Trulieve Cannabis Corp. has entered into a series of agreements to separate its mixed-use marijuana business from its medical marijuana business, a move the company says is intended to allow it to apply to list its subordinate voting shares on the New York Stock Exchange.
In a Form 8-K filed with the U.S. Securities and Exchange Commission, Trulieve said the restructuring was completed June 3 through what it described as a “deconsolidation transaction” involving Harvest Enterprises, LLC, a former indirectly wholly-owned subsidiary. Harvest now holds Trulieve’s former mixed-use marijuana business, except for assets that still require regulatory approval before being transferred.
Under the arrangement, Trulieve’s indirect subsidiary, Harvest Enterprises Holdings, Inc., now holds non-voting and non-participating units in Harvest. Those units do not include voting rights, dividend rights or the ability to direct Harvest’s business, operations or activities.
The filing says the units may only convert into common units after the NYSE allows companies to list while consolidating financial statements from businesses that cultivate, distribute or possess marijuana for non-medical use in the United States. If converted, Trulieve’s subsidiary would own no more than 90% of Harvest’s units.
As part of the transaction, Whitley Holding 05192026, LLC acquired voting units representing a 10% economic ownership interest in Harvest for approximately $14.8 million. The investor appointed Frank Whitley and Rudy Rowe to Harvest’s board, while Trulieve’s subsidiary appointed Trulieve CEO Kim Rivers.
Trulieve and Harvest also entered into a management services agreement, under which a Trulieve subsidiary will provide consulting, advisory and administrative services to Harvest. The agreement includes reimbursement of costs plus a 5% margin, subject to a cap, and either party may terminate it with 90 days’ notice.
Trulieve said it expects to report in its second-quarter filing that it consolidated Harvest’s financial results only through June 3, and that as of that date it had deconsolidated Harvest and retained a non-controlling interest. The company expects to file its quarterly report by Aug. 7.
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