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A Look at iAnthus Capital’s Strategic Partnerships

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Strategic partnerships

Apart from owning Mayflower, GrowHealthy, Citiva, and Grassroots Vermont, iAnthus Capital Holdings (IAN) (ITHUF) has made two significant investments in Reynold Greenleaf & Associates and Organix Highlights.

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Reynold Greenleaf & Associates

iAnthus Capital owns 24.6% in Reynold Greenleaf, which manages three licensed non-profit producers and one licensed processing facility in New Mexico. The company earns its revenue from consulting services, equipment, and real estate leasing, and managing of various contractual agreements.

Organix

The company, which operates a medical and recreational cannabis dispensary in Breckenridge, Colorado, was acquired by iAnthus Capital in December 2016. However, iAnthus Capital can’t consolidate the financial results of Organix due to the state regulatory restrictions.

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iAnthus and MPX transaction

In October 2018, iAnthus Capital announced it would acquire MPX Bioceutical’s US assets, which would increase its footprint to ten states with an addressable population of $112 million. Earlier this month, the Supreme Court of British Columbia approved the acquisition, and the transaction is expected to close by January 30, 2019.

Third quarter performance

In the third quarter of 2018, which ended on September 30, iAnthus Capital posted revenue of $1.07 million, which represents growth of 101% from $0.53 million in the second quarter of 2018. However, including the company’s investment in New Mexico and Colorado, iAnthus Capital’s revenue increased by 16% during the quarter to $5.14 million.

In comparison, iAnthus Capital’s peers MedMen Enterprises (MMNFF), Planet 13 Holdings (PLNHF), and CannTrust Holdings (CNTTF) have posted revenue growth of 1,086%, 62.5%, and 105%, during the same period, respectively.

In the third quarter, iAnthus Capital posted a loss of $10.0 million. However, adjusting for non-cash expenses, the company’s adjusted loss stood at $4.9 million.

Analysts’ revenue expectations

Analysts expected iAnthus Capital’s revenue to rise by 86.3% to $4.5 million in 2018, and by 4,070% to $187.2 million in 2019. The company is expected to post profits in 2019 with a net income of $16.3 million.

Next, we’ll look at analysts’ recommendations for iAnthus Capital.

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