Harvest One poised to be a leading innovator in Canada’s cannabis industry
Company has sights set on serving the expanding marketplace for medical and recreational marijuana
If you haven’t heard of Harvest One, you’ve been missing out on one of the most compelling business stories within Canada’s legal cannabis industry.
Trading on the TSX (HVT.V), Harvest One is an innovative, forwarding-thinking company that produces high-quality cannabis products and technology for the global cannabis market with offerings throughout the European Union and Australia. Beyond the global medical market, the firm has also set its sights on being a leading supplier for Canada’s recreational market, and is currently in negotiations with provinces across the country.
“Our company aims to be a first mover, serving an ever-expanding marketplace for both medical and recreational use,” says Harvest One’s CEO Andreas Gedeon, a former German naval officer turned successful entrepreneur with a strong track record of building complex and largescale businesses.
“Although we have been a small, craft operation to start, we’re now building up capacity and positioning ourselves to be a leader in the development of a broad range of cannabis products.”
The company has much to be optimistic about—in part because Harvest One is uniquely positioned in the industry with an innovative corporate structure, Gedeon adds.
“The company is structured strategically to be able to quickly navigate the complexities of an evolving industry for marijuana,” he says. “Harvest One is ready to serve the global markets—from high-quality dried flower for the recreational market to edibles and concentrates to cannabinoid-based pharmaceutical products.”
Its structure consists of three business units with Harvest One acting as the parent company for its two other business arms: United Greeneries Holdings Ltd. (UG) and Satipharm AG.
United Greeneries is the firm’s horticultural division with the aim to be able to cultivate 20,000 kg of dried marijuana by the end of 2018.
UG is already providing the medical market with highgrade cannabis from their 16,000-square-foot facility in Duncan, B.C., which has been licensed since mid-2016 under the Access to Cannabis for Medical Purposes Regulations (ACMPR).
Additionally, the company is in the midst of an expansion to propagate large quantities of rooted cuttings and pre-grown starter plants to support production at its current facility, as well as their planned expansion sites. The 15,000-square-foot addition in Duncan is expected to be completed this year—as is another key development in Saskatchewan.
Located about 150km south of Saskatoon, UG’s Lucky Lake facility will add 80,000 square feet of cultivation space and is advancing through the final stages of licensing under the ACMPR.
The company is also looking to vastly expand its operations beyond indoor cultivation by strategically investing in the potential of outdoor growing.
“Outdoor cultivation offers many upsides, including helping to drive down cost as well as offering a much more sustainable and natural form of cultivation,” Gedeon says. “It’s a strategy also based on our belief there is a strong market for sustainable, high-grade cannabis grown in B.C.”
While legislation remains a work in progress regarding outdoor cultivation, Harvest One anticipates the government will eventually permit regulated, outdoor operations to meet demand.
“Our industry’s first goal is to supplant the black market. In order to do that, we should offer the full range of products that are out there,” he says.
“There is definitely going to be a consumer segment throughout Canada that values sustainable and naturally grown outdoor cannabis.”
With approximately 400 acres of prime agricultural land in British Columbia, Harvest One is well-positioned to lead the industry when outdoor cultivation is legalized.
“This region has one of the lowest precipitation rates in all of Canada especially in August and September,” he says, adding it is the ideal microclimate for growing cannabis.
“While outdoor growing regulations remain uncertain, we believe in thinking ahead. That is why we purchased and are preparing land in one of the few regions in Canada that is optimally situated to grow cannabis on a large scale.”
On the medical side, Harvest One’s Satipharm AG—based in Switzerland—is also a pioneer. Already manufacturing a pharmaceutical-grade product for the European Union (EU) and Australia, it is focused on developing products containing cannabidiol, the medicinal element in cannabis.
To that end, Satipharm is pushing the frontiers of pharmaceutical research. Their products are currently being used in two different, Phase 2 clinical trials: exploring cannabis and pediatric epilepsy, and the other on pain management and spasticity in multiple sclerosis patients.
“The potential of cannabidiol cannot be underestimated,” Gedeon says. More broadly, few cannabis corporations have diversified their businesses as extensivesly as Harvest One in the last two years.
With $80-million in cash and no debt, the company is actively looking for strategic acquisitions that may include other players within the domestic recreational and medical markets as well as abroad.
“We were also one of the last licensed producers to raise significant capital before the stock market correction hit in January,” he says, adding other firms have faced challenges raising capital since.
With a share price less than $1, Harvest One is indeed a rarity among its peers.
“Right now we’re valued cheaply for a stock that has tens of million in the bank,” Gedeon says, adding its cash position will allow Harvest One to expand aggressively as conditions permit.
“With the plans we have in place, this year should be exceptional for Harvest One.”