Did iAnthus Bankers Conspire To 'Wipe Out' Shareholders?

It’s a bombshell recording between former iAnthus Capital Holdings Inc. (OTC: ITHUF) Hadley Ford and an unidentified investor that has been leaked to the internet. A transcript was published online in which Ford candidly discusses the company’s dealings with its lenders Gotham Green Partners and Oasis Management. Green Market Report reached out to both companies for comment but has yet to receive a response. The most explosive exchange alleges that the lenders conspired to wipe out the unsuspecting shareholders. The stock was plunging another 30% to lately sell at 29 cents as it has also found itself mired in a lawsuit with MPX NJ, a class-action lawsuit, and a fight over the company’s recapitalization or bankruptcy plan.

Well, How Did We Get Here?

At the beginning of 2020, iAnthus was looking like it would become one of the top MSO’s (multi-state operators) in the business, and then the company unraveled in spectacular fashion. In 2019, iAnthus was delivering solid earnings, making acquisitions, and getting capital from Gotham Green Partners (GGP). It closed on its huge $835 million acquisition of MPX Bioceuticals, whose COO was Beth Stavola. The company also acquired Stavol’s CBD For Life brand and made her a board member. In January of 2020, the company completed its commitment to Stavola of $11 million. This raised eyebrows at the time as many believed the company should have restructured the payment or that Stavola as a board member and Chief Strategy Officer should have made it easier for the company to repay her. In hindsight, she was smart to get her money quickly before the company fell apart. Ford’s opinion of these actions are discussed on the call.

In April 2020, Ford abruptly resigned from the company after an investigation by the board’s special committee. The company’s President and Co-founder Randy Maslow was appointed as the interim CEO. The company formed a special committee to look into allegations made in an online media report that Hadley had misused company funds for his own benefit and that there was a conflict of interest. The committee determined that two of the allegations were substantiated and recommended further action.

According to a company statement, the Special Committee determined that Ford entered into two undisclosed loans (one loan for $100,000 with a related-party and the other for $60,000 with a non-arm’s length party) and those loans created a potential or apparent conflict and should have been disclosed to the board in a timely way. On The alleged call, Ford says he believed Stavola leaked the loan information because she wanted to become CEO of the company.

Stavola at the time said, “I look forward to working closely with Randy as interim CEO and the Special Committee as the Company explores strategic alternatives.” iAnthus initiated a Strategic Alternatives Review Process and has hired Canaccord Genuity Corp. as its financial advisor.

Recapitalization To Avoid Bankruptcy

In August 2020, iAnthus reported a staggering net loss of $237.3 million, which included a $199.4 million impairment loss. While the revenue rose 12% sequentially to $30.4 million, the net losses and defaulting on debt payments have overshadowed any good news. iAnthus said in its earnings statement that it did not make interest payments due on its Secured Notes and Unsecured Debentures due on March 31, 2020. “This non-payment of interest triggered an event of default with respect to these components of the Company’s long-term debt, consisting of principal amounts at face value of $97.5 million and $60.0 million and accrued interest amounts at March 31, 2020, of $3.2 million and $1.2 million on the Secured Notes and Unsecured Debentures, respectively.”

The company had an accumulated deficit of $622 million according to the filing. On July 10, the company entered into a Restructuring Support Agreement with some of its lenders. “If the Recapitalization Transaction is completed through CCAA Proceedings, then the Existing Shareholders (defined as the existing holders of Common Shares) will not receive a recovery.” In other words, the shareholders lose everything.


In addition to the Recapitalization plan, Stavola left the company. Since that time, Stavola has filed a lawsuit against iAnthus regarding MPX NJ.  In late 2020, MPX NJ sued iAnthus Capital Management and its New Jersey subsidiary. MPX is saying that iAnthus is improperly going after the operation of the Pleasantville Alternative Treatment Center by trying to negotiate with regulators. The judge ruled against iAnthus according to a story on NJ.com. The two companies have a shared lease for the dispensary, but MPX NJ is insisting that it is the company that was awarded the permit in 2018 and that the master services agreement that iAnthus cites as its authority, has not been approved by the New Jersey State of Health. iAnthus disputes the allegations of the Complaint and disputes that it ever engaged in the conduct that was the subject of the temporary restraints in the first place.

Oasis Management Debt

In addition to the money invested by GGP, Oasis Management stepped in with $25 million. In March 2020, Oasis began to complain publicly that iAnthus was in breach of the terms. This topic is discussed in detail on the call transcript with regards to Alex Shoghi, the contact at Oasis. Ford is quoted in the published transcript, which hasn’t been verified as saying:

So then we get to June of 2019 and I get this phone call from, uh, Alex Shoghi at Oasis saying, Oh, you’re in violation of your maintenance covenants. I’m like, what are you talking about? Well, the stock price is so low. Um, you know, you violated the maintenance component, so there are no maintenance covenants of the deal. Uh, there’s only a current test. And he said, nah, that’s not the way I read it. I don’t care how you read it. You and I negotiated the deal. We both know there’s no maintenance covenant. Like it’s not in any of my notes. It’s not in any of the language and any of the usual things. So yeah, he tried to stick us up for some better economics, but he had his lawyers involved and there wasn’t a maintenance covenant. So he went away.

Ford according to the call contact Adler at GGP to tell him what Shoghi was up to and Adler allegedly said he wouldn’t negotiate with terrorists and they should play hardball with Oasis. They felt that Oasis wanted better terms for his deal and that by threatening to take it public he could tank the stock price. Ford was very concerned according to the call that Shoghi was going to publish what he deemed were lies about the company. As it turned out, Shoghi did go public and the stock price dropped as expected.

The Phone Call

Initially, according to the phone call. GGP wasn’t too happy with Oasis and was on the side of iAnthus. iAnthus was trying to get more investment money from GGP and at first it seemed Adler was on board. GGP was going to invest $20 million, but then delays began to happen and the paperwork looked to be changing in GGP’s favor. Ford started to get concerned and began to look elsewhere to raise money as the $20 million dropped down to $15 million and investors were getting nervous about the Shoghi situation. As all of this is happening, the stock price continues to fall. Then it seems, Adler and GGP began to side with Oasis. Ford says on the alleged call:

 guys, you know, we got an interest payment in a week. You guys have said that you were going to forbear that, or, you know, push that off for us. I haven’t seen any paperwork. I need to get the paperwork. And Alex says, and Jason let’s Alex talk, And Alex says, oh, we’re happy to continue to have a conversation on forbearances but there’s nothing that I ask this to give us that would make them forbear. And then Jason says, I had a thought. More of a Gotahm led action. We’re going to take the company private. I’m like, well, that’s interesting. I said, you know, stocks low enough. Um, and I’ve got some ideas on that. You could, uh, offer a warrant and all these other things, and you could actually make it a very shareholder friendly, uh, going private transaction. You could have guys showing more than 1% roll into it and keep the cash need down. And the stock guys with less than that could get a long day warranted. Um, you know, give some upside when the company comes back public again, and there’s enough juice for everyone to make a lot of money.

And Jason says, well, actually had different concepts are going private. Um, uh, we’re going to take out, we’re going to wipe out the public shareholders and the junior guys, and then we’re going to recharge the management team.

At this point, Ford starts to think about the shareholders.

I’ve got a responsibility to the public shareholders. I agree to likehose the public shareholders and junior guys and enrich myself and Jason’s well, think about it. Don’t send any texts, don’t send any emails. Um, and, um, you know, we’ll talk about it. Um, and I went and spoke with our outside counsel, spoke with my board and they’re like, well, Gotham’s not your friend. And we said, okay, let’s go to the mattresses. You know, we got a lot of people already in the data room booking to, uh, finance this, we’ll hire an outside advisor, which ended up being canaccord to do kind of a strategic review. We will start to hoard cash. We’ll start to lay people off. we’ll stop all our spending. We won’t pay any interest. Um, and we’ll fight these bastrdds and there’s enough assets value here that will emerge successful.

By this time, iAnthus had approached Canaccord Genuity to help with raising money. According to the call, Ford supposedly gave names of wealthy individuals who could invest in the company, but he felt that Canaccord never pursued those options. The other unidentified person on the supposed call complained that Canaccord did receive bids for iAnthus, but never pass those offers along to the company. Had that been pursued, iAnthus shareholder value may have been saved.

More Shareholder Disrespect

The transcript of the supposed call is quite lengthy. While Ford mostly fights for the shareholders, it seems others in the company have no concern for those investors. Ford says at one point:

They’re saying, what’s my liability going forward or saying the board is not going to get rich on a shareholder friendly outcome.

And this:

 So the optimization was never about getting the best deal for the shareholders, although they will claim that, but I know the optimization was around getting something that looked prudent and thoughtful.

In Closing

Again, Green Market Report hasn’t verified the call, although New Cannabis Ventures wrote, ” We were able to confirm with the investor, who was aware that it had been leaked, that the recording is legitimate, though he claimed to have no involvement in sharing the information and had no intention for it to become public.”

With regards to the Recapitalization Plan, there is an appeal with respect to the Supreme Court of British Columbia’s final approval for the plan of arrangement to implement the Recapitalization Transaction, iAnthus confirmed that the appeal is scheduled to be heard on January 26, 2021. The submissions will be held virtually before a three-member panel of the British Columbia Court of Appeal. iAnthus considers the appeal to be without merit and intends to vigorously defend its interest in court.

In March of 2019, the stock traded at roughly $5.67. It is now trading at approximately 31 cents.

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.



  • Alan K

    January 26, 2021 at 12:37 pm

    Where are reply posts shown online?


    • Debra Borchardt

      January 26, 2021 at 1:41 pm

      Hi Alan,
      I moderate the comments and approve them because sometimes people just try to promote their links.


      • Mike Divincenzo

        June 29, 2021 at 7:08 pm

        I invested 10k in Ianthus buying some around 2 dollars and some around 5 dollars.
        I saw the recapitalization plan and received notice. I agreed with the move. I must admit I’m a little lost here. Am I going to lose my Ten K?
        If there is proven COO neglect I can pierce the veil.
        This has made me so distraught because Ianthus had to me one of the best looking models in commercial cannabis,
        Do you know what other small investors like me are doing.
        Do the company execs current and former know there is enough evidence and negligence to pierce the corporate veil making each and everyone liable.



        • Debra Borchardt

          June 30, 2021 at 8:44 am

          I would agree iAnthus looked like a really solid company. I think with some time they would have weathered the storm. Sadly, I think the shareholders will lose their investments. Maybe there’s a class action in there somewhere? IMHO I think the debtholders saw a cheap way to take over the company and when you owe someone money, you don’t have too much leverage. Normally the debt holders don’t want to own the company and just want to get paid back. However, in this case, it seems they saw the payoff was better to take the company vs. just getting the debt paid back. I don’t have all the information and am not privy to much of it, so I can only base my opinion on what I’ve read.


  • Alan K.

    January 26, 2021 at 12:39 pm

    I see it now. So, question is, how does it feel to be paid shill of private investors turned litigants where you post what they want to help them in litigation and you get paid? Did you learn how to do that in journalism school? ….. I’ve got the evidence by the way…. just tell me when you want it posted publicly?


    • Debra Borchardt

      January 26, 2021 at 1:48 pm

      Well, not sure what your “evidence” is. If people saw my bank account, they would see pretty quickly I have very little money. In fact, they would probably feel sorry for me. As far as Beth is concerned, the last time I spoke with her was at an event in LA right after the iAnthus acquisition (2019) and I hung out with her and Hadley for about 20 minutes. So, please post your evidence as it just doesn’t exist. Also, I don’t hide and have the guts to show my face and name.


  • Alan K.

    January 26, 2021 at 12:51 pm

    wow, what a shocker, you moderated that post right into the trashcan LOL. Don’t worry, the info will be posted elsewhere wherever there is a link to any of your new articles….. you give journalists everywhere a bad name…. I know all about you and Beth Stavola, Beth can’t keep her mouth shut……. this is going to be fun, and justified. Good luck!


  • Michael Kaye

    January 28, 2021 at 3:25 am

    I don’t know what this guy Alan is talking about, you found the most interesting topic in business and did what any good journalist would do… What I find hard to believe is that ianthus claims 67% percent of shareholders agreed to the restructuring leaving them with 2.8% equity. Anyone who’s been following cannabis stocks knows this story makes a lot of sense, ianthus has brands and license’s that would potentially of made it the it company in the game. Every interview I heard with Hadley Ford sounded like he was an exceptional mind that any company would be lucky to have…


    • Debra Borchardt

      January 28, 2021 at 8:02 am

      I’d spoken to Hadley many times when he was CEO and always found him to be gracious and intelligent. I agree, how do MedMen shareholders survive but iAnthus goes belly up? No buyers at all?


      • Michael Kaye

        January 29, 2021 at 3:34 am

        I know right , it’s like they were hoping people would show up because they like red. If Cresco would pay 213 million for Bluma’s One Plant which gives them 7 dispensaries and 8 more allowed to build – How much do you think Grow Healthy 17 dispensaries with license to build as many as they want is worth ? For ianthus is was 58 million in 2019… It’s crazy that this is going to get decided in a Canadian court meanwhile if the executives with they’re 7.9 percent negative operating expense want to get a hearing to review they’re due compensation it would be decided in New York…


        • Debra Borchardt

          January 29, 2021 at 8:22 am

          My guess is the court just gives it to the bankers. It’s less trouble for the judges.


          • Michael Kaye

            January 30, 2021 at 5:20 am

            My bad it was -7.4% adjusted operating income , ianthus as a whole is up 87% for the year and 17% last quarter – and that 40 million revenue they posted for final fiscal qtr. 2020 is just the beginning … NJ and Arizona just went Rec’ – ianthus holds – NY goes Rec’ ianthus holds one of 11 licenses for the state – ” they ask for the brand by name” Hadley Ford – talking about MPX which is predicted to dominate in the highest growing cannabis sector called concentrates. If federal laws change and products are allowed to be shipped beyond state lines ianthus would start to look like Altria [ MO ] – First thing the shareholder’s who are appealing have to do is prove that the vote for restructuring held in a meeting didn’t represent the voice of the majority… Shareholders don’t care about some stupid 60,000 loan Hadley took out – what’s more concerning is the payoff you mentioned when it turns out that 12 million was about how much they needed to postpone defaulting… I think There always be buyers for ITHUF – 2.8% of a Trillion is still a lot especially after they announce venturing into psilocybin haha jk … joking aside shareholders have a good case – only question is do they have a good lawyer … ?

      • Alan K.

        January 29, 2021 at 10:02 am

        Well if you’d done your homework as Michael says you did, you would easily know from like 20 news sources (or the Canadian Plan of Arrangement filings) that iAnthus ran a three month process with the biggest cannabis banker in Canda and had many many bids but each one screwed the current shareholders even worse than the winning bid, which was the one iAnthus had to agree to. How do you not know that, it is all public knowledge? And, by the way, maybe the difference between iAnthus and MedMen is that MEdMen did not have a principal shareholder and board member like Beth Stavola who took $11 million out of the company in January when it was running out of money? That $11 million would have made the March interest payments and iAnthus wold have made it another three months, during which time the Company appears to have turned itself around financially. Again, publicly-available filings and financial statements show this to be true. This is why I question your allegiance to journalism and truth, Debra. Your reporting and history shows your friendship with Beth has clouded your journalistic integrity. IMHO.


        • Alan K.

          January 29, 2021 at 10:05 am

          That being said, I do applaud the fact that you actually posted my comment that started this thread and did not toss it. I was surprised and good for you that you don’t take the easy way out like 90% of the journalists in the canabis space.


        • Debra Borchardt

          January 31, 2021 at 4:41 pm

          1. I barely know Beth and I don’t know why you think I’m besties with her. I have met her a few times and that’s about it. I don’t have her phone number or even her email address. I know her PR person, that’s it.
          2. I’m running a small news website covering an industry with over 300 publicly traded companies. I don’t have a steady paycheck like some cannabis reporters. I can’t devote hours to one company because I am spinning many plates. I am not an analyst working for a banker who can spend hours poring through documents. I can allot a certain of time to each story and then I have to move on. I also freelance to help pay my mortgage and put a kid through college. So insulting my journalistic integrity is a laugh. I could certainly go back to Wall St and make more money, but I love being a journalist.
          3. Go get your news elsewhere. If you don’t like what I’m doing at GMR, you are welcome to go somewhere else. Please.


  • steve

    January 28, 2021 at 7:07 pm

    GGP, Hadley and others belong in jail or worse.
    They stole the company from us and scared investors into voting for the plan leaving us almost nothing.


  • cactuspat

    January 29, 2021 at 11:07 pm

    As a former shareholder I have to say the “recapitalization plan” stank from the get-go, you just kinew they were thieving the company from the shareholders!


  • Michael Kaye

    January 31, 2021 at 3:48 am

    Looks like you were right , the predator creditors got a unanimous dismissal and the stock was put on Halt, what I can’t grasp is how does 700 million debt equate to 8 billion in assets…


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