Curaleaf Holdings, Inc 6-K, filed Dec 10, 2020
Curaleaf Holdings, Inc. (CURLF)
About this 6-K
Curaleaf Holdings, Inc filed this 6-K on December 10, 2020.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANTTO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of December, 2020.
Commission File Number: 333-249081
CURALEAFHOLDINGS, INC.
(Exact Name of Registrant as Specified in Charter)
666 Burrard Street, Suite 1700,Vancouver, British Columbia V6C 2X8
Canada
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F □ Form 40-F x
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CURALEAF HOLDINGS, INC. | |||
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| (Registrant) | |||
| Date: | December 10, 2020 | By: | /s/ Michael Carlotti |
| Name: | Michael Carlotti | ||
| Title: | Chief Financial Officer |
EXHIBIT INDEX
| 99.1 | Form 7 Monthly Progress Report – December 9, 2020 |
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Exhibit 99.1
FORM 7
MONTHLY PROGRESS REPORT
Name of Listed Issuer: Curaleaf Holdings, Inc. (the “Issuer” or “Curaleaf”).
Trading Symbol: CURA
Number of Outstanding Listed Securities: 567,632,882 Subordinate Voting Shares
Date: December 9, 2020
This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month. This report is not intended to replace the Issuer’s obligation to separately report material information forthwith upon the information becoming known to management or to post the forms required by Exchange Policies. If material information became known and was reported during the preceding month to which this report relates, this report should refer to the material information, the news release date and the posting date on the Exchange website.
This report is intended to keep investors and the market informed of the Issuer’s ongoing business and management activities that occurred during the preceding month. Do not discuss goals or future plans unless they have crystallized to the point that they are "material information" as defined in the Policies. The discussion in this report must be factual, balanced and non-promotional.
General Instructions
| (a) | Prepare this Monthly Progress Report using the format set out below. The sequence of questions<br>must not be altered nor should questions be omitted or left unanswered. The answers to the items must be in narrative form. State<br>when the answer to any item is negative or not applicable to the Issuer. The title to each item must precede the answer. |
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| (b) | The term “Issuer” includes the Issuer and any of its subsidiaries. |
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| (c) | Terms used and not defined in this form are defined or interpreted in Policy 1 – Interpretation and General Provisions. |
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Report on Business
| 1. | Provide a general overview and discussion of the development of the Issuer’s business and<br>operations over the previous month. Where the Issuer was inactive disclose this fact. |
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General
Curaleaf Holdings, Inc.(“Curaleaf” or the “Company”) operates as a life science company developing full scale cannabis operations,with core competencies in cultivation, manufacturing, dispensing and medical cannabis research. Curaleaf is a leading verticallyintegrated medical and wellness cannabis operator in the United States. Headquartered in Wakefield, Massachusetts, the Companyhas operations in 23 states including operating 95 dispensaries, 22 cultivation sites and 30 processing sites with a focus on highlypopulated, limited license states, including New York, New Jersey, Florida and Massachusetts. The Company leverages its extensiveresearch and development capabilities to distribute cannabis products with the highest standard for safety, effectiveness, consistentquality and customer care. The Company is committed to leading the industry in education and advancement through research and advocacy.The Company markets to medical and adult-use customers through brand strategies intended to build trust and loyalty.
Recent developments regardingthe Issuer’s business and operations
On November 5, 2020, Curaleafannounced it completed its acquisition of Alternative Therapies Group’s cultivation and processing operations.
Please see the Issuer’spress release dated November 5, 2020 filed on the Issuer’s website for more information.
On November 6, 2020, Curaleafannounced it had signed a definitive agreement for an asset divestiture in Maryland for $31.5 million.
Please see the Issuer’spress release dated November 6, 2020 filed on the Issuer’s website for more information.
On November 9, 2020, Curaleafannounced its Select brand had expanded into Pennsylvania.
Please see the Issuer’spress release dated November 9, 2020 filed on the Issuer’s website for more information.
On November 17, 2020, Curaleafannounced its CEO succession effective January 2021.
Please see the Issuer’spress release dated November 17, 2020, filed on the Issuer’s website for more information.
On November 17, 2020, Curaleafreported its third quarter 2020 financial and operations results.
Please see the Form 5 andfinancials filed with the CSE on November 30, 2020 and the Issuer’s press release dated November 17, 2020, filedon the Issuer’s website for more information.
On November 20, 2020, Curaleafannounced the launch of fast onset NANO Chews in Florida.
Please see the Issuer’spress release dated November 20, 2020 filed on the Issuer’s website for more information.
| 2. | Provide a general overview and discussion of the activities of management. |
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Boris Jordan, Executive Chairman, was featured prominentlyin both a Bloomberg online article and a New Cannabis Ventures interview on November 4, 2020. He also participated in broadcastinterview on Bloomberg TV on November 6 and was profiled by Forbes on November 27, 2020. Boris also participated in theProhibition Partners Live 2020. Mr. Jordan also participated in the “US MSOs: The South” at the Cowen’s3rd Annual Boston Cannabis Conference.
Joseph Lusardi, Chief Executive Officer, participatedin broadcast interviews with Cheddar and Yahoo! Finance on November 4 and November 6, 2020, respectively.
Joseph Bayern, President, was featured in the NewYork times on November 19 and in Business Insider on November 20, 2020. Joe participated in CannaVest’s CannabisBusiness Summit: Multi-State Operator Roundtable.
Jason White, Chief Marketing Officer, participatedin a radio interview on WARC on November 17, 2020. Jason participated in the Global Cannabis Intelligence European CannabisSummit, as well as the Forbes CMO summit.
| 3. | Describe and provide details of any new products or services developed or offered. For resource<br>companies, provide details of new drilling, exploration or production programs and acquisitions of any new properties and attach<br>any mineral or oil and gas or other reports required under Ontario securities law. |
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On November 20, 2020, Curaleafannounced the launch of fast onset of NANO Chews in Florida.
Please see the Issuer’spress release dated November 20, 2020 filed on the Issuer’s website for more information.
| 4. | Describe and provide details of any products or services that were discontinued. For resource companies,<br>provide details of any drilling, exploration or production programs that have been amended or abandoned. |
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N/A
| 5. | Describe any new business relationships entered into between the Issuer, the Issuer’s affiliates<br>or third parties including contracts to supply products or services, joint venture agreements and licensing agreements etc. State<br>whether the relationship is with a Related Person of the Issuer and provide details of the relationship. |
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On November 9, 2020 Curaleafannounced continued expansion of its Select brand into the state of Pennsylvania.
Please see the Issuer’spress release dated November 9, 2020 filed on the Issuer’s website for more information.
| 6. | Describe the expiry or termination of any contracts or agreements between the Issuer, the Issuer’s<br>affiliates or third parties or cancellation of any financing arrangements that have been previously announced. |
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N/A
| 7. | Describe any acquisitions by the Issuer or dispositions of the Issuer’s assets that occurred<br>during the preceding month. Provide details of the nature of the assets acquired or disposed of and provide details of the consideration<br>paid or payable together with a schedule of payments if applicable, and of any valuation. State how the consideration was determined<br>and whether the acquisition was from or the disposition was to a Related Person of the Issuer and provide details of the relationship. |
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Massachusetts
On November 5, 2020, Curaleafannounced it completed its acquisition of Alternative Therapies Group’s cultivation and processing operations.
Please see the Issuer’spress release dated November 5, 2020 filed on the Issuer’s website for more information.
Maryland
On November 6, 2020, Curaleafannounced it had signed a definitive agreement for an asset divestiture in Maryland for $31.5 million.
Please see the Issuer’spress release dated November 6, 2020 filed on the Issuer’s website for more information.
| 8. | Describe the acquisition of new customers or loss of customers. |
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N/A
| 9. | Describe any new developments or effects on intangible products such as brand names, circulation<br>lists, copyrights, franchises, licenses, patents, software, subscription lists and trade-marks. |
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N/A
| 10. | Report on any employee hirings, terminations or lay-offs with details of anticipated length of<br>lay-offs. |
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Issuer has a total of 3,590employees, which includes 188 new hires and 75 terminations in the month of November.
| 11. | Report on any labour disputes and resolutions of those disputes if applicable. |
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N/A
| 12. | Describe and provide details of legal proceedings to which the Issuer became a party, including<br>the name of the court or agency, the date instituted, the principal parties to the proceedings, the nature of the claim, the amount<br>claimed, if any, if the proceedings are being contested, and the present status of the proceedings. |
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Curaleaf may become threatenedby a party, or otherwise become party to litigation from time to time in the ordinary course of business which could adverselyaffect its business. Among other disputes, Curaleaf (1) is defending against claims in arbitration relating primarily to alock-up agreement that the former minority shareholders of Curaleaf’s Connecticut operations signed in connection with theirreceipt of Subordinate Voting Shares of the Issuer in exchange for their minority interest; (2) is defending against purportedsecurities class actions alleging similar claims based on the FDA’s July 22, 2019 warning letter to Curaleaf and thepromotion of Curaleaf’s CBD products; and (3) defending against purported class actions alleging, among other things,claims of mislabeling and fraud.
Connecticut
No update since last reporting of this item on Form 7filed with the CSE on November 8, 2020.
FDA
No update since last reporting of this item on Form 7filed with the CSE on April 9, 2020.
| 13. | Provide details of any indebtedness incurred or repaid by the Issuer together with the terms of<br>such indebtedness. |
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N/A
| 14. | Provide details of any securities issued and options or warrants granted | |||
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| Security | Number<br><br><br> Issued | Details<br> of Issuance | Use<br> of Proceeds(1) | |
| --- | --- | --- | --- | --- |
| Subordinate<br> Voting Shares | 581,595 | Shares<br> issued in<br><br> connection with option <br><br>exercises | The<br> proceeds from payment of the option exercise price will be used for general working capital purposes. | |
| Subordinate<br> Voting Shares | 245,629 | Shares<br> issued in<br><br> connection with settlement <br><br>of debt. See Form 9 filed <br><br>with CSE on November 27, <br><br>2020 | N/A | |
| (1) | State aggregate proceeds and intended allocation of proceeds. | |||
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| 15. | Provide details of any loans to or by Related Persons. | |||
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N/A
| 16. | Provide details of any changes in directors, officers or committee members. |
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N/A
| 17. | Discuss any trends which are likely to impact the Issuer including trends in the Issuer’s<br>market(s) or political/regulatory trends. |
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Adverse publicity reports orother media attention regarding the safety, efficacy and quality of marijuana in general, or associating the consumption of adult-useand medical marijuana with illness or other negative effects or events, could have such a material adverse effect. There is noassurance that such adverse publicity reports or other media attention will not arise. A negative shift in the public's perceptionof cannabis, including vaping or other forms of cannabis administration, in the U.S. or any other applicable jurisdiction couldcause State jurisdictions to abandon initiatives or proposals to legalize medical and/or adult-use cannabis, thereby limiting thenumber of new State jurisdictions into which Curaleaf could expand. Recent medical alerts by the CDC and future bans on the saleof vaping products in the locations we serve, and recent state health agencies’ approaches to vaping related illness andother issues directly related to cannabis consumption could potentially create an inability to fully implement Curaleaf's expansionstrategy and may have a material adverse effect on Curaleaf's business, results of operations or prospects.
2020 Elections
The results of the 2020 Presidential and Congressional elections may impact the likelihood of any legal developments regarding cannabis at the national level, including the passage of the Secure and Safe Enforcement(SAFE) Banking Act and the Marijuana Opportunity Reinvestment and Enforcement (MORE) Act, measures and initiatives, as well aspotential executive action to clarify federal policy toward the industry, although it is uncertain whether and in what manner anysuch federal changes will occur. On a federal level, former Vice President Joe Biden, who campaigned on a platform that includedcannabis decriminalization, is widely recognized as President-Elect. However, it appears that Congress will remainsplit: Democrats, who are generally more supportive of federal cannabis reform than Republicans, maintained their majorityin the House of Representatives, although at a smaller margin than initially expected, and gained seats in the Senate, althoughthe ability for Democrats to gain a majority in the Senate, including a Vice Presidential tie-breaking vote, is uncertain and willdepend on the outcome of the January 2021 Georgia runoff election. Although the House of Representatives voted to pass theMORE Act on December 4, 2020, which would remove cannabis from the Controlled Substances Act, the prospect of its passagein the Senate and final enactment remains unclear.
On a state level, the November 2020 electionsincluded multiple initiatives on state ballots regarding cannabis, all of which passed. In Arizona and New Jersey, two marketswhere the Company already has medical operations described herein, adult use cannabis ballot initiatives passed. Similarly,adult use passed in Montana, medical use passed in Mississippi, and both adult use and medical use passed in South Dakota. Barring any further legal challenges, these states are expected to adopt governing rules and regulations to expand their cannabisprograms accordingly.
COVID-19
The novel coronavirus commonlyreferred to as "COVID-19" was identified in December 2019 in Wuhan, China. On January 30, 2020, the World HealthOrganization declared the outbreak a global health emergency, and on March 11, 2020, the spread of COVID-19 was declared apandemic by the World Health Organization. On March 13, 2020, the spread of COVID-19 was declared a national emergency byPresident Donald Trump. The outbreak has spread throughout Europe, the Middle East and North America, causing companies and variousinternational jurisdictions to impose restrictions such as quarantines, business closures and travel restrictions. While theseeffects are expected to be temporary, the duration of the business disruptions internationally and related financial impact cannotbe reasonably estimated at this time. The rapid development of the COVID-19 pandemic and the measures being taken by governmentsand private parties to respond to it are extremely fluid. While the Company has continuously sought to assess the potential impactof the pandemic on its financial and operating results, any assessment is subject to extreme uncertainty as to probability, severityand duration of the pandemic as reflected by infection rates at local, state, and regional levels. The Company has attempted toassess the impact of the pandemic by identifying risks in the following principle areas:
• Mandatory Closures. Inresponse to the pandemic, many states and localities implemented mandatory closures of, or limitations to, businesses to preventthe spread of COVID-19; this impacted the Company’s operations. Subsequently, the Company’s business was deemed an "essential service," permitting us to stay open despite the mandatory closure of non-essential businesses. More recently,the mandatory closures that impacted the Company’s operations were lifted and the Company resumed full operations, albeitsubject to various COVID-19 related precautions and changes in local infection rates. The Company’s ability to generate revenuewould be materially impacted by any future shut down of its operations.
• Customer Impact. Whilethe Company has not experienced an overall downturn in demand for its products in connection with the pandemic, if its customersbecome ill with COVID-19, are forced to quarantine, decide to self-quarantine or not to visit its stores or distribution pointsto observe "social distancing" it may have material negative impact on demand for its products while the pandemic continues.While the Company has implemented measures, where permitted, such as "curb side" sales and delivery, to reduce infectionrisk to our customers, regulators may not permit such measures, or such measures may not prevent a reduction in demand.
• Supply Chain Disruption.The Company relies on third party suppliers for equipment and services to produce its products and keep its operations going. Ifits suppliers are unable to continue operating due to mandatory closures or other effects of the pandemic, it may negatively impactits own ability to continue operating. At this time, the Company has not experienced any failure to secure critical supplies orservices. However, disruptions in our supply chain may affect our ability to continue certain aspects of the Company’s operationsor may significantly increase the cost of operating its business and significantly reduce its margins.
• Staffing Disruption.The Company is, for the time being, implementing among its staff where feasible "social distancing" measures recommendedby such bodies as the Centers for Disease Control (CDC), the Presidential Administration, as well as state and local governments.The Company has cancelled non-essential travel by employees, implemented remote meetings where possible, and permitted all staffwho can work remotely to do so. For those whose duties require them to work on-site, measures have been implemented to reduce infectionrisk, such as reducing contact with customers, mandating additional cleaning of workspaces and hand disinfection, providing masksand gloves to certain personnel, and contact tracing following reports of employee infection. Nevertheless, despite such measures,the Company may find it difficult to ensure that its operations remain staffed due to employees falling ill with COVID-19, becomingsubject to quarantine, or deciding not to come to come to work on their own volition to avoid infection. At certain locations,the Company has experienced increased absenteeism due to increased COVID-19 infection rates in certain locales. If such absenteeismincreases, the Company may not be able, including through replacement and temporary staff, to continue to operate in some or alllocations.
• Regulatory Backlog. Regulatoryauthorities, including those that oversee the cannabis industry on the state level, are heavily occupied with their response tothe pandemic. These regulators as well as other executive and legislative bodies in the states in which we operate may not be ableto provide the level of support and attention to day-to-day regulatory functions as well as to needed regulatory development andreform that they would otherwise have provided. Such regulatory backlog may materially hinder the development of the Company’sbusiness by delaying such activities as product launches, facility openings and approval of business acquisitions, thus materiallyimpeding development of its business. The Company is actively addressing the risk to business continuity represented by each ofthe above factors through the implementation of a broad range of measures throughout its structure and is reassessing its responseto the COVID-19 pandemic on an ongoing basis. The above risks individually or collectively may have a material impact on the Company’sability to generate revenue. Implementing measures to remediate the risks identified above may materially increase our costs ofdoing business, reduce our margins and potentially result in losses. While the Company is not currently in financial distress,if the Company’s financial situation materially deteriorates as a result of the impact of the pandemic, the Company couldeventually be unable to meet its obligations to third parties, including observing financial covenants under the Facility, whichin turn could lead to insolvency and bankruptcy of the Company.
This document contains forward-lookingstatements and forward-looking information within the meaning of applicable securities laws. These statements relate to futureevents or future performance. All statements other than statements of historical fact may be forward-looking statements or information.Generally, forward-looking statements and information may be identified by the use of forward-looking terminology such as "plans", "expects" or, "proposed", "is expected", "intends", "anticipates", " or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions,events or results may, could, would, or might occur or be achieved. More particularly and without limitation, this news releasecontains forward-looking statements and information concerning (i) the Issuer’s current litigation and arbitration proceedings,(ii) the potential impacts of adverse publicity reports or other media attention regarding the safety, efficacy and qualityof marijuana in general, or associating the consumption of adult-use and medical marijuana and (iii) the potential impactsof the COVID-19 pandemic on the Issuer’s business and operations. Such forward-looking statements and information reflectmanagement's current beliefs and are based on assumptions made by and information currently available to the company with respectto the matter described in this new release. Forward-looking statements involve risks and uncertainties, which are based on currentexpectations as of the date of this release and subject to known and unknown risks and uncertainties that could cause actual resultsto differ materially from those expressed or implied by such statements. Additional information about these assumptions and risksand uncertainties is contained under "Risk Factors and Uncertainties" in the Company's Annual Information Form filedon September 25, 2020, which is available under the Company's SEDAR profile at www.sedar.com, and in other filings that theCompany has made and may make with applicable securities authorities in the future. Forward-looking statements contained hereinare made only as to the date of this press release and we undertake no obligation to update or revise any forward-looking statementswhether as a result of new information, future events or otherwise, except as required by law. We caution investors not to placeconsiderable reliance on the forward-looking statements contained in this press release.
[signature page follows]
Certificate of Compliance
The undersigned hereby certifies that:
| 1. | The undersigned is a director and/or senior officer of the Issuer and has been duly authorized<br>by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance. | |
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| 2. | As of the date hereof there is no material information concerning the Issuer which has not been<br>publicly disclosed. | |
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| 3. | The undersigned hereby certifies to the Exchange that the Issuer is in compliance with the requirements<br>of applicable securities legislation (as such term is defined in National Instrument 14-101) and all Exchange Requirements (as<br>defined in CNSX Policy 1). | |
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| 4. | All of the information in this Form 7 Monthly Progress Report is true. | |
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| Dated | December 9, 2020. | |
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| Michael Carlotti | ||
| Name of Director or Senior Officer | ||
| /s/ Michael Carlotti | ||
| Signature | ||
| Chief Financial Officer | ||
| Official Capacity | ||
| Issuer Details <br><br>Name of Issuer <br><br>Curaleaf Holdings, Inc. | For Month <br><br>Ended <br><br>November 30, <br><br>2020 | Date of Report <br><br>YY/MM/D <br><br>December 9, 2020 |
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| Issuer Address <br><br>301 Edgewater Place #405 | ||
| City/Province/Postal Code<br><br> Wakefield, MA 01880 USA | Issuer Fax No.<br><br> ( ) | Issuer Telephone No.<br><br> (781) 451-0150 |
| Contact Name<br><br> Dan Foley | Contact<br><br> Position<br><br> Vice President <br><br>of Investor<br><br> Relations | Contact Telephone No. <br><br>(781) 451-0150 |
| Contact Email Address <br><br>dfoley@curaleaf.com | Web Site Address <br><br>www.curaleaf.com |