Curaleaf (CURLF) (CURA) Holdings announced that its core shareholders agreed to extend the lockup agreement. Core shareholders hold more than 75% of the total shareholding agreed for the lockup agreement. The new agreement has a schedule for the release of the lockup shares.
Curaleaf’s reverse takeover
During October 2018, Curaleaf entered into a transaction to buy a Canadian-listed shell company that had stopped most of its operations. By buying an already listed company, Curaleaf avoided the long procedure of IPO (initial public offering) and its costs.
As a result, Curaleaf’s shares can be traded in the Canadian stock market. This allows the cannabis operator to sell to the acquired company’s country. As Canada now allows recreational marijuana, this came as a strategic move for the company.
More on the lockup agreement
During the takeover last year, all shareholders who held more than 1% of the shareholding agreed to not sell their shares for one year. Now, those core shareholders have agreed to extend the one-year period. Core shareholders make up about 75% of the total shareholding.
By comparison, this extension results in 15% less locked-up shares than last year’s agreement. Under the new schedule, 15% of the locked-up shares will be released every quarter. As per the schedule, the last 10% release will be on March 31, 2021.
Executive Chairman Boris Jordan said, “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.” Jordan further believes that core shareholders do not intend to sell any shares despite the partial release from the lockup.
Why Curaleaf is set to boom
Curaleaf Holdings is a leading cannabis operator in the US. The company is in 12 states. Also, the cannabis operator owns the whole supply chain that the company uses to spread its products.
Additionally, it’s the first company to receive a license to launch medical cannabis in New York. It launched limited-edition flower pods in one dispensary. The company plans to launch the flower pods in its other dispensaries in the future.
Currently, the company has three brands. The brands are Curaleaf, Curaleaf Hemp, and UKU Cannabis. These brands make cannabis products in the form of vapes, oils, flowers, lotions, capsules, mints, and edibles.
To know more about the cannabis launch in New York and its impact, read New York: Curaleaf Launched Cannabis Flower Products. Also, read Curaleaf Stock Rallying after Q2 Earnings and Curaleaf Will Soon Be the World’s Largest Cannabis Company.