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Harvest One Reports Fourth and Year End Financial Results for 2020

October 28, 2020 – Vancouver, British Columbia – Harvest One Cannabis Inc. ("Harvest One" or the "Company") (TSX-V: HVT; OTCQX: HRVOF) is pleased to announce its financial results for the three and twelve months ended June 30, 2020.

Management Commentary

“We are encouraged by modest revenue growth in our consumer goods divisions in the fourth quarter in spite of COVID and uncertain market conditions. This was mainly due to the successful launch of our Cannabis 2.0 program in addition to steady performance from Dream Water and LivRelief products. We anticipate this growth to continue in the new fiscal year as we focus on product innovation,  distribution and marketing of our consumer goods brands,” said Gord Davey, President and Interim Chief Executive Officer of Harvest One. “This has been a transformational year for Harvest One as we continue to pursue the growth of our core business while undergoing a Strategic Review to divest capital intensive and non-performing assets. Such divestitures have significantly decreased operating costs and provide the Company with capital to reduce its liabilities and grow ongoing operations. I remain optimistic for the future as we look to complete the Strategic Review and continue to execute our commercial plans to grow the consumer goods business.”

Financial Highlights:

  • During the year ended June 30, 2020, the Company announced the divestment from cultivation and focus on cannabis infused and non-infused consumer packaged goods (“CPG”). As such, cultivation assets including United Greeneries Holding Ltd.’s Duncan and Greenbelt facilities are considered Discontinued Operations and the CPG assets including Dream Water Products Inc., Delivra Inc., and Satipharm AG are considered Continued Operations for the purposes of the Audited Financial Statements for the year ended June 30, 2020. The divestitures of both the Duncan and Greenbelt facilities were completed on August 26 and October 15, 2020, respectively. 
  • For the twelve months ended June 30, 2020, the Company reported total net revenue of $11.79 million made up of $8.38 million from Continued Operations and $3.40 million from Discontinued Operations representing 40% and -38% year on year growth for Continued and Discontinued Operations, respectively. For the quarter ended June 30, 2020, the Company reported total net revenue of $2.33 million and $0.29 million from Continued and Discontinued Operations, respectively. 
  • The year on year net revenue growth of 40% for continued operations was attributable to the addition of Cannabis 2.0 products introduced in Q3 2020, and the addition of sales from of LivRelief generated from the acquisition of Delivra Corp. completed on July 3, 2019. Net revenue from cultivation activities decreased by 38% compared to the same period last year.
  • SG&A for the twelve and three months ended June 30, 2020, was $12.18 million and $3.13 million respectively, representing a 4% reduction for the year and  33% reduction for the quarter ended June 30, 2020.  The cost reduction was significant during the fourth quarter as the Company began to streamline operations and made drastic changes to its organizational structure.
  • The Company recognized a goodwill impairment of $41.12 million for the year due to the decrease in the Company’s market capitalization, slow development of the cannabis market, and changes to initial assumptions used to value intangible assets and goodwill of previous acquisitions to reflect current market conditions. 
  • The Company recognized a loss of $10.17 million from the divestitures of Discontinued Operations for the year ended June 30, 2020, which were completed subsequent to the year end. 

Subsequent to Quarter End;

  • On August 26, 2020, Harvest One completed the divestiture of the Duncan facility for cash consideration of $8.2 million. Concurrently, Harvest One commenced a licensing agreement with Costa LLP, the purchaser, to facilitate the production, distribution and sale of the Company’s Cannabis 2.0 product lines.
  • In conjunction with the closing of the Duncan transaction, the Company also repaid all principal, fees and interests totaling $3.73 million related to the $1.5 million bridge financing facility due to Costa LLP and $2.0 million loan due to MMJ Group Holdings Ltd.
  • On October 16, 2020, Harvest One completed the sale of its majority interest in Greenbelt Greenhouse Ltd. for net cash proceeds of approximately $2.85 million. Greenbelt is a non-core cultivation asset.
  • On October 9, 2020, Harvest One announced leadership changes with Andy Bayfield transitioning to the Board of Directors from his role as Interim Chief Executive Officer and Gord Davey being appointed as President and Interim Chief Executive Officer and director of the Company. 

Summary of Key Financial Results

  For the Year Ended June 30, 2020
($000’s, except share and per share amounts) 2020 2019
Continued Operations: $ $
Net Revenue 8,384 5,982
Cost of Sales 6,767 3,966
Inventory Write-down 2,248 -
Gross Profit (631) 2,016
General and Admin 12,181 12,655
Asset Impairment and Write Down (41,123) (6,100)
Other Costs 7,327 9,542
Total Expenses 60,631 28,297
Loss from Operations (61,262) (26,281)
Other (expense) Income (1,509) 73
Net Loss from Continued Operations (62,771) (26,208)
Discontinued Operations:    
Net Revenue 3,405 5,483
Gross (Loss) Profit (4,672) 992
Expenses 3,149 1,562
Loss from Remeasurement of Discontinued Assets (10,167) -
Other (expenses) Income (634) (1,187)
Loss from Discontinued Operations (18,622) (1,757)
Net Loss (81,393) (27,965)

Adjusted EBITDA (non-GAAP measure)

  For the Year Ended June 30, 2020
($000’s, except share and per share amounts) 2020 2019
Loss from operations (61,262) (26,281)
Inventory write-down 2,248 -
  (59,014) (26,281)
Asset impairment and write-downs 41,123 6,100
Fair value adjustment in cost of sales 1,409 468
Depreciation and amortization 3,073 879
Share-based compensation 2,022 4,245
Issuance of common shares for services 471 -
  48,098 11,692
Adjusted EBITDA(1) (10,916) (14,589)
(1)Adjusted EBITDA is a non-GAAP measure defined as loss from operations before interest, taxes, depreciation and amortization adjusted for fair value items and other non-cash items, as reconciled in the Management’s Discussion and Analysis for fiscal 2020.

Balance Sheet and liquidity

Management is managing capital resources to ensure that it has adequate liquidity to fund operations and discharge liabilities and obligations. During the fiscal year ended June 30, 2020, the Company used $18.36 million and $3.63 million in operating and investing activities, respectively, and received $3.17 million from financing activities. The Company’s ability to continue in the normal course of operations is dependent on the Company’s ability to increase profitability, reduce operating costs, and acquire capital from divestiture of non-core assets during the Strategic Review in addition to raising capital through equity and debt subscriptions. The Company has made significant progress in streamlining operations to lower operating costs by reducing its workforce, including eliminating several executive management positions, and divesting non-performing assets. These cost-saving initiatives have made a positive impact in the fourth quarter. Subsequent to the fiscal year ended June 30, 2020, the Company has successfully completed divestitures of two assets including the Duncan facility and Greenbelt Greenhouse. Net proceeds from these transactions were used to reduce liabilities and provided working capital to support operations. The Company is continuing to evaluate other non-performing asset divestiture opportunities as it completes the Strategic Review. 


Management anticipates sales volumes, net revenues, and adjusted EBITDA to improve throughout the new fiscal year due to a full year of new Cannabis 2.0 sales, organic growth of core OTC consumer products, improvements in gross margin, and a continued focus on reducing overhead costs. The Company remains confident in achieving positive operating cash flow and profitability in the near term.

The Company will continue to drive the growth of its Dream Water, Liv Relief and Satipharm brands and continued to advance the commercialization of new Cannabis 2.0 product offerings. Harvest One will also accelerate the commercialization of both cannabis infused and non-infused over-the-counter consumer products while leveraging its established distribution channels in North America and Europe. International expansion for the Company’s OTC products remains a high priority as well as the advancement of new product innovation.

The Strategic Review remains ongoing to further restructure the organization and solidify the balance sheet with additional sales of non-core assets. The Company will also continue to evaluate all transactions or financing alternatives available to support the growth and expansion of its CPG brands and product lines.

About Harvest One

Harvest One is a global company that develops and distributes premium health, wellness and selfcare products with a market focus on sleep, pain, and anxiety. Harvest One is a uniquely positioned company in the cannabis space with a focus on cannabis infused and non-infused consumer packaged goods.  Harvest One owns and operates three subsidiaries; Dream Water Global, and Delivra (consumer); if (medical and nutraceutical). For more information, please visit

This press release contains references to “Adjusted EBITDA”, which is a non-GAAP financial measure.

Adjusted EBITDA is a non-GAAP measure used by management that does not have any standardized meaning prescribed by International Financial Reporting Standards and may not be comparable to similar measures presented by other companies. Management defines adjusted EBITDA as the loss from operations, as reported, before interest, taxes, depreciation and amortization and adjusted for share-based compensation, common shares issued for services, the fair value effects of accounting for biological assets and inventories, asset impairments and write-downs and other non-cash items. Management believes that Adjusted EBITDA is a useful financial metric to assess the Company’s operating performance on a cash basis before the impact of non-cash items, and on an adjusted basis as described above.

A reconciliation of the supplemental non-GAAP measure is presented in the Year-end June 30 2020 MD&A. The Company believes that the measure provides information useful to shareholders and investors in understanding its performance and may assist in the evaluation of the Company’s business relative to that of its peers. For more information, please see “Non-GAAP Measures” in the Year-end 2020 MD&A available on the Company’s profile on SEDAR at

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. The forward-looking information contained in this press release is made as of the date hereof, and the Company is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

Neither TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accept responsibility for the adequacy or accuracy of this release.

Investor Relations:                                                                             
Colin Clancy
Investor Relations

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