Harvest Health is awarded three medical cannabis licenses in the recently-recreational state of Arizona

https://www.benzinga.com/markets/cannabis/19/03/13335740/harvest-health-recreation-buys-verano-holdings-in-850m-all-stock-dea

Bethan Rose Jenkins, Cannabis News Writer/Editorial

Three vertical medical cannabis licenses in Arizona are about to be snapped up by Harvest Health & Recreation. Devine Hunter is on the other end of the settlement deal, which was announced on November 2. Harvest’s multi-license acquisition will see the Cannabis MSO’s dispensary count climb from 15 to 18.

In March, litigation was filed by Harvest to encourage the closure of six vertical medical cannabis licenses. Although the terms were not released publicly, it has been confirmed that the agreement had been delayed since February 2019. 

A news release confirmed that the settlement comprised a repayment of $10.45 million by Devine; Harvest was believed to have been owed this amount as a result of the acquisition agreement. In addition to the three licenses that were obtained by Harvest, the company was also awarded a right of first refusal for four extra vertical medical cannabis licenses in Arizona.

“We are pleased to settle this dispute without payment of any additional capital, and we are very excited to focus on bringing three new locations online as soon as practicable,” said Harvest’s Chief Executive Officer (CEO) Steve White, who claims that no new equity, debt or cash was handed over as part of the license acquisition/settlement.

Arizona’s initiative for cannabis legalization just passed

On November 3 “Election Day” Proposition 207 gained enough votes to pass. As a direct effect of this, Arizona will become one of 15 states that have, so far, legalized recreational cannabis consumption, sale, purchase and possession for adults aged 21 and older. 

In approximately one month when the election results have been certified possession of cannabis in Arizona will be legal. However, smoking cannabis in public places will still be banned. Furthermore, sales are anticipated to begin in May 2021. 

Prop. 207 was described by The Arizona Secretary of State’s Office as follows:

“The law would allow limited cannabis possession, use, and cultivation by adults 21 or older; amend criminal penalties for cannabis possession; ban smoking cannabis in public; impose a 16 percent excise tax on cannabis sales to fund public programs; authorize state/local regulation of cannabis licensees; and allow expungement of cannabis offenses.”

Cannabis in Arizona will put Harvest in prime position to expand presence 

According to state rules, medical cannabis operators who are currently serving the patient demographic in Arizona will snag priority status now that a recreational cannabis market has been successfully voted on. A voter-approved initiative to legalize recreational cannabis passed in Arizona by a margin of 60-40 percent on November 3.

Harvest boasts ample cultivation space to serve recreational cannabis-consuming dispensary customers; a total of 18 dispensaries are owned and operated by Harvest. These licensed retail establishments are currently served by four cultivation sites and two processing facilities. Since priority status is ensured for this company, among many others, Harvest gains an opportunity to substantially broaden its existing footprint.