US: RIV Capital to buy New York cannabis company for $257 million

RIV Capital announced a definitive agreement to acquire ownership and control of Etain LLC and Etain IP LLC, owners and operators of legally licensed cannabis cultivation and retail dispensaries in the state of New York.

RIV Capital will acquire ownership and control of the Etain companies for approximately US$247 million, payable through a combination of cash and newly issued Class A common shares of RIV Capital, subject to, among other things, receipt of all required regulatory approvals, including from the New York Cannabis Control Board and the New York State Office of Cannabis Management.

RIV Capital also announced today that its Board of Directors has named Mark Sims as President and CEO of RIV Capital, to lead the company's formal entry into the U.S. market and expansion into licensed adult-use operations in New York. Mr. Sims is a current director of RIV Capital, a role he will retain, and most recently was Senior Vice President of Strategy and M&A for The Scotts Miracle-Gro Company, where he also previously served as its CIO and head of business transformation. He replaces Narbé Alexandrian, who departs RIV Capital to pursue other opportunities.

"On behalf of the entire Board of Directors, I would like to congratulate Mark on this appointment. Mark has deep experience in successfully building out teams and infrastructure in complex businesses and has extensive M&A experience from his prior roles at Scotts Miracle-Gro. We are confident that Mark has the operational and leadership chops to lead our transformational pivot into the U.S. and drive the next chapter of growth for RIV Capital," said Asha Daniere, Chair of RIV Capital's Board of Directors. "I also want to thank Narbé for his valuable contributions to RIV Capital, which allowed the company to reach this critical turning point in its journey, and wish him ongoing success in his future endeavours."

"The pending acquisition of the Etain business is the first step in the execution of the RIV Capital strategy, shifting from an investor in the cannabis value chain to a full-fledged operator of licensed cannabis cultivation and dispensary facilities in the U.S.," Mr. Sims said. "By capitalizing on growth opportunities in New York's emerging market and building upon Etain's foundation in the medical space, we intend to accelerate our strategy and continue to deliver value for shareholders."

"I am excited for the future of RIV Capital and our mission of providing the highest-quality products for consumers. Our plan is to grow the Etain brand while creating a platform to bring successful, authentic West Coast brands to New York," Mr. Sims continued. "We are thrilled to make New York the foundational cornerstone of our platform, and believe that its outsized cultural influence, limited licence program, and pending implementation of adult-use sales make it a uniquely attractive state."

Etain, the New York cannabis market's only women-owned and -operated business, is one of the state's original five medical cannabis licence recipients and one of only 10 approved vertically integrated operators. Etain was founded by members of the Peckham family in Chestertown, N.Y., where the business is undergoing significant expansion of growing and manufacturing space. Etain has four operating dispensaries, including its Manhattan flagship store and locations in Kingston, Syracuse and Westchester.

Etain COO, Hillary Peckham said, "This agreement marks the most significant transaction for a women-owned business in cannabis history. While the Peckham family will be stepping back from control of the company, we will be actively partnered with RIV Capital on preserving the ethos of the Etain brand and utilizing our combined efforts to continually find and make new spaces for women in cannabis. RIV Capital clearly recognized the potential for women-led brands to flourish in the cannabis industry, and we are proud that our work at Etain has led us to this point in time."

To strengthen and expand the company's presence in New York, RIV Capital plans to invest additional capital and resources into four new dispensaries, and to support the construction of a new state-of-the-art flagship indoor cultivation facility, tailored to specifically address the premium New York market.