The Most Beaten Down Pot Stocks.. Taking a Fresh Look (ITHUF, KSHB, CRLBF)

iAnthus Capital Holdings Inc (OTCMKTS:ITHUF) shares have been getting truly clobbered. The company is correctly understanding the driver as having to do with market concerns about the long-term sustainability of its endeavor given rising competition and heavy debt loads. But the answer they are turning to might be like pouring gasoline on a fire.

Specifically, the company just announced that Gotham Green Partners has invested an additional $20.0 million through the purchase of senior secured convertible notes from iAnthus. According to the release, GGP’s investment is part of a broader $100.0 million financing plan to support the buildout of all existing markets in which the Company currently operates.

In other words, to shore up capital concerns, the company has issued a massive license to short the stock.

iAnthus Capital Holdings Inc (OTCMKTS:ITHUF) provides investors diversified exposure to “best-in-class” licensed cannabis cultivators, processors, and dispensaries throughout the United States. iAnthus currently owns, operates or has partnered with marijuana license holders in Massachusetts, Vermont, Colorado and New Mexico.

As reported, “founded by entrepreneurs with decades of experience in investment banking, corporate finance, law and healthcare services,” iAnthus provides a “unique combination” of capital and hands-on operating and management expertise. The Company leverages these skills to support “a diversified portfolio of cannabis industry investments for our shareholders.”

Moreover, iAnthus Capital Holdings, Inc. engages in the delivery of solutions for financing, developing, and managing state-licensed cannabis cultivators and dispensaries in the United States. The company is headquartered in New York, New York.

“We are pleased to be working with a leading financial investor in the U.S. cannabis sector. The new notes will allow us to build out operations in our key markets and continue to develop our retail and product brands,” said Hadley Ford, CEO of iAnthus.   “We believe this level of support from GGP will fully fund the development of our existing assets and provide the necessary capital for iAnthus to achieve positive and sustainable EBITDA and operational free cash flow in 2020.”

Even in light of this news, ITHUF has been diving in recent action, losing ground nearly every day for the past month. Volume has been picking up on the way down. Capitulation of some kind may be verging.

iAnthus Capital Holdings Inc (OTCMKTS:ITHUF) managed to rope in revenues totaling $19.2M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 7411.4%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($30.5M against $41.2M, respectively).

 

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KushCo Holdings Inc (OTCMKTS:KSHB)
shareholders have been falling on very rough times. That much should be clear.

To possibly help fend off another wave lower, the company just announced that it has named Sentia Wellness, a new hemp-derived CBD company with manufacturing and distribution capabilities, as its first brand partner for its new Retail Services division focused on CBD mass distribution, industry education, and compliance.

According to the release, “Sentia will utilize KushCo’s partnership with C.A. Fortune, a leading full-service national consumer products sales and marketing agency focused on lifestyle brand partnerships, to activate its Social CBD brand across a variety of retail channels. The partnership commenced on October 1, 2019 and enables Sentia to leverage KushCo’s enhanced distribution capabilities across the U.S. with many of the largest conventional retailers.”

KushCo Holdings Inc (OTCMKTS:KSHB) is a pick and shovel play in the cannabis patch. Its brands include Kush Bottles, a dynamic sales platform that is the nation’s largest and most respected distributor of packaging, supplies, and accessories, Kush Energy, which provides ultra-pure hydrocarbon gases and solvents to the cannabis and CBD sector, Hybrid Creative, a premier creative design agency for cannabis and non-cannabis ventures, and Koleto Packaging Solutions, the research and development arm driving intellectual property development and acquisitions.

Founded in 2010, KushCo Holdings has now sold more than 1 billion units and regularly services more than 5,000 legally operated medical and adult-use dispensaries, growers, and producers across North America, South America, and Europe. KushCo Holdings subsidiaries maintain facilities in the five largest U.S. cannabis markets as well as having a local sales presence in every major U.S. cannabis market.

While the latest release from the company is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action KSHB shareholders really want to see.

In total, over the past five days, shares of the stock have dropped by roughly -2% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. In addition, the company has seen a growing influx of trading interest, with the stock’s recent average trading volume running just under 140% over the long run average.

“After having successfully built and delivered a platform of proprietary and value-added products to our highly entrenched customer base, we are excited to begin delivering to customers our higher-value services, with Sentia as the first CBD brand partner under our new Retail Services division,” said Jason Vegotsky, KushCo’s Chief Revenue Officer and President. “Sentia represents an ideal candidate to tap into the KushCo ecosystem and leverage our mass distribution channels and deep industry knowledge to establish a stronger foothold in the rapidly growing CBD market. They appreciate the need to partner with an industry leader like KushCo that has developed a keen understanding of the regulatory and compliance challenges impacting the CBD industry, along with having a robust distribution network to scale nationwide and turn Social CBD into a household name. This partnership represents the first of many, and we are thrilled to leverage our relationship with C.A. Fortune to drive even higher value for our customers, enhance our margins, and strengthen our competitive moat.”

KushCo Holdings Inc (OTCMKTS:KSHB) managed to rope in revenues totaling $41.5M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 221.5%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($12.2M against $29.8M, respectively).

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Cresco Labs Inc (OTCMKTS:CRLBF)
has closed its acquisition of 100% of the membership interests of Gloucester Street Capital, LLC, the parent entity of Valley Agriceuticals, LLC via a merger between Gloucester and a subsidiary of Cresco Labs.

According to the release, “as a result of this acquisition, Cresco Labs now holds one of the 10 vertically integrated cannabis business licenses granted in the State of New York by the New York State Department of Health. Each license gives the operator the right to operate one cultivation facility and four dispensaries in New York. The New York market is projected to grow to $500 million by 20221.”

CRESCO LABS ORD (OTCMKTS:CRLBF) trumpets itself as a company that manufactures and sells medical cannabis products in the United States. It offers cannabis dry flower; vaporizer forms of cannabis; cannabis oil in capsule, oral and sublingual solutions; cannabis in topical; and other cannabis products.

The company also provides cannabis infused edibles, including chocolate and toffee confections, fruit-forward gummies, and hard sweet and chews. Cresco Labs Inc. sells its products under the Cresco brand. In addition, it operators a Hope Heal Health dispensary in Fall River, Bristol County, Massachusetts.

“New York is one of the most influential consumer markets in the world and we expect the state to act as a cornerstone in Cresco Labs’ plan to continue building the most strategic and valuable geographic footprint in the U.S. cannabis industry,” said Charles Bachtell, CEO and Co-founder of Cresco Labs. “Since recently receiving regulatory approval for this transaction, Valley Ag has opened two new dispensaries in Williamsburg, Brooklyn and Huntington, Long Island. As a result, Cresco Labs enters the New York market with four strategically located dispensaries. These assets position us well to immediately generate meaningful revenue from this market. As we fully implement the world-class branding, marketing and distribution expertise that has helped us to develop leading positions in some of the most attractive cannabis markets in the country, we expect to steadily increase our share of a market that is projected to grow to $500 million by 2022.”

Cresco Labs Inc (OTCMKTS:CRLBF) pulled in sales of $40M in its last reported quarterly financials, representing top line growth of 42.9%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($89.8M against $41.2M).

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