• Third quarter revenue was $61.6 million, up 86% from the third quarter 2019 and 11% sequentially
• Third quarter adjusted EBITDA was $10.5 million, compared to $4.1 million in the second quarter of 2020
• 2020 revenue target increased to greater than $225 million, up from $215- 220 million

PHOENIX, November 10, 2020 — Harvest Health & Recreation Inc. (“Harvest” or the “Company”) (CSE: HARV, OTCQX: HRVSF), a vertically integrated cannabis company and multi-state operator in the U.S., today reported its financial and operating results for the third quarter 2020. All financial information is provided in U.S. dollars unless otherwise indicated.

Third Quarter 2020 Financial Results

• Total revenue in the third quarter was $61.6 million, an increase of 86% from $33.2 million in the third quarter of 2019, and up 11% compared to $55.7 million in the second quarter of 2020.
•  Gross profit excluding biological adjustments in the third quarter was $28.7 million, compared to $11.6 million in the third quarter of 2019, and $23.4 million in the second quarter of 2020.
• Gross profit margin excluding biological adjustments in the third quarter was 46.6%, compared to 35.0% in the third quarter of 2019, and 42.1% in the second quarter of 2020.
• Net loss was $2.1 million for the third quarter, compared to a net loss of $39.1 million in the third quarter of 2019 and $18.3 million for the second quarter 2020.
• Adjusted EBITDA excluding biological adjustments in the third quarter was $10.5 million, compared to ($10.9) million in the third quarter of 2019 and $4.1 million in the second quarter of 2020.

  Please see the supplemental information regarding unaudited results and Non-IFRS Financial Measures at the end of this press release.

  Third Quarter 2020 Business Highlights

• During the third quarter of 2020, Harvest opened one new dispensary in Phoenix, Arizona and one new dispensary in Cranberry Township, Pennsylvania.
• As of September 30, 2020, Harvest owned, operated, or managed 37 retail locations in seven states, including 15 open dispensaries in Arizona. Harvest owned and operated dispensaries exclude retail locations serviced through Interurban.

Subsequent Events

Subsequent to September 30, 2020, Harvest opened two retail locations in Camp Hill and King of Prussia, Pennsylvania.

On October 2, 2020, Harvest terminated the agreement to sell two California retail assets to Hightimes Holdings for $6 million in preferred stock.

On October 28, 2020, Harvest completed a bought deal financing raising gross proceeds of approximately $32.4 million including the overallotment option. Units sold in the offering were priced at Cd$2.26 per unit and included one subordinate voting share and one-half warrant. Each warrant has an exercise price of Cd$3.05 and duration of 30 months.

On October 30, 2020, Harvest completed the purchase and license transfer of THChocolate, LLC, including cannabis manufacturing licenses in Colorado. The consideration paid was immaterial.

On November 2, 2020, Harvest announced a settlement agreement with Devine Holdings. Under the terms of the agreement, Harvest will acquire three vertical medical cannabis licenses in Arizona exchange for the repayment by Devine Holdings of an outstanding $10.45 million receivable owed to Harvest concurrently with the license acquisition.

On November 3, 2020, Arizona voters approved Prop 207, a ballot initiative to allow recreational cannabis consumption in Arizona.

Outlook/Management Commentary

“Our third quarter results demonstrate further progress toward our primary goal of returning to profitability through revenue growth, cost controls, and investments in our core markets of Arizona, Florida, Maryland, and Pennsylvania” said Chief Executive Officer Steve White. “We are focused on preparing for recreational cannabis in Arizona in 2021 and continuing to build on this positive momentum as we execute on our plan.”

Conference Call & Webcast

Harvest Health and Recreation Inc. will host a conference call and audio webcast with Chief Executive Officer Steve White and Chief Financial Officer Deborah Keeley, Tuesday November 10, 2020 at 5:00 PM Eastern Time.