Marijuana company Curaleaf looking for $4 billion valuation

Massachusetts-based Curaleaf, a vertically integrated cannabis company, is seeking a valuation of up to $4 billion.

According to Bloomberg, the company entered into a reverse takeover when Canada’s Lead Ventures combined with PalliaTech in August and changed its name to Curaleaf.

The company plans to offer subscription receipts – which can be exchanged for common shares once the company goes public – at 8.56 to 11.47 Canadian dollars ($6.57-$8.81) per initial receipt. The range for the receipts is based on a diluted pre-offering equity valuation of $3 billion to $4 billion.

Leading the offering are GMP Securities and Canaccord Genuity, which recently served as the lead underwriter on an IPO for CBD company Charlotte’s Web.

GMP Securities also recently published a report that determined U.S. companies are more desirable than their Canadian equivalents because the companies to the north are overvalued.

Curaleaf is focused on legal medical marijuana states with robust populations but limited licenses, including New York, New Jersey, Massachusetts and Florida.

Bloomberg reported that Curaleaf will use the proceeds from its offering to:

  • Fund infrastructure construction.
  • Purchase minority buyouts.
  • Complete certain acquisitions pending regulatory approval.
  • Cover general needs.

As Canada gears up to legalize recreational marijuana nationwide Oct. 17, more U.S. companies are completing reverse takeovers of Canadian firms.

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7 comments on “Marijuana company Curaleaf looking for $4 billion valuation
  1. George Bianchini on

    How do we short this? 4 Billion dollars, aren’t we running out of uninformed investors yet? The days of back of the napkin deal making is over. They are going to need about ten thousand stores ( now )to make sense of that deal. I predict that cannabis will be like the grocery business, a one percent profit business. The glory days of needing a wheel barrel to haul your profits are long gone. Free enterprise will dictate the market and consumers will decide the winners and losers. Any large or corporate backing/ownership will have negative effects.
    Want to make fast money, do something else!

    • Matt Benning on

      Lol it is you who are uninformed, sir. These large US multistaters are vertically integrated from grow to cash register which means they are able to capture margin all the way through the value chain. And the East Coast states have limited licenses available which means companies like CuraLeaf and iAnthus will enjoy oligopolies. Factor $5-10M in annual sales per dispensary and you’ll realize that they require nowhere near your estimate of ten thousand stores to do big sales/earnings.

      • George Bianchini on

        Hey Matt,
        I understand your position, however When the FDA steps in I think we will see a change in the complete dynamics of how this industry works. Legalization was just the first step forward from the grey and black market. Eventually as those business models subside due to less and less profit, our current legal market will expand licenses until the free market place becomes like most other businesses, saturated in the marketplace.
        Now comes the FDA, and they will, smart new comers will build out a new way of doing business without the burden of way over priced stocks and valuations. The dispensary model will evaporate and pharmaceutical companies will do the manufacturing, with large farms doing the cultivating. The cost of regular farming will be less than the local taxes that are charged now (California-about $2 a foot) . My costs now for medium size Hemp cultivation is about 25 cents a foot or about $7 a pound. And I pay my help a union wage. (UFCW). Our hemp is grown like I used to grow marijuana, 420 plants at 100 sq ft. each coming in at about 4 pounds.
        Don’t get me wrong, I think the brokers will make a killing. But from someone that has been doing this for twelve years I see major changes coming. It sickens me that moneyed people will displace the industry that many gave so much for.
        Just as the larger players will displace them (I’m not going anywhere). Other players will displace them, except they won’t need to pay for excessive stock valuation for infrastructure that needs be replaced anyway.
        My advise to investors, Buy stock in a real operation with at least five years of above market P/E levels. Don’t buy on what they could do if they had your money.

  2. John on

    The only people who get burned are those that do not do their own due dilegence and research. You want to invest in Company “A”: Read everything on line you can….don’t buy from a Tip or referral. There is lots and lots of opportunity to profit now this last quarter of 2018 especially.

    • George Bianchini on

      “Read everything on line you can”
      Yes, go online. If it’s on the internet it must be true!
      Buy, buy, buy. or wait about few years or so when the volatility
      wear’s off, then short, short, short. This industry is huge, has been for years.
      Just like the video rental business, anyone remember Blockbuster Video?
      Blockbuster began game and video renting in stores in the late 1990’s. At its peak in 2004, Blockbuster had more than 9,000 stores in the U.S. It was called the “cash cow of the decade”. Oh, how times have changed. Once valued at nearly $5 billion. Now their bankrupt and gone, yet the industry is larger than ever. It wasn’t a lack of business or customers, someone just figured out a better way of conducting transactions. And only the buying public makes that choice.
      Want to watch history repeat itself? There were predator investors that drove up the price of the stock knowing it’s M.O. was flawed, then shorted the heck out of it. They made money going in and made money going out. Everybody else lost big time. I hope I’m wrong, but this greed over profit rather than people getting their medicine is poisoning the cannabis industry.
      God bless America, were its ok to f**k your fellow human as long as you make a profit and pay your taxes.

  3. DJF on

    Curaleaf is doing well, but not that well. I put them at about $100 million in revenue, maybe slightly higher at this point. Asking $3-$4 Billion for a company that offers very little competitive advantage on that amount of sales is indeed risky. I could see maybe $1.5 Billion, and that is generous. They do have a healthy acquisition strategy and a very good team. However, I am not seeing a HUGE difference between them and other dispensaries at this point that will allow them to ask for a such a high valuation.

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