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TORONTO - RIV Capital Inc. (“RIV Capital” or the “Company”) (CSE: RIV) (OTC: CNPOF), an acquisition and investment firm with a focus on building a leading multistate platform with one of the strongest portfolios of brands in key strategic U.S. markets, today released its financial results for the second quarter ended June 30, 2024 (“Q2 2024”). All financial information in this press release is reported in U.S. dollars unless otherwise indicated.
“We are very pleased with the ongoing success of our adult-use operations rollout in New York through the second quarter,” said Mike Totzke, COO and interim CEO of RIV Capital. “The customer response has been strong, reflecting the years of dedication and hard work from our team. Additionally, since the appointment of David Vautrin as Chief Retail Officer, we have enhanced our in-store retail shopping experience to best serve our growing cannabis community. We look forward to implementing these strategies further with the expected opening of two additional adult-use retail locations in New York later in 2024.”
Mr. Totzke added, “Since announcing our strategic business combination with Cansortium, we have begun the important work to align our two companies and ensure we are prepared to hit the ground running upon successful completion of the transaction. Cansortium’s best practices and standard operating procedures have been implemented at our New York operations to boost our operational efficiency and elevate quality standards. There are also plans to rapidly introduce Fluent’s brands into the New York market to expand our consumer reach and further bolster national brand recognition. With all that lies ahead, we are incredibly excited about the remainder of 2024 and the promising future of our combined company.”
The Company is pleased to note that New York state continues to actively advance its efforts to combat ongoing illicit market activities. At the federal level, the Company continues to monitor developments regarding the rescheduling of cannabis from a Schedule I to a Schedule III substance under the Controlled Substances Act (the “CSA”), as rescheduling is anticipated to lead to the removal of 280E taxes and provide support for further potential federal reform. This potential change may expand institutional access to invest in the cannabis sector and accelerate opportunities for research into the medical benefits of cannabis.
The following is a summary of the Company’s unaudited financial results for the three and six months ended June 30, 2024 and 2023. As previously announced, the Company has changed its fiscal year end from March 31 to December 31. Accordingly, the comparative period presented for the six months ended June 30, 2023, had not previously been reported in historical unaudited condensed interim consolidated financial statements published by the Company. Further details regarding the change in fiscal year end, including the length and ending dates of the Company's financial reporting periods, are available in the Company's Notice of Change in Year End prepared in accordance with Section 4.8 of National Instrument 48-102 and filed on the Company's SEDAR+ profile at www.sedarplus.ca.
Unless otherwise indicated, all financial highlights summarized in tables in this press release are presented in thousands of dollars, except share and per share amounts. All references to “$” are to United States dollars.
This press release should be read in conjunction with the Company’s unaudited condensed interim consolidated financial statements and management’s discussion and analysis (“MD&A”) for the three and six months ended June 30, 2024 and 2023, which are available under the Company’s profile on SEDAR+ at www.sedarplus.ca and on the Company’s website at www.rivcapital.com/investors.
RIV Capital is an acquisition and investment firm with a focus on building a leading multistate platform with one of the strongest portfolios of cannabis brands in key strategic U.S. markets. Backed by in-house expertise and cannabis domain knowledge, RIV Capital aims to grow its own brands and partner with established U.S. cannabis operators and brands to bring them to new markets and build market share. RIV Capital established the foundational building blocks of its active U.S. strategy with its previously announced acquisition of Etain. Through its strategic relationship with The Hawthorne Collective, Inc. (“The Hawthorne Collective”), a subsidiary of The ScottsMiracle-Gro Company (“ScottsMiracle-Gro”), RIV Capital is The Hawthorne Collective’s preferred vehicle for cannabis-related investments not under the purview of other ScottsMiracle-Gro subsidiaries.
This news release contains statements which constitute "forward-looking information" within the meaning of applicable securities laws. Often, but not always, forward-looking statements and information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “enables”, “intends”, “anticipates” or “does not anticipate”, “potential”, “seeks” or “believes”, or variations of such words and phrases, or state that certain actions, events or results “may”, “can”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Cansortium, RIV Capital or their respective subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements or information contained in this news release. Examples of such statements include, but are not limited to, statements regarding: the timing and completion of the proposed business combination between RIV Capital and Cansortium; the Company’s expectations regarding the ability to leverage RIV Capital’s reported cash balance to support growth across multiple states; the Company’s expectations to open two additional adult-use medical dispensaries in New York; the Company’s plans to introduce Fluent’s brands into the New York market to expand consumer reach and bolster national brand recognition; the anticipated impacts of a rescheduling of cannabis under the CSA; and expectations for other economic, business and/or competitive factors.
Investors are cautioned that forward-looking information is not based on historical fact 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 RIV Capital 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 RIV Capital or its portfolio companies.
Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information include: the prompt and effective integration of Cansortium’s and RIV Capital’s businesses and the ability to achieve the anticipated synergies contemplated by the business combination and ongoing integration activities; the diversion of management time on issues related to the business combination transaction; expectations regarding future investment, growth and expansion of Cansortium’s and RIV Capital’s operations; regulatory and licensing risks; Cansortium’s and RIV Capital’s reliance on licenses issued by state authorities; future levels of revenues and the impact of increasing levels of competition; changes in laws, regulations and guidelines and Cansortium’s and RIV Capital’s compliance with such laws, regulations and guidelines; the timing and manner of the legalization of cannabis in the United States; business strategies, growth opportunities and expected investment; the potential effects of judicial, regulatory or other proceedings, litigation or threatened litigation or proceedings, or reviews or investigations, on Cansortium’s and RIV Capital’s business, financial condition, results of operations and cash flows; risks associated with divestment and restructuring; the anticipated effects of actions of third parties such as competitors, activist investors or federal, state, provincial, territorial or local regulatory authorities, self-regulatory organizations, plaintiffs in litigation or persons threatening litigation; consumer demand for cannabis; risks related to stock exchange restrictions; risks related to the protection and enforcement of Cansortium’s and RIV Capital’s intellectual property rights; future levels of capital, environmental or maintenance expenditures, general and administrative and other expenses; changes in general economic, business and political conditions, including changes in the financial and stock markets; inflation risks; risks relating to the economic impacts caused by the ongoing conflicts in Europe and the Middle East; risks relating to anti-money laundering laws; compliance with extensive government regulation and the interpretation of various laws, regulations, and policies; public opinion and perception of the cannabis industry; and such other risks contained in the public filings of Cansortium filed with Canadian securities regulators and available under Cansortium’s profile on SEDAR+ at www.sedarplus.ca and in the public filings of RIV Capital filed with Canadian securities regulators and available under RIV Capital’s profile on SEDAR+ at www.sedarplus.ca, including RIV Capital’s annual information form for the year ended March 31, 2023, annual management’s discussion and analysis for the nine-month period ended December 31, 2023, and management information circular dated July 12, 2024 under the heading “Risk Factors”.
Cansortium and RIV Capital, through several of their respective subsidiaries, are directly involved in the manufacture, possession, use, sale, and distribution of cannabis in the adult-use and medical cannabis marketplace in the U.S. Local state laws where Cansortium and RIV Capital operate permit such activities, however, investors should note that there are significant legal restrictions and regulations that govern the cannabis industry in the U.S. Cannabis remains a Schedule I drug under the CSA, making it illegal under federal law in the U.S. to, among other things, cultivate, distribute, or possess cannabis in the U.S. Financial transactions involving proceeds generated by, or intended to promote, cannabis-related business activities in the U.S. may form the basis for prosecution under applicable U.S. federal money laundering legislation.
While the approach to enforcement of such laws by the federal government in the U.S. has trended toward non-enforcement against individuals and businesses that comply with adult-use and medical cannabis programs in states where such programs are legal, strict compliance with state laws with respect to cannabis will neither absolve Cansortium and RIV Capital of liability under U.S. federal law, nor will it provide a defense to any federal proceeding which may be brought against Cansortium or RIV Capital. The enforcement of federal laws in the U.S. is a significant risk to the business of Cansortium and RIV Capital and any proceedings brought against Cansortium or RIV Capital thereunder may adversely affect operations and financial performance.
Should one or more of the foregoing 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 Cansortium and RIV Capital have 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. The forward-looking information and statements included in this news release are made as of the date of this news release and Cansortium and RIV Capital do not undertake any obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities laws.
SOURCE RIV Capital Inc.
For further information: Investor Relations Contact for RIV Capital: ir@rivcapital.com Media Contact: media@rivcapital.com Officer Contact for RIV Capital: Matt Mundy 416-583-5945
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