Exclusive Interview with iAnthus Capital Holdings Director and CEO Hadley Ford
Mergers and acquisitions skill, the ability to raise capital and strong leadership are the three vital success factors for a U.S. cannabis company, according to iAnthus (CSE: IAN) (OTCQB: ITHUF) Director and CEO Hadley Ford. Ford spoke with New Cannabis Ventures about the impending merger with MPX Bioceutical (CSE: MPX) (OTCQX: MPXEF), the Gotham Green Partners investment, and how the company’s leadership envisions scaling iAnthus.
Ford has a financial services and healthcare background. His past experience includes work as a research analyst at Fidelity, a banker and investor at Goldman Sachs, and CEO of healthcare company ProCure Treatment Centers. Before he entered the cannabis business, it was already in the family. His parents ran a small farm in the 1960s and his two siblings had licenses. He was unsure of how to build a scalable model until Randy Maslow, a former partner and now President of iAnthus, came to him to discuss the enormous opportunity in the industry. From there, the company has grown and added to its strong operations team.
iAnthus started building the business in smaller markets like New Mexico, Colorado, and Vermont. From there, it pursued greenfield opportunities in Massachusetts, Florida, and New York, according to Ford. The company has largely grown through acquisition, with the exception of Massachusetts. There the company applied for and secured a license. The company’s strategy is fairly straightforward: expand brand awareness through retail footprint, finance the expansion, and hire good people.
In Massachusetts, the roll out has been slow, but Ford is confident the company will find success in the state. He also sees a bright future in Florida. The company has 16 leases signed, and its first two dispensaries in the state will open in December. The rest of the dispensaries will open quarter after quarter through 2019, according to Ford. Looking at revenue and cash flow numbers from the company’s competitors, Ford expects iAnthus will be able to achieve similar numbers.
Gotham Green Partners Investment
Earlier this year, Gotham Green Partners invested $50 million in iAnthus. Beyond the pure value of the capital, Ford has found this relationship has opened the door to more industry introductions, strategic advice, and the opportunity for additional capital. As U.S. institutional investors begin to pursue opportunities in the cannabis space, he foresees the relationship with Gotham Green as a significant boon. Investors are going to want to investigate opportunities that already have guidance and support from a recognizable name, according to Ford.
MPX Bioceutical Merger
iAnthus has always aimed to grow through acquisition, and MPX was a natural fit for the company from an operational, capital markets, and leadership perspective. The MPX merger will bring the company into four new states (Arizona, Maryland, Nevada, and California) with additional presence in Massachusetts. Both companies have a track record of executing acquisitions, and MPX brings additional retail expertise to the table.
From a capital markets perspective, the MPX merger will mean a company with 30,000 shareholders and capital raised across four continents. Ford points out this gives investors a high level of liquidity.
Beth Stavola, COO of MPX, is the third element that makes the merger a strategic win. She executed multiple acquisitions that helped build MPX, and Ford is excited about the leadership strength she brings with her.
The merger is expected to close in January, but the two companies’ operational teams have already been meeting to discuss best practices and how to take those practices across all operations.
Following the announcement of the merger, Ford has seen a considerable increase in the volume of inbound phone calls. The company is exploring growth opportunities in both new markets and existing markets. In 2018, iAnthus completed approximately three large acquisitions and a couple of buyouts. With a larger team in 2019, Ford expects the company to complete a similar or greater number of acquisitions.
When it comes to projecting revenue for 2019, Ford points to dispensary openings as a metric to track. In addition to the Florida dispensary openings scheduled for December, the company will also open a Brooklyn dispensary in the same month. More openings will follow in 2019.
The MPX merger means significant growth in terms of revenue, assets, and people, which will challenge the company on a management front. On the other hand, that significant growth helps the company pursue its place as a major player in the U.S. market. Ford believes the major players that will win big in the future, though undervalued now, are all actively competing today.
iAnthus Capital Holdings is a client of New Cannabis Ventures, as is MPX. Listen to the entire interview: