Cannabis MSO Curaleaf swaps CEOs, stakes out new 280E tax position

Boris Jordan, a longtime leading figure at Curaleaf Holdings and the marijuana multistate operator’s executive chair, is now taking on the role of CEO.

New York-based Curaleaf announced Jordan’s elevated role during its quarterly earnings call on Wednesday – when it also staked out a bold new position on its federal tax liability.

Matt Darin, the company’s CEO since May 22, is retiring but will remain a “special advisor” to the company for the rest of the year, according to a news release.

Jordan said in a statement that, as CEO, he will “oversee all day-to-day operations” and “navigate the strategic direction.”

Q2 losses, stock upheaval, tax strategy

Curaleaf reported second-quarter losses of $49.8 million, with interest and real-estate expenses wiping out a modest income on operations of $7.5 million, according to filings.

The value of Curaleaf shares dropped from $4 at Wednesday’s close to $3.25 during midday trading Thursday.

The company trades as CURA on the Toronto Stock Exchange and CURLF on the over-the counter markets.

In addition to the leadership shift and earnings report, Curaleaf disclosed a new position on its federal tax liability, claiming it’s no longer subject to Section 280E of the Internal Revenue Code.

“As of June 30, 2024, the Company has adopted a new federal and state income tax position, asserting that the restrictions of Section 280E of the Internal Revenue Code (“Section 280E”) do not apply to the Company’s cannabis operations,” the company wrote in its quarterly filings.

Curaleaf plans to file new amended tax returns for 2022 reflecting this position, the company noted.

The new position means the company is realizing about $110 million in positive working capital, according to the filings.

Curaleaf conceded the IRS is likely to challenge its interpretation and audit the company.

MSO embraces hemp, exits markets

Under Darin’s leadership, Curaleaf expanded its hemp-derived cannabinoid offerings this year after pulling out of legacy cannabis markets such as California, Colorado, and Oregon in a quest for profitability.

But Jordan was never out of the picture, with the social media-savvy executive hyping the company’s nationally available hemp drinks.

Jordan was born in the United States but also holds a Russian passport and worked as a banker and an entrepreneur in Russia, a resume that’s caused some controversy.

Also of note, Forensic News reported in 2022 that U.S-sanctioned billionaire Roman Abramovich invested heavily in a Jordan company called Palliatech, which became Curaleaf in 2018.

However, Abramovich has long since exited his position, Jordan said.

Chris Roberts can be reached at chris.roberts@mjbizdaily.com.