IAnthus Capital Holdings (IAN.C) expands in anticipation of decriminalized U.S. cannabis market

Ianthus Capital Holdings (IAN.C) has expanded its reach over the United States cannabis markets with the acquisition of MPX Bioceutical.

MPX Bioceutical is a vertically-integrated multinational company operating in the American medical and recreational cannabis markets. The acquisition stretches iAnthus’ footprint across 11 states, 63 retail locations and 15 cultivation and processing facilities.

These retail and production capabilities combine with pre-existing licensing agreements across the U.S. with the potential to reach 121 million potential customers.

“As demonstrated with our 2018 acquisitions in Florida and New York, and now with the closing of our MPX transaction, the iAnthus team continues to demonstrate its focus on growing its platform and operations,” said Hadley Ford, CEO of iAnthus.

The need for cannabis brands develop alongside market demand, according to Ford. Now that their operation has expanded from six to 11 states, they plan on taking advantage of this opportunity to reveal their national retail and product brands across the organization.

Determining whether or not this is a positive move for iAnthus depends on projections regarding the regulatory future for cannabis in the United States.

In 2018, 21 states considered legalizing marijuana for adult-use, including four of the states under iAnthus’ new expanded footprint.

All of the additional states that iAnthus now reaches have previously legalized medical marijuana usage. If lifting prohibition for recreational use takes on a domino effect, spanning the majority of the states of the union, then iAnthus would suddenly find itself in an extremely advantageous situation with operations already in place and ready to roll out product. However, if it doesn’t, then it’s a large amount of money lost and questions from angry shareholders.

Ianthus footprint pre-merger:

  • New York
  • Florida
  • Massachusetts
  • Vermont
  • Colorado
  • New Mexico

Ianthus’s newest additions add retail and/or production in:

  • Arizona
  • Maryland
  • Nevada
  • California
  • Massachusetts
  • New Jersey
Image courtesy of businessinsider.com.

Beth Stavola, former COO of MPX said,

“As early pioneers in the licensed cannabis sector in Arizona, Nevada and Maryland, MPX is extremely excited to join forces with iAnthus as we create the multi-state operator that will define this burgeoning industry. We plan to add the power of our market leading product, retail and wholesale experience to the iAnthus platform.”

Ianthus will expand its board of directors to seven members. All of the presently serving board members will retain their posts, but will be joined by MPX nominees Robert Petch, Elizabeth Stavola and Robert Galvin.

To make space on the board for one of the MPX nominees, Dr. Richard Boxer stepped aside and will take up the role of chief medical officer.

The original acquisition agreement had iAnthus acquiring all of the issued and outstanding common shares of MPX.

Holders of MPX shares received 0.1673 common shares of iAnthus for each MPX share they held, representing a 30.6% premium based on the closing price of iAnthus and MPX on Oct. 17, 2018.

Also, MPX shareholders received an undisclosed amount of common shares of the newly formed MPX International Corporation, which is the holding company responsible for all of the non-U.S cannabis businesses of MPX.

MPX International has received conditional approval to list its securities on the CSE, and will commence trading either on or around Feb. 6, 2019.

Ianthus has also submitted applications to the CSE and the Ontario Securities Commission to delist the MPX shares.

IAnthus is valued at a little over $417 million, and it closed at $7.12.

–Joseph Morton

Full disclosure:  iAnthus is an Equity.Guru marketing client.

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

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