Clever Leaves Cannabis Company Exits NASDAQ Amid Financial Strains, Stock Plunges -60%, Investors Impacted

Once a cannabis pioneer, Clever Leaves Holdings Inc. CLVR has announced its plan to voluntarily delist from NASDAQ and deregister its securities. 

This financial move, approved by its Board of Directors, aims to terminate and suspend its reporting obligations to the Securities and Exchange Commission (SEC).

Out By May

Set to initiate the delisting process by filing a Form 25 with the SEC around May 6, Clever Leaves expects the final trading day of its securities on NASDAQ to be approximately May 16. Subsequently, the company will file a Form 15 to cease its reporting duties. This filing, effective 90 days post-submission, will end the company's obligation to submit various SEC reports and forms, including Forms 10-K, 10-Q, and 8-K.

Impact on Investors

Investors holding shares or warrants of Clever Leaves should be aware that following the delisting, these securities will no longer trade on NASDAQ. While the securities can still be held, they may be traded over-the-counter (OTC), typically resulting in lower trading volumes and potentially less liquidity. Investors are advised to consult with their financial advisors to better understand the implications of the delisting on their investments and consider their options regarding holding or disposing of their shares.

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Share Value Is Plunging

Once a major player in the medicinal cannabis industry, Clever Leaves has significantly impacted the sector, employing 296 full-time staff, primarily in Colombia. However, the company’s share value has plummeted over 60% since the delisting announcement. At its peak in August 2021, amid the cannabis gold-rush, shares traded at an all-time high of $538, but the current share price has dramatically fallen to around $1.5

A Broader Restructuring Plan

In their 2023 annual overview, Clever Leaves reported a revenue increase of 6%, achieving $17.4 million up from $16.4 million The growth was particularly strong in cannabinoid sales, which surged 39% to $6.6 million. The company also enhanced its operational efficiency by optimizing its cost structure, resulting in a 24% reduction in general and administrative expenses. 

The last financial report makes this new decision appear as a move inside a wider restructuring plan. These sorts of cut-cost decisions have been normal in the cannabis space, amid a general and global recession and consolidation, driven by falls in CBD prices and the slowdown of regulatory change.

The decision stems from a thorough review of internal strategies and external conditions, influenced by factors such as ongoing non-compliance with Nasdaq's listing requirements and the financial burden of regulatory compliance. By delisting, Clever Leaves says it aims to reduce significant operational costs associated with the demands of public trading and reporting.