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Harborside Inc. $HBOR.ca $HBORF Announces Participation in ATB 9th Annual Institutional Investor Conference $VFF.to $HARV.ca $ACB.to

Posted by AGORACOM at 1:46 PM on Wednesday, January 13th, 2021
  • Matt Hawkins, Chairman of Harborside, will participate at the ATB 9th Annual Institutional Investor Conference, January 14, 2021

Harborside Inc. (“Harborside”, or the “Company”) (CSE: HBOR), (OTCQX: HBORF), a California-focused, vertically-integrated cannabis enterprise, announced that Matt Hawkins, Chairman of Harborside, will participate at the ATB 9th Annual Institutional Investor Conference, being held on January 14, 2021. Mr. Hawkins is scheduled to participate in a panel discussion, “U.S. Retail: What Leadership Looks Like Today and Tomorrow”, at 9:40am ET as well as host one-on-one investor meetings throughout the day.

About Harborside:
Harborside Inc. is one of the oldest and most respected cannabis retailers in California, operating three of the major dispensaries in the San Francisco Bay Area, a dispensary in the Palm Springs area outfitted with Southern California’s only cannabis drive-thru window, a dispensary in Oregon and a cultivation/production facility in Salinas, California. Harborside has played an instrumental role in making cannabis safe and accessible to a broad and diverse community of California consumers. In 2006, Harborside was awarded one of the first six medical cannabis licenses granted in the United States and today holds cannabis licenses for retail, distribution, cultivation, nursery and manufacturing. Harborside is currently a publicly listed company on the CSE trading under the ticker symbol “HBOR”. Additional information regarding Harborside is available under Harborside’s SEDAR profile at www.sedar.com.

Harborside Inc.$HBOR.ca Completes Acquisition of San Francisco Dispensary $HBOR.ca $VFF.to $HARV.ca $ACB.to

Posted by AGORACOM at 8:48 AM on Monday, December 21st, 2020
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  • Expands Footprint with Social Equity Dispensary in Historic Haight-Ashbury District 

Harborside Inc. (“Harborside”, or the “Company”) (CSE: HBOR), (OTCQX: HBORF), a California-focused, vertically-integrated cannabis enterprise, announces the closing of the transactions contemplated by the previously announced agreement to acquire 50.1% of the equity (the “Shares”) of FGW Haight, Inc. (“FGW”), a California corporation which has the conditional use approval necessary to operate a cannabis dispensary and related businesses in the Haight Ashbury area of San Francisco, California (the “Acquisition”).

With the completion of the Acquisition, Harborside expands its retail dispensary footprint in the state of California to five and solidifies a strong presence in the historic and culturally-significant Haight-Ashbury district of San Francisco. The Company expects to complete the build-out, receive all necessary regulatory approvals, and open the social equity retail dispensary in the third quarter of 2021.

“I’m excited to continue to expand our footprint in California and look forward to serving consumers in Haight Ashbury,” said Peter Bilodeau, Interim CEO of Harborside. “Together, we will work with the team from FGW to give back to the community and support initiatives to address the negative impact of past cannabis policies which have disproportionally impacted low income and minority community members. This new location will also introduce the best-in-class service and unbeatable product selection that Harborside has become famous for to an iconic area of San Francisco.”

Upon closing of the Acquisition, Harborside paid an aggregate purchase price of USD $2,179,350 based on a post-build-out and proforma working capital enterprise value of USD $4,350,000 (the “Purchase Price”). The Purchase Price is comprised of: (a) USD $1,265,000 as consideration for convertible notes of FGW entitling the Company to such number of underlying Shares equal to 29.1% of the Shares; and (b) the balance of the Purchase Price in multiple voting shares (“MVS”) valued at CAD$125 per MVS as consideration to certain selling shareholders of FGW for 21% of the issued and outstanding Shares.

Subject to regulatory approval, Harborside has also agreed to purchase an additional 29.9% of the issued and outstanding Shares (the “Subsequent Shares”) to get to an 80% ownership of FGW, subject to regulatory approvals. The aggregate purchase price for the Subsequent Shares will be USD $1,300,650, which will be satisfied in MVS valued at the greater of: (i) the 30 day VWAP of the subordinate voting shares of the Company on the Canadian Securities Exchange (“CSE”) at the time of issuance less a discount multiplied by 100; (ii) CAD$150 per MVS; or (iii) such other price as may be approved by the CSE. Harborside also retains the right of first refusal to purchase, in its discretion, in whole or in part and in one or more closings, the remaining 20% of the Shares, subject to regulatory approvals.

About Harborside:
Harborside Inc. is one of the oldest and most respected cannabis retailers in California, operating three of the major dispensaries in the San Francisco Bay Area, a dispensary in the Palm Springs area outfitted with Southern California’s only cannabis drive-thru window, a dispensary in Oregon and a cultivation/production facility in Salinas, California. Harborside has played an instrumental role in making cannabis safe and accessible to a broad and diverse community of California consumers. In 2006, Harborside was awarded one of the first six medical cannabis licenses granted in the United States and today holds cannabis licenses for retail, distribution, cultivation, nursery and manufacturing. Harborside is currently a publicly listed company on the CSE trading under the ticker symbol “HBOR”. Additional information regarding Harborside is available under Harborside’s SEDAR profile at www.sedar.com.

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Cannabis Tax Revenues Climbing in California SPONSOR: Harborside $HBOR.ca $VFF.to $HARV.ca $ACB.to

Posted by AGORACOM at 11:04 AM on Wednesday, December 16th, 2020
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SPONSOR: Harborside is a California-focused, vertically integrated, fully licensed cannabis company with its business consisting of three primary segments, Retail Dispensaries, Cultivation and Processing and Wholesale Sales (including branded product sales). Harborside operates the only drive through dispensary in California

  • Purchasers of Marijuana Pay About 10 Percent in State Taxes on Retail Buys

The sale of cannabis in California went legal in 2016, and retailers were able to open their doors two years later. Along with the legal retail sale of cannabis came two new taxes — a cultivation tax on all harvests and an excise tax on the purchase of weed and products made with it; the usual sales taxes, both state and local, also applied. They add up, and in the third quarter of 2020, California’s total cannabis tax revenue was $306.7 million. Of that amount, the state gained sales and excise tax on $11 million worth of retail cannabis sold in cities in Santa Barbara County.

For $30 worth of cannabis flower, or buds, the taxes can raise the consumer’s payment to $41.77, the state Tax and Fee Administration (CDTFA) calculated. That includes a 15 percent excise tax and the state’s 8.5 percent sales tax. The CDTFA also added a 10 percent cannabis business tax, which is charged by most California jurisdictions, although Santa Barbara County’s cities’ rate is 5-6 percent. The cultivation tax is paid by weight when the farmer sells to a distributor.

The breakdown of the $306 million in taxes are excise tax of $159.8 million, cultivation tax of $41 million, and sales tax of $105.9 million. For the previous year’s July to September, the cannabis taxes to the state were $170.8 million.

The previous quarter, or April through June, generated $260 million for the state, and the first quarter of January to March generated close to $206 million. Santa Barbara County’s retail cannabis sales saw a similar move upward from the first to second quarter, the Tax and Fee Administration reported. January to March sales were $9 million, and April to May sales were $16.7 million. Many speculate the increase is due to the shutdown.

Santa Barbara County has yet to permit any retail cannabis stores and is in the process of determining where eight will go in the county’s unincorporated areas. If the $11 million in sales would have occurred in county areas, the income would have been about $441,000 with the county’s 4 percent retail cannabis tax, said Jeff Frapwell of the County Executive Office.

Correction: Santa Barbara County plans eight retail cannabis stores, not six; and this story has been updated to reflect local business tax amounts.

SOURCE: https://www.independent.com/2020/12/14/cannabis-tax-revenues-climbing-in-california/UnfollowRecommend

California Cannabis Businesses Praise The Action Taken In Washington On Decriminalization SPONSOR: Harborside $HBOR.ca $VFF.to $HARV.ca $ACB.to

Posted by AGORACOM at 9:37 AM on Tuesday, December 8th, 2020
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SPONSOR: Harborside is a California-focused, vertically integrated, fully licensed cannabis company with its business consisting of three primary segments, Retail Dispensaries, Cultivation and Processing and Wholesale Sales (including branded product sales). Harborside operates the only drive through dispensary in California

SAN DIEGO — On Friday the United States House of Representatives passed a bill decriminalizing marijuana at the federal level. Although it is unlikely to pass the Senate, it has industry leaders here in California excited that the conversation towards decriminalization is rolling in Washington.

After receiving some rare bi-partisan support, the Marijuana Opportunity Reinvestment and Expungement or MORE Act passed the House of Representatives by a large margin. Highlights of the bill include:

  • Decriminalizing marijuana federally
  • Establishing a 5% federal tax on all cannabis products
  • Prohibiting the denial of federal benefits to people convicted of cannabis-related crimes
  • The bill would start the process of expunging the records of those convicted of Cannabis-related offensives

Will Senn is the founder of Urbn Leaf, a marijuana dispensary in San Diego. He says that the bill has been a long time coming and that it was a historic win for the industry. He went on to say that attitudes towards marijuana are shifting around the country. “I think the writing is on the wall, right? Everybody is voting for cannabis legislation nationwide. You had five more states pass some legislation in the last election year. There’s a number of upcoming bills in the near future here.”

Marijuana has been decriminalized in California since 1996 but attitudes about the plant differ drastically around the country. According to the FBI and the Pew Research Center, in 2018 40% of the 1.65 million drug arrests from around the country were marijuana-related and 92% of them were for possession.

Jason Ortiz from the Minority Cannabis Business Association said, “So, I mean, there are thousands at the very minimum, especially on the federal level. But as you start to extend the impact statewide, it could be upwards of millions of records that would get affected.”

Ortiz added that the potential expungement of cannabis-related crimes off a person’s record  could change the lives of thousands of people, “And having that on your record denies you access to housing, to jobs, to other sorts of social services.

Although the bill passed in the House, it’s unlikely that it will see a vote in the Senate. Still, business owners like Senn see it as an important benchmark of just how far the conversation around decriminalizing marijuana has come since he entered the industry.

SOURCE: https://www.cbs8.com/article/news/local/marijuana-opportunity-reinvestment-and-expungement-act/509-a4567228-ad82-4f48-85b3-556e282aa8ed

House Gets Ready For Historic Vote On Federal Marijuana Prohibition SPONSOR Harborside $HBOR.ca $VFF.to $HARV.ca $ACB.to

Posted by AGORACOM at 1:03 PM on Thursday, December 3rd, 2020
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SPONSOR: Harborside is a California-focused, vertically integrated, fully licensed cannabis company with its business consisting of three primary segments, Retail Dispensaries, Cultivation and Processing and Wholesale Sales (including branded product sales). Harborside operates the only drive through dispensary in California

This week the U.S. House of Representatives is expected to vote on a bill that would remove marijuana from the Controlled Substances Act and require federal courts to expunge many prior marijuana offenses. It will be the first time the full House will vote on ending the federal prohibition of cannabis.

Morgan Fox with the National Cannabis Industry Association says House passage would “send a really strong message to not only the rest of Congress, but to a lot of other states that the time to end prohibition has come.”

The Marijuana Opportunity Reinvestment and Expungement Act (MORE Act), introduced by Rep. Jerry Nadler (D., N.Y.), would eliminate conflict between state and federal law and allow states to set their own marijuana policies.

 “We don’t need to have one size fits all. We just need to get rid of prohibition and then let the states do what the states are doing. It’s essentially what the states have done already. They haven’t waited for the federal government, which is why we have a lot of these discrepancies and challenges,” said Rep. Earl Blumenauer (D., Ore.), who has long pushed for marijuana legalization.

 Blumenauer and Rep. Barbara Lee (D., Calif.) — who also wrote parts of the legislation — told Yahoo Finance the bill is a racial justice issue.

 “It’s coming at a time when Americans are recognizing how hopelessly flawed the criminal justice system is,” said Blumenauer.

‘You’ve got to repair the damage’

The MORE Act would impose a 5% sales tax on marijuana and marijuana products. The revenue would go toward a new trust fund for grant programs designed to help people “adversely impacted by the War on Drugs” access job training, re-entry services, legal aid, treatment and more. The bill would also provide protections prohibiting denial of federal benefits based on use, possession or conviction for a marijuana offense.

“Regardless of who you are, if you’ve been incarcerated and if you’ve done your time and you get out, you should be provided for a second chance,” Lee told Yahoo Finance. “When you’ve been incarcerated or when you have have a record based on unjust laws — they’re really targeted in many ways, Black and Brown people — then you’ve got to make restitution, you’ve got to repair the damage. This fund is about the time that was lost because of barriers to employment, because of incarceration.”

The MORE Act would open up more opportunities for marijuana businesses, including access to Small Business Administration funding. It would also require the Bureau of Labor Statistics to gather demographic data on cannabis business owners and employees to ensure people of color and economically disadvantaged people are taking part in the industry.

“That really sets out a process for equity in the industry. This is a job-creating industry, and it also provides economic opportunities for minority-owned business owners,” said Lee.Graphic by David Foster/Yahoo Finance

The House Judiciary Committee passed the MORE Act last year 24 to 10 — Rep. Matt Gaetz (R., Fla.) and Rep. Tom McClintock (R., Calif.) were the only Republicans who voted for the bill.

In an interview with Yahoo Finance, McClintock said while he didn’t endorse marijuana, it’s clear U.S. marijuana laws have “not accomplished their goals.”

“These laws have done far more harm than good. They’ve created a violent underground economy and ruined the lives of so many young people who’ve had a youthful marijuana conviction, follow them and ruin their lives,” said McClintock.

The House was scheduled to vote on the bill in September, but Democratic leadership postponed the vote because some members in tight races worried passing the MORE Act before a stimulus package could hurt them at the polls.

Nearly a month after the election, there is still no additional coronavirus relief and many Republicans are again slamming Democrats for what they see as prioritizing the cannabis bill over coronavirus relief efforts.

Democrats have already passed two versions of the Heroes Act and argue it’s the Trump administration and Republican Senate that’s holding up stimulus talks.

SOURCE: https://finance.yahoo.com/news/house-gets-ready-for-historic-vote-on-federal-marijuana-prohibition-192829701.html

Harborside Inc. $HBOR Announces Results of Annual General Meeting $VFF.to $HARV.ca $ACB.to

Posted by AGORACOM at 6:09 PM on Wednesday, November 25th, 2020

OAKLAND, Calif. and TORONTO, Nov. 25, 2020 /CNW/ – Harborside Inc. (“Harborside”, or the “Company”) (CSE: HBOR), (OTCQX: HBORF), a California-focused, vertically-integrated cannabis enterprise, announced today that the nominees set forth in the Company’s Management Information Circular dated October 26, 2020, Mr. Matthew Hawkins, Mr. Kevin Albert, Mr. Michael Dacks, Mr. Peter Kampian, Mr. Alexander Norman, Mr. James Scott, and Mr. Andrew Sturner, were elected as directors of the Company at the annual meeting of shareholders held today (the “Meeting”). At the Meeting, shareholders also approved the re-appointment of MNP LLP as the auditor of the Company, Harborside’s Equity Incentive Plan, and a special resolution approving certain housekeeping amendments to the articles of the Corporation.

“On behalf of the entire Board, I’d like to thank our shareholders for their overwhelming support and for placing their trust in us to lead Harborside through its next phase of growth,” said Matthew K. Hawkins, Chairman of Harborside. “With a strengthened leadership team in place, we will work together to leverage our high-quality products and brands to accelerate our momentum and drive strong shareholder value. I look forward to updating you as we execute on the opportunity ahead.”

Harborside Inc. is one of the oldest and most respected cannabis retailers in California, operating three of the major dispensaries in the San Francisco Bay Area, a dispensary in the Palm Springs area outfitted with Southern California’s only cannabis drive-thru window, a dispensary in Oregon and a cultivation/production facility in Salinas, California. Harborside has played an instrumental role in making cannabis safe and accessible to a broad and diverse community of California consumers. Co-founded by Steve DeAngelo and dress wedding in 2006, Harborside was awarded one of the first six medical cannabis licenses granted in the United States and today holds cannabis licenses for retail, distribution, cu

ltivation, nursery and manufacturing. Harborside is currently a publicly listed company on the CSE trading under the ticker symbol “HBOR”. Additional information regarding Harborside is available under Harborside’s SEDAR profile atwww.sedar.com.

For the latest news, activities, and media coverage, please visit the Harborside corporate website athttp://www.investharborside.com or connect with us onLinkedIn,Facebook, andTwitter.

CLIENT FEATURE: Harborside Inc. $HBOR.ca Record 3rd Quarter of $19.6 Million Revenue from Dispensaries In California $VFF.to $HARV.ca $ACB.to

Posted by AGORACOM at 12:54 PM on Wednesday, November 25th, 2020

Harborside Inc (CSE: HBOR) is a California-focused, vertically integrated, fully licensed cannabis company with its business consisting of three primary segments that generated record gross revenue in the 3rd quarter 2020.

  • Retail Dispensaries
  • Cultivation and Processing
  • Wholesale Sales (including branded product sales). 

Harborside operates the only drive through dispensary in California and is one of the oldest and most respected cannabis retailers in California:

  • Operations have generated over $400M in cumulative sales since inception
  • Generated 21.2% Sequential Revenue Growth Q3 
  • Record Gross Revenues of $19.6 Million
  • Expects Full Year Gross Revenues of Approximately $61 Million – $63 Million  from 5 dispensaries 

OPERATIONS: 

California Focused 

Harborside dispensaries have generated over $400M in sales to date, and are strategically focused on growing market share in California. 

  • The SF Bay Area cannabis market is expected to grow from ~$667M in 2018 to ~$1.5B in 20221
  • Market potential & growth for California eclipses the combined value of FL, NY, MA & NV

RETAIL OPERATIONS 

Harborside dispensaries are preeminent NorCal cannabis retail operations with a significant track record and expertise gained through 13 years of operations.

  • Retail operations command 3% of California’s entire retail market
  • Harborside operates five dispensaries that are expected to produce approximately $62M in sales in 2020.
  • Significant market share and captive shelf space drive industry-leading sales
  • Recently opened two new Harborside locations to further expand California footprint

Watch the Video to see how Harborside works:

Harborside is an advertising client of AGORA Internet Relations Corp.

Harborside Inc. $HBOR.ca Reports Third Quarter 2020 Financial Results with Record Gross Revenues of $19.6 Million $VFF.to $HARV.ca $ACB.to

Posted by AGORACOM at 8:18 AM on Wednesday, November 18th, 2020
  • Generates 21.2% Sequential Revenue Growth, with Record Gross Revenues of $19.6 Million and Continued Positive Adjusted EBITDA (1) of $4.5 million
  • Reports Strong Combined Gross Margin of 54.7% (1) Driven by Improved Harvest Yields and Higher Wholesale Volumes
  • Expects Full Year Gross Revenues of Approximately $61 Million – $63 Million with Adjusted EBITDA of 8-10% (1)(2)

OAKLAND, CA and TORONTO, Nov. 18, 2020 /CNW/ – Harborside Inc. (“Harborside” or the “Company”) (CSE: HBOR) (OCTQX: HBORF), a California-focused, vertically integrated cannabis enterprise, today reported its financial results for the period ending September 30, 2020 (“Q3 2020”). The Q3 2020 financial report and corresponding management’s discussion and analysis (collectively the “Q3 Filings”) are available for download from the Company’s investor website,investharborside.com, and on the Company’sSEDAR profile. Unless otherwise indicated, all dollar amounts in this press release are in U.S. dollars.

Management Commentary

“We’ve implemented strong operational improvements that have continued our progress towards long term profitability and sustained growth. Harborside continues to be one of the leaders in the Northern California market,” said Peter Bilodeau, Chairman, and interim Chief Executive Officer. “As our production capacity is expected to ramp up in early 2021, following the completion of the planned upgrades at our Salinas greenhouse facility, we expect to be well-positioned to accelerate our growth and continue to gain wholesale market share. I’m thrilled with how far Harborside has come this year and look forward to further growth in 2021.”(2)

Q3 2020 Financial Results and Highlights (2)(3)

 Q3 2020Q2 2020Q1 2020Q4 2019
Retail Revenues$10,681,897$10,940,143$10,181,471$9,511,221
Wholesale Revenues(a)$8,890,723$5,208,439$4,456,775$2,185,701
Total Gross Revenues(a)$19,572,620$16,148,582$14,638,246$11,696,922
     
Retail Gross Profit(e)$5,353,429$5,601,565$5,219,890$4,903,947
Wholesale Gross Profit(a)(e)$5,360,764$2,435,952$787,964-$1,373,186
Total Gross Profit(a)(e)$10,714,193$8,037,517$6,007,854$3,530,761
     
Retail Gross Margin(b)(e)50.10%51.20%51.30%51.60%
Wholesale Gross Margin(a)(e)60.30%46.80%17.70%-62.80%
Total Gross Margin(e)54.70%49.80%41.00%30.20%
     
G&A/Professional Fees(c)(d)$6,783,987$6,764,781$5,786,573$7,621,971
Adjusted EBITDA(e)$4,473,046$642,025$431,562-$2,796,178
NOTES:
a. Not including excise taxes or biological asset adjustments.
b. Retail gross margin in Q1 2020 and Q2 2020 are slightly affected by additional expenditures on personal protective equipment and other safety measures due to the COVID-19 pandemic. Retail gross margin in Q2 2020 and Q3 2020 include additional pay for the Company’s front line workers and expenses relating to the impacts of the civil unrest in the Bay Area to certain of the Company’s retail stores.
c. Professional Fees for the fourth quarter of 2019 include approximately $953,000 in one-time fees and accruals for legal matters
d. Professional Fees for Q2 2020 and Q3 2020 include approximately $977,000 and $1,115,000, respectively, in one-time costs relating to the audits and restatements of certain of the Company’s previous financial statements.
e. This is a non-IFRS reporting measure. For a reconciliation of this to the nearest IFRS measure, see “Use of Non-IFRS Measures” and “Non-IFRS Measures” in the Company’s management discussion and analysis for September 30, 2020.

Q3 2020 Financial Summary

During Q3 2020, Harborside generated total gross revenues of approximately $19.6 million. This represented 21.2% sequential growth over the second quarter of 2020 (“Q2 2020”) and a 42.9% year-over-year increase when compared to the approximately $13.7 million of gross revenues reported in the period ending September 30, 2019 (“Q3 2019”). Combined gross profit before excise taxes and adjustments for biological assets was approximately $10.7 million, an 85.8% year-over-year increase as compared to the $5.8 million reported in Q3 2019. On a year over year basis, combined gross margins increased from 42.1% in Q3 2019 to 54.7% in Q3 2020(1).

Harborside’s wholesale operations reported gross wholesale revenues of approximately $8.9 million, representing 70.7% sequential growth compared to Q2 2020 and a year-over-year increase of 169.4% as compared to the approximately $3.3 million in gross revenues reported for Q3 2019.  The year-over-year increase in gross wholesale revenues was primarily due to improved harvest yields and production of premium flower, higher sales volumes, and higher average prices per pound at the Company’s 47-acre integrated production campus in Salinas, California (the “Salinas Facility”). As compared to gross wholesale revenues, wholesale gross margins increased from -22.1% in Q3 2019 to 60.3% in Q3 2020(1).

The Company’s retail operations generated revenues of approximately $10.7 million, a 2.8% increase as compared to the approximately $10.4 million realized in Q3 2019, with gross margins improving from 48.5% to 50.1% on a year-over-year basis, despite increased costs for safety and staffing related to COVID-19 and inventory losses experienced during the civil unrest that occurred in the Bay Area.(1) The year-over-year increase in retail revenue was driven primarily by the Company’s enhanced merchandising and pricing initiatives which resulted in, amongst other things, improved product mix, selected pricing changes and higher sell-through of internally produced products. Across Harborside’s retail stores in California, the Company’s branded products represented from 9 to 14 of the 25 top-selling SKUs in Q3 2020.

Total operating expenses for Q3 2020 were approximately $7.8 million, including $1.15 million in one-time costs related to the audit and restatement of prior year financials. This was a 7.5% year-over-year decrease when compared to approximately $8.5 million of costs incurred in Q3 2019. The year-over-year decrease in operating expenses is primarily related to a decrease in general and administrative expenses of $1.1 million to $4.1 million as compared to $5.2 million in Q3 2019, a decrease in allowance for credit losses of $0.3 million, and a decrease in write-downs of receivables, investments and advances of $1.3 million, as no impairments were recorded on any of the Company’s investments in Q3 2020.

During Q3 2020, the Company also recorded an income tax provision of $1.8 million, compared to $1.3 million in Q3 2019, based on estimated federal income taxes payable at period-end.

Operating Income for Q3 2020 was approximately $0.8 million, compared to an operating loss of approximately $3.6 million for Q3 2019. Net loss and comprehensive loss was $2.4 million, compared to a net loss and comprehensive loss of $1.9 million in Q3 2019, a 24.2% decrease on a year-over-year basis.  The year over year decrease was due primarily to additional income tax provisions and related interest expense booked during Q3 2020.

Adjusted EBITDA(1) for Q3 2020 was approximately $4.5 million, compared to a negative EBITDA(1) of approximately $0.9 million for Q3 2019, with the year over year increase being driven largely by improved operating efficiencies and headcount reductions across the Company. See “Non-IFRS Financial Measures, Reconciliation, and Discussion.”

Q4 2020 and Full Year Expectations (2)(4)

The Company expects Q4 2020 gross revenues to follow a more historically typical seasonal pattern, with lower flower production and wholesale revenues, resulting in total combined gross revenues of $11 million to $12.5 million for the fourth quarter, with EBITDA(1) for the quarter close to breakeven.  For the full year ended December 31, 2020, the Company expects gross revenues in the range of approximately $61 – $63 million, with Adjusted EBITDA(1) for the year in the range of 8 – 10% of revenues.

Liquidity and Cash Balance (2)(3)

As of September 30, 2020, Harborside had approximately $13.3 million in cash. The increase in cash balance since the second quarter of 2020 included a delay in payment of approximately $1.6 million of sales taxes that were due to the state of California. Payment of these taxes was postponed by the state as part of their COVID-19 business relief program and, in accordance with state guidelines, the funds were ultimately remitted at the end of October 2020.

Recent Operational Highlights

Wholesale Operations:  Harborside recently announced planned cultivation facility upgrades at the Salinas Facility. The planned upgrades include, among other things, the installation of blackout curtains and supplemental LED grow lights at the Salinas Facility. Following the successful completion of these upgrades, the Company expects an approximately 50% increase in production, an expected approximately 10% increase in bulk wholesale revenue capacity, and an approximately 7% increase in the total productive capacity, on an annualized basis(2)(4). The upgrades are expected to be completed within the first quarter of 2021(2).

In furtherance of its brand strategies, Harborside announced that two of its award-winning in-house brands, Harborside Farms and Key, introduced new product offerings for the market. Key has added ‘Key Mini Pre-Rolls’, a pack of seven 0.5g strain specific pre-rolls, to its product suite. These mini pre-rolls use flower that is sustainably grown in Harborside’s state of the art greenhouses using proprietary techniques. Key also recently offered a new seasonal SKU, ‘Limited Edition Skeleton Key Mini Pre-Rolls’, a nighttime blend of G4 OG and Gelato 33 packed in seven 0.5g mini pre-rolls. Harborside Farms has also added ‘Harborside Farms Quarter Ounces’, which offers strain-specific and single-origin flower from Harborside Farms. The Company also recently commenced sales of clones grown at its Salinas Facility at all Harborside branded retail locations, including Desert Hot Springs.

Capital Markets: During Q3 2020, the Company commenced trading on the OTCQX under the ticker symbol of “HBORF” and, subsequent to the quarter end, Harborside received depository trade clearance (DTC) eligibility.

Acquisitions: Subsequent to Q3 2020, Harborside announced it had executed a definitive agreement with FGW Haight, Inc. (“FGW”) to acquire majority ownership FGW, which holds a dispensary license in the historic Haight-Ashbury District of San Francisco, where the Company expects to start operations in the second quarter of 2021(2).

Secured Indemnity

On November 17, 2020, the Company and its subsidiaries entered into a guaranty and security agreement to guarantee and secure the obligations of the Company to defend and to indemnify its directors and officers (collectively, the “Secured Indemnity“). The Secured Indemnity is intended to supplement coverage available under existing directors and officers insurance maintained by the Company in order to mitigate concerns about claims and potential claims against directors and officers and whether the available insurance applies to and will satisfy in full such claims and potential claims. The scale and complexity of the Company’s operations in a highly regulated sector requires that the directors and officers managing those operations be committed to the performance of their duties without undue or inappropriate distractions. In management’s view, concerns about claims and potential claims and adequacy of insurance may detract from the performance of the directors and officers involved in the Company’s operations or lead to their resignations, which would disrupt the Company’s business. The Board has therefore determined that it is in the best interests of the Company and its subsidiaries to enter into the Secured Indemnity in order to induce the directors and officers to perform their duties to the Company, provide comfort to the directors and officers involved in the Company’s operations and to encourage their ongoing services.

The Secured Indemnity constitutes a “related party transaction” under Multilateral Instrument 61-101 – Protection of Minority Securityholders in Special Transactions (“MI 61-101“). The Company is relying on the exemptions from the valuation and the minority approval requirements of MI 61-101 provided for in subsections 5.5(a) and 5.5 (b) and subsection 5.7(a) of MI 61-101, respectively, as the Company’s shares are not listed on specified markets and neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the Secured Indemnity, in relation to the interested parties, will represent more than 25% of the Company’s market capitalization, as determined in accordance with MI 61-101.

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About Harborside:

Harborside Inc., a vertically integrated enterprise with cannabis licenses covering retail, distribution, cultivation, nursery, and manufacturing, is one of the oldest and most respected cannabis companies in the world. Founded in California in 2006, Harborside was awarded one of the first six medical cannabis licenses granted in the United States.  Today, the company operates three major dispensaries in the San Francisco Bay Area, a dispensary in the Palm Springs area outfitted with Southern California’s only cannabis drive-thru window, a dispensary in Oregon and an integrated cultivation/production facility in Salinas, California. Harborside continues to play an instrumental role in making cannabis safe and accessible to a broad and diverse community of California and Oregon consumers. Harborside is currently a publicly listed company, trading on the CSE under the ticker symbol “HBOR” and the OTCQX under the ticker symbol “HBORF”. Additional information regarding Harborside is available under Harborside’s SEDAR profile atwww.sedar.com.