TORONTO – November 19, 2020 –
Canopy Rivers Inc. (the “Company” or “Canopy Rivers”) (TSX: RIV, OTC: CNPOF), a venture capital firm specializing in cannabis, today released its financial results for the three and six months ended September 30, 2019 (“Q2 2020”). The Company’s unaudited condensed interim consolidated financial statements for Q2 2020, and its management’s discussion and analysis for Q2 2020 (the “Q2 2020MD&A”), are available under the Company’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com and on the Company’s website at www.canopyrivers.com/investors/financials-and-public-filings. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.
“Headlined by our graduation to the TSX, our business matured during the second quarter as we launched our Strategic Advisory Board and continued to work closely with our portfolio companies as they achieved new milestones,” said Narbé Alexandrian, President & CEO, Canopy Rivers. “There were numerous achievements for our portfolio companies this quarter. Several of these companies received licences and amendments from Health Canada for the sale of cannabis oils, while others made key acquisitions, launched their Canadian business, or brokered agreements with companies both inside and outside of the Canopy Rivers ecosystem. As we move forward, we plan to continue to develop a robust ecosystem of mutually beneficial cannabis companies intended to drive the industry forward and lay down the foundation for long-term success.”
“Although the cannabis industry experienced challenging capital markets conditions during the quarter, our view is that the underlying positive momentum across the sector globally will help propel disciplined companies through these headwinds,” said Eddie Lucarelli, Chief Financial Officer, Canopy Rivers. “We believe that a strong balance sheet and a continually maturing market create optimal conditions for investment opportunities for Canopy Rivers. We remain focused on our business model of providing capital to the disruptors of the cannabis industry, while maintaining a thesis-driven approach to investment decisions and keeping long-term value creation for our shareholders front of mind.”
Operating expenses for the quarter were $6.2 million, of which $3.0 million (or approximately 48% of the total) related to share-based compensation. As with previous reporting periods, a significant portion of this non-cash expense is related to options granted to non-employees, which occurred at an early stage in the Company’s growth and requires remeasurement each period. Other operating expenses, which include consulting and professional fees and other general and administrative expenses, were $3.2 million, representing an increase from the comparative quarter last year due to the build-out of the Company’s management team and employee base and enhanced public company compliance, marketing and business development, and regulatory costs. Other operating expenses also increased from the previous quarter due to certain non-recurring costs relating to the Company’s graduation to the Toronto Stock Exchange (“TSX”) and the launch of a formal branding and marketing campaign.
Other comprehensive income, which captures the net changes in fair value of financial assets that are reported at fair value through other comprehensive income, was a loss of $28.3 million, net of tax. The fair values of Canopy Rivers’ investments in Eureka 93 Inc., JWC, YSS Corp. (“YSS”), Les Serres Vert Cannabis Inc. and TerrAscend Corp. (“TerrAscend”) were negatively impacted by downward trends in public market valuations for cannabis companies during the period.
Q2 2020 Corporate and Portfolio Updates
The following represents a brief summary of the milestones achieved by Canopy Rivers and/or its portfolio companies during the quarter ended September 30, 2019:
Subsequent Corporate and Portfolio Updates
Subsequent to the end of the quarter, Canopy Rivers and its portfolio companies reported several achievements:
For more information regarding the Company and its portfolio companies, please refer to the Q2 2020 MD&A and the Company’s annual information form dated July 15, 2019 (“AIF”), filed with the Canadian securities regulators and available on Canopy Rivers’ profile on SEDAR at www.sedar.com
Canopy Rivers is a venture capital firm specializing in cannabis. Its unique investment and operating platform is structured to pursue investment opportunities in the emerging global cannabis sector. Canopy Rivers identifies 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 Corporation (TSX: WEED, NYSE: CGC) 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 portfolio.
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
and its portfolio companies 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 intended use of proceeds from TerrAscend’s
private placement; YSS’ goal of taking over New Brunswick’s recreational cannabis operations and the expected timing for the opening of YSS Grand Prairie; YSS’ Ontario expansion plans and its initial strategy for such expansion;
JWC’s plans to open a farmgate retail store, the impact thereof and the products expected to be sold thereat; the expectation that JWC’s farmgate retail store will be the Kitchener-Waterloo region’s first cannabis store located on
a licensed cultivation site; and expectations for other economic, regulatory, 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 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; changes in the
use of proceeds from TerrAscend’s private placement; changes in cannabis industry growth and trends; changes in consumer preferences and demands; changes in the business activities and plans of JWC and YSS and the associated timing therewith; 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, including Canopy Rivers’ interpretation of such regulation; public opinion and perception of the cannabis industry; divestiture risks; and the risk factors set out in
Canopy Rivers’ annual information form dated July 15, 2019, filed with the Canadian securities regulators and available on Canopy Rivers’ profile on SEDAR at www.sedar.com.
SOURCE Canopy Rivers Inc.
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