WAKEFIELD, Mass., Dec. 20, 2019 /PRNewswire/ -- PRESS RELEASE -- Curaleaf Holdings, Inc., a vertically integrated cannabis operator in the United States, has announced that the company has received commitments from a syndicate of lenders for a US$275 million Senior Secured Term Loan Facility bearing interest at a rate of 13.0% per annum, payable quarterly in arrears, with a maturity 48 months from closing.
Curaleaf has received commitments for the facility from existing lenders as well as other United States based institutional investors. This transaction constitutes a broadly syndicated institutional deal led by sophisticated and long-term investors that have confidence in the cannabis industry and the Curaleaf team in particular. The proceeds will be used to refinance existing debt, satisfy transaction fees and expenses from previously announced acquisitions, fund capital expenditures and for general corporate purposes. The sole placement agent for the facility is Seaport Global Securities LLC.
"This transaction is a historic milestone for Curaleaf. Our track record of continuously improving results has attracted a strong group of institutional investors who share our belief that we have established a leading credit profile in the cannabis industry," said Joseph Lusardi, Chief Executive Officer of Curaleaf. "Importantly, we have raised debt capital at attractive terms without the need to dilute our shareholders. We believe this additional capital fortifies Curaleaf's balance sheet to take advantage of the significant market opportunities that exist in this space."
Neil Davidson, Chief Financial Officer of Curaleaf, continued, "As our business continues to scale and generate positive free cash flow, this additional capital puts us in a position of strength and provides us with ample liquidity to execute on our strategy. Further, we believe our pending acquisitions, most notably Select and Grassroots will benefit from our expanded balance sheet, both of which are expected to close early next year."
The facility is subject to completion of customary closing conditions, with expected completion of conditions precedent and drawdown on or about Jan. 10, 2020.
University Research and the Cannabis Industry: Q&A with Robert Eddy
As prohibition crumbles, more research becomes available to cannabis cultivators. How can growers best implement plant science into their operations?
Cannabis’s Schedule I status has largely forced cultivators to make decisions based on industry consensus, but as prohibition crumbles, research is beginning to trickle out of major universities around the world. As more information becomes available, growers can start to use the same meticulous methodology and peer-reviewed process that has been used for flower, vegetable and agronomic crops to have a better understanding of the plant physiology responsible for higher yields and the development of cannabinoid and terpenoid profiles.
Here, Robert Eddy, director of ag projects at Core Cannabis and the former plant growth facilities manager at Purdue University, shares how a lack of scientific knowledge has impacted the cannabis industry, as well as how growers can begin to implement the science that is becoming available.
Cannabis Business Times: How has a lack of research and scientific knowledge affected the cannabis industry?
Robert Eddy: From my perspective, they’ve done an excellent job teaching themselves and learning, sharing information. I think where the limitation is, there hasn’t been a lot of research coming out of the universities. The other half of it is, when universities do research that can apply to commercial production of agriculture and horticulture products, they use the cooperative extension service to disseminate that information. That community, until recently, hasn’t been serving the cannabis growers because universities aren’t quite ready to do that yet. But the dam has broken. Thanks to Cannabis Business Times in particular, that dam has broken, and you guys are publishing articles by extension specialists like Ray Cloyd, Brian Whipker [and] Brian Jackson. If they’re disseminating information, the cannabis growers are finding that valuable, and the universities realize, “Yes, we are serving a good industry here, and we need to sustain this.”
CBT: What kind of research on plant science is starting to come out of major universities?
RE: Of course, there’s been some great stuff beginning to roll out on cannabis, but what I find intriguing is to look at the other industries that plant science is serving and realizing, “Oh, this would apply to cannabis beautifully.” For example, the vertical farming industry, where they have stacks of plants, usually in indoor warehouses with LED lights—they are trying to improve flavor profiles. The way you do that is to improve the secondary metabolite [and cannabinoid] production in the plants. So, you [can] look at what other industries do to improve flavor of their crops, or maybe they’re using some cool tricks for disease control, and you realize, “Oh, this would apply beautifully to cannabis.”
Some of the stuff that’s beginning to roll out right now is, of course, the lighting research. There’s been great work with using finishing spectrums, using light in the last week of production to improve THC and terpene profiles, using sub-canopy lighting [and] intra-canopy lighting to improve yield and terpene profiles. There’s been a lot of work on far red light being added to the spectrum that’s in these grow fixtures, and that can improve yield of crops through some really nifty new plant physiology discoveries—brand new stuff that’s been very exciting to follow and, sure enough, the cannabis industry has picked up on this really quickly.
There’s been great work in applying stresses to plants to increase the secondary metabolites. Drought stress, for example, but also light stress—those inter-cycle spectrum treatments where you expose plants to a blue light or a green light or some other specific waveband in the last week or two. That’s actually applying stress to that plant, and they’re responding by creating more cannabinoids.
Then, there’s been research—not on cannabis but on other crops—on using heat treatments or light treatments for disease control. Using environmental controls for something like disease control would really be helpful in the cannabis industry where you just don’t have access to fungicides.
Another aspect of science that’s been around a little while, but it really needs to be applied to cannabis, is the four stages of rooting. These are environmental recommendations [on] the four stages of germination if it’s a seedling or the four stages of rooting if it’s a tissue culture. It’s just a matter of dividing up that period of time where the seed or the tissue culture/clone starts the process of initiating roots, until it’s ready to go into the veg stage. You just divide that up into four periods and they’re specifically defined, and you apply different environmental setpoints during those four periods just to optimize the rooting and to get it ready for the vegetative stage, so the plant doesn’t go into some kind of shock when it gets moved in.
And one more [bit of research] is phenotyping, in this case meaning the automated assessment of plant traits. Humans have been phenotyping plants forever. They make a cross between two lines and they examine to see which ones they like and what kinds of traits they have. Now, plant science is bringing machine vision into this, and sometimes automatic conveyance where you have this chamber with sophisticated environmental controls and the plants are on conveyors and they move into imaging booths, like camera booths, and they’re imaged. Sometimes, that imagery is with normal red/green/blue spectrum, but other times, they’ll use fluorescent spectrometry, and they’ll use other wavelengths. They can look at plants and see things that the human eye couldn’t see. They can also make automatic measurements of plants, like the number of flowers, the number of branches [and] the leaf area, and all this can be automated and quantified. It’s a great tool is it’s great for breeding. If you’re breeding, then you can automate the assessment of all these new lines. It’s all being done in a quantifiable way by machines, and you’ve got data to look at, not just human assessment, which is, of course subjective.
CBT: How can cannabis cultivators start to implement this research into their operations, and how will this change the way they run their businesses?
RE: Better and better information is coming out of the universities, so they can pay attention [to] see what’s going on in the plant science community.
Also, as they hire new staff, I think they will begin to look for students who’ve been exposed to these new technologies. They’ll be hiring more students with maybe some ag engineering backgrounds, not just the horticulture.
Also, along those lines, I suspect that community colleges and technical colleges and universities [that are] already beginning to create cannabis programs of study [will] get more technical, so these graduating students who will become the new hires have some background in it.
I think it will depend on the cannabis growers’ current market and methodology. A craft grower might particularly look at some of the ways to change the cannabinoid profile and utilize those, and it probably would build from experience they already know, but this would be a way to quantify it so that it can be done not just subjectively by one or two humans on their team, but could be done in a little bit more automated fashion or in a more controlled way. As they scale up their business or open up different greenhouses or grow rooms in different parts of whatever state they’re in, they can have more uniform methods to achieve those cannabinoid profiles.
CBT: What sort of benefits will cultivators see from a more science-based approach?
RE: I think they’ll see their own knowledge and their own experience validated, and yet it will be validated in a way that can be quantified and shared objectively. So, it’ll validate what they already know, it’ll quantify what they already know, and it’ll also, at the same time, provide scientific explanations for what some of the observations are that still might be mysterious with this plant.
Also, I think they’ll see that they’ll have better control over their environments. They’ll have a better understanding of how to modify their environments for particular goals, [such as] uniformity of your crop, higher yields or maybe a particular cannabinoid profile. You might not be able to get all of those things at once, but I think they could choose and modify the environment.
I think they might find they’re able to reduce the time it takes to reap plants by following those four stages of rooting. Sometimes, [cultivators are] not having good luck in the greenhouse. Maybe the yield isn’t there, or maybe the yield is sometimes there, but it’s not uniform. I think these plant environment principles will help them grow in the greenhouse and better understand how the greenhouse works. They might find that the scalability of the greenhouse combined with these plant empowerment principles might allow them to get the uniformity that they’ve always wanted from those environments.
CBT: What do you hope attendees will bring back to their business from your session at Cannabis Conference 2020?
RE: I hope they’ll bring back an excitement and enthusiasm about what’s out there. I hope they see that there’s a lot of low-hanging fruit out there. There are a lot of things being done in other crops in greenhouses that could apply to cannabis right now. They could get a better crop or a more uniform crop from knowledge that is already known and being practiced in other parts of the agriculture industry.
Then, I’d like them to go home with a bit of an excitement about what’s coming in the future, about some of these great discoveries that have been made with these plant empowerment principles or plant phenotyping to control plant disease.
Editor’s Note: This interview has been edited for style, length and clarity.
Denis Larkin | Adobe Stock
Illinois Governor Pardons More Than 11,000 Cannabis Convictions Ahead of Adult-Use Market Launch
Gov. J.B. Pritzker announced Dec. 31 that he would clear the records of those with low-level cannabis-related convictions.
Illinois Gov. J.B. Pritzker announced Dec. 31, the eve of adult-use cannabis legalization in the state, that he was pardoning more than 11,000 low-level cannabis convictions.
“When Illinois’ first adult-use cannabis shops open their doors tomorrow, we must all remember that the purpose of this legislation is not to immediately make cannabis widely available or to maximize product on the shelves; that’s not the main purpose, that will come with time,” Pritzker said in his announcement. “But instead the defining purpose of legalization is to maximize equity for generations to come.”
The pardon means that convictions involving less than 30 grams of cannabis will be automatically expunged, and the 11,017 Pritzker pardoned Tuesday will receive notification via mail, the Chicago Tribune reported.
State officials estimate that there are hundreds of thousands of people in Illinois who could be eligible for expungement, according to the news outlet. Illinois State Police are searching criminal records to identify eligible cases and submitting them to the Prisoner Review Board, which reviews the cases and sends the names of those eligible for expungement to the governor’s office to be considered for a pardon.
While many of the cases will be automatically expunged in the next couple of years through this process, those with criminal convictions can get a copy of their record and start the process sooner, the Chicago Tribune reported.
Cases involving 30 to 500 grams of cannabis are also eligible for expungement, but the process will not be automatic; individuals must file motions to vacate the convictions, according to the news outlet.
Zack Frank | Adobe Stock
New Mexico Lawmakers to Pre-File Cannabis Legalization Bill
The legislation will include recommendations from the state’s governor-appointed work group, which was charged with suggesting what an adult-use cannabis program should entail.
New Mexico Rep. Javier Martinez (D-Albuquerque) will pre-file an adult-use cannabis legalization bill in the coming days that incorporates recommendations from the state’s governor-appointed work group, which was charged with suggesting what an adult-use program should entail.
Martinez’s legislation will establish a private adult-use cannabis industry in the state and regulate the market similar to alcohol, according to a local KRQE report.
In an effort to protect the state’s existing medical cannabis program, the legislation would remove sales tax on medical cannabis products and create subsidies for low-income patients, the news outlet reported.
Martinez participated in New Mexico’s work group alongside 21 other policy leaders from across the state, including law enforcement, medical professionals and politicians. The group submitted its recommendations for an adult-use cannabis program to elected officials in October, and focused on prioritizing the state’s medical cannabis patients and providing a large portion of adult-use proceeds to law enforcement and public health programs.
The New Mexico House passed an adult-use legalization bill last spring by a narrow margin of 36-34, but the legislation ultimately stalled in the Senate.
This year’s legislative session begins Jan. 21, and Gov. Michelle Lujan Grisham has indicated that she wants cannabis legalized this time around, according to KRQE.
Jake Gravbrot
Cannabis Conference Pricing Deadline Extended to Jan. 10
Now that we're on the far side of the holiday season, the Cannabis Conference team is extending its Early Bird registration deadline (originally Dec. 27) to Jan. 10.
Now that we're on the far side of the holiday season, the Cannabis Conference team is extending its Early Bird registration deadline (originally Dec. 27) to Jan. 10.
Savings at the Early Bird pricing level include: $500 off the All-Access pass, $400 off the Conference & Expo pass and $300 off the Expo Only pass.
Prices will shoot up another $100 after Jan. 10, so get your registration in now.
And while you're at the Cannabis Conference 2020 website, check out our education schedule and our list of speakers. We've been developing our education offerings with our Cannabis Conference 2020 advisory board, which includes some of the brightest minds in cannabis cultivation and retail, as well as the newly legal U.S. hemp industry.
Cannabis Conference 2020 will be our fourth annual event, and our second visit to Las Vegas. The conference happens April 21-23 at the Paris Las Vegas Hotel & Casino. We're looking forward to gathering business owners from across the rapidly growing cannabis industry, and we're excited to have everyone share ideas and perspectives on how best to support this fascinating marketplace.
Legislative Map
Cannabis Business Times’ interactive legislative map is another tool to help cultivators quickly navigate state cannabis laws and find news relevant to their markets. View More