iAnthus Capital Holdings, Inc.
Climate Impact & Sustainability Data (2022, 2023)
Reporting Period: 2022
Environmental Metrics
Climate Goals & Targets
Short-term Goals:
- Expand retail footprint within existing dispensary license portfolio.
- Increase cultivation and processing capacity.
- Increase patient and customer counts per location.
- Develop and introduce new products to increase wallet share.
- Acquire attractive targets to enhance footprint, product offerings, and/or operations.
- Secure additional operating licenses throughout the United States.
Environmental Challenges
- Liquidity constraints due to the decline in public equity cannabis markets and the COVID-19 pandemic.
- Increased competition and price compression in several markets.
- Higher sales discounts and competitive pricing pressures.
- Higher cultivation costs.
- Lower online and wholesale sales of CBD products.
- Delinquency in the payment of federal and state income taxes.
- Impairment losses on intangible assets, right-of-use assets, and property, plant, and equipment.
- Difficulty accessing banking services due to the illegality of cannabis under U.S. federal law.
- Competition from illicit cannabis businesses.
- Constraints on marketing products due to government regulations.
- Significant inflation impacting purchasing power and cost of labor and materials.
- Risks associated with the cultivation of cannabis and hemp, including crop failure.
- Uncertainty surrounding the regulatory pathway for CBD.
- Product liability claims and product recalls.
- Reputational risk associated with cannabis-related business activities.
- Potential for fraudulent or illegal activity by employees, contractors, and consultants.
- Risks related to the protection and enforcement of intellectual property rights.
- Conflicts of interest between the company and its directors and officers.
- Expensive and time-consuming financial reporting obligations.
- Ineffective internal control over financial reporting.
- Limitations on the use of net operating losses and tax credit carryforwards due to Section 382.
- Heightened scrutiny by regulators, stock exchanges, and other authorities.
- Uncertainty surrounding U.S. state regulation of cannabis and potential for federal enforcement actions.
- Limited market for common shares and volatility in share price.
- Substantial doubt about the ability to continue as a going concern.
Mitigation Strategies
- Consummation of a recapitalization transaction to address liquidity constraints.
- Measures to control discretionary spending and employ capital efficiently.
- Negotiating payment agreements or "currently not collectable" status with tax authorities.
- Implementing robust technology systems.
- Expanding operations in Florida, New Jersey, and New York.
- Increasing cultivation and processing capacity.
- Focusing on brand awareness and attracting new customers.
- Developing and introducing new products.
- Pursuing strategic acquisitions.
- Seeking additional operating licenses.
- Maintaining adequate insurance coverage.
- Implementing detailed procedures for testing finished products.
- Maintaining product liability insurance.
- Implementing security measures to protect facilities and data.
- Developing and implementing standard operating procedures to protect intellectual property.
- Ensuring compliance with all relevant laws, regulations, and guidelines.
- Working to remediate material weaknesses in internal control over financial reporting.