Harvest Health & Recreation, a Tempe, Arizona–based multi-state cannabis operator, said it closed on the acquisition of Franklin Labs LLC, a subsidiary of CannaPharmacy, for about $25.5 million
The acquisition, payable with $15.5 million in cash and a $10 million promissory note, includes a 46,800-square-foot cultivation and manufacturing/processing facility in Reading.
Pending necessary approvals, Harvest expects to expand the existing cultivation operation this year and potentially complete further expansion to support market growth.
It plans to begin manufacturing and processing operations this year during the second quarter. Franklin Labs is the only cultivation facility owned by Harvest in Pennsylvania and is expected to supply significant product to retail dispensaries across the state, the company said.
“This acquisition helps to alleviate supply constraints in a fast-growing market, while contributing to improved financial performance,” said Harvest CEO Steve White, in a statement. “This investment in Pennsylvania is an important milestone in our plan to expand operations in key states and return to profitability.”
Harvest of Reading is at 201 Lancaster Ave., and is open from 9 a.m. to 6 p.m., Tuesday through Saturday. Its other Reading location is on North Fifth Street.
Harvest affiliated entities own and operate five retail dispensaries in Pennsylvania: two in Reading, and one each in Harrisburg, Johnstown, and Scranton. Harvest affiliated entities are permitted for up to 15 total retail locations across the state.
“This investment is part of our focus on allocating capital to a core state where we can improve our financial performance by going deeper,” said Alex Howe, spokesperson for Harvest. “It will allow us to improve our margin profile of our overall Pennsylvania operations and provide high-quality products to medical patients and our existing and future stores. Pennsylvania is an important market where we see significant growth in the future.”