Marijuana Business Magazine March 2019

March 2019 | mjbizdaily.com 111 Harvest’s founders, who previously ran a company that performed design and building work, lead the construction team. “We’ve become very good at facility design and getting them built the way we want them,” Harvest CEO Steve White said. “You have to do that so you can control the (growing) environment.” Growing Footprint Harvest owns more than 60 cannabis licenses with a domestic footprint that includes real estate, equipment and other assets in 12 states stretching from Florida and Maryland on the East Coast to California on theWest Coast. Currently, the company has operations—including cultivation, manufacturing and retail facilities— up and running in Arizona, California, Colorado, Florida, Maryland and Pennsylvania. It has facilities under construction in Arkansas, Massachu- setts, North Dakota and Ohio. Over the next year, Harvest plans to cultivate more than 720,000 square feet of indoor, outdoor and greenhouse cannabis. The company already has indoor cultivation facili- ties under construction that will add up to 200,000 square feet of growing space to its capacity. It’s also building an additional 200,000 square feet of greenhouse space. “We will be growing cannabis in 10 to 11 states by the end of 2019,”White said. “That does not include the stuff we may win in the interim—just exist- ing licenses.” Can’t Rely on Hired Help Over the course of the six years the company has been growing marijuana, Harvest executives have learned that greenhouses produce higher-quality crops than outdoor grows. They’ve also learned that constructing a greenhouse is cheaper than building out an existing ware- house facility for cultivation. But one of the biggest lessons Har- vest executives have learned? Don’t rely on vendors and consultants to design and construct the company’s facilities correctly. For example, Harvest purchased a greenhouse from a large manufacturer in 2014 for its Camp Verde, Arizona, cultivation facility. Despite buying the “newest, coolest model,” the company got a green- house with a heating element that produced light, preventing its MMJ from receiving the light deprivation needed to better control when a plant begins to flower. “We changed out the way that place was heated,”White said. “We knew then to examine in future facil- ities how a greenhouse vendor was going to heat it in the winter time. It also causes you to look at other sys- tems the same way. It causes you to go back and verify all sorts of things.” When building and equipping its facilities, for example, Harvest closely examines everything from lighting and humidification to airflow and nutrient dosers. There is no one-size-fits-all formula for building out Harvest’s cultivation facilities, White said. In Massachu- setts, for example, the company is converting an existing greenhouse into a facility where it can grow can- nabis. But in Arkansas and Ohio, the company is building new greenhouse facilities from the ground up. New Real Estate Vehicle To fund its various build-outs, Harvest went public in Canada in November. It began trading on the Canadian Securities Exchange under the ticker symbol HARV. “We went public because we are engaged in a land grab, and we didn’t want everyone to have an advantage over us,”White said. “It provides us with currency to make acquisitions.” The company has aggressive expansion plans for this year. In December, Harvest agreed to form a joint venture called Aina We Would. The real estate investment trust (REIT) will provide funding for can- nabis-related real estate purchases. That includes land purchases, capital improvements and sale-leasebacks to Harvest and other operators in the cannabis industry. In addition to a Harvest subsidiary, Aina We Would (AWW) includes two family offices: Aina Advisors and Stadlen Family Holdings. According to a Harvest news release, Aina and Stadlen have agreed to fund or arrange up to $100 million to bankroll AWW projects they approve. “This new vehicle—combined with the approximately $290 million we raised in conjunction with our recent debt and equity financing Executives at Harvest Health & Recreation have learned to rely on themselves to ensure the company’s cultivation facilities are designed and built correctly. The vertically integrated, multistate operator has its own construction team. Arizona- based Harvest also has established a real estate investment trust (REIT) and set up a medical cannabis research unit. Harvest’s multipronged strategy involves the following: • The company has greater control over the design and construction of its new grows when it handles the job itself instead of relying on vendors and consultants. • The company is expanding its geographic footprint, and having an in-house construction team has facilitated this growth. • Harvest agreed to form a joint ven- ture called Aina We Would, a REIT that will provide funding for canna- bis-related real estate purchases. • To expand the scientific literature devoted to medical cannabis, Harvest formed a separate com- pany called the Medical Marijuana Research Institute.