In a development that must have been watched closely by market participants, Harvest Health and Recreation Inc (CSE:HARV) (OTCQX:HRVSF) announced on Sunday that the term of its deal with Hightimes Holdings had been amended. The amendment to the terms means that the value of the deal will be lower, and a fewer number of assets are going to be involved.
As per the modified terms, Harvest Health is going to sell a total of 10 planned and already operational dispensaries in California to Hightimes Holdings. The value of the deal now stands at up to $67.5 million. None of the two parties revealed the reason behind the modifications to the terms of the deal.
The deal is going to be made up of only $1.5 million in cash. The rest of the deal is going to consist of a one-year promissory note worth $4.5 million with the interest of as much as 10% and class A Hightimes Holdings stock to the tune of $61.5 million. The two companies had agreed on a deal back in April this year. According to the terms of that deal, Harvest Health had agreed to sell as many as 13 dispensaries located in California.
That deal was going to be worth around $80 million. It was going to be made upon $7.5 million in the form of a promissory note, a maximum of $5 million in the form of cash, and $67.5 million in preferred stock in Hightimes. The new arrangement will allow Harvest Health to keep hold of its four dispensaries, which are currently operational. The dispensaries in question are located in Napa, Grover Beach, Venice, and Palm Springs.
The company also announced that the new deal does not alter its projections for 2020. Harvest Health had projected annual revenues of $200 million. It should be noted that in 2019, the company managed to generate revenues of $155 million.