iAnthus CEO Keeping Close Eye on US Cannabis Markets

As legalization in Canada reshapes the North American cannabis market, iAnthus Capital Holdings (CSE:IAN) Director and CEO Hadley Ford is eager to get his company involved with many of its neighbors south of the border.

At MJBizCon INT’L in Toronto, Ford took part in a panel on international investing considerations, alongside GreenWave Advisors Founder Matt Karnes and GTV Capital CEO Samuel Proctor.

Following the panel, Ford caught up with the Investing News Network (INN) to talk about the strategy iAnthus employs when evaluating new markets to enter in the US landscape.

Ford explained that the US cannabis market is a “self-testing type,” which he associates more with nutraceutical health and wellness. iAnthus likes to look at the whole addressable market; he expanded by saying that the medicinal side of cannabis differs from standard pharmaceutical approaches.

“We look at it as an addressable market and that’s defined by the states,” he said. “We look at the general population. What program is in place in that state? How big is their addressable market?”

Ford further explained his point by elaborating on the key differences between certain states and their markets, using Florida and New York as two examples. The company holds assets in both states.

“The Florida market is much bigger because you’ve got more forms of ingestion. You have more indications on their list. So we look at it [as] kind of a 5-percent penetration type market. You look at New York, both of those parameters are somewhat more restricted … it’s like 1.5 percent.”

The executive said the company is evaluating the logistics of its entry into California, and it has become a question of “how and where,” not “if.” Ford said iAnthus is observing the market for the time being, but is scoping out states such as Arizona, Nevada and Oregon.

California has been promised as one of the biggest cannabis markets, with projections indicating a US$5-billion opportunity by 2020. However, projections from the state on taxes have declined.

Ford said his personal goal for the company this year is to “dramatically” expand its footprint in the US. He added that he feels there are opportunities across multiple states available to iAnthus.

Ford said he would be disappointed if the company didn’t grow that footprint further by the end of 2018.

Potential of recreational legalization of cannabis in iAnthus market

Florida legalized medical cannabis in 2017, following a vote in the 2016 election. Now momentum for adding an adult-use policy on the 2020 ballot has started.

As a company with plans for a network of dispensaries and a production facility in the state, as well as a planned expansion, Ford gave his opinion to INN on whether the legalization of recreational cannabis in Florida will earn a spot on the Sunshine State’s 2020 ballot.

He explained that a lot of the potential behind that ballot spot lies in the hands of Orlando attorney John Morgan, who has been a public advocate for the venture.

“I thought it was a moot point, but then I read something the other day that Morgan is saying he’s going to try and get it on the ballot,” Ford said.

“He’s shown great ability in the past to raise a lot of additional money and an ability to be very organized around ballot initiative referendum. So if he gets behind it with his people, his money and his fundraising ability, yes, I think it can end up on the ballot.”

Investor takeaway

2018 has seen the rise of bullish sentiment for US-focused stocks in the Canadian market, and Ford attributes this peak in interest to a few different factors, including legalization in Canada and California’s recent stance on the market.

The executive told INN that the opening of California’s recreational market this year caused a rush of excitement for investors in both the US and Canada.

“At the end of last year, all these companies went up. Our stock went up and we went up like 50 percent — we didn’t even have any [assets] in California,” he said. “Companies in Canada were going up 50 percent [with] no exposure at all to the US, let alone California.”

He continued, “I think those sort of watershed moments … capture investors’ imagination. They start paying attention and they come and say, ‘oh, what companies can I buy? What can I point to click buy?’”

iAnthus was trading at C$2.79 a year ago — the company has since shot up to C$6.60 per share.

Don’t forget to look for our coverage of MJBizCon INT’L, with show notes from the floor and exclusive interviews on INN. You can also follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.