A year ago, iAnthus Capital Holdings had a $1.2 billion market value as it raced to become one of America’s nationwide cannabis chains. Today, bankers are running a foreclosure sale of iAnthus stock that secured the company’s unpaid loans, according to investors in the marijuana industry.
A May 12 email marked “Strictly Confidential” from Roth Capital Partners sets a Friday deadline for those interested in the equity stake in “one of the leading multistate operators.” The solicitation’s description of the unnamed company’s revenues and five-state operations, contained in a copy of the Roth email viewed by Barron’s, matches that of iAnthus.
iAnthus announced last month that it was in default on $157 million in debt, blaming the Covid-19 crisis for its financial crunch. At April’s end, iAnthus chief executive Hadley Ford resigned as the company said an investigation found that he hadn’t disclosed a personal loan from one of the founders of Gotham Green Partners—a secured lender to iAnthus and a prominent private-equity investor in pot businesses.
iAnthus has yet to report results for its 2019 year and March 2020 quarter.
Shares of iAnthus have tumbled 97% from a year-ago level of 8 Canadian dollars (or US$6) on the Canadian Securities Exchange. iAnthus didn’t respond to requests for comment. Gotham Green and attorneys for Ford also did not answer queries. Roth Capital declined to comment.
iAnthus was one of several companies profiled last year in a Barron’s cover story on the race to assemble cannabis operations in states that allow the drug, which remains illegal under U.S. federal law.
The weed’s federal illegality has kept U.S. operators from listing their stocks on the large exchanges that have welcomed producers from Canada, where cannabis went legal nationwide in 2018. Shares of Canada’s Canopy Growth (CGC), Aurora Cannabis (ACB) and Tilray (TLRY) bubbled up, then sank as investors grew impatient with those companies’ negative cash flows.
Published: May 15, 2020