Amid a sharp decline in the price of marijuana stocks, the Massachusetts company buying Oregon’s biggest marijuana business restructured the transaction Wednesday and dramatically reduced its value.

Instead of nearly $1 billion, the deal could now be worth less than $300 million – though Portland-based Cura Cannabis has the opportunity to earn back some of what’s been lost if it hits newly established sales targets next year.

The sharply lower valuation reflects growing investor uncertainty about the business prospects for marijuana companies.

Cura announced in May that it would sell its Select line of recreational marijuana products to Massachusetts-based Curaleaf for nearly $1 billion in Curaleaf stock. The companies heralded it at the time as the biggest deal ever in the young industry and a signal of marijuana’s business potential.

In the intervening six months, while waiting for the deal to close, Curaleaf’s stock has plunged by nearly half. Investors are worried about federal regulation, the vaping health crisis and have growing doubts about when or if the federal government will make marijuana legal nationwide.

Many other marijuana stocks – which trade on Canadian exchanges – saw similar declines in their value.

The Curaleaf selloff had already reduced the value of the deal for the Portland company by nearly half, from $947 million to just $523 million at Tuesday’s market close.

Citing “changing market conditions,” Curaleaf said Wednesday the companies have restructured their agreement.

Now, Curaleaf is offering $286 million in stock – less than a third of the deal’s original value. But it said it will award Cura’s shareholders up to $411 million in additional shares if sales of the Portland company’s Select brand of recreational marijuana top $300 million next year.

Since privately held Cura doesn’t report financial results, it’s impossible to say whether those new sales targets are achievable. The Portland company said it had $117 million in total sales in 2018. That includes revenue from Cura’s line of CBD oils, which are not included in its deal with Curaleaf.

Since it remains an all-stock transaction, the deal’s ultimate value will depend on the future of Curaleaf’s share price. The stock fell another 5% Wednesday after the company announced the new terms of its deal for Cura.

"The amended terms of the acquisition that we have agreed to with Select reflect our commitment to executing a prudent investment strategy that is in the best interests of our shareholders,” Curaleaf CEO Joseph Lusardi said in a written statement. “We remain extremely confident in the strength and operations of the Select business and of the long-term prospects of the cannabis sector as a whole.”

Additionally, Curaleaf said it had cleared a key antitrust hurdle and now expects to close its deal for Cura’s Select brand on January 1 – eight months after the companies announced the transaction.

Curaleaf is backed by a Russian billionaire, Andrei Blokh, and by American investment banker Boris Jordan, who made a fortune helping privatize state-owned industries following the collapse of the Soviet Union. Jordan is also an investor in Cura.

Portland-based Cura has been beset by a string of controversies dating to the company’s roots in a real-estate scam. A Lake Oswego investment manager is serving a three-year sentence in federal prison for diverting Oregon retirees’ savings into the marijuana company that became Cura.

Earlier this month, Cura settled a lawsuit alleging that a California rival used anonymous social media posts to highlight a past rape allegation against the company’s executive chairman, Nitin Khanna.

Khanna denies the allegations but he stepped down as Cura’s CEO last year after members of the cannabis community began highlighting the allegations.

And earlier this year, Cura hired a man named Nick Sarnicola as its president. Sarnicola has also served as CEO of a Michigan company called ViSalus, which has settled a string of lawsuits alleging it of operating a “pyramid scheme” peddling protein power and weight-loss shakes.

-- Mike Rogoway | twitter: @rogoway | 503-294-7699