According to Steve Rivera, a senior account manager at We Financial, Curaleaf’s plan to list on the Toronto Stock Exchange is part of its strategy to increase its investor base. The American cannabis company recently announced that it plans to list stocks on the TSX. A few months ago, it mentioned plans to reorganize US cannabis assets and look at different approaches to get a listing.
But before Curaleaf is listed on the TSX, it needs approval from shareholders. Currently, the company is divided on whether or not to do so because the listing will result in cash restrictions. This specifically applies to cash transfers made to Curaleaf USA and other subsidiaries based in the United States. While it won’t apply to all cases, it will be the case when it comes to activities that may violate United States cannabis laws.
Curaleaf Decides To List on TSX After Seeing TerrAscend
The company’s decision to get a listing on the TSX comes after a Canadian and US cannabis operator, TerrAscend, was listed recently. Experts in the cannabis industry are reporting that the successful listing of TerrAscend on the TSX will encourage other multi-state operators in the US.
Currently, it’s common for multi-state operators to get restricted access to liquidity and larger investors. That’s because they mostly trade on the secondary CSE, Canadian Securities Exchange, or the OTC market.
As of now, it won’t be easy for other companies to replicate the same moves as TerrAscend. That’s because the company had to raise around $20.5 million in debenture private placements and equity. A large chunk of the funds was needed for restructuring the company and the acquisition of assets in Maryland.
But if the company is successful, Steve Rivera of We Financial expects a rise in the number of companies looking for similar opportunities.
TerrAscend’s Move To List on TSX Delivers Results
The first step of getting consent from shareholders involves getting a list of proposed indenture amendments. This can Curaleaf involve redefining terms like a change of control and asset sales. TerrAscend started trading on the TSX in early July after it completely restructured its business so that it could be listed. In late June, it even secured a loan from Stearns Bank worth $25 million.
And many have noted that this move is already delivering results. The executive chair of TerrAscend, Jason Wild, stated that the company had gone beyond being a restricted Morgan Stanley stock. The change would allow Morgan Stanley’s customers to trade the cannabis company’s stocks on the TSX with ease.
CEO of Curaleaf, Matt Darin, has long since spoken about the company’s plans to list the stock on a bigger exchange. In an interview, he stated that they’re taking the path to list on the TSX, which would allow for further liquidity. Steve Rivera of We Financial believes that it would also increase the availability of more institutional investors who would want to purchase shares.
Overall, Steve Rivera of We Financial expects that things will improve for cannabis MSOs that want to be free from the uncertainty of US regulatory reform.
