No matter the positive steps taken by the U.S. cannabis multi-state operators (MSOs), the market has completely shunned the stocks. A prime example is iAnthus Capital (ITHUF) that is down over 50% from the recent highs despite recently reporting 35% sequential revenue growth and the stock trading at a reasonable P/S multiple.
iAnthus has licenses for 68 dispensaries in 11 states with a current focus on the 8 locations already open in Florida plus strong revenues in Arizona and Nevada. For Q2, revenues surged 35% sequentially to $25 million.
The recently closed deal for CBD For Life added $1.2 million into the pro-forma revenues. The company only paid $10.4 million for the access to a CBD brand with distribution into 1,100 retail locations in 46 states and a current revenue stream of nearly $5 million. If only, all cannabis acquisitions were at tis valuation multiple.
iAnthus was able to reduce the adjusted EBITDA loss to $4.7 million in the quarter. The ideal situation is a company generating profits on a quarterly basis, but the sector is quickly ramping so one should expect some short-term losses in certain occasions.
Lots Of Potential
The opportunity here is that iAnthus is opening up dispensaries in new markets of Massachusetts, New York and New Jersey. In addition, the company expects to double the dispensaries in the key Florida market by next year after recently opening 5 stores alone in August.
The CBD For Life brand recently expanded a distribution deal with Dillard’s to 265 department stores in 29 states. The CBD brand saw sales surge in Q2 to $1.2 million, up from only $0.7 million in Q1. The addition of iAnthus as an owner of the brand has seen immediate benefits.
The relatively small U.S. cannabis MSO already has annualized revenues of $100 million with analyst targets