Oakland Dispensary Harborside Hopes for a Stock Market High
The Bay Area will see its first homegrown marijuana dispensary trading on a stock exchange, as Oakland’s Harborside is about to go public.
The recent Uber and Lyft IPOs did not “eat San Francisco alive,” as The New York Times predicted. But one big-name Bay Area cannabis company has a stock offering that might be more likely to give you a case of the munchies.
Oakland pot shop Harborside, one of the largest dispensaries in the country and a 13-year mainstay on the Bay Area marijuana scene, is about to go public on the Canadian stock exchange. It’s another big-bucks transaction that shows how California cannabis companies now see themselves as operations worth hundreds of millions of dollars — but those dollars are often Canadian.
Technically, Harborside will not be the first Bay Area cannabis company listed on a stock market. The Canadian firm that acquired The Apothecarium in February is already on the Canadian Securities Exchange under the name of that parent company TerrAscend. A Monterey cannabis conglomerate called Indus Holdings also made it onto the Canadian exchange in April.
But this is the first homegrown, historic, pre-legalization Bay Area marijuana brand that will hit the stock market under its original name and identity.
“In terms of core Bay Area and longstanding legacy companies, particularly one like Harborside that’s been around since 2006, this is unique and very, very special for northern California, for the industry, and certainly for Harborside,” the company’s CEO Andrew Berman tells SF Weekly.
As of press time, we don’t know exactly when Harborside stock will begin trading. The company has announced it expects the stock to start trading “on or around June 6,” but that decision lies with the Canadian Securities Exchange. (Update: Harborside announced Thursday that shares will begin trading on Monday, June 10.)
“We hope it’s Thursday. We expect it to be Thursday,” Berman tells us. “It might be Friday. It might be next week. But sometime in the near term.”
And we still don’t know with certainty the stock’s introductory share price.
“We are targeting a $7 share price. That’s Canadian” dollars, he says.
This is not really an IPO. Harborside performed a complex transaction called a “reverse takeover” (RTO) with the already-existing Canadian cannabis stock Lineage Grow Company. That company’s stock, which trades under the stock ticker name “BUDD,” has had its trading halted, per Canadian stock exchange rules for takeovers of this type. The new stock will trade under the Harborside name, and its ticker name will be updated to “HBOR.”
“This is a reverse takeover where we have found a company that was already listed on the Canadian Securities Exchange,” Berman explains. “We merge into a company, and then in order for the merge to take place, we effectively take on more of their shares, so we end up being the controlling entity.”
Lineage Grow Company was already in the marijuana business. They’re nowhere the size of Harborside, which is valued at $150 million, but they do have two dispensaries in Oregon, one in San Jose, and a 43,000-square-foot grow in Sacramento. So Harborside acquires some nice things of value in this reverse takeover deal.
“Some of the other folks that have done RTOs found companies that were maybe an old mining company or an old pharmaceutical company,” he says.
But Harborside is more than just a dispensary in Oakland, and parent company FLRish has quietly become one of the most powerful cannabis companies in California. While Harborside has been retailing since the “medical marijuana collective” days of 2006, they’ve also acquired licenses to grow, process, manufacture, and transport cannabis. The company claims to sell three percent of all retail cannabis in California.
Unfortunately for Harborside employees, they do not stand to get rich quick off Harborside stock the way tech employees do. That’s because they won’t get any Harborside stock — not yet, at least.
“We are merging and becoming a new business,” Berman admits. “I need to go and get a new employee stock option plan for the new company. I’ll have a new board of directors. That is something we would like to do, but they won’t have it immediately.”
But if you hope to get rich investing in Harborside shares, how does an American go about buying Canadian marijuana stock?
“You need a broker in Canada,” he says. “Most of the larger U.S. [brokerage] companies can help you do that, too.”
Unsurprisingly, the CEO of Harborside thinks that Harborside stock is an excellent investment.
“It’s a good, attractive investment because it’s been around a long time,” Berman explains. “We know what we’re doing. We have assets that are in place. Some companies have gone public and they’re in the process of raising money to build out assets. We have existing assets.”
True, but the grass hasn’t always been greener up north for Canadian marijuana stocks. Most of them are down for the year, thanks to regulatory uncertainty around the drug that makes it hard for businesses to plan. It’s certainly a significant milestone to become a publicly traded stock, but there’s no guarantee Harborside’s ship will come in when they go public on the Candian stock exchange.