iAnthus Capital Holdings, Inc. (IAN) is poised to take a bite out of the Big Apple. On Feb. 1, 2018, the company announced that it had acquired Citiva Medical, LLC (Citiva NY), which holds one of New York’s 10 vertically integrated medical marijuana licenses, and Citiva, LLC (Citiva USA), which owns various assets and intellectual properties in the cannabis industry.
The total value of this acquisition was $18 million. Citiva NY was acquired for $12 million, with $2.4 million payable in cash and $9.6 million in iAnthus common shares and Class A convertible restricted shares at a price of $2.57 per share. Citiva USA was acquired for $6 million, with $1.2 million payable in cash and $4.8 million in iAnthus common shares and Class A convertible restricted shares, also at a price of $2.57 per share.
Citiva NY’s properties include cultivation and processing facility and four dispensary locations. The four dispensary locations, which have yet to be opened, will be located in Brooklyn, Staten Island, Dutchess County and Chemung County.
Citiva’s proposed 2000 square foot Brooklyn dispensary, which will serve as the company’s flagship dispensary in New York, is set to open in Q4 2018 and will be one of two medical cannabis dispensaries located in most populous borough, with approximately 2.6 million residents.
The Staten Island dispensary, which will be the only dispensary to serve the areas approximately 500,000 residents, will also open in Q4 2018. The Duchess County and Chemung County dispensaries are slated to open in Q2 2019.
iAnthus also plans to complete the purchase of 8.2 acres of land located in Orange County, NY and hopes to begin construction on a cultivation facility by the end of this fiscal quarter. At a later date, the company hopes to purchase an additional 6.2 acres at the same location.
Phase One, which will create 27,500 square-feet of cultivation space generate approximately 1,470,000 grams of total flower per year, is expected to be completed by February 2019. Phase 2 is expected to begin in Q3 2020 and construction is expected to conclude by Q1 2021. Phase 2 is expected to expand the facilities space to 43,000 square feet and generate approximately 2,940,000 grams of cannabis flower per year.
“We’re excited to be partnering with a Citiva team with deep roots in New York, and which has a sophisticated understanding of how to build healthcare companies in the state…” said iAnthus CEO Hadley Ford in a statement.”With the closing of the New York transaction, iAnthus now has operations in six states, and is currently the only publicly traded company which holds a New York Registered Organization.”
On Feb. 1, 2018, the company held a conference call for financial analysts and investors to discuss the transaction. A reply of the call will be available for up to seven days and can be found here. Interested parties can also access the call by dialing (855) 859-2056 for domestic callers, (404) 537-3406 for international callers. The conference ID is 8788029.