LEEF Brands Inc. (CSE: LEEF) (OTC: LEEEF), a leading cannabis extraction and manufacturing business in California, recently became one of the first publicly traded cannabis companies to adopt Bitcoin as a treasury reserve asset. The strategy mirrors that of other companies that have seen their shares prices soar following Bitcoin’s meteoric rise.
The company has already acquired 3.936 Bitcoin at an average cost of $88,255.17 per coin, which means it has an unrealized gain of more than $73,000 already. To expand these holdings, the company announced a $5 million convertible debenture offering with an overallotment option that could bring the total to $5.75 million.
A Familiar Playbook in a Unique Market
LEEF Brands’ Bitcoin strategy mirrors the approach taken by MicroStrategy Inc. (MSTR), which has become the largest corporate holder of Bitcoin. Under Michael Saylor’s leadership, the company began purchasing Bitcoin in August 2020 when it was trading around $11,000, helping it become a $90 billion company in 2024.
MSTR shares have risen more than 500% over the past year. Source: Google Finance
Other companies have taken similar approaches to acquiring digital assets, including Sol Strategies Inc. (CSE: HODL) and Neptune Digital Assets Corp (CSE: NDA), which have seen their share prices also increase sharply over the past few months.
The move comes as the cannabis industry faces unique challenges, including limited access to traditional banking services and high operational costs. By moving into Bitcoin, the company can more easily manage its treasury funds in this challenging environment while exposing investors to significant upside potential over time.
To help navigate the move, the company appointed Jamie Warm, former CEO of Henry’s Original and an experienced Bitcoin consultant, as VP of Strategy to spearhead the new initiative. CEO Micah Anderson supports the vision, noting the similarities between the cannabis and Bitcoin industries and the potential for Bitcoin to amplify growth and value.
Why Investors Should Take Note
Bitcoin prices have soared in the wake of Donald Trump’s election victory. After promising to deregulate the sector and explore building a national Bitcoin reserve, speculators are bidding up the digital asset’s value in anticipation of future gains. Over the past seven days alone, prices have risen more than 13% to over $107,000.
Bitcoin prices have soared over the past few weeks. Source: CoinMarketCap
Of course, Bitcoin is only a small part of LEEF Brands’ story. In a recent interview, CEO Micah Anderson discusses some of the major catalysts coming up next year:
LEEF Brands’ convertible debenture presents an interesting opportunity that combines exposure to cannabis and Bitcoin. The 5-year convertible debentures carry a 10% annual interest rate and a conversion price of approximately $0.18 per share. Notably, the securities also carry first-lien interest in the Bitcoin holdings.
Looking Ahead
LEEF Brands’ dual strategy of cannabis extraction and building Bitcoin reserves could create a new model for cannabis companies seeking financial stability and growth. The success of this approach could also influence other cannabis companies to consider a similar strategy, potentially reshaping how the industry approaches its finances.
For investors interested in both cannabis and cryptocurrencies, the approach offers a unique investment opportunity that combines exposure to both markets in a single security. But, as with any emerging industry or technology, they should carefully consider the associated risks and how it fits into their portfolio.
For more information, visit the company’s website at www.leefbrands.com.
