Curaleaf, a Massachusetts-based, multistate cannabis operator, is amending the terms of its pending acquisition of Cura Partners because of changing market conditions.
Curaleaf, which initially announced the proposed deal in May for an estimated price of almost $1 billion, will now issue 55 million of its shares instead of the original 95.6 million shares in the all-stock transaction.
That is a 42.5% drop in the number of shares definitively offered.
The balance of shares will be payable to Cura Partners if Curaleaf achieves a minimum of $130 million in Cura’s Select brand sales in 2020 and a maximum of $250 million.
In addition, equity holders in Oregon-based Cura Partners will also be eligible to receive an earnout of up to $200 million from the issuance of additional Curaleaf shares if the newly merged company exceeds $300 million in Select sales next year.
The move comes as the industry faces a wave of either renegotiated or failed deals in light of a poor funding environment and lower profitability rates.
Earlier this month, California-based MedMen canceled its planned acquisition of Illinois-headquartered PharmaCann, and Cresco Labs of Illinois said soon will close its planned transaction with Canada’s Origin House on mutually agreeable terms.
The Curaleaf-Cura Partners transaction, which Curaleaf said has now cleared antitrust hurdles, is expected to close by Jan. 1.
Curaleaf trades on the Canadian Securities Exchange as CURA. Cura Partners is privately owned.
For more details on the amended transaction, click here.