Harvest Completes US$100 Million First Tranche of US$500 Million Convertible Debenture Financing

Harvest Health & Recreation, Inc. (CSE: HARV, OTCQX: 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 purposes.

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.