August 16, 2019 – PHOENIX, Ariz. – Harvest Health & Recreation, Inc. (CSE:HARV, OTCQX: HRVSF) ("Harvest"), a vertically integrated cannabis company with one of the largest and deepest footprints in the U.S., today released the following response to the Harvest entities' agreement with the Pennsylvania Department of Health.
On August 16th, after concluding negotiations with the Pennsylvania Department of Health, two of our affiliate companies, Harvest of Northwest PA, LLC and Harvest of North Central PA, LLC, will no longer pursue the permits granted to them. This means those entities will not pursue the operational status of their two already constructed facilities located in New Castle and Shamokin. Instead, the remaining Harvest affiliates will focus on the five permits they have been granted, which allows them to open up to 15 dispensaries across the Commonwealth.
On December 18th, 2018, six Harvest affiliates were each granted a dispensary permit by the Commonwealth of Pennsylvania. These six permits were each applied for through separate and distinct legal entities, each bearing some form of the Harvest name along with identical ownership and management for each entity. Each entity moved forward with recruiting employees, building their individual dispensary and planning to become operational.
During the construction of these dispensaries, a question arose by the Department of Health concerning the use of a Small Diverse Business, Environmental Construction Services, Inc. ("ESCI 360"). ESCI 360 was identified in each of the six applications as the General Contractor (GC). Because ESCI 360 was not able to act as a GC for all six of the permitted locations, the Harvest entities transitioned the role of GC to a different contractor without notifying the Department of Health. Despite this error, the Harvest Entities still utilized ECSI 360 as a mechanical, electrical and plumbing contractor on all of the dispensaries and paid ECSI 360 the amount specified in the applications.
Rather than engaging in a lengthy legal dispute that would involve all of the Harvest Entities, our affiliate companies, Harvest of Northwest PA, LLC and Harvest of North Central PA, LLC, ultimately determined that not pursuing the permits granted to them would be the best way to ensure that the remaining Harvest affiliate companies get their dispensaries in Pennsylvania operational to serve as many patients as quickly as possible. Consequently, our affiliates will not be opening dispensaries in New Castle and Shamokin where 18 employees will be affected. Having already completed their state required training, we are providing these impacted employees with company-paid services to help them find other employment, which includes a severance payment, resume reviews and access to transition and recruiting agencies. Although this was not an easy decision to make, our affiliates believe it was the best decision for the remaining Harvest affiliated
Each Harvest affiliate strongly believes that state regulatory frameworks are essential to the success of the industry and are committed to operating within the bounds of the many cannabis policies across states. We know these frameworks are new in our industry – and because of this we will continue to encounter challenges but are committed to working closely with all state regulators. Nevertheless, we are proud of achieving an exemplary record of compliance, while conducting well over a million transactions in various markets, and we are confident that our focus on compliance and strong partnerships with regulators is a key reason we've been awarded more licenses than any other cannabis company in the U.S.; a demonstration of the strength of our businesses.
Each Harvest affiliate is glad to be moving forward in opening dispensaries in Scranton, Reading, Harrisburg and Johnstown and we are looking to bring our high-quality and premium medical marijuana experiences to those Pennsylvanians suffering with serious medical conditions very soon.
Disclaimer: Past performance is not an indicator of future performance.
About Harvest Health & Recreation, Inc.
Headquartered in Tempe, Arizona, Harvest Health & Recreation, Inc. is a multi-state cannabis operator (MSO) and vertically-integrated cannabis company. Subject to completion of announced acquisitions, Harvest will have one of the largest footprints in the U.S., with rights to more than 210 facilities, of which approximately 135 are retail locations, and more than 1,695 employees across 18 states and territories. Since 2011, the company has been committed to expanding its Harvest House of Cannabis retail and wholesale presence throughout the U.S., acquiring, creating and growing leading brands for patients and consumers nationally and continuing on a path of profitable growth. Harvest's mission is to improve lives through the goodness of cannabis and is focused on its vision to become the most valuable cannabis company in the world.
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