iAnthus Capital is Soaring: What Investors Should Know

iAnthus

iAnthus Capital Holdings (CSE:IAN) (OTCQX:ITHUF) is a risky play in 2019. Shares have dropped a significant 35% year-to-date. Today, however, stock is soaring 8.14% at the time of writing. Let's check out what's causing the jump and, importantly, ask—should investors reconsider this cannabis play?

iAnthus Capital Holdings Stock Jump

At the time of writing, shares in iAnthus are selling for $2.75 USD on the OTC. The movement is most likely attributed to the company's subsidiary MPX (CSE:MPXI). Shares in MPX are also on a run today; up 7.14% at the time of writing and selling for $0.45 CAD.

Earlier today, MPX announced the purchase of the remaining stake in MPX Australia for $4 million CAD worth of shares.

According to that release:

"The deal will cost MPX just over 7 million common shares. These shares will be granted in three separate blocks based on achieved milestones by the Australian division."

The acquisition will allow MPX to run operations in seven international markets. These include Canada, Australia, South Africa, Malta, Switzerland, England, and Israel, where it will be part of a joint venture. At present, the Australian division is awaiting a medical cannabis license from the Australian Office of Drug Control, with the aim of building and operating a cannabis cultivation facility in Tasmania.

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iAnthus and MPX

MPX was formed from the merger between MPX Bioceutical and iAnthus Capital. Effectively, iAnthus acquired MPX for more than $500 million in February of this year.

According to SeekingAlpha: "The merger was designed to apply only to MPX’s US-based cannabis assets [...] At the time, the all-stock merger between the US division of the company and iAnthus allowed MPX to begin exploring business operations at the international stage."

About iAnthus

iAnthus Capital Holdings is considered a competitive Multiple Services Operator in the cannabis industry. The company develops dispensary facilities as well as distributing and cultivating cannabis in the US. It operates in 11 states, runs 68 dispensaries, and expects to have production capacity worth $525 million.

Later in 2019, the company is expecting to open more retail locations, and this should help to boost revenue.

However, thus far in 2019, iAnthus has hardly pleased investors. The company reported detrimental Q1 gross margins that fell from 32% to 6% "due to extremely weak margins at its Western Region."

>> Read More iAnthus News

Featured Image: DepositPhotos © tomert

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