iAnthus Capital Holdings has made its first cannabis investment in Colorado – agreeing to acquire assets including all real estate holdings that include a fully integrated medical and adult use dispensary located in Breckenridge, a 12,000 square foot cultivation facility in Denver, all equipment, and all of the intellectual property and brands associated with Organix LLC – for just under $4.4 million.
“With the closing last month of our successful financing of CAD$21.5 million (US$16.2 million) in gross proceeds, iAnthus has the financial resources to diversify its footprint across the U.S.” said Hadley Ford, CEO of iAnthus. “This acquisition is the first deployment of capital from our recent financing and helps set the stage for our growth strategy in Colorado.”
Organix is the only retail outlet that holds both a medical and recreational license in the ski resort town of Breckenridge, Colorado – one of the top North American ski and winter resort destinations that attracts more than two million winter tourists and one million summer visitors. The company currently holds a 40 percent market share with estimated gross retail sales for this year of $4.4 million, and cash flow margins of over 30 percent.
“With an implied multiple of approximately four times cash flow, we believe that this transaction is both financially accretive and strategically valuable,” said iAnthus CFO Julius Kalcevich. “Organix has a great team and an efficient operation. Retail sales were up 7% over the last 12 months and margins have been expanding.”
The deal will not only add to iAnthus’ portfolio but it will expand the Toronto and New York based firm’s geographic reach, expanding beyond Massachusetts, Vermont, and New Mexico to include a presence in one of the top U.S. legal marijuana markets.
“This acquisition is iAnthus’ first step in what we expect will be a broader presence for iAnthus within the Colorado regulated cannabis market.”
The deal does not include any cannabis inventory or licenses to manufacture or sell marijuana. These assets have come under an agreement through a related transaction to be sold for $300,000 to Bellflower LLC, a newly formed Colorado-based limited liability company registered in November to the same street address as iAnthus’ New York headquarters reports The Cannabist. Despite the same address, iAnthus will hold no ownership stake in Bellflower, which will be run by a Colorado resident in accordance with Colorado state laws.
“We’re not in the business of manufacturing and selling cannabis,” Ford told The Cannabist. “What we do is provide the turnkey solution set for great operators.”
Although this agreement is pending approval from the Colorado Marijuana Enforcement Division, once closed, iAnthus will provide branding, marketing, financing, equipment leasing and professional services to Bellflower and potentially to other licensed cannabis operators in Colorado and across the U.S.
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Lynda Kiernan