Summary: Verano Holdings Corp. CEO, George Archos, anticipates that the ongoing classification review by the Biden administration will enable publicly traded U.S. marijuana companies to uplist to major stock exchanges through at least a rescheduling of the drug.
U.S. Cannabis Companies Might Uplist to Major Exchanges, Predicts Verano Holdings CEO
Verano Holdings Corp. CEO, George Archos, expressed confidence during the company’s Q2 earnings call that the current classification review by the Biden administration will provide publicly traded U.S. marijuana companies the opportunity to uplist to major stock exchanges by at least rescheduling the drug. Archos highlighted that Verano is a member of the U.S. Cannabis Council, which has been lobbying the Biden administration on this issue since the review began last year.
He stated, “With a rescheduling or descheduling status still on the horizon, we will continue our involvement at the federal level to help push progress forward. We ultimately anticipate that some form of federal action will create large changes for the industry, including the possibility of an uplisting to U.S. exchanges.”
Uplisting to major exchanges like the New York Stock Exchange or the Nasdaq could significantly benefit many public companies in the cannabis industry by providing them access to more capital. This would be particularly beneficial for companies like Verano. Despite the company reporting positive business conditions and revising its financial guidance for the year to increase free cash flow projections to $65 million-$75 million, it still has a tax liability of $227 million, as noted by CFO Brett Summerer.
However, some state-level tax credits, designed to alleviate the burden from the 280E provision in the federal tax code (which prevents cannabis companies from claiming standard business tax deductions), offset this debt. Archos mentioned that 280E offsets introduced in states like Connecticut, Illinois, and New Jersey have already saved Verano millions. He commented on the tax debts, stating, “We’re down from about $250 million to about $225 million. The state portion is a healthy portion, but not all of that, and that’s essentially a direct result of the 280E rollbacks that we saw in Illinois and New Jersey.”
With the increased free cash flow, the company is contemplating whether to continue paying down its tax debts, settle some of the debts it owes to Chicago Atlantic, or perhaps invest in expansion. Archos concluded by saying, “All options are on the table.”[Source: Green Market Report]
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