Pure Harvest Cannabis Group Is Trading At A Large Discount Compared To Asset Value

Pure Harvest Cannabis Group Is Trading At A Large Discount Compared To Asset Value

Since 2014, Colorado has been the epicenter of the US cannabis industry and we have seen countless leading brands become national names after establishing market dominance in Colorado.

Although California and Florida are two of the most talked about cannabis markets, Colorado represents a massive opportunity, and this is an opportunity that we are excited about. Last year, we saw increased interest in the Colorado cannabis market after Governor Jared Polis passed regulation that would allow cannabis companies to raise capital, complete go-public transactions, acquire other companies, or be acquired.

2020 has been a banner year for the Colorado cannabis market and has been highlighted by the acquisition of The Green Solution, a leading US cannabis retailer. Over the next year, we expect to see further consolidation of the Colorado cannabis market and this is a trend that our readers need to be aware of.

During the last year, the cannabis sector has been under considerable pressure and this has created a great opportunity for companies to acquire cannabis operators that are trading for a discount. A majority of cannabis companies have strained balance sheets and will only be able to survive this tough period through a merger or an acquisition. We have been highly focused on companies that are capitalizing on this opportunity and are making accretive acquisitions to support continued growth.

When it comes to consolidating the Colorado cannabis market, Pure Harvest Cannabis Group, Inc. (PHCG) is one of the first names that comes to mind. During the last few months, the company has been working tirelessly on the completion of previously announced acquisitions and we are impressed with the way the management team has been able to execute. Over the next year, we expect Pure Harvest announce additional acquisitions as it continues to expand its presence in strategic US markets.

An Execution Story in the Making

The last month has been busy for Pure Harvest and we are favorable on the way activity has ramped up. During the last two weeks, the company has reported two significant transactions, and this is an opportunity to have on your radar. We are favorable on the way these assets complement the business and want to provide an update on the opportunity.

The first transaction reported by Pure Harvest in the month of March was an agreement to acquire Sofa King Medical Wellness Products (SKM), a vertically integrated cannabis operator located in Dumont, Colorado. The dispensary is strategically located near Colorado’s most famous ski resorts and we are favorable on the amount of value that the location adds to the entire operation.

Shortly after this announcement, Pure Harvest announced a major milestone and entered into an agreement to acquire 51% of How Smooth It Is, Inc. (HSII), a licensed medical cannabis processor that is based in Riverdale, Michigan. The acquisition represents a substantial growth opportunity for the business, and we are bullish on the Michigan market. Last year, the state legalized recreational cannabis and we expect Pure Harvest to benefit from having leverage to this market.

HSII plans to offer a wide range of cannabis-infused products (i.e. chocolate bars, gummies, beverages, and other Pure Harvest branded products) and will operate out of a 5,800 square foot facility. HSII has a proven track record in regard to extracting, processing and manufacturing an array of products that contain tetrahydrocannabinol (THC) and cannabidiol (CBD). The acquisition further expands Pure Harvest’s product line and we expect the acquisition to quickly prove to be accretive.

A Growth Story that is Trading for a Discount

Although Pure Harvest has been advancing a number of important company initiatives, the shares have been under pressure and have traded lower with the rest of the cannabis industry. During this time, Pure Harvest has held up better than its peers and we believe that it has substantial catalysts for growth.

Once the assets in Colorado and Michigan are fully operational, Pure Harvest will be generating significant revenues and we will be monitoring how the management team is able to execute on these projects. Due to the management team’s track record, we are confident in their ability to execute and find this to be an important aspect of the story.

Colorado and Michigan represent a burgeoning cannabis markets and Pure Harvest has attractive leverage to these opportunities. When compared to its peers, Pure Harvest is trading at a considerable discount and we believe that it has a favorable risk-reward profile at current levels. We believe that Pure Harvest is in the early innings of a major growth cycle and has visible catalysts for growth.

If you are interested in learning more about Pure Harvest Cannabis Group, please email support@technical420.com to be added to our distribution list.

Pursuant to an agreement between StoneBridge Partners LLC and Pure Harvest Cannabis Group (PHCG) we have been hired for a period of 90 days beginning March 11, 2020 and ending June 11, 2020 to publicly disseminate information about (PHCG) including on the Website and other media including Facebook and Twitter. We are being paid $7,500 per month (PHCG) for or were paid “0” shares of restricted common shares. We own zero shares of (PHCG), which we purchased in the open market. We plan to sell the “ZERO” shares of (PHCG) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (PHCG) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.


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Authored By

Anthony Varrell

Anthony Varrell is Managing Director of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

Published at Fri, 03 Apr 2020 11:47:06 +0000

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