F-10: Curaleaf Holdings Seeks to Raise $1 Billion Through Shelf Prospectus

Sentiment:

Short Form Base Shelf Prospectus 5 February 2025 4:43 PM

Curaleaf Holdings files a short form base shelf prospectus to offer up to US$1 billion in various securities over the next 25 months.

Capital raiseCuraleaf Holdings is seeking to raise up to US$1,000,000,000 through the issuance of various securities.The securities include subordinate voting shares, debt securities, subscription receipts, warrants, and units.The capital raised may be used for general corporate purposes, repaying indebtedness, discretionary capital programs, and potential future acquisitions.The specific terms of any offering of securities will be set forth in the applicable Prospectus Supplement to this Prospectus.

Summary

Curaleaf Holdings, Inc. has filed a short form base shelf prospectus to offer various securities, including subordinate voting shares, debt securities, subscription receipts, warrants, and units, up to an aggregate of US$1,000,000,000.
The securities may be offered separately or together, in one or more offerings, and at prices to be set forth in prospectus supplements.
The prospectus is effective for a 25-month period.
The company qualifies as a well-known seasoned issuer (WKSI) under applicable securities laws.
The document incorporates by reference information from previously filed documents with Canadian securities commissions and the SEC.
Curaleaf's business is subject to significant risks due to the U.S. federal illegality of cannabis, despite its legality in many states.
The company derives over 90% of its revenues from the cannabis industry in certain U.S. states, which is illegal under U.S. federal law.
The company operates in 17 states in the U.S. and has international operations.
The company is positioning itself to meet increased demand in the U.S. for cannabis for research purposes through the importation of cannabis from its foreign operations.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While the company is seeking to raise a significant amount of capital, the document also highlights the risks and uncertainties associated with the cannabis industry.

Positives

Curaleaf qualifies as a well-known seasoned issuer (WKSI), allowing for streamlined prospectus requirements.
The company has a diversified portfolio of cannabis-based therapeutic offerings.
The company has a strategic network of branded retail dispensaries.
The company is operated by an executive team comprised of seasoned professionals with significant experience in the cannabis industry and in scaling for growth.
The company has strategically positioned itself for growth through a series of well-planned acquisitions.
The company is positioning itself to meet increased demand in the U.S. for cannabis for research purposes through the importation of cannabis from its foreign operations.

Negatives

The company's business is subject to significant risks due to the U.S. federal illegality of cannabis, despite its legality in many states.
The company may be subject to heightened scrutiny by regulators, stock exchanges, and other authorities.
The company's investments in the United States cannabis market may subject the company to heightened scrutiny by regulators, stock exchanges, clearing agencies and other United States and Canadian authorities.
The company's business activities, and the business activities of its subsidiaries, while believed to be compliant with applicable U.S. state and local laws, currently are illegal under U.S. federal law.

Risks

The U.S. federal government may enforce current federal laws relating to cannabis, materially and adversely affecting the company's business.
Changes in government policy or public opinion could significantly influence the regulation of the cannabis industry.
The company may face difficulties in accessing traditional bank financing due to federal laws regarding cannabis.
The company's operations may be subject to heightened scrutiny by regulators, stock exchanges, and other authorities.
Third-party service providers could suspend or withdraw their services due to the uncertain legal landscape.
The company's inability to raise financing through traditional banking to fund on-going operations, capital expenditures or acquisitions could limit its growth and may have a material adverse effect upon the company's business, results of operations, financial condition or prospects.

Future Outlook

The Corporation remains committed to its growth trajectory and monitors the market continuously for potential acquisition targets that can offer strategic value, whether through new technologies, innovative products or expanded market access.

Industry Context

The announcement comes as the cannabis industry continues to navigate a complex regulatory landscape, with state-level legalization efforts contrasting with federal prohibition. Curaleaf's move to raise capital suggests a strategic focus on expansion and market leadership within this evolving environment.

Comparison to Industry Standards

Other major cannabis companies such as Trulieve Cannabis Corp., Green Thumb Industries Inc., and Canopy Growth Corporation have also utilized shelf prospectuses to raise capital.
The $1 billion target is a significant amount, placing Curaleaf among the larger capital raises in the cannabis sector.
Compared to global benchmarks, the company's focus on limited license states aligns with strategies to maximize profitability in restricted markets, similar to tactics employed by alcohol and gaming companies.

Stakeholder Impact

Shareholders may experience dilution if additional equity is issued.
Employees may benefit from the company's continued growth and expansion.
Customers may see improved product offerings and accessibility.
Suppliers may benefit from increased demand for their products and services.
Creditors may be impacted by the company's use of proceeds to repay indebtedness.

Next Steps

Curaleaf will file prospectus supplements detailing the specific terms of each offering of securities.
The company will seek regulatory approvals for the offerings.
The company will monitor the market for potential acquisition targets.

Key Dates

Date	Description
November 13, 2014	Lead Ventures Inc. was incorporated under the laws of the Province of British Columbia.
February 8, 2018	The Canadian Securities Administrators published CSA Staff Notice 51-352 regarding issuers with U.S. Marijuana-Related Activities.
October 25, 2018	Lead Ventures Inc. changed its name to Curaleaf Holdings, Inc. as part of its business combination with Curaleaf, Inc.
December 20, 2018	President Donald Trump signed the Agriculture Improvement Act of 2018 into law.
September 26, 2019	The U.S. House of Representatives passed the Secured and Fair Enforcement Banking Act of 2019 (SAFE Banking Act).
April 7, 2021	Curaleaf established an overseas subsidiary named Curaleaf International Holdings, Limited.
January 24, 2022	The OCM announced the launch of a new Medical Cannabis Program certification and registration system expanding the existing medical cannabis program.
July 21, 2022	The Cannabis Administration and Opportunity Act (CAOA) was introduced by U.S. Senate Majority Leader Chuck Schumer.
August 9, 2022	PKF O'Connor Davies, LLP (PKF O'Connor Davies) is the auditor of the Corporation since August 9, 2022.
October 6, 2022	President Biden announced a series of marijuana-related initiatives.
December 2, 2022	President Biden signed into law H.R. 8454, the Medical Marijuana and Cannabidiol Research Expansion Act.
January 26, 2023	The FDA concluded that a new regulatory pathway for CBD is needed.
January 10, 2023	Retail sales of adult use cannabis commenced in Connecticut.
September 20, 2023	The MORE Act was reintroduced in the House of Representatives.
September 21, 2023	A revised bill known as the Secure and Fair Enforcement Regulation Banking Act (SAFER Banking Act) was introduced in the Senate.
August 29, 2023	HHS, FDA and the National Institute on Drug Abuse issued a recommendation that the DEA reschedule marijuana from its current status in Schedule I to Schedule III of the CSA.
May 21, 2024	The DEA published, in the Federal Register, a Notice of Proposed Rulemaking (the NPRM) signed by Attorney General Merrick Garland.
June 7, 2024	The initial applications for licenses were available in Ohio.
June 14, 2024	Annual general meeting of the shareholders of the Corporation.
July 22, 2024	Individuals and businesses were given until July 22, 2024 to submit comments on the NPRM.
August 27, 2024	The DEA announced that it would hold a hearing before an administrative law judge on the cannabis rescheduling proposal.
September 7, 2024	Provisional licenses were granted in Ohio.
September 25, 2024	Stakeholders interested in speaking at the hearing had until September 25, 2024, to register their request in accordance with the Notice of Hearing.
December 2, 2024	The hearing commenced on December 2, 2024, but was stayed by the administrative law judge pending two private movants appeal on the denial of their motion to remove the DEA from its role as proponent of the proposed reclassification.
December 14, 2023	Completion of the listing of its Subordinate Voting Shares on the TSX.
January 31, 2025	The last trading day prior to the date of this Prospectus, the closing price per Subordinate Voting Share on the TSX was CDN$1.89 and on the OTCQX was US$1.32.
February 3, 2025	Date of the short form base shelf prospectus.
February 5, 2025	Date of the F-10 filing.
March 14, 2025	The Rohrabacher-Farr Amendment was most recently extended through March 14, 2025.

Keywords

cannabis, securities, Curaleaf, prospectus, offering, regulation, federal law, dispensaries, debt, shares

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