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Wednesday, December 2, 2020

The Two Paths Ahead for Curaleaf Holdings Inc (OTCMKTS:CURLF)

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Having been a recent winner in terms of relative strength, shareholders in Curaleaf Holdings Inc (OTCMKTS:CURLF) are likely resting less easily as the stock moves back down to test key support and threatens a breach and a potential fresh extension to the downside. Amid that action, the company just announced that its core shareholders representing approximately 75% of the issued and outstanding shares of the Company have entered into an amended and extended lock-up agreement.

According to the release, “Since the Company’s reverse takeover transaction in October 2018, all shareholders holding individually more than 1% of the issued and outstanding shares have been subject to lock-up agreements. The core shareholders have voluntarily agreed to an extended lock-up release schedule, which limits the number of shares released as of today to 15% of previously locked-up shares. Going forward, an additional 15% of the locked-up shares will unlock on the last day of each subsequent calendar quarter, with the final 10% to unlock on March 31, 2021.”

Curaleaf Holdings Inc (OTCMKTS:CURLF) promulgates itself as a company that operates as an integrated medical and wellness cannabis operator in the United States.

The Company is the parent of Curaleaf, Inc., a leading vertically integrated cannabis operator in the United States. Headquartered in Wakefield, Massachusetts, Curaleaf, Inc. has a presence in 12 states.

Curaleaf, Inc. operates 30 dispensaries, 12 cultivation sites and 9 processing sites with a focus on highly populated, limited license states, including Florida, Massachusetts, New Jersey and New York. Curaleaf, Inc. leverages its extensive research and development capabilities to distribute cannabis products in multiple formats with the highest standard for safety, effectiveness, consistent quality and customer care. Curaleaf is committed to being the industry’s leading resource in education and advancement through research and advocacy.

Curaleaf Inc.’s Florida operations were the first in the cannabis industry to receive the Safe Quality Food certification under the Global Food Safety Initiative, setting a new standard of excellence.

It cultivates, processes, markets, and/or dispenses a range of cannabis products in various operating markets, including flower, pre-rolls and flower pods, dry-herb vaporizer cartridges, concentrates for vaporizing, concentrates for dabbing, tinctures, lozenges, capsules, and edibles.

The company also provides non-cannabis services to licensed cannabis operators in the areas of cultivation, extraction and production, and retail operations. As of November 01, 2018, it operated a network of 29 dispensaries. The company was founded in 2010 and is headquartered in Wakefield, Massachusetts.

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As noted above, CURLF just announced that its core shareholders representing approximately 75% of the issued and outstanding shares of the Company have entered into an amended and extended lock-up agreement.

While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action CURLF shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -12% on above-average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Furthermore, the company has witnessed a pop in interest, as transaction volume levels have recently pushed 17% over the long-run average.

Executive Chairman Boris Jordan commented, “The extension of the lock up agreements by Curaleaf’s core shareholders signals their ongoing support for the Company. We expect the new lock-up release schedule to reduce uncertainty regarding the release of currently locked-up shares and provide for a more orderly increase in the available float in the Company’s shares. Nevertheless, the core shareholders have all expressed their current intention not to sell any shares despite the partial release from lock up. As announced on October 3, I myself recently increased my shareholding.”

Now commanding a market cap of $2B, CURLF has a significant war chest ($140.3M) of cash on the books, which is balanced by about $64.1M in total current liabilities. CURLF is pulling in trailing 12-month revenues of $181.9M. In addition, the company is seeing recent top-line growth, with sequential quarterly revenues growing at 38.4%. We will update the story again soon as developments transpire. Sign-up for continuing coverage on shares of $CURLF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $CURLF, either long or short, and we have not been compensated for this article.

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