HRVSF) (“Harvest” or the “Company”), a vertically

integrated cannabis company with one of the largest and deepest

footprints in the U.S., is pleased to announce that it has closed the

first tranche of its previously announced brokered private placement of

7% unsecured convertible debentures (the “Convertible Debentures”)

of the Company, at a price of US$1,000 per Convertible Debenture (the “Issue

Price”) for gross proceeds of US$100,000,000. Eight Capital is

acting as agent for the offering. The Company intends to use the net

proceeds of the offering to fund working capital and general corporate


The Convertible Debentures have a maturity date (the “Maturity Date”)

of May 9, 2022 and bear interest from the date of issue at 7.0% per

annum, payable semi-annually on June 30 and December 30 of each year.

The Convertible Debentures are convertible, at the option of the holder,

into subordinate voting shares of the Company (“Subordinate Voting

Shares”) at any time prior to the close of business on the last

business day immediately preceding the Maturity Date. The Convertible

Debentures have a conversion price of US$11.4198723 (the USD equivalent

of CDN$15.378, based on the Bank of Canada CAD/USD exchange rate as of

May 8, 2019) per Subordinate Voting Share (the “Conversion Price”).

The purchaser of the Convertible Debentures also received, for no

additional consideration, 3,502,666 warrants (the “Warrants”).

Each Warrant is exercisable to purchase one Subordinate Voting Share at

an exercise price of CDN$18.17 per share, for a period of 36 months from

the date of issue.

“Our vision is to become the most valuable cannabis company in the world

and this transaction will help fuel Harvest’s growth,” said Harvest CEO

Steve White. “This is a particularly acquisitive time in the industry

and access to significant capital with favorable terms is crucial to

long-term success.”

The Company may, subject to certain conditions, force the conversion of

all of the principal amount of the then outstanding Convertible

Debentures at the applicable Conversion Price if, at any time after the

date that is four months and one day following the date of issue of the

Convertible Debentures, the daily volume weighted average trading price

(the “VWAP”) of the Subordinate Voting Shares is greater than

CDN$21.53 for any 10 consecutive trading days, by providing 30 days’

notice of such conversion.

The Convertible Debentures, the Warrants and the Subordinate Voting

Shares underlying both, are subject to a statutory hold period which

expires on September 11, 2019, being four months and one day following

the date of issue of the Convertible Debentures.

The Company has also entered into an investment agreement with an

institutional investor and an Agency Agreement with Eight Capital,

pursuant to which Eight Capital has agreed to offer for sale, and the

institutional investor has agreed, subject to certain terms and

conditions customary for a transaction of this nature, to purchase up to

4 additional tranches of 100,000 convertible debentures (the “Additional

Debentures”) at the Issue Price, for additional gross proceeds of up

to US$400,000,000 (the “Additional Offering”), on the terms

described in Harvest’s press release dated April 4, 2019. There can be

no assurances that any Additional Debentures will be issued as proposed

or at all.

About Harvest Health & Recreation, Inc.

Headquartered in Tempe, Arizona, Harvest Health & Recreation Inc. is

a multi-state cannabis operator (MSO) and vertically-integrated

cannabis company. Subject to completion of announced

acquisitions, Harvest will have the largest footprint in the U.S., with

rights to 219 facilities, of which 142 are retail locations and more

than 1,580 employees across 17 states. Since 2011, the company has been

committed to aggressively expanding its Harvest House of Cannabis retail

and wholesale presence throughout the U.S., acquiring, creating and

growing leading brands for patients and consumers nationally and

continuing on a path of profitable growth. Harvest’s mission is to

improve lives through the goodness of cannabis and is focused on its

vision to become the most valuable cannabis company in the world. We

hope you’ll join us on our journey:

Forward-looking Statements

This press release contains statements which constitute

“forward-looking information” within the meaning of applicable

securities laws, including statements regarding the plans, intentions,

beliefs and current expectations of Harvest with respect to future

business activities. Forward-looking information is often identified by

the words “may,” “would,” “could,” “should,” “will,” “intend,” “plan,”

“anticipate,” “believe,” “estimate,” “expect” or similar expressions and

include information regarding the completion of the offering or any

tranche of the offering.

Investors are cautioned that forward-looking information is not based

on historical facts but instead reflects Harvest management's

expectations, estimates or projections concerning future results or

events based on the opinions, assumptions and estimates of management

considered reasonable at the date the statements are made. Although

Harvest believes that the expectations reflected in such forward-looking

information are reasonable, such information involves risks and

uncertainties, and undue reliance should not be placed on such

information, as unknown or unpredictable factors could have material

adverse effects on future results, performance or achievements of the

combined Company. This forward-looking information may be affected by

risks and uncertainties in the business of Harvest and market conditions.

Should one or more of these risks or uncertainties materialize, or

should assumptions underlying the forward-looking information prove

incorrect, actual results may vary materially from those described

herein as intended, planned, anticipated, believed, estimated or

expected. Although Harvest has attempted to identify important risks,

uncertainties and factors which could cause actual results to differ

materially, there may be others that cause results not to be as

anticipated, estimated or intended. Harvest does not intend, and does

not assume any obligation, to update this forward-looking information

except as otherwise required by applicable law.


Alex Howe, Head of Corporate Communications