Is Curaleaf nonetheless a purchase?

Beacon Securities analyst Russell Stanley maintained his “Purchase” ranking and C$5.00 value goal on Curaleaf Holdings (Curaleaf Holdings Inventory Quote, Chart, Information, Analysts, Financials TSX:CURA) in a Dec. 2 notice, saying the corporate’s plan to amass The Cannabist Firm’s vertically built-in Virginia operations for US$110-million strengthens its place forward of a probable adult-use launch in late 2026.

Wakefield, Mass.–primarily based Curaleaf is a multinational, vertically built-in hashish operator with property throughout the U.S., Europe, and Australasia.

Stanley left his estimates unchanged however referred to as the transaction “beneficial,” given Virginia’s inhabitants measurement (8.8 million), the medical program’s regional exclusivity, and the “excessive likelihood of a business adult-use market opening late subsequent 12 months.”

Curaleaf will purchase 82,000 sq. ft. of cultivation/manufacturing capability, 5 working retail websites and one extra location below growth. The US$110-million consideration consists of US$80-million money at closing, US$20-million deferred money, and a US$10-million, one-year promissory notice paying 6%.

Deferred consideration turns into payable inside 30 days of both first adult-use gross sales in any respect six shops or 12 months after first adult-use gross sales at anyone retailer.

The deal features a 15-business-day go-shop (expiring Dec. 22) and a US$3.3-million break payment. Closing, anticipated in Q1 2026, requires regulatory approvals and majority consent from holders of The Cannabist Firm’s senior secured notes.

Cannabist beforehand launched a strategic overview amid ongoing working and monetary challenges and plans to make use of sale proceeds to redeem debt. Verano acquired Cannabist’s coastal Virginia property in 2024 for US$105-million.

A ultimate proposal for Virginia’s business adult-use market was anticipated to be launched this week. The draft envisions gross sales starting in November 2026. With a brand new Democratic governor taking workplace in January, after prior vetoes below Republican management, Stanley sees political alignment enhancing the chance of passage.

Notably, the opt-out mechanism for native municipalities has been eliminated, decreasing a barrier seen in different states. The draft additionally proposes an 8% state excise tax, permits municipalities so as to add their very own levy as much as 3.5%, permits operators to deduct bills disallowed federally below 280E, and caps every operator, together with MSOs, at 5 complete retail and/or cultivation-processing licences.

Stanley mentioned Curaleaf ought to generate US$262-million in Adjusted EBITDA on US$1.268-billion of income in fiscal 2025, enhancing to US$332-million EBITDA on US$1.385-billion of income in fiscal 2026.

-30-