iAnthus Capital Holdings Inc (OTCMKTS: ITHUF) is back to where it started the year after coming under immense short selling pressure in the second quarter. The stock started the year on a roll rallying by more than 40% before succumbing to bearish pressure.
iAnthus Capital Price Action Activity
The underperformance in the stock market has come on the lack of substantial updates needed to validate the Company’s long-term prospects. While the plunge is a point of concern, the stock is staring at a crucial support level above which it remains well positioned to edge higher.
As it stands, the stock is likely to bounce off the support level on Q1 earnings report coming out better than expected. Improved financial position following the closing of a $25 million private placement means the Company is well financed to pursue strategic initiatives going forward
IAnthus Capital Holdings has also unveiled a national retail brand as it continues to strengthen its sales channels in pursuit of additional revenue streams. Plans are also underway to expand into new markets as part of the expansion drive.
However, the stock has continued to edge lower even on the Company moving to safeguard its long-term prospects through strategic initiatives. A plunge to the $4.10 level leaves iAnthus Capital Holdings exposed to the $3.80 crucial support level.
Above the crucial technical level, the stock remains supported for further upside action as a bounce-back play. However, a breach of the support level could trigger further sell-off that could result in iAnthus Capital Holdings edging lower.
About iAnthus Capital Holdings
IAnthus Capital Holdings owns and operates licensed cannabis cultivation, processing, and dispensary facilities. The Company seeks to provide investors a reliable way of gaining exposure to the U.S regulated cannabis industry.
Solid Financial Position
Amidst the underperformance in the stock market, iAnthus Capital Holdings has continued to fire on all angles when it comes to operational efficiency. For instance, the Company has strengthened its balance sheet, which has approximately $55 million following the closing of a non-brokered placement.
A revamped a balance sheet leaves the Company in a solid financial position to pursue initiatives that have the potential to strengthen the bottom line. For instance, iAnthus Capital Holdings is in the process of revamping its retail network as it seeks to enhance and strengthen its sale channels.
National Retail Brand Push
The Company has already unveiled in national retail brand dubbed “Be.” Under the new brand, the Company seeks to build retail stores that provide a welcoming environment for customers in need of cannabis products.
“Be. Was created to align with what we see as the need for a retail cannabis experience where consumers can simply “Be. You”. Be. Is a place to empower self-expression and being a better version of yourself? Be. is a place where you will smile again,” stated Chief Marketing Officer Neil Calves Bert.
iAnthus Capital Holdings has also confirmed plans to open a flagship Be store in Brooklyn in the fourth quarter. The long-term plan is to open additional flagship stores in Miami, Atlantic City as well as Las Vegas and Orlando.
The Company also expects significant growth throughout the year with the opening of stores in New York, Massachusetts, and Florida. In Florida, for instance, the Company has three locations having also signed an additional 17 leases.
In the first quarter, the Company completed the acquisition of MPX U.S assets that generated $14.7 million in revenue in Q3 2018. The assets should boost iAnthus financials once their results are consolidated in Q1 financial results.
Over a short period as a public company, iAnthus Capital Holdings has generated big returns for early investors. However, in recent months, the stock has fallen behind its peers in what appears to be a consolidation phase.
Once the correction phase comes to a halt and investors take note of the Company’s tremendous potential, then the stock is likely to resume its uptrend. Expansion into new markets in pursuit of new streams of revenues as well as the acquisition of MPX are some of the developments that underscore long-term prospects.
While the stock’s valuation has taken a significant hit, a bounce-back could be in sight on price action activity stabilizing above the $3.80 support level.
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Disclosure: We have no position in ITHUF and have not been compensated for this article.