Back in June, iAnthus announced that the company had signed a binding LOI to acquire Gloucester Street Capital, LLC, and its operating subsidiary, Valley Agriceuticals, LLC. Earlier this month, iAnthus announced that the NY State Dept. of Health had approved the proposed acquisition and that Valley Agriceuticals had been granted a "Registered Organization" license. Despite this, the parties weren't able to come to definitive legal agreements, and iAnthus terminated the term sheet with Gloucester Street Capital.
Today, iAnthus announced that the company has signed an LOI to acquire Citiva Medical. Citiva Medical holds one of only ten vertically integrated medical marijuana licenses in New York state. Citiva NY's license includes a cultivation and processing facility and four dispensary locations, which will be located in Brooklyn (Kings County), Staten Island (Richmond County), Dutchess County and Chemung County. Citiva is planning to build its cultivation, extraction and product development center in Orange County, NY.
Terms of the Deal
Under the LOI, iAnthus will acquire will acquire 100% of Citiva NY and Citiva USA and certain operating subsidiaries for roughly US$18 million in a combination of cash and stock.
iAnthus will acquire 100% of Citiva NY for approximately US$12 million, with US$2.4 million payable in cash and approximately US$9.6 million payable in iAnthus common shares priced at US$2.40 per share, subject to a 10% symmetrical, fixed value collar with US$2.40 as the mid-point.
iAnthus will acquire 100% of Citiva USA for approximately US$6 million, with US$1.2 million payable in cash and approximately US$4.8 million payable in IAN common shares priced at US$2.40 per share, subject to the same collar described above.
The transaction is subject to New York State Department of Health regulatory approval, Canadian Securities Exchange approval and the completion of definitive legal documentation.
iAnthus CEO, Hadley Ford
"Our investors expect us to find ways to create value in the high growth U.S. cannabis market. Kim Volman, the Chief Executive Officer of Citiva NY and Citiva USA, is a highly successful New York City entrepreneur who founded a medical business with over $50 million in annual revenues that includes a long-term care pharmacy, retail pharmacies, and a compounding pharmacy focused on pain management, with four locations in and around New York City. In addition, Citiva NY's dispensary locations in Brooklyn and Staten Island will provide immediate access to more than 10 million people in the New York City metropolitan area. We will be able to leverage that access with a management team that has developed relationships with more than 800 physicians and a proven track record of delivering specialized prescription medication to patients. We believe this will be a winning combination."
Citiva NY and Citiva USA's CEO, Kim Volman
"We are excited to be partnering with iAnthus. Our team has spent decades meeting the pharmacy needs of patients in New York City. Combining our experience with the operational and capital markets expertise of iAnthus should allow us to scale quickly and execute on our mission to provide the highest quality, consistently-dosed and standardized cannabis medications to meet the specific needs of New York residents."
iAnthus' CFO, Julius Kalcevich
"We are very impressed with the Citiva team, which brings a wealth of direct experience in both the delivery of medicine and the development of medical cannabis projects," said "We believe that the transaction will be accretive to our shareholders and represents a fair agreement on a set purchase price that affords us certainty on the number of shares that will be issued by the Company."
In early trading on the CSE, shares of iAnthus Capital are rising roughly 1% after recovering early losses. The company's OTC Markets listing is flat on the day. Year-to-date, shares of iAnthus Capital are up a nice 28%!
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