Shares of Trulieve Cannabis (TCNNF) surged nearly 16% on Thursday, after the company took a major step toward a potential New York Stock Exchange listing by separating its recreational cannabis operations from its core medical cannabis business.
According to an SEC filing on Thursday, Trulieve Cannabis said it has completed a restructuring that moves its mixed-use cannabis assets into a separate entity, Harvest Enterprises.
What Does The Restructuring Entail?
As part of the transaction, Trulieve will no longer consolidate Harvest’s financial results into its own statements, a move designed to align with NYSE listing requirements.
While Trulieve will retain an interest in Harvest through non-voting units, those holdings will not provide voting rights, dividends, or operational control. The units can only be converted into regular ownership interests if future stock exchange rules allow companies with U.S. recreational cannabis exposure to be listed.
As part of the restructuring, investor Whitley Holding acquired a 10% economic stake in Harvest for around $14.8 million and gained the right to appoint two members to Harvest’s board.
What’s The Rationale Behind The Move?
The company said the changes are intended to enable Trulieve to pursue a NYSE listing. While the U.S. Department of Justice formally moved to reclassify state-licensed medical marijuana as a less dangerous drug earlier this year, companies with mixed-use marijuana businesses are not permitted to list on the NYSE.
While the reclassification does not legalize marijuana, it reduces regulatory hurdles, offers tax relief for licensed operators, and makes research easier.
What Does Retail Think Of TCNNF?
Retail sentiment surrounding the OTC stock on Stocktwits remained ‘bullish’ over the past 24 hours, amid ‘high’ message volumes. At the time of writing, TCNNF was among the top trending tickers on the platform.
One user believes the NYSE up listing could take about 12 to 15 months to complete.
https://stocktwits.com/Saltee/message/655387618
The stock has gained around 17% so far this year.
