How iAnthus, Aurora, CuraLeaf, Cannex Make Their Pitch To Investors

Hundreds of cannabis investors had the opportunity to hear some of the industry's major players make their case in person Wednesday at the Benzinga Cannabis Capital Conference in Miami Beach. Here's what iAnthus Capital Holdings Inc ITHUF, Aurora Cannabis Inc ACB, CuraLeaf Holdings Inc CURLF, MJ Freeway and the newly combined Cannex Capital Holdings Inc CNXXF and 4Front had to say. 

iAnthus

CEO Hadley Ford highlighted his company’s M&A activity and growing national footprint.

New York-based iAnthus has made 18 transactions in the last 27 months, including its $673-million acquisition of MPX Bioceutical, which received shareholder approval this week.

The company has 18 retail dispensaries across 11 states. That amount will increase to around 50 in 2019, as the company has plans to open an additional 16 dispensaries in Florida, five in Massachusetts, three in Staten Island and two in New Jersey, Ford said. The cannabis company is also focusing on incorporating MPX-branded products into its California locations.

All told, the expansion will being iAnthus’ addressable market to 121 million people.

Aurora Cannabis

Aurora’s pitch to investors focuseds on their Aurora Sky facility, the nearly completed 800,000-square-foot hybrid indoor grow facility in Edmonton. The facility, which has a price tag of $115 million, will be able to grow over 100 million grams of cannabis per year once it reaches full capacity in the next 12-16 months thanks to a staff of 400 people and automation, said Marc Lakmaaker, Aurora’s vice president of investor relations.

“Growing cannabis at scale, as most producers have found out, is not easy. It’s a very fickle plant,” he said.

Aurora Sky will enable the company to grow the plant for under CA$1 (75 cents) per gram, down from $1.30, Lakmaaker said. 

With over 70,000 patients, Aurora remains focused on its mission as a medical marijuana company, he said: “We are very much a medical company at heart.”

CuraLeaf

CuraLeaf’s investor presentation highlighted the company’s dominance in retail. CuraLeaf has the largest footprint of branded retail stores in the U.S. and is the first multistate operator to create a national brand, said CEO Joe Lusardi. 

The company’s 12 cultivation facilities and 10 growing operations give it 650,000 square feet of production space, the most of any American cannabis company, he said. 

Lusardi highlighted Florida and New Jersey as success stories, as he said CuraLeaf opened more stores in Florida than anyone else in 2018 and holds 40 percent of the New Jersey retail cannabis market.

“Cannabis is a commodity, but we’ve already seen on the west coast tremendous pressure on the commodity itself,” he told a room of investors. “For now, it pays handsomely in the U.S. to be a vertical operator given the state-by-state operations.”

CuraLeaf will have over 60 retail locations by the end of 2019, up from 38 at the end of 2018 and seven at the end of 2017, Lusardi said. 

MJ Freeway

Jessica Billingsley, MJ Freeway’s co-founder and CEO, pitched the company as a SaaS play that happens to have exposure to cannabis.

“You should think about us as an attractively valued software as a service technology business, and you get to participate in the upside of the cannabis industry as a bonus.”

The cannabis technology market totals $2.2 billion, Billingsley said — and MJ Freeway is aiming to be the industry’s leading technology provider. Their applications include vendor management, labor management, supplies, forecasting, inventory, point-of-sale, CRM and online ordering.

“Businesses will need to focus on their IT [and] that’s where we come in,” she said. “If all we were able to do is grow at the rate of the cannabis industry, it’d be a tremendous outcome. But we think there’s a bigger opportunity to address.”

Cannex Capital, 4Front

Cannex Capital and 4Front recently announced a merger. The combination brings together Cannex, a cannabis producer, with 4Front, a retailer.

Combined, the firm will have 16 brands of marijuana-infused products, including seven of the top 10 bestsellersin Washington, and 220 product skews, said Anthony Dutton, CEO of Cannex Capital.

Cannex/4Front will have 14 dispensaries by end the end of 2019 in five states — Washington, Massachusetts, Illinois, Maryland and Pennsylvania — and is pursuing M&A in California, Arizona, Nevada, Michigan and Pennsylvania.

“If you boil it all down to why we’re so excited to the opportunity of this merger, you’re taking 16 product brands and immediately we’re dropping that into over 100,000-square-foot capacity,” said 4Front CFO Andrew Thut.

“If you believe we can get half the market share that we’ve achieved in Washington [which is 8 percent]  ... if we can get that, that’s $75 million. That’s what gets us excited.”

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