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Curaleaf Modifies Lockup Agreement Again

By Eric Volkman - Jan 22, 2020 at 9:53PM

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It's the latest in a series of revisions agreed to by the cannabis company's major shareholders.

In the latest in a series of modifications, Curaleaf (CURLF 6.39%) and Cura Partners shareholders agreed to revise the lockup agreement for the shares of the former company.

On Wednesday, Curaleaf announced that dating from the close of its pending acquisition of Cura Partners (owners of the Select Brand), 5% of applicable outstanding shares would be freed for sale on the last day of each calendar quarter. In the previous arrangement, that level was 15%. The first end-of-quarter date will be March 31.

Cannabis flowers in a bowl on top of US currency.

Image source: Getty Images

All individuals currently with holdings of more than 1% of Curaleaf's shares outstanding agreed to the modification. All told, it covers around 62% of all shares outstanding.

Those shareholders might not be unloading their stock anyway. In its announcement, Curaleaf said many of them "confirm their current intent to hold their shares despite the partial release from lockup."

Lockup periods are common for stocks that are relatively new to the market. Essentially, these periods prohibit insiders from selling shares for a certain period following the relevant company's initial public offering (IPO) on the stock exchange. They are mandatory in most cases, the concept behind them being to prevent a sudden wave of stock sales driving down the value of the shares.

Prior to this, Curaleaf most recently amended its lockup agreement last October. And before that, it modified the arrangement in March.

In its announcement, Curaleaf said the latest lockup agreement "ensures the orderly increase in the Company's freely traded shares and further reduces uncertainty regarding the release of shares."

At times a volatile marijuana stock, Curaleaf traded rather calmly on Wednesday. It closed slightly higher on the day.

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