Curaleaf Seeks Shareholder Approval for Corporate Move to Delaware

Cannabis industry powerhouse Curaleaf on Thursday announced the company’s intention to seek shareholder approval of a proposed arrangement involving “the continuation of the Company out of British Columbia, Canada and the concurrent domestication of the Company in the State of Delaware in the United States.” Known as “continuance,” the action will result in the company leaving the British Columbia jurisdiction in favor of incorporation under Delaware’s laws and regulations.

“Curaleaf believes the favorable corporate environment afforded by Delaware will further the Company’s strategic objectives, streamline the Company’s organizational and regulatory structure all within the United States and help the Company conduct its business more effectively,” the company wrote in a statement about the continuance.

Upon completion of the continuance, each issued and outstanding subordinate voting share of the British Columbia-formed Curaleaf will be deemed to represent one share of subordinate voting common stock of the Delaware-continued Curaleaf. The company plans to hold a special meeting of its shareholders in February to vote on the proposal. For the proposal to become effective, it must be approved by at least two-thirds of the votes cast.

“We believe the Continuance to Delaware will reflect and better align with our business, operational focus, and strategic objectives, while also providing other expected and potential benefits,” Curaleaf chairman and CEO Boris Jordan said in a statement about the move.

Investment Expert Sees Curaleaf’s Move as ‘Corporate Cleanup’

In an interview with IgniteIt, Morgan Paxhia, co-founder and managing director of cannabis-focused capital firm Poseidon Investment Management, says he sees Curaleaf’s domestication to Delaware as more of a housekeeping move than a significant financial development.

“What I see Curaleaf doing is just probably considered corporate cleanup, because they don’t even trade on the [Canadian Securities Exchange] anymore,” Paxhia said in an online interview. “They trade on the TSX Venture [in Canada] and the OTC markets here in the U.S., so they’re leaving their Canadian headquarters and basically just consolidating operations to the U.S.”

Paxhia adds that if President Donald Trump’s recent executive order to expedite the rescheduling of cannabis comes to fruition, Curaleaf’s move to Delaware sets the company up for listing on U.S. exchanges. Characterizing Curaleaf as a “first mover” in the sector, he expects other U.S. cannabis companies may follow suit with similar measures.

“Everybody’s waiting for that next step in the rescheduling process, and then what’s coming next,” he explains. “But I’m very excited about this year. I think the way we ended last year–with both the hemp ban and the executive order–really sets the stage for growth to come back to cannabis. And you know, this is a pro-America administration, so having U.S. companies listing on U.S. exchanges certainly fits that mission, and we’re ready for it.”