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Can iAnthus Capital Maintain Its Upward Momentum in 2019?

Stock performance

After a stellar performance in 2018 with a 120% rise, iAnthus Capital Holdings (IAN) (ITHUF) has also started 2019 on a strong note. As of January 26, the company was trading at 6.15 Canadian dollars, representing a YTD return of 11.8%.

Also, the company is trading at an 114.3% premium to its 52-week low of 2.87 Canadian dollars and at a discount of 35.2% from its 52-week high of 9.49 Canadian dollars.

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Driving factors

Earlier this month, the Supreme Court of British Columbia approved the acquisition of MPX Bioceutical by iAnthus Capital. The companies announced the agreement on October 18, 2018.

According to the agreement, MPX Bioceutical’s non-US businesses will be spun off to form “MPX International,” and shareholders of MPX Bioceutical will receive 0.1673 common shares of iAnthus Capital for every share of MPX Bioceutical. MPX shareholders will also receive shares in the newly formed entity, MPX International. The acquisition will increase iAnthus Capital’s footprint to ten states with an addressable population of $112 million. Arcview Market Research and BDS Analytics expect these ten states to generate ~$16.2 billion in cannabis sales per year by 2022. So, the approval from the Supreme Court appears to have increased investors’ confidence, leading to a rise in the company’s stock price.

Peer comparisons

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In comparison, peers Canopy Growth (WEED), Aurora Cannabis (ACB), and Cronos Group (CRON) have returned 58.8%, 21.8%, and 37.0% YTD, respectively. The Horizons Marijuana Life Sciences Index ETF (HMMJ), which tracks the North American Medical Marijuana Index, has returned 25.8%.

Next, we’ll look at iAnthus Capital’s core operations.

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