Please ensure Javascript is enabled for purposes of website accessibility

Curaleaf Modifies Lockup Agreement Again

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

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Curaleaf Holdings, Inc. Stock Quote
Curaleaf Holdings, Inc.
$5.91 (6.39%) $0.36

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.