Verano Holdings has approved a 1-for-5 reverse stock split as the multistate cannabis operator takes steps toward listing on a major U.S. stock exchange.
The Chicago-based company’s board approved the consolidation, which is expected to take effect around June 11, according to a company news release.
“The reverse stock split marks another significant step forward for Verano and our future and builds on a series of strategic initiatives we’ve executed to position Verano ahead of growth and U.S. capital markets opportunities,” Verano founder and CEO George Archos said in a statement.
What does a reverse stock split do?
A reverse stock split consolidates a company’s shares, reducing the number outstanding while increasing the price per share proportionately. On its own, the move does not change a company’s market capitalization or create new value.
Why is Verano executing a reverse stock split?
Verano expects the reverse stock split will help prepare the company for listing on a major U.S. exchange, which Archos said is “in the best interests of our employees and stockholders.”
The move will reduce Verano’s share count from about 364.4 million to roughly 72.9 million shares outstanding, assuming no additional shares are issued before the effective date. The per-share price is expected to rise proportionately.
Stockholders who would be left with fractional shares as a result of the split will receive a cash payment instead.
As Verano positions itself for a potential U.S. exchange uplisting, the company does so with a sizable multistate footprint built through acquisitions and expansion efforts.
Among its transactions:
- The Cannabis Co.’s plant-touching operations in Arizona and Virginia for $105 million in 2024
- Nevada-based Sierra Well for $29 million in stock and cash in 2021
- Territory Dispensaries Arizona retail assets for $7.3 million in cash and stock in 2021
Verano was also awarded one of the newly available vertically integrated medical cannabis permits in Texas.
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Are other cannabis MSOs preparing for uplisting to a US exchange?
Verano is the latest MSO to announce it will execute a stock split in preparation for uplisting to a U.S. stock exchange.
On May 25, Curaleaf Holdings said it’s planning a 1-for-3 reverse stock split to take effect around June 5.
At the time, Curaleaf Chairman and CEO Boris Jordan said rescheduling of medical cannabis has “created a potential pathway toward uplisting to a major U.S. exchange.”
