Phoenix-based multistate marijuana operator Harvest Health & Recreation is in litigation with Interurban Capital Group, the former owner of the Have a Heart dispensary group that Harvest acquired in March for $85.8 million.
Harvest CEO Steve White unveiled that news during his company’s quarterly results call on Tuesday.
White said Harvest and Interurban entered the acquisition discussions in good faith.
It was only after the transaction was closed that disagreements arose, he noted.
“We anticipate we will ultimately prevail with that litigation,” White said during the quarterly call.
No specific details about the litigation were released. Interurban officials weren’t immediately available for comment.
Though the transaction ran into an early problem when two Have a Heart medical cannabis dispensaries in Iowa were abruptly shuttered, White said those assets “were not a key part of that acquisition.”
Meanwhile, former Interurban employees contacted Marijuana Business Daily with complaints that Harvest had cut the corporate head count at Seattle-based Have a Heart by 80%. A Harvest spokesman said the figure was 47%.
The transaction has also raised questions because the dispensary licenses it brings with it are not in the four key states in which Harvest operates and where it anticipates the most growth going forward – Arizona, Florida, Maryland and Pennsylvania.
However, White explained that developing operations in California and Washington state, where Have a Heart is licensed, will benefit Harvest operations in its core markets.
Harvest, which trades on the Canadian Securities Exchange as HARV, reported full-year revenues of $116.8 million and a fiscal-year net loss of $173.5 million.
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– Nick Thomas