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friends,

There hasn’t been much cannabis news this week, but what we did learn was kind of surprising. Cannabist, which sold one of its Virginia businesses to Verano for $90 million in 2024, announced the sale of its remaining Virginia assets to Curaleaf. Cannabist’s press release disclosed the price, while Curaleaf did not. Cannabist rallied and sold off and is now down 13.9% this week and down 39.9% year to date. The company is extremely difficult, in my opinion, and doesn’t really hold much value for investors given its low market cap and small trading volumes. Creditors are the ones who care.

Curaleaf, on the other hand, rallied on Wednesday after pulling back on Tuesday after announcing a pending $110 million buyout. It’s up 6.9% this week and is set to rise 56.4% in 2025. This is much better than the Global Hemp Stock Index, which is down 11.5% year-to-date at 6.09. MSOS, which carries most of Curaleaf, is down 3.2% in 2025.

I downgraded Curaleaf to Strong Sell at Seeking Alpha in April when it was $0.98 and yesterday it closed at $2.44. I remain very bearish on stocks and today I share an updated outlook. The main problems I see are that the valuation is too high relative to peers, the company has huge debt and MSOS has a lot.

Curaleaf’s rating is high compared to peers

While the current value of 7.8X projected adjusted EBITDA for 2026 may seem low, it is a large premium to its peers;

Curaleaf outperformed the major MSOs in 2025, driving this high relative valuation;

Curaleaf’s balance sheet is poor

The balance sheet is bad and getting worse. Net debt was $436 million at the end of 3Q, but most of the debt is due at the end of 2026, an amount that far outweighs cash. Management said on a conference call that it will replace it soon. That debt is currently realized at 8 percent cost. The company reported a current ratio of 1.5X. but that large debt due in 2026 will become current instead of long-term at the end of Q4 and this ratio will drop to 0.6X. The Virginia purchase would reduce it further.

Of course, the company can roll over the debt, but lenders should consider negative tangible equity as of Q3 of $853.6 million. This includes huge tax liabilities of $759 million. It is possible that the company will get a new loan, but investors should expect the interest rate to be potentially higher than the current 8%. The company may also sell some shares.

MSOS owns a lot of Curaleaf

MSOS controls 74.47 million shares of Curaleaf, its largest position. The Curaleaf has a thin flame compared to its peers and this further reduces it. Curaeaf’s shares are 678 million, so MSOS’s stake is more than 10% of the company’s outstanding subordinated shares, which trade over the counter in the US and on the TSX in Canada. I add the multiple voting shares as well as the RSUs and PSUs and some cash options to get a total stock dilution of 803 million, so MSOS has a 9.3% stake in the company.

If MSOS receives repayments again, it will likely need to sell more Curaleaf. Most investors remember the large number of ETF shares that redeemed in late 2022 and 2023. There were further redemptions in early 2025 and then again in November, when the number of shares fell 2%. Yesterday, shares fell by 0.5% due to another redemption. Despite this decline, the number of shares expanded by 41% in 2025. Curaleaf shares controlled by MSOS are up 54% year over year, compared to 32% for Trulieve and 2% for GTI. Curaleaf now holds the largest position at 26.7%, while Trulieve has 21.6% and Green Thumb Industries has 21.3%.

When MSOS received redemptions in November, it reduced Curaleaf shares it controlled by 2%, and then again yesterday. If the ETF receives more redemptions, it will likely sell more CURLF. This could be a problem if the ETF receives redemptions after bad news regarding 280E taxation emerges, as there are fewer buyers in that scenario.

Conclusion

Curaleaf traded at $0.84 on June 30 and rose to $2.04 on August 8, just ahead of the potential restructuring news. It’s unclear to me why Curaleaf is doing so well compared to its peers and other cannabis stocks. Cannabis stocks have been very volatile. Two that I have not liked at all over the past few years, Canopy Growth and Tilray Brands, have fallen so much and sold off the stock so much that I am now neutral on both. The demise of the 280E, if it happens, would be great for Curaleaf, but there are others that would benefit greatly as well. Investors looking to buy an MSO have better options than Curaleaf, which is quite risky.

Sincerely,

Alan:

New Cannabis Ventures publishes curated articles as well as exclusive news. Here is what we published last week.

Exclusives

Hemp stocks extend decline in November

M&A:

Cannabist to sell Virginia assets to Curaleaf

Follow Alan for real-time updates X.com:. Share and discover industry news with like-minded people on the largest group of cannabis investors and entrepreneurs LinkedIn:.

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Based in Houston, Alan leverages his experience as an online community founder 420 Investorthe first and still the largest due diligence platform focused on publicly traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. time New Cannabis Ventureshe is responsible for content development and strategic alliances. Before turning his attention to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst with more than two decades of research and portfolio management experience. A prolific writer, with over 650 articles published since 2007 Looking for Alphawhere he has 70,000 followers, Alan is a frequent speaker at industry conferences and frequent source Media including the NY Times, Wall Street Journal, Fox Business and Bloomberg TV. Contact Alan. Twitter: |: Facebook |: LinkedIn: |: El

On December 4, 2025 at 1:13 PM

Cannabist Company Announces Agreement to Sell Virginia Assets to Curaleaf

CHELMSFORD, Mass. — (Business Wire) —

The Cannabist Company Holdings Inc. (Cboe CA: CBST) (OTCQB: CBSTF) (“The Cannabist Company” or the “Company”), one of the most experienced developers, manufacturers and retailers of cannabis products in the United States, today announced that it has entered into an agreement to sell all of its ownership interests in its subsidiary engaged in the sale, distribution and sale to humans. hemp to a subsidiary in the Commonwealth of Virginia Curaleaf Holdings Inc. (the “Deal”) totaling $110 million, subject to adjustment. The assets consist primarily of 5 active retail locations, 1 additional retail location under development and approximately 82,000 square feet of processing and manufacturing capacity in the Richmond area.

As previously announced, the Company’s board of directors formed a special committee of independent directors (the “Special Committee”) to review strategic alternatives. The Special Committee, with the assistance of outside financial and legal advisors, is considering a number of options, including potential asset sales, mergers or other strategic or financial transactions. The review is being conducted in light of current operational and financial challenges for the Company and the industry, as well as the continued uncertainty as to whether and when there may be U.S. federal regulatory changes affecting the Company and the industry, including, without limitation, changes in the Company’s and the industry’s U.S. federal taxation pursuant to Section 280(e) of the Internal Revenue Code. The transaction forms part of this strategic review.

Deal Highlights

The Company, Green Leaf Medical of Virginia, LLC, a subsidiary of the Company (“gLeaf Virginia”), and Green Leaf Medical, LLC, another subsidiary of the Company and the sole member of gLeaf Virginia (the “Member”), entered into a stock purchase agreement (“EPA”) with Curaleaf, Inc. (“Buyer” EPA, Inc. The Purchaser will purchase all of the issued and outstanding shares of gLeaf Virginia from the Member for an aggregate consideration of $110 million, consisting of; by the Member prior to the Closing (“Promissory Note”), all subject to adjustment as described in the EPA. The Promissory Note will bear interest at 6% per annum from the EPA Closing Date (“Closing Date”) until maturity one year after the Closing Date. Deferred payment will be due within 30 days of the earlier of (i) the date on which the first adult sale occurred at a gLeaf Virginia retail location. in each and at one retail location under development in the Commonwealth of Virginia, and (ii) from the date that is twelve (12) months after the date on which the adult first retail sale occurred.

The principal amount of the promissory note is subject to downward adjustments for GLeaf Virginia’s cash, working capital, debt and transaction costs, as well as indemnification claims. Any unpaid indemnification obligation that is outstanding against a promissory note may also be indemnified by Buyer against deferred payment.

The EPA includes a 15 business day trading period beginning on the date of the EPA and continuing through 2025. December 22 at 11:59 p.m. Eastern Time, unless otherwise extended with the prior written consent of Buyer, during which the Company, with the assistance of its financial advisor, Moelis & Company LLC, will be limited to the requirements set forth by the EPA and other requirements. request, negotiate and enter into alternative offers. The EPA includes a $3.3 million break fee that will be payable if the Company enters into an alternative offer or if the Company does not obtain Noteholder Consent (as defined below).

The transaction is subject, among other things, to the satisfaction or waiver of certain closing conditions, including regulatory approvals and the consent of the holders of a majority of nine and one-quarter percent (9.25%) principal amount due December 31, 2028 (the “2028 Percent (New Percent Notes) and 90 Percent”). Convertible notes due December 31, 2028 (the “2028 Convertible Notes” and together with the 2028 Notes, the “Notes”) issued by the Company (the “Noteholder Consent”). No shareholder approval is required. The transaction is expected to close in or before early 2026.

The Company expects to use a portion of the net proceeds from the Transaction to repay the Notes.

Moelis & Company LLC acted as financial advisor to the Company. Stikeman Elliott LLP acted as Canadian counsel. Weil, Gotshal & Manges LLP and Foley Hoag LLP acted as counsel for the United States.

About The Cannabist Company (f/k/a Columbia Care)

The Cannabist Company, formerly known as Columbia Care, is one of the most experienced developers, manufacturers and suppliers of cannabis products and related services with licenses in 12 US jurisdictions. The company operates 77 facilities, including 61 dispensaries, and 16 cultivation and manufacturing facilities, including those in development. Columbia Care, now The Cannabis Company, was one of the original multi-state providers of cannabis in the United States and now provides industry-leading products and services to both the medical and adult use markets. In 2021, the company launched Cannabist, its retail brand, creating a national dispensary network that uses proprietary technology platforms. The company offers flower, edible, oil and tablet products and manufactures popular brands including dreamt, Seed & Strain, Triple Seven, Hedy, gLeaf, Classix, Press and Amber. For more information, visit www.cannabistcompany.com.

Original press release

Published by NCV Newswire

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