Havest One Cannabis Inc (CVE:HVT) Revenues Jump Triple-Digits QoQ

After a tough 2018, Harvest One Cannabis Inc (CVE:HVT) (OTCMKTS:HRVOF) may be slowly turning the corner. The Vancouver-based licensed producer reported triple-digit sequential revenue gains, as the company began shipping product to the provinces.

Q2 2019 net revenue for the company was $3.74 million, a sequential increase of 123% over Q1 2019 ($1.7 million). Gross margin before fair value adjustments of 47%—including a 53% gross margin for wholly-owned subsidiary United Greeneries Ltd., which was comparable with larger LPs. Despite the $3.33 million net loss—$1.13M gross profit minus $4.36M of operating expenses—Harvest One maintains a cash balance of $41.0 million (roughly $0.19/share fully-diluted).

Unlike many junior licensed producers domestically, Harvest One derived a good chunk of its revenue abroad. Approximately $1.65M (44.11%) of it was procured in the United States market, with a token amount ($13,872) generated in Ireland.

Regarding the latter, European Union revenues are about to become a bigger slice of the overall pie, as subsidiary Satipharm Ltd. launched sales of its CBD capsules in the United Kingdom and in the European Union. This will be followed by brick and mortar distribution within Canada—to commence shortly. It’s welcome news for the division which has disappointed to date, owing to regulatory snafus and poor overall execution before CEO Grant Froese took control.

Satipharm’s CBD GelPell has gone through a recent reformulation, as well as a new source of cannabidiol from eastern Europe that will reduce production costs. The market will be eagerly awaiting sales results in the back half of the company’s fiscal year end.

In a research note issued last month, Haywood Securities cited potential new product formulations announced in the Satipharm subsidiary as 1 of 3 possible catalysts for HVT stock in Q1/19. Haywood views the Satipharm division as among the key differentiators of Harvest One in the junior cannabis space. The Bay St. investment bank maintains a “Buy” rating and $1.30 price target on the stock, down from $2.00 previously.

Harvest One also reaffirmed that expansion plans at its Duncan and Lucky Lake facilities remain on track, as the company’s 20,000kg/annual run rate target through calendar 2019 remains in play.

Final Thoughts

In what surely seems like an eternity for investors, Harvest One is finally building up some momentum. Taken to the woodshed in 2018, HVT is one of 2019 pleasant junior rebound stories (up ↑61.53% year-to-date; ↑105.12 trough-to-peak). Obviously, there’s still lots of ground to cover before the sizable net losses turn black. But we’re finally getting a glimpse of the pieces coming together, and the substantial revenue potential that lies within.

Original article: Havest One Cannabis Inc (CVE:HVT) Revenues Jump Triple-Digits QoQ

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