Hartford Business Journal

HARTFORDBUSINESS.COM | NOVEMBER 25, 2024 5 What's Trending CT cannabis company secures $40M revolving credit line from 'major commercial regional bank' A re federally insured banks warming up to the cannabis industry? A recent deal announced by a major Connecticut-based cannabis company could indicate the answer is yes. Stamford-based Curaleaf Holdings Inc., the world's largest publicly traded cannabis company, announced that it has secured a new $40 million revolving credit facility with a major commercial regional bank. Curaleaf — which operates four dispensaries and a cultivation facility in the state, and has other operations in the U.S. and internationally — said it will be able to draw down on the credit line "as needed for general corporate purposes and working capital needs." The company declined to name the bank involved in the deal, but Chairman and CEO Boris Jordan called the financing arrangement a "milestone event for Curaleaf." He said the "credit line provides flexibility traditionally not available to the cannabis sector, and allows us to continue growing Curaleaf as the leader of the global cannabis industry during what continues to be a difficult capital-raising environment." Banks and credit unions have been skittish about serving the marijuana industry because cannabis remains illegal at the federal level. In short, because marijuana is still a Schedule 1 drug at the federal level, it is illegal for banks and credit unions to lend to such companies. A sea of cannabis flowers shown in Curaleaf's Simsbury grow facility. HBJ PHOTO | STEVE LASCHEVER However, some financial institu- tions have quietly dipped their toes in the market by offering cannabis customers cash management services like accounts and deposits. The Drug Enforcement Agency, at the urging of the Biden adminis- tration, has been in the process of potentially reclassifying marijuana as a Schedule III drug, which would ease restrictions on cannabis use. But it's not clear what impact that would have on bank financing for the industry, or if a Trump adminis- tration will continue to support that policy shift. Curaleaf, which trades on the Toronto Stock Exchange, earlier this year identified Stamford as its new headquarters. The company operates in 17 states, and had 19 cultivation sites and 147 retail locations in the U.S. as of August. — Greg Bordonaro Stanley Black & Decker warns Trump's tariffs could cost it $200M a year Stanley Black & Decker President and CEO Donald Allan Jr. CONTRIBUTED PHOTO N ew Britain toolmaker Stanley Black & Decker has announced details of its plan to mitigate higher costs from tariffs. Stanley's President and CEO Donald Allan Jr. announced during a recent call with shareholders that the company may increase prices and relocate production facilities if Presi- dent-elect Donald J. Trump imposes additional tariffs on global trade. Trump said on the campaign trail that he intends to propose a 60% tariff on goods produced in China. While it's unclear how quickly Trump could enact higher tariffs after he takes office on Jan. 20, 2025, Stanley is bracing for the potential impacts. The proposed 60% tariff would cost Stanley about $200 million annually, without any new mitigation actions, the company said. Stanley is "preparing to discuss potential price increases with its customers, has begun assessing supply chain adjustments based on current U.S. trade-related rules and regulations, and intends to continue its direct engagement with policy- makers," the company said. Stanley believes that supply chain adjustments would take 12 to 24 months to neutralize the potential tariffs. Allan said Stanley may move produc- tion from China to other parts of Asia and Mexico. The company has about 50 production facilities overseas. Also, Stanley said that new tariffs might "alter the path" to Stanley's goals of attaining mid-single digit sales growth and adjusted gross margins of 35% or higher. In 2018, during Trump's previous administration, the U.S. government imposed a 25% tariff on Chinese imports, which remains in effect. Stanley said the increased cost of goods imported from China during 2017 and 2018 would have cost the company more than $300 million a year, without mitigation measures. However, the company limited its exposure by taking "supply chain repositioning actions" and raising customer prices. With those miti- gation measures in place, the 2018 tariff cost the company less than $100 million annually, it said. Other U.S. businesses — including auto-parts company AutoZone and Columbia Sportswear — have warned of price increases if Trump's tariff plan is implemented, according to Business Insider. — Drew Larson. PRESENTING SPONSORS MAJOR SPONSOR SUPPORTING SPONSORS TO THE 2024 AND THANK YOU TO OUR SPONSORS

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