December 9, 2021 – iAnthus Capital Holdings, Inc. (“iAnthus” or the “Company”) (CSE: IAN) (OTCPK: ITHUF), which owns, operates and partners with regulated cannabis operations across the United States, provides an update with respect to the Company’s previously announced recapitalization transaction (the “Recapitalization Transaction“). On November 4, 2021, iAnthus announced that the Florida Department of Health, Office of Medical Marijuana Use (the “OMMU“), by notice dated October 29, 2021, approved the variance request pursuant to Section 381.986(8)(e) of the Florida Statutes filed by the Company’s subsidiary, McCrory’s Sunny Hill Nursery, LLC d/b/a GrowHealthy (“McCrory’s“) to approve the prospective change of beneficial ownership of McCrory’s contemplated by the Recapitalization Transaction (the “Variance Request“).
On November 19, 2021, Michael Weisser, Benjamin Pollara and Florida for Care, Inc., a not-for-profit corporation representing members including qualified Florida medical marijuana patients, filed a Petition for Formal Administrative Hearing (the “Petition“) with the OMMU, challenging the OMMU’s approval of the Variance Request and requesting a formal administrative hearing before an administrative law judge at the Florida Division of Administrative Hearings. The OMMU has informed the Company that, as a result of the filing of the Petition challenging the agency’s decision within the permissible challenge period, the OMMU’s prior approval is not an enforceable final agency order until there is a final resolution of the Petition and a final agency order rendered under Rule 28-106 of the Florida Administrative Code, and Sections 120.569 and 120.57 of the Florida Statutes (collectively, the “Florida Rules“).
On December 6, 2021, the Florida Department of Health issued to the petitioners an “order to show cause” with respect to why the Petition meets the criteria set forth in Rule 28-106.201 and Rule 28-106.301 of the Florida Administrative Code. The petitioners have been ordered to either respond or amend the Petition by December 17, 2021.
As previously disclosed, securityholder approval and Court approval were two of the primary conditions for closing the Recapitalization Transaction, both of which conditions have been satisfied. The closing of the Recapitalization Transaction remains subject to certain closing conditions as set forth in the Restructuring Support Agreement dated July 10, 2020, as amended (the “RSA“). Specifically, certain of the transactions contemplated by the Recapitalization Transaction have triggered the requirement for an approval by state-level regulators in certain U.S. states with jurisdiction over the licensed cannabis operations of entities owned, in whole or in part or controlled directly or indirectly, by iAnthus in such states.
As disclosed in the Company’s news release dated November 4, 2021, regulatory approvals in Massachusetts, New York and Maryland1 necessary to close the Recapitalization Transaction were outstanding. As a result of the filing of the Petition, regulatory approval in Florida remains outstanding until there is a final resolution of the Petition and a final agency order is issued by the OMMU pursuant to the Florida Rules.
iAnthus owns and operates licensed cannabis cultivation, processing and dispensary facilities throughout the United States. For more information, visit www.iAnthus.com.
COVID-19 Risk Factor
The Company may be impacted by business interruptions resulting from pandemics and public health emergencies, including those related to COVID-19. An outbreak of infectious disease, a pandemic, or a similar public health threat, such as the recent outbreak of COVID-19, or a fear of any of the foregoing could adversely impact the Company by causing operating, manufacturing, supply chain, and project development delays and disruptions, labor shortages, travel, and shipping disruption and shutdowns (including as a result of government regulation and prevention measures). It is unknown whether and how the Company may be affected if such a pandemic persists for an extended period of time, including as a result of the waiver of regulatory requirements or the implementation of emergency regulations to which the Company is subject. Although the Company has been deemed essential and/or has been permitted to continue operating its facilities in the states in which it cultivates, processes, manufactures, and sells cannabis during the pendency of the COVID-19 pandemic, there is no assurance that the Company’s operations will continue to be deemed essential and/or will continue to be permitted to operate. The Company may incur expenses or delays relating to such events outside of its control, which could have a material adverse impact on its business, operating results, financial condition, and the trading price of the Company’s common shares.