Having emerged unscathed from a headline-grabbing bout with the IRS over several years of 280E questions, Harborside is moving forward with its goal of executing a reverse takeover and going public on the Canadian Securities Exchange—the latest high-profile U.S. cannabis company to do so. The California retailer will merge with Toronto-based Lineage Grow Co., which has spent recent months acquiring California growers.
The result is a vertically integrated cannabis company that will be known as Harborside Inc.
Last summer, the companies set off on this path toward a reverse takeover, with Lineage acquiring all issued and outstanding Harborside securities. In return, Harborside received newly issued Lineage shares valued at $200 million.
Now, Lineage will change its name to Harborside Inc. The newly formed business combination has reserved the CSE ticket symbol HBOR. (The deal is awaiting final approval from the CSE.)
“Today marks a major milestone in a strategy designed to fuel Harborside’s planned expansion,” CEO Andrew Berman said in a public statement. “I am excited to announce this proposed merger with Lineage, which will enable us to move through 2019 with more assets and the resources we need to quickly expand our retail platform [and] drive revenue. This combination with Lineage will significantly bolster our retail program and vertically-integrated, California-centric business model.”
Over the past eight months, Harborside, which is incorporated in California as FLRish Inc., has been raising capital with an eye toward retail expansion. (Absent the Lineage reverse takeover, Harborside owns and operates two dispensaries in the Bay Area and a cannabis growing facility in Salinas.) Series B Convertible Debenture financing brought Harborside $26 million in November.
Earlier, in May 2018, Series A financing, led by Cresco Capital Partners, brought $6.5 million.
And in the very near future, prior to the closing of the reverse takeover, the company plans to offer subscription receipts in a private placement that could raise $70 million (in Canadian dollars).