.m. Eastern Time Wednesday, August 28, 2020

For the latest news, activities, and media coverage, please visit the Harborside corporate website at or connect with us on LinkedIn, Facebook, and Twitter.