Is Curaleaf still a buy?

Beacon Securities analyst Russell Stanley maintained his “Buy” rating and C$5.00 price target on Curaleaf Holdings (Curaleaf Holdings Stock Quote, Chart, News, Analysts, Financials TSX:CURA) in a Dec. 2 note, saying the company’s plan to acquire The Cannabist Company’s vertically integrated Virginia operations for US$110-million strengthens its position ahead of a likely adult-use launch in late 2026.

Wakefield, Mass.–based Curaleaf is a multinational, vertically integrated cannabis operator with assets across the U.S., Europe, and Australasia.

Stanley left his estimates unchanged but called the transaction “favourable,” given Virginia’s population size (8.8 million), the medical program’s regional exclusivity, and the “high probability of a commercial adult-use market opening late next year.”

Curaleaf will acquire 82,000 sq. ft. of cultivation/production capacity, five operating retail sites and one additional location under development. The US$110-million consideration consists of US$80-million cash at closing, US$20-million deferred cash, and a US$10-million, one-year promissory note paying 6%.

Deferred consideration becomes payable within 30 days of either first adult-use sales at all six stores or 12 months after first adult-use sales at any one store.

The deal includes a 15-business-day go-shop (expiring Dec. 22) and a US$3.3-million break fee. Closing, expected in Q1 2026, requires regulatory approvals and majority consent from holders of The Cannabist Company’s senior secured notes.

Cannabist previously launched a strategic review amid ongoing operating and financial challenges and plans to use sale proceeds to redeem debt. Verano acquired Cannabist’s coastal Virginia assets in 2024 for US$105-million.

A final proposal for Virginia’s commercial adult-use market was expected to be released this week. The draft envisions sales beginning in November 2026. With a new Democratic governor taking office in January, after prior vetoes under Republican leadership, Stanley sees political alignment improving the likelihood of passage.

Notably, the opt-out mechanism for local municipalities has been removed, reducing a barrier seen in other states. The draft also proposes an 8% state excise tax, allows municipalities to add their own levy up to 3.5%, permits operators to deduct expenses disallowed federally under 280E, and caps each operator, including MSOs, at five total retail and/or cultivation-processing licences.

Stanley said Curaleaf should generate US$262-million in Adjusted EBITDA on US$1.268-billion of revenue in fiscal 2025, improving to US$332-million EBITDA on US$1.385-billion of revenue in fiscal 2026.

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