Cannabis MSO Curaleaf extends debt with record $500 million placement
- Curaleaf Holdings Inc. raised $500 million in new debt at an 11.5% interest rate through a private placement to refinance $457 million of debt maturing in December, marking the largest note offering in the U.S. cannabis industry.
- The new debt matures on February 1, 2029, and the refinancing reflects a tougher financing environment for cannabis companies due to tighter capital markets and regulatory uncertainties.
- The refinancing strategy, termed "extend and pretend," allows Curaleaf to push financial challenges further into the future, while the new debt offering attracted 10 first-time cannabis lenders and was oversubscribed.
- Despite higher borrowing costs and recent setbacks in acquisitions, Curaleaf's leadership views the refinancing as strengthening its balance sheet and enabling pursuit of long-term global growth opportunities supported by strong institutional backing.
Facing $457 million of debt scheduled to mature in December, multistate cannabis operator Curaleaf Holdings Inc. on Monday announced it had raised $500 million in new debt via a private placement.
With an interest rate of 11.5%, the “oversubscribed… strategic refinancing” is also the “largest note offering in the U.S. cannabis industry to date,” company CEO Boris Jordan said in a news release.
The new notes are set to mature on Feb. 1, 2029.
The company will use the proceeds from the new offering to refinance $475 million in existing senior secured notes due on December 15, 2026, of which $457 million is still outstanding.
Curaleaf’s previous debt, issued in 2021, carried a rate of 8%. The new 11.5% rate reflects the tougher financing environment cannabis companies face as capital markets tighten and regulatory uncertainties persist.
The refinancing strategy is an example of what Frank Colombo, a managing director at New York-headquartered investment banking and data firm Viridian Capital Advisors, has dubbed “extend and pretend,” in which companies roll over their debt to push financial challenges further down the road.
The new debt may also portend the borrowing environment for cannabis companies following President Donald Trump’s Dec. 18 executive order directing cannabis be moved to Schedule 3 of the Controlled Substances Act.
The prospect of marijuana rescheduling triggered a flurry of M&A activity in the cannabis space, with more activity expected once Attorney General Pam Bondi advances Trump’s EO.
That included Curaleaf getting outbid for a vertically integrated medical cannabis permit in Virginia, where adult-use sales are expected to begin as soon as this fall.
After initially agreeing to a $110 million price for The Cannabist Co.’s Virginia assets, an affiliate of a Boston-based hedge fund put together an offer worth $160 million.
Despite the higher cost of borrowing, Curaleaf’s leadership is framing the placement as a win.
Jordan highlighted the demand for the offering, which was oversubscribed and brought in 10 first-time cannabis lenders.
“This transaction strengthens our balance sheet, extends maturities to 2029 and provides ample flexibility to pursue high-return global growth opportunities, reinforced by our robust and consistent cash generation,” he said in a statement.
“With this strategic priority nearing completion, we are well-positioned to execute on our long-term growth strategies with strong institutional backing.”
Curaleaf’s next earnings report is issued Feb. 26.
After turning towards hemp-derived THC, the company has pivoted away from hemp after a federal ban, set to take effect in November 2026.