iAnthus Provides Update on Recapitalization Transaction

iAnthus Capital Holdings, Inc. (“iAnthus” or the “Company”) (CSE: IAN) (OTCPK: ITHUF), which owns, operates and partners with regulated cannabis operations across the United States, announces that it is in receipt of a purported notice (the “Purported Notice“) from the Lenders and the Consenting Debenture Holders (as such terms are defined in the Restructuring Support Agreement dated July 10, 2020, as amended on June 15, 2021 (the “RSA“)).  The Purported Notice seeks to unilaterally extend the outside date (the “Outside Date“) for closing the recapitalization transaction (the “Recapitalization Transaction“) beyond the existing Outside Date, August 31, 2021, to “the date on which any regulatory approval or consent condition to implementation of the Plan is satisfied or waived.”

The Company’s position is the RSA does not afford the Lenders and Consenting Debenture Holders a unilateral right to extend the Outside Date.  Accordingly, the Company believes that the Purported Notice does not modify the Outside Date, and as such, has advised the Lenders and the Consenting Debenture Holders that the Outside Date remains August 31, 2021, subject to any permitted extension in accordance with the RSA.

The Company continues to work with the Lenders and Consenting Debenture Holders towards obtaining the required regulatory approvals by the Outside Date in the RSA.

On August 20, 2021, iAnthus received a Notice of Application from Gotham Green Partners, LLC and Gotham Green Admin 1, LLC (the “Applicants“).  The Applicants seek, among other things, a declaration that the Purported Notice is effective.  In the alternative, the Applicants seek an order rectifying the RSA to permit the Outside Date to be extended and prohibiting the Company from terminating the RSA without further order of the court.  No hearing date for the application has been set.  iAnthus intends to respond to the application and ask that it be dismissed with costs.

A copy of the RSA is available under the Company’s profile on SEDAR at www.sedar.com and was filed originally on July 20, 2020 and the amendment was filed on June 16, 2021.  The RSA is also available under the Company’s profile on the US Securities and Exchange Commission’s website at www.sec.gov.

Further Details on the Recapitalization Transaction

On September 14, 2020, the Company’s securityholders voted in support of the Recapitalization Transaction, and on October 5, 2020, the Supreme Court of British Columbia (the “Court“) approved the Plan of Arrangement, which approval was upheld on appeal on January 29, 2021.

As previously disclosed, securityholder approval and Court approval were two of the primary conditions for closing the Recapitalization Transaction, both of which conditions have been satisfied. The closing of the Recapitalization Transaction remains subject to certain closing conditions as set forth in the RSA.  Specifically, certain of the transactions contemplated by the Recapitalization Transaction have triggered the requirement for an approval by state-level regulators in certain U.S. states with jurisdiction over the licensed cannabis operations of entities owned, in whole or in part or controlled directly or indirectly, by iAnthus in such states.

State-level regulatory approvals remain outstanding in Florida, Massachusetts, Maryland, New York and New Jersey.(1)

(1)           In New Jersey, a change of control approval is not required at the present time because the Company is awaiting approval by the state Cannabis Regulatory Commission (“CRC“) for the Company to close its acquisition of 100% of the equity interests in New Jersey license holder MPX of New Jersey, LLC (“MPXNJ“), pursuant to certain contractual agreements (the “Agreements“, and the approval application before the CRC, the “Amended Permit Application“). The Company has a reasonable expectation that approval of the Amended Permit Application will be listed for consideration by the CRC on its monthly agenda in the next sixty (60) days or sooner and, upon any such approval thereof and the closing of the acquisition within no later than five (5) business days thereafter, as set forth in the Agreements, a prior regulatory approval for the change of beneficial ownership of MPXNJ that would result from the Recapitalization Transaction will be required as a condition to closing under the RSA.

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