6-K
Curaleaf Holdings, Inc. (CURLF)
UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of March, 2021.
Commission File Number: 333-249081
CURALEAF HOLDINGS, 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. | ||
|---|---|---|
| (Registrant) | ||
| Date:<br> March 9, 2021 | By: | /s/ Michael Carlotti |
| Name: | Michael Carlotti | |
| Title: | Chief Financial Officer |
EXHIBIT INDEX
| 99.1 | Form 7 Monthly Progress Report dated March 8, 2021 |
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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: 590,281,217
Date: March 8, 2021
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 101 dispensaries, 23 cultivation sites and 30 processing sites with a focus onhighly populated, limited license states, including New York, New Jersey, Florida and Massachusetts. The Company leverages itsextensive research and development capabilities to distribute cannabis products with the highest standard for safety, effectiveness,consistent quality and customer care. The Company is committed to leading the industry in education and advancement through researchand advocacy. The Company markets to medical and adult-use customers through brand strategies intended to build trust and loyalty.
Recentdevelopments regarding the Issuer’s business and operations
On February5, 2021, Curaleaf announced it had expanded its Florida retail footprint, opening its 34^th^ dispensary in the state.
Please seethe Issuer’s press release dated February 5, 2021 filed on the Issuer’s website for more information.
On February10, 2021, Curaleaf announced the grand opening of its 100^th^ national retail location.
Please seethe Issuer’s press release dated February 10, 2021 filed on the Issuer’s website for more information.
On February12, 2021, Curaleaf announced the opening of a new branded store in Bangor, Maine.
Please seethe Issuer’s press release dated February 12, 2021 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 the keynotespeaker in the Benzinga Cannabis Capital Conference on February 25 and an investor webinar on February 3. He also participatedin broadcast interviews with CNBC’s Squawk on the Street on February 11 and Bloomberg TV on February 16.
Joseph F. Lusardi, Vice Chairman, participated inan investor webinar on February 3 and presented at the CFA Society Boston’s, “Understanding the Cannabis InvestmentLandscape: Perspectives from Investors, Regulators, and Entrepreneurs” on February 11. He was also featured in the CannabisBusiness Times and S&P Global on February 8.
Joseph D. Bayern, CEO, participated in an investorwebinar on February 3. He was also featured in the Cannabis Business Times and S&P Global on February 8.
| 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 February22, 2021, Curaleaf announced the expansion of its Select brand into the State of Utah.
Please seethe Issuer’s press release dated February 22, 2021 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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N/A
| 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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N/A
| 8. | Describe the acquisition of new customers or loss of customers. |
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Pleasesee Item 1 above for information on new dispensary openings.
| 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 hasa total of 3,901 employees, which includes 257 new hires and 149 terminations in the month of February.
| 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 maybecome threatened by a party, or otherwise become party to litigation from time to time in the ordinary course of business whichcould adversely affect its business. Among other disputes, Curaleaf (1) is defending against claims in arbitration relating primarilyto a lock-up agreement that the former minority shareholders of Curaleaf’s Connecticut operations signed in connection withtheir receipt of Subordinate Voting Shares of the Issuer in exchange for their minority interest; (2) defended against purportedsecurities class actions alleging similar claims based on the FDA’s July 22, 2019 warning letter to Curaleaf and the promotionof Curaleaf’s CBD products; and (3) is defending against purported class actions alleging, among other things, claims ofmislabeling and fraud, related to sales of the Select brand, in most cases related to periods prior to the Company’s acquisitionof the brand in February 2020.
Connecticut
No update since last reporting of this item on Form7 filed with the CSE on November 8, 2020.
FDA
The class action was dismissed with prejudice onmotion for summary judgment.
| 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 Issued | Details of Issuance | Use of Proceeds^(1)^ |
| --- | --- | --- | --- |
| Subordinate Voting Shares | 768,678 | Shares issued in connection with option exercises and RSU conversions | The proceeds from payment of the option exercise price will be used for general working capital purposes. |
| (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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Concerns about Marijuana Efficacyand Safety
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 limitingthe number of new State jurisdictions into which Curaleaf could expand. Recent medical alerts by the CDC and future bans on thesale of vaping products in the locations we serve, and recent state health agencies’ approaches to vaping related illnessand other issues directly related to cannabis consumption could potentially create an inability to fully implement Curaleaf'sexpansion strategy and may have a material adverse effect on Curaleaf's business, results of operations or prospects.
COVID-19
The novel coronavirus commonlyreferred to as "COVID-19" was identified in December 2019 in Wuhan, China. On January 30, 2020, the World Health Organizationdeclared the outbreak a global health emergency, and on March 11, 2020, the spread of COVID-19 was declared a pandemic by the WorldHealth Organization. On March 13, 2020, the spread of COVID-19 was declared a national emergency by President Donald Trump. Theoutbreak has spread throughout Europe, the Middle East and North America, causing companies and various international jurisdictionsto impose restrictions such as quarantines, business closures and travel restrictions. While these effects are expected to be temporary,the duration of the business disruptions internationally and related financial impact cannot be reasonably estimated at this time.The rapid development of the COVID-19 pandemic and the measures being taken by governments and private parties to respond to itare extremely fluid. While the Company has continuously sought to assess the potential impact of the pandemic on its financialand operating results, any assessment is subject to extreme uncertainty as to probability, severity and duration of the pandemicas reflected by infection rates at local, state, and regional levels. The Company has attempted to assess the impact of the pandemicby 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 at desired levelsin some or all locations. The Company continues to address a limited number of complaints about the efficacy of its Covid-relatedprecautions made both directly to the Company or indirectly through complaints to regulatory authorities.
• Regulatory Backlog.Regulatory authorities, including those that oversee the cannabis industry on the state level, are heavily occupied with theirresponse to the pandemic. These regulators as well as other executive and legislative bodies in the states in which we operatemay not be able to provide the level of support and attention to day-to-day regulatory functions as well as to needed regulatorydevelopment and reform that they would otherwise have provided. Such regulatory backlog may materially hinder the developmentof the Company’s business by delaying such activities as product launches, facility openings and approval of business acquisitions,thus materially impeding development of its business. The Company is actively addressing the risk to business continuity representedby each of the above factors through the implementation of a broad range of measures throughout its structure and is reassessingits response to the COVID-19 pandemic on an ongoing basis. The above risks individually or collectively may have a material impacton the Company’s ability to generate revenue. Implementing measures to remediate the risks identified above may materiallyincrease our costs of doing business, reduce our margins and potentially result in losses. While the Company has not to date experiencedany overall material negative impact on its operations or financial results related to the impact of the pandemic, so long asthe pandemic and measures taken in response to the pandemic are not abated, substantial risk of such impact remains, which couldnegatively impact the Company’s ability to generate revenue and/or profits, raise capital and complete its development plans.
· Limited availability of vaccine. On December 11, 2020, the FDAissued an emergency use authorization (EUA) for the Pfizer BioN-Tech COVID-19 vaccine, the first such approval. Additional EUAswere issued on December 18, 2020 for a vaccine created by Moderna, and on February 27, 2021 for a vaccine created by Janssen Biotech(a Johnson & Johnson affiliate). As of March 2, 2021, approximately 78 million doses of the various vaccines have been administeredin the US, although both the Pfizer and Moderna vaccines require the administration of two doses for full effectiveness. On March2, 2021, President Biden stated that the US will have sufficient vaccine supply for all adults by the end of May 2021. Actual deliveryof the vaccines to individuals, however, is controlled by state and local governments using various prioritization criteria andstates continue to impose activity limitations and other precautions on businesses during this period until the vaccine is widelydisseminated. In addition, there can be no assurance of when the Company’s employees in any particular jurisdiction willbe able to access the vaccine. Moreover, there can be no assurance that all employees will choose to avail themselves of the vaccineor, if so, when they will choose to do so. The same applies to the Company’s patients, customers, regulators, and suppliers.Consequently, the COVID-19 risk factors described above continue to be applicable.
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 orinformation. Generally, forward-looking statements and information may be identified by the use of forward-looking terminologysuch 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 certainactions, events or results may, could, would, or might occur or be achieved. More particularly and without limitation, this newsrelease contains forward-looking statements and information concerning (i) the Issuer’s current litigation and arbitrationproceedings, (ii) the potential impacts of adverse publicity reports or other media attention regarding the safety, efficacy andquality of 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 the Companyhas made and may make with applicable securities authorities in the future. Forward-looking statements contained herein are madeonly as to the date of this press release and we undertake no obligation to update or revise any forward-looking statements whetheras a result of new information, future events or otherwise, except as required by law. We caution investors not to place considerablereliance 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 March 8, 2021
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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> <br>Name of Issuer<br><br> <br><br><br> <br>Curaleaf Holdings, Inc. | For Month Ended<br><br> <br>February 28, 2021 | Date of Report<br><br> <br>YY/MM/D<br><br> <br>March 8, 2021 |
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| Issuer Address<br><br> <br>301 Edgewater Place #405 | ||
| City/Province/Postal Code<br><br> <br><br><br> <br>Wakefield, MA 01880 USA | Issuer Fax No.<br><br> <br>( ) | Issuer Telephone No.<br><br> <br>(781) 451-0150 |
| Contact Name<br><br> <br>Investor Relations | Contact<br><br> <br>Position<br><br> <br>Investor<br><br> <br>Relations | Contact Telephone No.<br><br> <br>(781) 451-0150 |
| Contact Email Address<br><br> <br>IR@curaleaf.com | Web Site Address<br><br> <br>www.curaleaf.com |