iAnthus Capital Holdings Again Expects to Default on Interest Payments

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New York-based cannabis firm iAnthus Capital Holdings plans to once again default on interest payments due on senior secured and unsecured debts totaling roughly $160 million. 

In a news release issued Thursday, the multistate operator said it does not anticipate being able to make payments on the debt obligations, which are due on June 30, 2020.

The announcement comes about two months after the firm revealed that it had failed to make $4.4 million in interest payments that were due on March 31, 2020.

As of June 11, iAnthus had $97.5 million of 13% senior secured convertible debt, $60 million of 8% unsecured convertible debt, and $1.6 million of other debt obligations.

The firm also said it expected miss an extended June 15, 2020 deadline to file its annual financial statements for 2019, in part due to disruptions caused by the COVID-19 pandemic.

In its announcement, iAnthus warned investors that if it does not file an annual report by June 15, the Ontario Securities Commission could step in an issue a cease trade order (CTO) for the company’s stock.

“If a CTO is issued, the company expects the CTO to affect trading in all securities of the company by securityholders of the company,” the company wrote.

Following the CTO, iAnthus would have 90 days to submit the required filings so investors could resume trading the firm’s shares.

The firm had previously said it would file last year’s results “on or before May 30, 2020,” and Q1 2020 earnings by June 30, 2020.

The announcements come at a tumultuous time for iAnthus. Last month, entrepreneur and marketer Mark Dowley resigned from the company’s board of directors.

Dowley was one of five independent board members tasked with investigating former iAnthus CEO Hadley Ford, who exited the company in April following a probe into alleged conflicts of interest.

During an investigation, the special committee determined that Ford violated company policy by failing to disclose the acceptance two personal loans from iAnthus investors totaling $160,000.

Shares of iAnthus, which trades on the Canadian Securities Exchange as IAN, have dropped more than 155% from a year-to-date high of C$2.29, to C$0.29.

iAnthus is one of the largest multistate cannabis enterprises in the U.S. The company operates 33 dispensaries across 11 states. In a February investor presentation, iAtnhus said it owned a total of 73 dispensary licenses and had 817,000 sq. ft. of cultivation space worth $525 million at retail.

The company’s CBD products are sold in 2,300 retail stores across 50 states, while its THC products are sold in more than 190 dispensaries.

In Q3 2019, the company reported $22.3 million in revenue.


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