Canopy Rivers Portfolio Company Licensed by Health Canada, Triggering Long-Term Cash Flow Stream
25 March 2019 - 10:00PM
Canopy Rivers Inc. (“
Canopy Rivers” or the
“
Company”) (TSXV: RIV) congratulates Canopy Growth
Corporation (TSX: WEED) (NYSE: CGC) (“
Canopy
Growth”) and its portfolio company, Spot Therapeutics Inc.
(“
Spot”), on receiving a cultivation license from
Health Canada for its Fredericton-based production and distribution
facility. The newly licensed facility will operate under the
flagship Tweed banner and is another important pillar in the Canopy
family of companies’ commitment to establishing a local presence,
engaging local trades, and creating economic opportunities within
the provinces and communities the companies serve.
In 2017, Canopy Growth solidified its expansion
strategy in Atlantic Canada when it acquired Spot and made
significant local funding commitments in collaboration with Canopy
Rivers, ultimately resulting in Canopy Growth being rewarded with
one of the first provincial supply contracts in the cannabis
industry, pursuant to a landmark MOU with the government of New
Brunswick.
Canopy Rivers purchased the production facility
at that time and entered into a long-term lease with Canopy Growth
with respect to the facility, and also provided a significant
capital commitment for the development of the New Brunswick-based
project via a repayable debenture. The receipt of Spot’s
cultivation license represents a triggering event under the
debenture and initiates a long-term cash flow stream that is
anticipated to be approximately $2.85 million per year, with a
25-year term. Commencement of the cash flow stream is expected to
begin in September 2019.
“The long-term income stream from Spot, combined
with our existing royalty portfolio, will further stabilize Canopy
Rivers’ operating cash flow profile and provide us with additional
financial resources to deploy as we continue to make investments in
industry verticals we believe offer long-term strategic value for
our portfolio partners and shareholders,” said Eddie Lucarelli, CFO
of Canopy Rivers.
For more information regarding the Company’s
investment in Spot, please refer to the joint management
information circular of Canopy Rivers Corporation and the Company
dated August 8, 2018, filed with Canadian securities regulators and
available on the Company’s profile on SEDAR at www.sedar.com.
About Canopy Rivers:
Canopy Rivers is a unique investment and
operating platform structured to pursue investment opportunities in
the emerging global cannabis sector. Canopy Rivers works
collaboratively with Canopy Growth (TSX: WEED, NYSE: CGC) to
identify strategic counterparties seeking financial and/or
operating support. Canopy Rivers has developed an investment
ecosystem of complementary cannabis operating companies that
represent various segments of the value chain across the emerging
cannabis sector. As the portfolio continues to develop,
constituents will be provided with opportunities to work with
Canopy Growth and collaborate among themselves, which Canopy Rivers
believes will maximize value for its shareholders and foster an
environment of innovation, synergy and value creation for the
entire ecosystem.
Forward-Looking Statements
This news release contains statements which
constitute “forward-looking information” within the meaning of
applicable securities laws, including statements regarding the
plans, intentions, beliefs and current expectations of Canopy
Rivers with respect to future business activities and operating
performance. Forward-looking information is often identified by the
words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”,
“anticipate”, “believe”, “estimate”, “expect” or similar
expressions and includes information regarding: the operation of
the Spot facility under the Tweed banner; the size and expected
start date of the cash flow stream; the long-term strategic value
of Canopy Rivers’ investments; and other expectations for other
economic, business, and/or competitive factors.
Investors are cautioned that forward-looking
information is not based on historical facts but instead reflects
management’s expectations, estimates or projections concerning
future results or events based on the opinions, assumptions and
estimates of management considered reasonable at the date the
statements are made. Although Canopy Rivers believes that the
expectations reflected in such forward-looking information are
reasonable, such information involves risks and uncertainties, and
undue reliance should not be placed on such information, as unknown
or unpredictable factors could have material adverse effects on
future results, performance or achievements of Canopy Rivers. Among
the key factors that could cause actual results to differ
materially from those projected in the forward-looking information
are the following: regulatory and licensing risks; the ability to
cultivate and sell cannabis products; changes in general economic,
business and political conditions, including changes in the
financial markets; the global regulatory landscape and enforcement
related to cannabis, including political risks and risks relating
to regulatory change; risks relating to anti-money laundering laws;
compliance with extensive government regulation; public opinion and
perception of the cannabis industry; and the risk factors set out
in Canopy Rivers’ final short form prospectus dated February 21,
2019, filed with Canadian securities regulators and available on
Canopy Rivers’ profile on SEDAR at www.sedar.com.
Should one or more of these risks or
uncertainties materialize, or should assumptions underlying the
forward-looking information prove incorrect, actual results may
vary materially from those described herein as intended, planned,
anticipated, believed, estimated or expected. Although Canopy
Rivers has attempted to identify important risks, uncertainties and
factors which could cause actual results to differ materially,
there may be others that cause results not to be as anticipated,
estimated or intended. Canopy Rivers does not intend, and does not
assume any obligation, to update this forward-looking information
except as otherwise required by applicable law.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
For further information, please
contact:
Canopy Rivers
Inc. Karoline Hunter Sr. Director, Investor Relations
& Communications E-mail: ir@canopyrivers.com |
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