#multistateoperator

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iAnthus (IAN) Launching National Retail Chain

Multi-state operator iAnthus Capital Holdings (CSE: IAN) has unveiled plans to consolidate its entire estate of retail outlets under one national brand. The new chain will be called Be. and the first flagship store will open in Brooklyn in before the end of the year. Further flagship stores are slated to open in Miami, Atlantic City, Las Vegas, and Orlando. iAnthus has licenses to launch 68 dispensaries across 11 states: California, Arizona, Nevada, New Mexico, Colorado, Florida, Maryland, New York, New Jersey, Massachusetts, and Vermont. Twenty-one of them are already operational and the firm is building out the remaining stores. Until now they have traded under a number of different fascias under the iAnthus umbrella, including Citiva, Mayflower, and Health For Life. The company believes that consolidating its national network of stores under a single brand name will have a greater impact in the marketplace and offer better value for its 60,000 shareholders. Be. is billed as a new kind of cannabis store where visitors receive help, advice, understanding, support, knowledge and trust. It is designed to offer a space for education and discovery, as well as sales. “Our new Be. stores will build on the pioneering and award-winning retail experience of Beth’s Health for Life stores in Arizona and Maryland, and provide a welcoming environment where both the curious and the dedicated will feel comfortable,” said chief executive Hadley Ford.

A Compelling Investment Opportunity

iAnthus offers investors a compelling opportunity to invest in the dynamic U.S. cannabis industry. Its growth is in line with rival multi-state operators, but it trades at a significant discount to its peers. Its share price increased from C$$5.17 on Dec. 24, 2018, to C$7.99 by Mar. 22, 2019, as the cannabis sector came flying out of the blocks at the beginning of the year. Since then, however, its price has decreased and it closed at C$5.48 on Tuesday, May 21. Its current valuation discount to its peers provides a safety net for investors in a U.S. cannabis market packed full of unprofitable, overpriced operators. It has an ambitious two-year growth plan and a strong management team with a long and successful track record, suggesting the potential to outperforming the sector going forwards as its footprint grows across the country. Around half of the licenses it holds are for dispensaries in Florida, but it has clear plans to boost its presence in plenty more states. It now has the ability to launch national advertising campaigns for Be. too.

A Better Risk Profile

iAnthus closed an C$865 million all-stock purchase deal to acquire MPX Bioceutical in Feb. 2019. The merger of the two businesses created a C$1.6 billion entity, while it was the first U.S. multi-state operator to go public and raise money in Canada. It is a vertically integrated company with around 820,000 sq. ft. of cultivation space, and listings with more than 100 dispensaries for its products, plus a further 750 stores that sell its CBD products across 42 states. It is ramping up its wholesale distribution and increasing its cultivation capacity to meet growing demand for its products. By diversifying across multiple states on either coast, and combining retail, wholesale and production, iAnthus arguably creates a better risk profile for investors than rivals that are more exposed to just a handful of states. In the interest of full disclosure, Capital 10X employees' own shares in iAnthus. More information on the profiled company can be found by reviewing the public filings of iAnthus Capital Holdings Inc. on SEDAR at www.sedar.com. Writers at Capital10X.com are not certified financial analysts or licensed in the securities industry in any manner and the content of this report may not be complete, accurate or current. iAnthus is a consulting client of Capital 10X and though the information contained herein is believed to be the subjective opinion of the author, this business relationship could create a conflict of interest. Read the full article

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Vireo Health (VREO) Bolsters Board

Multi-state operator Vireo Health Inc. has bolstered its board of directors with four appointments in a bid to accelerate its ambitious growth plans. Chelsea Grayson, the first female chief executive at jeans manufacturer True Religion, will lend her commercial expertise to the Vireo boardroom. Entrepreneur Amy Langer, co-founder of Salo LLC and a former KMPG auditor, brings experience within finance, human resources, and accounting. ACOVA Integrated Health chief executive Chad Martinson, another former KPMG auditor, also joins the board, as does Judd Norquist, a partner at regional accounting firm Abdo, Eick & Meyers. This foursome will sit alongside Vireo founder and chief executive Kyle Kingsley, chief financial officer Amber Shimpa and chief operating officer Ari Hoffnung on the new-look board. It will also allow Vireo to create three new internal committees to provide oversight and guidance on audit, compensation, and general corporate governance.

The Cannabis Company of the Future

“Vireo Health is pleased to have added several highly-regarded industry leaders with deep retail, manufacturing and financial expertise to help guide the company as we continue to execute upon our ambitious growth plans,” said Kingsley. He feels it can now become “the cannabis company of the future”. Los Angeles native Grayson took the top job at True Religion in Nov. 2018 after a spell as chief executive at American Apparel. She also sits on the board of Delta Dental of California and Marca Global. She said she is pleased to join two other talented women on the board in Langer and Shimpa. The U.S. cannabis industry has recognized the need to promote better diversity and equality and it has just launched a taskforce to spearhead this drive.

An Undervalued Stock?

Vireo already has licenses to operate in New York, Pennsylvania, Ohio, Maryland, Massachusetts, Rhode Island, Minnesota, New Mexico, Arizona, and Nevada. It has processing licenses in all of them, and cultivation licenses in each one apart from Ohio. They all cover medicinal cannabis, while New Mexico and Arizona provide for adult-use marijuana too. The firm has 22 retail outlets spread across the country, with six in New Mexico, four in New York, four in Minnesota, three in Pennsylvania, three in Massachusetts, and one apiece in Rhode Island and Arizona. It wholesales in each state it is present in and boasts numerous processing facilities. It also has a license pending in California, while it has a binding purchase and sale agreement in place that will give it six dispensaries, a 32,000 sq. ft. warehouse and cultivation and processing licenses in Puerto Rico. This is expected to close within the next month or two. The plan is to roll out further dispensaries in Pennsylvania and New Mexico in 2019. It will also build new facilities in Massachusetts, Rhode Island, Nevada and Puerto Rico, and it is increasing production capacity across the U.S. It has proven its ability to win licenses by seamlessly navigating complex regulatory procedures in a number of jurisdictions. Vireo has a solid financial runway, with more than two years of remaining cash, and a lot of untapped potential as new licenses are still to be integrated, so we should expect strong sequential revenue growth. The firm recently reported revenue of $5.6 million for Q4 2018, an increase of 72% from the corresponding period in 2017. Revenue growth for the year was also up 70% to $18.5 million. Gross profit is also increasing faster than revenue, which is positive. It posted net losses of $1.2 million for Q4, attributable to the licensing and legal fees required to enter new states. This expense should come down in the future as it is now present in several key markets. Read the full article