VIDEO: Harvest One Cannabis CEO Latest Acquisition and International Developments
Harvest One Cannabis (CVE:HVT) (OTCMKTS:HRVOF) (FRA:2CN) CEO Andreas Gedeon expands on the company’s growing global reach in the medical and pharmaceutical cannabis space. Their recent acquisition of Dream Water Products Canada Inc and Sarpes Beverages, LLC provides the company with a ready-made product development division, consumer goods marketing, and distribution system in 30,000 stores across North America. This acquisition strengthens their expanding brand combined with the company’s Canadian licensed producer, United Greeneries, and Swiss manufacturer of pharmaceutical and medical goods, Satipharm AG.
James West: Hey, welcome back to Midas Letter Live. My guest this segment is Andreas Gedeon; he’s the CEO of Harvest One Cannabis, trading on the TSX Venture under the symbol HVT. Andreas, great to see you.
Andreas Gedeon: It’s my pleasure being here. Thank you, James.
James West: This is our first time sitting down together. Andreas, give me an update: How is Harvest One different from all of the other ACMPR growers out there?
Andreas Gedeon: Oh, it is very different. We have been in this game for quite a long time. We started the cannabis business back in 2013, with our licensed producer, United Greeneries, being the 13th applicant in the system, and then the 30th license that got issued. And we are growing for a long time; we have a subsidiary in Switzerland called Satipharm, where we make medical and pharmaceutical preparations; we have been undertaking clinical trials for our products in Israel, and we are for sale in Australia as a prescription drug with our products, and we have just finished a very, very interesting acquisition in Canada: the Dream Water acquisition.
James West: Yeah, tell me about that.
Andreas Gedeon: It positions us very, very specifically in a niche, in the sleep niche.
James West: Okay, and so what is Dream Water’s main business?
Andreas Gedeon: Dream Water, you can find it in 7-11, in Shopper’s Drug Mart, at the till – and it puts you to sleep. It’s that simple. It contains a formulation of active ingredients that solve one of the biggest problems in Canadian populations – 62 percent of Canadians have sleep issues.
You drink a Dream Water and, well, you sleep, and you wake up the next morning well-rested. And it is a natural evolution to put cannabinoids into this, we think.
James West: Sure.
Andreas Gedeon: So we acquired Dream Water as a national business. With Dream Water, we have now a distribution system in 30,000 stores throughout North America. We have significant revenue coming from this, and we acquired an incredible team that we can now integrate into our cannabis world, and we will use this to create great synergies, I think.
James West: Fantastic. So Dream Water, you envision as a global vehicle to distribute their products with a cannabinoid formulation, which at this point they don’t do, but you’re positioning for the future, I guess?
Andreas Gedeon: We are. And as you know, the international market is very complex when it comes to hemp, CBD, cannabidiol, in the different jurisdictions. We are very active in Europe through our subsidiary Satipharm, where we sell a proprietary cannabidiol CBD product in 12 European countries over the counter as a dietary supplement. We are planning to add Dream Water to that distribution chain.
We are also planning to use the distribution chain of Dream Water to bring our European products into the Canadian and North American market.
James West: So I would say, looking – because I haven’t really heard that much about you in the last little while – so I would consider you one of the stealth cannabis companies who’s busily going about their business, and looking at your asset mix here, I’m kind of quite surprised that you’ve got so much going on and I haven’t spent any time with you yet. So we’re going to come and visit you with a camera for sure.
But currently, right now, what’s your revenue profile look like? Where are you distributing products, what are you growing?
Andreas Gedeon: We are in Canada, we have a sales license under the ACMPR since October last year. We have just rolled out two significant brands into the market: one is called Royal High, which is geared toward the premium section of cannabis –
James West: Dried flower, then?
Andreas Gedeon: Dried, high-end flower.
James West: High THC?
Andreas Gedeon: High THC but also high CBD varieties.
James West: Ah, okay.
Andreas Gedeon: And then we do have an economy product that’s called Captain’s Choice – it’s a milled product, where we give the benefits of the cost savings of consistent quality and mixing, blending products to the consumer. We’ve just been very successful in negotiating deals for the recreational market with several provinces; that will be announced very shortly. And we are preparing for the upcoming recreational market. We are massively increasing our capacity, and we are a truly global company in the context that we are in, with our footprint, in Switzerland, in the European Union, in Australia, with Dream Water now in North America.
Our approach has always been to bring those to create an opportunity platform where we don’t look at this as a Canadian operator that goes international, but an international company that has Canada as its home base.
James West: That’s really interesting. The use of your relationship as United Greeneries – so, was this formerly a company that grew other things in greenhouses?
Andreas Gedeon: United Greeneries as a name is very intriguing, I think, in that regard. United Greeneries has a concept that we will introduced to the market very shortly, where we’ll allow other micro-license holders in the recreational market to feed into our supply system. This is really where the name United Greeneries comes from. Of course, the challenge for the upcoming system in Canada will be: how do you handle, as a public company, the fact that cannabis will be an agricultural commodity at some point? What niches do you occupy as a business?
James West: Sure.
Andreas Gedeon: I think it’s naïve to think that growing cannabis and wholesaling it to the provincial cannabis/liquor boards, that that can be a public company model. So the challenge really is to attach us as a company to the high-margin items of the value chain of cannabis: those are the brands, those are the manufactured consumer products, and that is what you will see under the Harvest One umbrella.
James West: Cool. How much money has gone into the company capital-wise, and what percentage of that is retail versus institutional?
Andreas Gedeon: We have raised, over the last, since 2013, I’ve raised roughly $150 million, both in Australia on the Australian Stock Exchange, as well as on the TSX Venture board. Most of that originally was raised from institutions; the last capital raise was in January, we raised $40 million with Mackie Research Capital. We are very, very well capitalized. We have, after the Dream Water acquisition, we have $62 million in the bank, so this was all allocated to strategic value catalysts, and I think we are in a very good position to really take advantage of the opportunities that come up.
James West: Sure, you bet. So then, you’ve got now, how many brands altogether? You’ve got quite a collection.
Andreas Gedeon: So under the Harvest One umbrella, we have now three wholly-owned subsidiaries. We have in Canada our licensed producer, United Greeneries
James West: Right.
Andreas Gedeon: We have, in Switzerland, our manufacturer of pharmaceutical and medical goods, that’s Satipharm AG, based in Zurich.
James West: Right.
Andreas Gedeon: And we have now, Dream Water Global, that owns the international distribution rights and product rights on the Dream Water product, and there will be quite a few new scoops coming up shortly.
James West: Great. Okay, well, that’s a great introduction. It’s a pleasure to have you here for the first time, but we’re going to look forward to visiting your operations and having you here repeatedly in the future.
Andreas Gedeon: I look forward to seeing you. Thank you very much.
James West: Thank you.
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