[PRESS RELEASE] – NEW YORK and TORONTO, Feb. 7, 2025 – iAnthus Capital Holdings Inc., which owns, operates and partners with regulated cannabis operations across the United States, announced that certain iAnthus subsidiaries entered into definitive agreements (the “purchase agreements”) with a leading Arizona cannabis operator, Pitchfork Enterprises LLC, d/b/a Sonoran Roots, and its affiliates to sell three dispensaries and two processing/cultivation facilities in Arizona for aggregate consideration of approximately $36.5 million (the “transaction”).

This strategic transaction is part of the company’s ongoing efforts to optimize its portfolio, strengthen its balance sheet, and focus on key markets with the greatest growth potential.

The transaction includes two dispensaries, a processing facility and a cultivation/processing facility located in Mesa, Arizona, as well as one dispensary located in Phoenix, Arizona (collectively, the “facilities”). These facilities have consistently delivered high-quality cannabis products and experiences to their surrounding communities.

The transaction will allow iAnthus to redirect resources to its growth initiatives in Florida, Maryland, New Jersey, Massachusetts and New York while still maintaining a retail presence in Arizona with one dispensary in Mesa.

“This transaction aligns with our ‘smart growth, strong margins’ strategy by enabling us to double down on markets where we can deliver the most value to our customers and long-term business interests,” iAnthus CEO Richard Proud said. “By streamlining our Arizona operations, we are laying the foundation for a future defined by operational excellence, unmatched customer loyalty and enhanced profitability. Our continued presence in Arizona through our Health for Life dispensary [on Crismon Road], and our trusted MPX brand underscores our commitment to delivering exceptional products and experiences in every market we serve.”

The transaction represents a strategic milestone for iAnthus, allowing it to align resources with its long-term objectives. For iAnthus, the transaction not only reinforces its commitment to smart growth by simplifying the company’s operations but also provides significant capital to invest in its core markets and reduces the company’s debt.

“We are thrilled to announce the acquisition of select iAnthus Arizona assets, a transformational step for us in Arizona,” Sonoran Roots CEO Michael O’Brien said. “This transaction is highly accretive and strategically enhances our market position, increasing our Ponderosa Dispensary footprint to seven retail locations with broad geographical coverage. We are excited to continue providing exceptional cannabis products and experiences to customers in these locations.”

Transaction Details

Pursuant to the purchase agreements, iAnthus will sell and Sonoran Roots will acquire, substantially all of the assets related to or used in connection with the facilities, including but not limited to all cannabis licenses associated with such businesses and related real property (collectively, the “assets”), together with certain assumed liabilities related to the assets.

The purchase price for the assets is approximately $36.5 million and will consist of approximately $20 million of cash payable at closing, subject to certain adjustments, and a secured promissory note to be issued by Sonoran Roots in the principal amount of $16.5 million. The note will bear interest at a rate of 6% per annum compounded annually, with a term of 66 months. The proceeds of the transaction, net of related fees, costs and expenses, are expected to be used for working capital and general corporate purposes, together with the repayment of a portion of the company’s various secured debt obligations.

The transaction is expected to close in 1Q 2025, subject to customary conditions precedent including the receipt of applicable consents and regulatory approvals.

Ducera Securities LLC served as the financial adviser to the company in connection with the transaction. The Hawkeye Capital Markets team of Beech Hill Securities Inc. acted as the financial adviser to Sonoran Roots in connection with the transaction.

All references to currency in this news release are in U.S. dollars.