The stock trend of California-centric cannabis company Harborside Inc. heads lower after going public on Monday under the “HBOR” ticker on the Canadian Securities Exchange. This comes following a reverse takeover transaction involving FLRish Inc. and Lineage Grow Company. The company, which has reached the Canadian exchange for capital, is one of the first six companies to obtain a medical marijuana license in California.
As a result of the reverse takeover and proposed exercise of merger options, the combined businesses include Harborside’s two dispensaries in Oakland and San Jose, about 160,000 square foot cultivation campus in Salinas, California, and two dispensaries in Portland and Eugene, Oregon, d/b/a Terpene Station. Also, the company has deals in place for two additional dispensaries in San Leandro and Desert Hot Springs, California expected to open this year.
For the first quarter of 2019, FLRish reported a net loss of $2.06 million compared to the flat bottom line in the previous year quarter. Total revenues jumped by 39% year-over-year helped by higher services revenue from the related party while rental revenue from related party remained flat with last year.
Harborside operates two of the major dispensaries in the Bay Area in Oakland and San Jose and has played an instrumental role in making cannabis safe and accessible to a broad and diverse community of California consumers. Harborside was awarded one of the first six medical cannabis licenses granted in the US.
The company is actively pursuing growth opportunities to expand its portfolio in the medical and adult use cannabis industry in the San Francisco Bay Area. In 1996, California was the first state to legalize medical marijuana and Oakland, California was the first jurisdiction to license commercial cannabis activities in the US.
As cannabis is still not accepted official for medical use and a high potential for abuse, this prevents US cannabis companies from listing on the major US exchanges. However, the Canadian Securities Exchange and NEO Exchange have welcomed cannabis listing as the companies started searching for capital.
Also read: Tilray stock heads downward on doubts of cannabis risks
The US market for direct legal cannabis sales alone is projected to grow from $6.1 billion in 2017 to $17 billion by 2021 and the total addressable market for direct cannabis sales in the US is predicted at $45 to $50 billion if every state legalized full adult recreational consumption. The number of medical cannabis patients in states with existing comprehensive medical cannabis programs was about 1.5 million by the end of 2017, and the total number of medical cannabis patients nationwide is expected to grow to 2.5 million by 2021.
Shares of Harborside opened higher on Thursday but changed course to the red territory on the Canadian Securities Exchange. The stock is trading down 7.25% at C$5.12 at mid-afternoon.