Sometimes, things just don’t go your way, as the management team at iAnthus Capital Holdings Inc (OTCMKTS:ITHUF) found out in vivid color over recent days. But, we would stress, this likely does not reflect weakness in their overall model. It was just an error. It happens. Specifically, the company issued a raft of stock options and then saw the price of its stock dive. It then cancelled and reissued the options because the basis was now “unfair” to its new hires. The stock dove again.
According to the release, “One of the most important objectives at iAnthus in 2019 is to hire the right people to move our company forward, drive growth and deliver results for our shareholders. With these goals in mind, I am thrilled to welcome several new senior members to the iAnthus team. Experienced talent is hard to find in the cannabis industry and one of the promises we make to our team is that they will be rewarded for the work they do,” said Hadley Ford, CEO.
iAnthus Capital Holdings Inc (OTCMKTS:ITHUF), through its wholly-owned subsidiary iAnthus Capital Management, LLC, provides investors diversified exposure to “best-in-class” licensed cannabis cultivators, processors, and dispensaries throughout the United States. iAnthus currently owns, operates or has partnered with marijuana license holders in Massachusetts, Vermont, Colorado and New Mexico.
As reported, “founded by entrepreneurs with decades of experience in investment banking, corporate finance, law and healthcare services,” iAnthus provides a “unique combination” of capital and hands-on operating and management expertise. The Company leverages these skills to support “a diversified portfolio of cannabis industry investments for our shareholders.”
Moreover, iAnthus Capital Holdings, Inc. engages in the delivery of solutions for financing, developing, and managing state-licensed cannabis cultivators and dispensaries in the United States. The company is headquartered in New York, New York.
According to company materials, “iAnthus Capital Holdings, Inc. owns and operates best-in-class licensed cannabis cultivation, processing and dispensary facilities throughout the United States, providing investors diversified exposure to the U.S. regulated cannabis industry. Founded by entrepreneurs with decades of experience in operations, investment banking, corporate finance, law and healthcare services, iAnthus provides a unique combination of capital and hands-on operating and management expertise. The Company harnesses these skills to support operations across five states.”
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As noted above, ITHUF just announced several recent senior additions to its operating, marketing and legal teams.
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action ITHUF shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -16% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.
What’s more, the company has witnessed a pop in interest, as transaction volume levels have recently pushed 51% beyond its prior sustained average level.
Mr. Ford continued, “Recently we issued options for existing team members and initial grants for new hires, impacting over 160 team members and strategic consultants to the Company. Shortly after the issuance of these options, the market and particularly the stocks of the U.S. cannabis multistate operators, including iAnthus, declined significantly for general market and sector reasons that we believe were not related to and did not properly reflect the performance of the Company’s new hires and existing team. We made the decision to issue new stock options, and cancel certain previously issued stock options, to ensure our team stays focused on growing the company and aligned with our shareholders through a long-term incentive program. However, we clearly did not handle the public release of this information in the proactive manner which our shareholders have come to expect from us, and for this I apologize.”
Earning a current market cap value of $541M, ITHUF has a significant war chest ($42.3M) of cash on the books, which must be weighed relative to virtually no total current liabilities. ITHUF is pulling in trailing 12-month revenues of $16.6M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 1515.8%. We will update the story again soon as further details emerge. Sign-up for continuing coverage on shares of $ITHUF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $ITHUF, either long or short, and we have not been compensated for this article.