Curaleaf Holdings (OTC:CURLF) Inc., chaired by Boris Jordan, is preparing to transfer its stock listing to the Toronto Stock Exchange (TSX) following a C$16 million capital raise. The move comes in the wake of recent legislative developments, including the Drug Enforcement Administration's review of cannabis' Schedule I status and the approval of the Secure and Fair Enforcement (SAFER) Banking Act of 2023.
The capital raise involves Canaccord Genuity purchasing 2.7 million Curaleaf securities for C$16.2 million (USD1 = CAD1.3477) in a private offering in Canada and the U.S. The company's shares have seen a 4.5% increase in 2023, outpacing the AdvisorShares Pure US Cannabis ETF MSOS. According to InvestingPro data, Curaleaf has also seen a strong return over the last month, with a total return of 67.96%.
Curaleaf, with its market capitalization of $3.18 billion according to InvestingPro, competes with other cannabis firms like Green Thumb Industries (OTC:GTBIF) and Cresco Labs (OTC:CRLBF) Inc. The decision to shift to TSX follows similar moves by other cannabis companies such as TerrAscend, which witnessed an increase in trading volume after its transition to TSX.
The strategic move by Curaleaf is indicative of a broader trend among cannabis companies seeking larger markets and increased liquidity. It also reflects the growing acceptance and normalization of the cannabis sector within mainstream finance, aided by favorable legislative changes.
InvestingPro Tips shed light on some of the challenges and opportunities facing Curaleaf. The company's stock price movements have been quite volatile, and its short-term obligations exceed its liquid assets. However, analysts predict that the company will be profitable this year, and it has seen a significant return over the last week. For more insights like these, you can check out InvestingPro's premium subscription, which offers access to additional tips.
Despite not being profitable over the last twelve months and trading at a high EBITDA valuation multiple, Curaleaf has managed to increase its total debt for consecutive years, which could be a sign of aggressive expansion. The company's revenue growth for the second quarter of 2023 was 3.55%, and it has a gross profit margin of 39.33%. These figures suggest that Curaleaf is on a solid growth trajectory, despite the challenges it faces.
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