Debra Borchardt
Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF)closed on a C$34 million offering that was announced on July 2, 2020. The company said proceeds of the offering will be used to fund Grassroots’ high-return expansion projects, replenish its working capital as well as for general corporate purposes.
Joseph Lusardi, CEO of Curaleaf, said, “Our successful completion of this private placement further strengthens Curaleaf’s balance sheet and provides additional flexibility to support our future expansion initiatives as we look to extend our leadership position in the fast-growing U.S. cannabis market.”
Deal Terms
The company said in a statement that under the initial tranche, subscribers purchased an aggregate of 3,541,429 subordinate voting shares of the Company at a price of C$7.70 per Subordinate Voting Share for aggregate gross proceeds of approximately C$27,269,003. Subsequent to setting the initial tranche, the Company secured a second tranche investment, which is part of the Offering closing today. Under the second tranche, a subscriber purchased 842,269 Subordinate Voting Shares at a price of C$8.058 per Subordinate Voting Share for gross proceeds of approximately C$6,787,003.
In aggregate, the Offering generates approximately C$34,056,007 in gross proceeds for the Company in exchange for 4,383,698 Subordinate Voting Shares at an average price of approximately C$7.77 per Subordinate Voting Share.
Grassroots Acquisition
Curaleaf had announced in July 2019 that it was buying Grassroots or GR Companies Inc. in a deal valued at $875 million. The deal was to be made up of 108.8 million shares and $75 million at the closing which was expected in early 2020. “With the acquisition of Grassroots and the pending acquisition of Select, Curaleaf is the world’s largest cannabis company by both revenue and operating presence,” said Joseph Lusardi, CEO of Curaleaf. “With a combined 68 open dispensaries, this transaction significantly accelerates our expansion strategy and strengthens our reach across the medical and adult-use markets. In addition, it enhances the depth of our retail and wholesale platform across the country. By leveraging our scale, as well as our market-leading capabilities and expertise, we will continue to deliver value for our shareholders.”
The company currently operates in 18 states with 57 dispensaries, 15 cultivation sites, and 24 processing sites. Curaleaf employs over 2,200 people across the United States.
