TORONTO, ON and NEW YORK, NY --(Marketwired - August 02, 2017) - iAnthus Capital
Holdings, Inc. ("iAnthus" or "the Company"), (CSE: IAN) (CSE:
IAN.CN) (CNSX: IAN) (OTCQB: ITHUF), which owns, operates,
and partners with licensed cannabis operators throughout the United States, is pleased to announce that the New York State
Department of Health ("DOH") has approved the Company's proposed acquisition of Valley Agriceuticals, LLC ("Valley
Agriceuticals"), as set forth in a binding term sheet between the parties signed in June 2017 (the "Binding Term Sheet"). The
state also announced that Valley Agriceuticals has officially been granted a license as a Registered Organization under the
medical marijuana program of the State of New York.
Per the license from the state, Valley Agriceuticals has been granted dispensary locations in King's County
("Brooklyn"), Dutchess County, Oneida County and Suffolk County, as well as approval for cultivation and manufacturing operations
in its facility in Wallkill, NY. With the dispensary location in Brooklyn, Valley Agriceuticals will have a presence in the
second most densely populated county in the United States. If counted as a standalone city, Brooklyn would be the fourth most
populous city in the United States with an estimated 2.6 million residents, smaller than only New York City as a whole, Los
Angeles and Chicago. The Suffolk County location also exposes Valley Agriceuticals to a large market of approximately 1.5 million
residents.
iAnthus recently agreed, pursuant and subject to the terms of the Binding Term Sheet, to acquire 100% of Gloucester Street
Capital, LLC, and its wholly owned subsidiaries, Valley Agriceuticals and Valley Agriceuticals Real Estate, LLC for US$17.3
million, which includes US$2.3 million payable in cash and US$15.0 million payable in common shares and Class A restricted voting
convertible shares of iAnthus ("Class A shares" and together with the common shares, referred to for convenience as "shares")
priced at US$2.00 per share. Up to an additional five million shares may be issued to Valley Agriceuticals' shareholders
conditional upon Valley Agriceuticals achieving 15,000 active patient registrations by December 31, 2020 (the "Milestone
Payments"). In aggregate, iAnthus expects to issue 7,500,000 shares to satisfy the US$15.0 million payment and up to a further
5,000,000 shares to satisfy the Milestone Payments.
In addition to acquiring Valley Agriceuticals and its license to cultivate, process and dispense medical cannabis through four
dispensary locations, the proposed acquisition also includes the Valley Agriceuticals cultivation campus in Wallkill, NY,
consisting of 136 acres of real estate that is currently zoned for cannabis cultivation, a 6,500-square foot custom-built
cultivation and processing facility.
Following yesterday's decision by the DOH to approve the transaction, the deal is expected to close during the third quarter
of 2017, following applicable approval from the Canadian Securities Exchange and completion of definitive documentation between
parties.
"Today marks a big step for the iAnthus and Valley Agriceuticals teams, receiving the state's blessing for the acquisition, in
addition to the granting of the license and dispensary locations to the Valley Agriceuticals team. The team is already making
progress in securing prime real estate in each of the dynamic markets in which it has been granted licenses," said Hadley Ford,
CEO of iAnthus. "The Brooklyn and Suffolk County dispensaries in particular provide Valley Agriceuticals with direct exposure to
large patient bases."
"On behalf of the Valley Agriceuticals team, we are excited to be given the opportunity to join New York's medical cannabis
program," said Erik Holling, President of Valley Agriceuticals. "Our team looks forward to ensuring that New York's medical
cannabis patients have access to the best medicines possible to take full advantage of the health benefits of medical
cannabis."
Background on the New York State Medical Marijuana Program
The New York State Medical Marijuana Program (the "Program") began registering patients in December 2015 and currently numbers
25,726 certified patients, as of August 1, 2017. The Program has been expanded in the recent months to increase the accessibility
of medical marijuana to patients through the addition of chronic pain as a qualifying condition and publishing the names of
qualifying practitioners to make it easier for patients to obtain a medical certification.
Since the addition of chronic pain to the Program's list of approved indications, certified patients have surged, increasing
by 10,744 since late March, and increase of 72%. Both houses of the New York State Congress have also recently passed legislation
to add post-traumatic stress disorder ("PTSD") to the list of qualifying conditions. That bill is currently awaiting a final
decision by the governor and is expected to provide an additional catalyst for patient growth in the near future.
Transaction Details
Subject to the terms of the Binding Term Sheet, iAnthus will acquire 100% of Gloucester Street Capital, LLC, and its wholly
owned subsidiaries, Valley Agriceuticals and Valley Agriceuticals Real Estate, LLC, for US$17.3 million, which includes US$2.3
million payable in cash and US$15.0 million payable in shares of iAnthus priced at US$2.00 per share (resulting in 7,500,000
shares). The proposed acquisition will also include the Valley Agriceuticals cultivation campus real estate and cultivation and
processing facility. Up to an additional five million shares may be issued to Valley Agriceuticals shareholders conditional upon
Valley Agriceuticals achieving 15,000 active patient registrations by December 31, 2020. Certain of the executives of Valley
Agriceuticals will receive 60% of their respective share consideration in Class A shares.
The transaction remains subject to a number of conditions, including Canadian Securities Exchange approval and completion of
definitive documentation between parties. The transaction is expected to close during the third quarter of 2017.
For more information about the New York State Medical Marijuana Program, please visit
https://www.health.ny.gov/regulations/medical_marijuana/about.htm
The securities issued by iAnthus under the transaction will be issued on a prospectus exempt basis and will be subject to: (i)
a hold period in Canada of four months and a day from the date of issuance; and (ii) an applicable US securities law legend.
About iAnthus Capital Holdings, Inc.
iAnthus Capital Holdings, Inc., through its wholly-owned subsidiary iAnthus Capital Management, LLC, provides
investors diversified exposure to best-in-class licensed cannabis cultivators, processors and dispensaries throughout the United
States. iAnthus currently owns, operates or has partnered with marijuana license holders in Massachusetts, Vermont, Colorado and
New Mexico. Founded by entrepreneurs with decades of experience in investment banking, corporate finance, law and healthcare
services, iAnthus provides a unique combination of capital and hands-on operating and management expertise. The Company leverages
these skills to support a diversified portfolio of cannabis industry investments for our shareholders. For more information,
visit www.iAnthuscapital.com.
About Gloucester Street Capital, LLC.
Gloucester Street Capital, LLC, together with its wholly-owned subsidiaries, Valley Agriceuticals, LLC and Valley
Agriceuticals Real Estate Holdings, LLC, was founded in 2014 to apply for registration as a licensed Registered Organization
under the New York State Medical Marijuana Program. On May 25, 2017, DOH issued Valley Agriceuticals a conditional registration
as a Registered Organization, subject to DOH review and approval of certain additional information related to Valley
Agriceuticals' real property interests and requested minor additions to Valley Agriceuticals' application and operating plan.
Valley Agriceuticals expects to receive its final registration as a Registered Organization in the Summer of 2017.
Forward Looking Statements
Statements in this news release that are forward-looking statements are subject to various risks and uncertainties
concerning the specific factors disclosed here and elsewhere in iAnthus' periodic filings with Canadian securities regulators.
When used in this news release, words such as "will, could, plan, estimate, expect, intend, may, potential, believe, should," and
similar expressions, are forward-looking statements.
Forward-looking statements may include, without limitation, statements relating to the acquisition of final registration as a
registered organization in New York State, the number of enrollees in the Program, Valley Agriceuticals' proposed products, the
expected date of the closing of the proposed acquisition, and potential for patient growth in New York State.
Although iAnthus has attempted to identify important factors that could cause actual results, performance or achievements to
differ materially from those contained in the forward-looking statements, there can be other factors that cause results,
performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: dependence on
obtaining regulatory approvals; investing in target companies or projects which have limited or no operating history and are
engaged in activities currently considered illegal under US Federal laws; change in laws; limited operating history; reliance on
management; requirements for additional financing; competition; hindering market growth and state adoption due to inconsistent
public opinion and perception of the medical-use and adult-use marijuana industry and; regulatory or political change.
There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of
future developments, circumstances or results will materialize. As a result of these risks and uncertainties, the results or
events predicted in these forward-looking statements may differ materially from actual results or events.
Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this
news release are made as of the date of this release. iAnthus disclaims any intention or obligation to update or revise such
information, except as required by applicable law, and iAnthus does not assume any liability for disclosure relating to any other
company mentioned herein.
The Canadian Securities Exchange has not reviewed, approved or disapproved the content of this news
release.