Harvest Health & Recreation Inc., a Tempe, Arizona-based cannabis company, said it has completed the sale of its medical marijuana dispensary and cultivation assets in Arkansas for $25 million, enabling the company to focus on its core markets such as Arizona.
The company said it has sold Natural State Wellness Dispensary, LLC and Natural State Wellness Enterprises, LLC, which own and operate a medical dispensary and cultivation facility in Arkansas.
Harvest Health received net proceeds from the sale of about $12.9 million in cash, following repayment of about $1.9 million loans associated with the assets. The company noted that it retains ownership of the real estate for the dispensary and cultivation facilities.
Following the completion of this divestiture, Harvest maintained its outlook for fiscal 2020 revenues of more than $225 million.
“We are pleased to have completed this divestiture as part of our strategic plan to streamline our business and focus on core markets. The additional cash on our balance sheet adds flexibility at a time when we are pursuing growth opportunities such as recreational sales in Arizona,” said Harvest Health Chief Executive Officer Steve White.
Arizona recently became the thirteenth state in the U.S. to legalize the cultivation and sale of recreational marijuana. On Election Day, voters in Arizona approved Proposition 207. Arizona is already one of the largest medical cannabis markets in the country.
Harvest currently operates fifteen medical marijuana dispensaries in Arizona, supported by cultivation facilities in Camp Verde, El Mirage, Phoenix, and Willcox as well as processing facilities in Flagstaff and Phoenix. The company expects to apply for regulatory approvals to serve the recreational marijuana market as soon as permissible.
In May, Harvest Cannabis Dispensary, an Arkansas-based medical marijuana dispensary, said it obtained a preliminary injunction preventing the two Arkansas facilities managed by Harvest Health & Recreation from using the “Harvest” name.
The dispensary said it obtained the preliminary injunction in its trademark dispute with Natural State Wellness Dispensary, LLC and Natural State Enterprises, LLC, together known as the NSW Entities.
The preliminary injunction prevented the NSW Entities from continued use of the name “Harvest” in connection with their dispensary located in Little Rock, Arkansas and cultivation facility located in Newport, Arkansas.
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