iAnthus Delivers Solid Quarter As It Keeps Cutting Losses

iAnthus Capital Holdings, Inc. (CSE: IAN)(OTCQX: ITHUF) delivered solid financial results for the fiscal second-quarter ending June 30, 2019 with revenues increasing 100% sequentially to $19.2 million from $9.6 million in the first quarter and easily whipping last year’s $256,000 for the same time period.

The company’s second-quarter net loss of $9.3 million was a considerable improvement over the adjusted net loss of $16.5 million in the first quarter and much better than last year’s net loss of $35.4 million for the same time period.

The first half of 2019 has been an exciting time for team iAnthus, and I want to thank all of our employees, nearly 700 strong, for all of their hard work.  We have integrated the MPX and iAnthus businesses, and the team effort is beginning to show in our results. MPX products are now carried in three states in over 110 stores and we’ll be adding CaliforniaMassachusetts, and Florida later this year,” said Hadley Ford, CEO of iAnthus. “We continue to generate operational efficiencies without limiting growth.  This is evidenced by our 35% sequential revenue growth, expanding gross margins and limited incremental G&A expenses.”

Expenses Under Control

While other cannabis companies seem to spend with abandon, iAnthus expense kept a sharp eye on its general and administrative expenses which only increased to $5.7 million in the second quarter from $4.1 million in the prior quarter. With 700 employees now, the salaries and benefits expenses increased to $8.1 million in the second quarter from $6.1 million in the first quarter. The adjusted gross margin for the quarter was 52.4%, up from 23.4% in the first quarter and the adjusted gross profit of $10.1 million, up 347% from $2.2 million in the prior quarter.

iAnthus noted that its eastern region revenue increased to $10.2 million, up 143% from the prior quarter and the western region revenue increased to $9.0 million, up 67% from the prior quarter. The company now has eight dispensaries in Florida. It is a wholesaler to 21 dispensaries in Massachusetts and expects to open a dispensary there by the end of the year. There are three dispensaries in Maryland and expansion plans for New Jersey and New York.

Ford added, “Since opening our first Florida dispensary in December 2018, we have grown our market share to 3.5% and we are the third highest in the state in terms of THC volume per store.  These results in Florida show what we can bring to other greenfield markets for iAnthus like New York and New Jersey. In Massachusetts, we have made significant progress toward opening our first adult-use store in Worcester, and this fall will mark the launch of our new Be. store brand with the opening of our Brooklyn flagship store.”

Cash On Hand

The company has cash and cash equivalents of $30.5 million, an increase of $642.6 million (or 382%) in total assets from year-end 2018.

“As always, reducing our cost of capital remains a focus.  Our recently announced commitment for up to $50 million Senior Secured financing from Torian Capital, once closed, will move us forward on that front,” said Ford.

The stock was recently trading at $2.53, down from its 52-week high of $7.27.

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief 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 Masters degree in Business Journalism from New York University.


2 comments

  • Avatar
    ma

    August 27, 2019 at 11:08 pm

    There’s a typo… iAthus

    “iAthus noted that its eastern region revenue increased to $10.2 million…”

    Reply

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