iAnthus said it was unable to pay $4.4 million in interest on their debt
Multi-state cannabis operator iAnthus Capital Holdings is facing a class action lawsuit and its stock trading on the Canadian Securities Exchange was halted for about four hours yesterday after the firm announced earlier this month that it defaulted on its interest payments.
On April 6, iAnthus said it was unable to pay interest obligations of $4.4 million on $157.5 million in debt. In a statement, the company said it was unable to make the payments due to “the decline in the overall public equity cannabis markets, coupled with the extraordinary market conditions” caused by the novel coronavirus outbreak. The firm said it had been unable to secure further financing since December 20, 2019.
CEO Hadley Ford in a statement called the default “a difficult decision” but the management team and board of directors decided it was in the best interest of the company and its stakeholders to spend cash “to maintain the inherent value” of iAnthus’ business operations.
In the April 6 announcement, the company indicated the board had convened a special committee to investigate potential conflict of interest by Ford, determine the prospects of liquidity alternatives, and renegotiate financing arrangements and contracts. The firm also hired Canaccord Genuity Corp. as a financial advisor.
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