The Massachusetts-based cannabis firm told investors that a core group of shareholders that owns about three-quarters of Curaleaf’s issued and outstanding shares will extend a planned lockup agreement staggered on different dates.
The company’s share price had fallen 7.3 percent to C$7.65 by 11:15 a.m. EDT on Monday from an opening price of C$8.25. As of 12:51 p.m. EDT, Curaleaf sat at C$7.89.
The new agreement will limit the number of shares released in the lockup to 15 percent as of Monday. Moving forward, an additional 15 percent of the locked-up shares will be made available at the end of each subsequent calendar quarter. The final 10 percent of the shares will be released on March 31, 2021.
Since Curaleaf’s reverse takeover transaction in October 2018, all shareholders owning more than 1 percent of the company’s issued and outstanding shares have been under lockup agreements.
Curaleaf Executive Chairman Boris Jordan said in a statement that the lockup is a marker of continued support from shareholders.
“We expect the new lock-up release schedule to reduce uncertainty regarding the release of currently locked-up shares and provide for a more orderly increase in the available float in the Company’s shares.”
Cannabis companies look to improve market reputation
Curaleaf isn’t alone in trying to instill confidence in investors in an industry that’s seen a degree of volatility recently.
“With the downturn in industry stock prices recently, this was an opportunity to show investors that Acreage management is committed to creating long-term shareholder value,” Murphy said.
As a part of a downstream merger, Tilray is to acquire Privateer and replace shareholders’ Privateer shares with Tilray shares. The new shares will be locked up for a two year period barring any special considerations.
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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Acreage Holdings is a client of the Investing News Network. This article is not paid-for content.