Curaleaf Holdings in Talks with Exchanges for Listing Expansion

US marijuana multinational operator Curaleaf Holdings is reportedly in discussions with Nasdaq and the Toronto Stock Exchange about potentially listing on the larger exchanges in order to attract more institutional investors and increase liquidity. This move would be a departure from its current listing on the smaller Canadian Securities Exchange.

A month ago, Canadian cannabis producer Canopy Growth Corp announced its plan to accelerate its entry into the American market. The company intends to acquire three American cannabis enterprises following the legalization of cannabis under US law.

Canopy hopes that this plan will allow them to continue trading on major exchanges such as the Nasdaq or the Toronto Stock Exchange (TSX), despite acknowledging opposition from Nasdaq towards the plan.

Darin acknowledged to MJBizDaily that this initiative also interests Curalaf. He stated that officials from the Massachusetts-based company have been discussing it for some time, spurred by Canopy's announcement and the potential opportunities it presents.

After serving as President of Curaleaf since January, Darin assumed the role of CEO in May, replacing Joe Bayern. Bayern's task was to establish a new department focused on developing "a new CPG-based business model.

Since becoming CEO, Grassroots Cannabis founder Darin - based in Chicago - has stated that he and his team have been dedicated to the emerging adult-use market in New York, researching new products, and developing a leadership strategy combining the strengths of Curaleaf and Grassroots, which were acquired by Curaleaf in 2020.

Darin also had to oversee recent layoffs. Curaleaf confirmed to Insider this week that the company laid off about 220 employees before the Thanksgiving holiday.

According to its website, Curaleaf has over 6,000 employees. In a statement to Insider, the company stated that the layoffs were "part of efforts to control costs and improve efficiency in the face of future economic uncertainty.

During an interview with MJBizDaily at the November MJBizCon, Darin discussed Curaleaf's interest in listing on larger stock exchanges, the upcoming adult-use market in New York, and the recent acquisition of Tryke Cos in Arizona.

As you have completed the acquisition of Tryke, do you have plans to rebrand assets such as Reef dispensaries?

We are currently assessing our options. Reef has a strong reputation in Las Vegas. Typically, we would rebrand the store with our national name, but we are evaluating this and I believe we may not do so. However, Reef is a great brand. We are integrating and observing.

Meanwhile, you have just renamed the Grassroots brand.

This is a brand update. When we were launching in new states, smarter marketers than me suggested it. It's very much a true Midwest brand, but also resonates in places like the East Coast, Maryland, Pennsylvania, and similar areas. We see opportunities to expand it to the West Coast, Northeast, and Florida. So why not give it a fresh look, a little polish? It looks really sharp. I'm really excited about it.

What are your thoughts on the development of the Grassroots brand?

That's cool. The new logo is a shed, like a mini house. When I first founded Grassroots, I had an office in the suburbs of Chicago where my real estate company was located. It was a Victorian house with a shed in the back. It used to be a music school so they would have music classes and things like that. When we started the cannabis company, our cannabis employees worked in the shed without air conditioning or heat. Working conditions weren't great, but we had a lot of spirit. It became part of our origin story - the company started in a shed, like these tech companies in Silicon Valley or Apple. I have a cool photo in my office that includes our shed along with the garages of Apple, Harley-Davidson, and Google.

What experiences or perspectives from Grassroots will you bring to Curaleaf?

I believe in focusing on marijuana consumers and what they want: products and brands, innovation, and a positive shopping experience. As we continue to grow and acquire different states and functions, I am striving to maintain an entrepreneurial mindset by wearing different hats and ensuring our entire organization is not operating in silos.

This is about the strategic thought process of how to grow and enter new markets. It's interesting to know that Curaleaf has a successful strategy, while grassroots have different strategies for success. Hence, we mixed them together and found the optimal combination of both.

What did you learn from Curaleaf?

I have gained a lot of knowledge about capital markets and listed companies. My background is more entrepreneurial. I have conducted many transactions in the commercial real estate sector.

Curaleaf is ahead of Grassroots and has publicly acknowledged individuals such as its CEO Boris Jordan, who have raised funds for large corporations around the world.

Science, innovation, and research and development are indeed core components of Curaleaf's emergence into the medical industry, which has always been a focus. We have an exceptional research and development team based in Boston. Working alongside some very intelligent individuals on our team, I have gained a lot of knowledge about the science behind cannabis - certainly more advanced than what I had previously encountered.

What types of research and development is Curaleaf currently undertaking?

Our focus is on trending topics such as solventless extraction, the entire terpene profile, and liquid diamond technology, as well as the upcoming new version of distillates. Vapes currently rank second only to flower in terms of product categories, making it a significant area of interest for the vapor industry's next phase, particularly in regards to creating the perfect blend of flavor, potency, and desired effects.

Beverages currently only make up a small portion of the market, accounting for just 1%. However, with the wider distribution of cannabis, I believe it will become a larger category. Currently, carrying enough beverages in pharmacies presents some unique logistical challenges, such as needing to lock up all inventory at night.

We have launched our beverage brand in Massachusetts and are now planning to expand to several new states. Additionally, there are scientific categories such as "need state" and "emotional state" to consider.

How do you create a highly certain experience?

I cannot disclose too much about our early-stage research, but there is a potential to create specific experiences through the science of cannabinoids and terpenes.

During the latest earnings conference call at Curaleaf, you mentioned that you are considering listing on larger exchanges such as NASDAQ. Can you provide more details on this?

Yes, therefore we hope that the SAFE bill will pass in Congress. If this happens, US exchanges may become available depending on the actual provisions of the law. We have been actively discussing this opportunity with NASDAQ. Currently, all revenues listed by NASDAQ for non-plant-touching companies come from plant-touching companies or international companies that are not even in the US. This feels a bit outdated. However, to list companies that touch plants in the US, they need federal legislation to allow them to do so. We have also been in talks with the Toronto Stock Exchange.

I believe there is a potential avenue for us to list on the TSX, which would improve liquidity and increase the accessibility of our stock to at least some institutional investors. We are in discussions about all of this and ultimately hope to find the best opportunity to increase access to liquidity for a larger group of investors.

Do you still see a lot of opportunities in New York?

We are very optimistic about New York. I believe people need to relax a bit about the fact that New York may never release a statement for adult use, or that it may not include medical market participants, or that it will become like California again.

We would be happy to see it move faster, but these things take time.

There is much confusion surrounding the plans of the New York Cannabis Control Office. I believe much of the confusion stems from the CAURD plan, which is an independent plan separate from registered organization adult use plans (ROs) such as Curaleaf, which is currently involved in the medical market.

Therefore, people are reading certain rules and interpreting them to mean that RO will adhere to all of these rules, but in reality there are two different procedures. As such, we still hope to release the rules for adult usage of the program in the first half of this year, in addition to the CAURD plan, and ultimately launch the adult usage program later this year.

New York is a state with a population of 20 million, and is expected to become the center of the East Coast at some point. It has a significant history with cannabis culture and industry. New York City is a major player, and we are excited to be the biggest player there. We currently hold around 50% of the market share in the medical industry.

Therefore, we have invested and reinvested in adult use and expanding capacity. There will be a large enough market to benefit all stakeholders and current participants.

Does Curaleaf have additional acquisition plans?

We have just completed the acquisition of Tryke and we are thrilled to announce that we have added six new pharmacies and one flagship store on the famous Las Vegas Boulevard, as well as pharmacies in Arizona and Utah. This is likely the biggest deal in the cannabis industry for some time, and we are still in the process of integrating and digesting its impact. We are always on the lookout for opportunities, but we are very careful in our selection process, considering the many opportunities that lie ahead next year.

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