ITHUF - iAnthus MPX Do Battle Over New Jersey Dispensary
The acrimony between iAnthus (OTC: ITHUF) and Beth Stavola’s MPX NJ is heating up. Last week, MPX NJ sued the troubled iAnthus Capital Management and its New Jersey subsidiary. MPX is saying that iAnthus is improperly going after the operation of the Pleasantville Alternative Treatment Center by trying to negotiate with regulators.
The two companies have a shared lease for the dispensary, but MPX NJ is insisting that it is the company that was awarded the permit in 2018 and that the master services agreement that iAnthus cites as its authority, has not been approved by the New Jersey State of Health. Stavola sold her original cannabis assets to MPX Bioceuticals and then proceeded to build that company to become an attractive property, which iAnthus acquired for TK. She was the founder and CEO of Stavola Medical Marijuana Holdings, Health for Life Inc, GreenMart of Nevada and CBD For Life.
According to the New Jersey Globe , the suit states, “These actions cannot stand, as they threaten MPX NJ’s ATC permit, expose it to liability from third parties, and tarnish its reputation, as well as that of its owners, across the cannabis industry.” The lawsuit asks the judge, Monmouth County Superior Court Judge Joseph Quinn, to keep iAnthus from acting on behalf of MPX and declare MPX NJ as the owner of the dispensary rule that the master services agreement is no good until it is approved by the New Jersey Department of Health. Quinn will hear oral arguments on the temporary restraints sought by Stavola at 11 a.m. Wednesday.
The Globe said that the filing alleges further wrongdoing by iAnthus. Stavola, a former executive at the marijuana industry giant, left the firm and its subsidiaries in August, the suit says. But in September, iAnthus told regulators in Nevada she was still CEO of GreenMart of Nevada, and iAnthus subsidiary.
iAnthus Downfall
iAnthus problems began in April when Chief Executive Officer Hadley Ford has resigned from his position after an investigation by the board’s special committee. The company’s President and Co-founder Randy Maslow was appointed as the interim CEO effective immediately.
The company formed a special committee to look into allegations made in an online media report that Hadley had misused company funds for his own benefit and that there was a conflict of interest. The committee determined that two of the allegations were substantiated and recommended further action. According to a company statement, the Special Committee determined that Ford entered into two undisclosed loans with iAnthus’ senior secured lender, Gotham Green Partners (one loan for $100,000 with a related-party and the other for $60,000 with a non-arm’s length party) and those loans created a potential or apparent conflict and should have been disclosed to the board in a timely way.
In August, the company reported a staggering net loss of $237.3 million, which included a $199.4 million impairment loss. While the revenue rose 12% sequentially to $30.4 million, the net losses and defaulting on debt payments have overshadowed any good news. At this point, the credit Gotham Green Partners (GGP) demanded its debt payments or it was taking over the company and leaving the common shareholders with very little. August was also the month that Stavola resigned from the company.