iAnthus Capital Holdings, Inc. (CSE: IAN) (OTC: ITHUF) closed its acquisition of MPX New Jersey, LLC, a medical cannabis permit holder in New Jersey. The acquisition was originally announced in 2018 with a value of $835 million, but became a tangled mess with competing lawsuits.
On January 7, 2022, the New Jersey Cannabis Regulatory Commission approved iAnthus NJ’s acquisition of MPX NJ. As previously announced in the company’s February 2, 2021 news release, iAnthus NJ issued $11 million aggregate principal amount of senior secured bridge notes, the net proceeds of which are being used primarily for the construction and improvements of facilities leased by iAnthus NJ.
Since that time, iAnthus NJ has continued to make significant construction progress at its cultivation and manufacturing facility in Pleasantville, New Jersey and plans to start operations in the near term. Additionally, upon receipt of the necessary approvals from the CRC, MPX NJ expects to open its dispensary facility in Atlantic City, New Jersey in the next few months, and then two prospective satellite dispensaries in New Jersey upon approval of MPX NJ’s pending satellite applications filed with the New Jersey Department of Health in December, 2020.
In 2020, MPX NJ sued iAnthus Capital Management and its New Jersey subsidiary. MPX accused iAnthus of improperly going after the operation of the Pleasantville Alternative Treatment Center by trying to negotiate with regulators. A the time the judge ruled against iAnthus according to a story on NJ.com.
The story said that in a remote hearing, Judge Joseph Quinn issued an initial order that said iAnthus could not represent itself as MPX NJ without disclosing the pending agreement before the health department or enter into contracts that bind MPX. “iAnthus must also inform former shareholder Beth Stavola of all contracts and construction at the Pleasantville cultivation site, and avoid additional unauthorized construction in parts of the facility where marijuana is being grown.” Stavola sold her original cannabis assets to MPX Bioceuticals and then proceeded to build that company to become an attractive property, which iAnthus acquired. She was the founder and CEO of Stavola Medical Marijuana Holdings, Health for Life Inc, GreenMart of Nevada, and CBD For Life.
iAnthus has been mired in shareholder lawsuits since the company claimed it couldn’t make its debt payments and the lender Gotham Green essentially took the company. Shareholders have filed lawsuits claiming that iAnthus had the funds to make the debt payments and feel the company was stolen from them.
In December, Law360 reported that iAnthus Capital Holdings Inc. and Gotham Green Partners asked a New York federal court to toss a pair of shareholders’ securities fraud suits over purportedly misleading disclosures and allegedly self-interested financing deals. “The proposed class action asserts that iAnthus made false and misleading statements about its expanding business operations without disclosing to stockholders that it did not use escrowed funds to make necessary interest payments. On April 6, 2020, iAnthus announced it had defaulted on $4.4 million in interest payments to Gotham Green because of the coronavirus pandemic, as well as a decline in cannabis markets overall.”