GrowHealthy, a subsidiary of iAnthus Holdings, has racked up 10 mechanics liens in the last three months. Seven contractors have filed mechanics liens across various projects with a total of over $700k claimed.
If a contractor goes unpaid on a construction project, they can file a mechanics lien to recover the money owed to them. Mechanics liens attach to the property, preventing its sale until the claim is paid.
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GrowHealthy is a brand that grows and produces medical marijuana products all over Florida. GrowHealthy also has 16 brick and mortar locations where they sell their own products as well as four other in-house brands.
GrowHealthy was founded by Don Clifford after converting an 200,000 ft2 mattress factory into a production facility in 2014. The property is located in Lake Wales, Florida. Its renovation cost approximately $2 million.
After years of rapid expansion and financial success, GrowHealthy was purchased by iAnthus Capital Holdings, Inc., a New York City based company, in a 2018 deal worth $17.5 million. iAnthus is a company dedicated to growing profitable cannabis brands and creating an extensive network for national distribution.
iAnthus’s main growing facility is the Lake Wales property purchased by GrowHealthy. The Lake Wales facility is currently undergoing a massive expansion that will increase its operational area to around 500,000 ft2. As of now, phase 2 of the expansion has been completed with 150,000 ft2 of operational space added. The facility is located at 309 S. Acuff Road, Lake Wales, Florida.
7 Contractors Claim Over $700k on GrowHealthy Expansion
Over the course of iAnthus’s aggressive expansion of the Lake Wales growing facility, seven contractors have yet to be paid. The mechanics liens filed on the property have been rolling in since April. Each mechanics lien was recorded in Polk County, where the property is located, and each mechanics lien names GrowHealthy Properties, LLC as the owner.
Complete Property Services, LLC claims the highest amount of money, having filed a mechanics lien on April 28th, 2020 to the total of $274.3K. Complete Property Services was hired for new construction of the headhouse, fertigation building, and greenhouse as well as selective demolition and construction of building 5 on the Lake Wales growing facility. This project is known as “GROWHEALTHY PHASE 1B.” Complete was hired by I/C Mechanical, the direct contractor on this project.
Complete first furnished labor and materials on June 24th, 2019 and last furnished on March 24th, 2020.
Graybar Electric Co. Inc. filed a mechanics lien on July 10th, 2020 for the unpaid amount of $209K. Graybar was a supplier on the project, hired by AEI Electrical Construction to furnish electrical and communication materials. Graybar furnished materials starting on February 12th, 2019 and ending on April 24th, 2020. A copy of Graybar’s lien was served on AEI, GrowHealthy Properties, and I/C Mechanical.
BDG Architects, LLP filed a mechanics lien on July 1st, 2020 for the unpaid amount of $71.5K. BDG was directly contracted with GrowHealthy Properties for work generally described as “architectural services.” BDG is based out of Tampa, Florida. The architecture firm first furnished labor and materials on November 8th, 2018.
Q&N Technologies filed three mechanics liens on the growing facility for materials and labor related to security, data, and surveillance systems for GrowHealthy’s affiliate and tenant on the property, Mccory’s Sunny Hill Nursery. Each of them was recorded on July 14th, 2020, and Q&N was contracted directly with GrowHealthy.
The first lien was filed for the amount of $41K. The second lien was filed for work furnished on the fertigation area, totaling $18.8K. The third and final lien was filed for the amount of $4.8K. In total, Q&N is due $64.7K.
Tarheel Roofing Inc. was contracted by I/C Mechanical, the direct contractor with GrowHealthy on project phase 1b. Tarheel has gone unpaid for roofing work on the head house building and the fertigation building. To recover payment, Tarheel filed two mechanics liens, both recorded on July 6th, 2020.
The first Tarheel lien is worth $24.6K and the second is worth $15.6K. In total, Tarheel is owed $40.2K.
Rexel USA was hired by AEI Electrical to provide labor, materials, and services related to electrical work on the Lake Wales growing facility. After first furnishing on January 23rd, 2019, Rexel filed a mechanics lien to the unpaid amount of $33K on June 29th, 2020.
The last mechanics lien on file for the grow house comes from Hamilton Engineering & Surveying, Inc. Hamilton contracted directly with GrowHealthy to provide labor and materials relating to civil engineering, site engineering and design, site, environmental, and NPDES permitting, record drawings, landscape architecture plans, and construction administration as well as other related services on the 309 S. Acuff Rd. property.
Hamilton’s lien was filed on July 31st to the amount of $18.6K. Hamilton first furnished in November of 2019 and last furnished in May of 2020.
iAnthus Faces Financial Difficulties as Contractors Are Left Unpaid and COVID-19 Number Surge
iAnthus released two financial statements in August 2020 that indicated some massive losses. In the first quarter of 2020 the firm reported losses of $237.3 million, adding to the $301.2 million in losses claimed in the fourth quarter of 2019.
The 2019 report, outlined by The Deep Dive, shows that iAnthus is burning almost $10 million per month to stay afloat. The Deep Dive also remarks that building, maintaining, and growing cannabis businesses across several states costs a ton of money, and iAnthus was paying the bills to the tune of $11 million per quarter on a cash basis alone.
iAnthus released a statement in April that attributed the cash problems to “The decline in the overall public equity cannabis markets, coupled with the extraordinary market conditions that began in Q1 2020 due to the novel coronavirus known as COVID-19 pandemic,” which have “have negatively impacted the financing markets.”
iAnthus is also involved in a couple legal disputes. The prior shareholders of GrowHealthy have filed a claim against the company related to shares owed to them during the acquisition of the medical marijuana producer in 2018. Two former employees also filed claims for damages that total to $2.1 million.
Much like MedMen, another Florida medical marijuana company in lien trouble, iAnthus is currently under investigation for possible breaches of fiduciary duties.