iAnthus Capital Holdings Inc (OTCMKTS:ITHUF) Fends Off “Death Spiral” Concerns

iAnthus Capital Holdings Inc (OTCMKTS:ITHUF) Fends Off “Death Spiral” Concerns

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Yet another desperately troubled chart in the pot stock arena is iAnthus Capital Holdings Inc (OTCMKTS:ITHUF). Shares have been destroyed since February of this year, losing over 80% of their value in that time on recognition of a tough run rate to bottom-line growth, increasing competition, and a fat load of debt.

To perhaps help offset that narrative, the company just announced that Gotham Green Partners has invested an additional $20.0 million through the purchase of senior secured convertible notes from iAnthus. According to the release, GGP’s investment is part of a broader $100.0 million financing plan to support the buildout of all existing markets in which the Company currently operates. If there is a downside, balance-sheet-dogs don’t usually get well on convertible notes.

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 that Gotham Green Partners has invested an additional $20.0 million through the purchase of senior secured convertible notes from iAnthus.

“We are pleased to be working with a leading financial investor in the U.S. cannabis sector. The new notes will allow us to build out operations in our key markets and continue to develop our retail and product brands,” said Hadley Ford, CEO of iAnthus. “We believe this level of support from GGP will fully fund the development of our existing assets and provide the necessary capital for iAnthus to achieve positive and sustainable EBITDA and operational free cash flow in 2020.”

Also as noted above, the stock has been handed its you-know-what in recent months, and everyone is likely wondering how much it can get. It really depends on the nature of its new funders and how they want to handle their own strategic considerations. The market would appear to believe that note will be the hedge for new short interest to monetize the outstanding balance. Time will tell.

Currently trading at a market capitalization of $212M, ITHUF has a significant war chest ($30.5M) of cash on the books, which stands against about $41.2M in total current liabilities. ITHUF is pulling in trailing 12-month revenues of $31.7M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 7411.4%. You can bet we will update this one again as new information comes into view. 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.

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