Cannabis Firms Canopy Growth, Canopy Rivers Split; Rivers Looks to US

Article by Marijuana Business Daily

NEWS BRIEF Cannabis firms Canopy Growth, Canopy Rivers split; Rivers looks to US Canopy Growth Corporation-Canopy Growth Announces Plan of Arrang Canopy Growth Corporation Logo (CNW Group/Canopy Growth Corporation)

Canopy Growth Corp.’s partly owned strategic investment subsidiary, Canopy Rivers, is selling some of its assets to the former and cutting ties with the company in a transaction worth nearly 300 million Canadian dollars ($232.2 million) that Rivers says will clear the path for new deals in the United States.

The companies are based in Ontario, Canada.

The assets being transferred to Canopy Growth include:

  • Shares and share purchase warrants of Canadian and U.S. operator TerrAscend Corp., which will increase Canopy Growth’s stake in that company from 13% to 21%. TerrAscend has offices in Toronto and New York.
  • Shares of Quebec-based Les Serres Vert Cannabis, increasing Canopy Growth’s stake from 41% to 67%.

Canopy Growth will also terminate royalty obligations owed to Canopy Rivers from Tweed NB, which was recently closed.

In exchange, Canopy Growth will give Rivers CA$115 million in cash and 3.75 million Canopy Growth common shares.

Canopy Growth is also canceling its multiple voting shares and subordinate voting shares in Rivers “on a cashless basis,” meaning Canopy Growth will no longer hold any stake in Rivers.

The entire deal is valued at approximately CA$297 million.

“On closing, the transaction will result in Rivers becoming a widely-held company and will unlock substantial value, providing Rivers with significant additional cash resources and allowing it to pursue opportunities in the global cannabis market, including the United States,” Canopy Rivers said in a news release.

“(Canopy Rivers) believes that its significant cash position and single class share structure will make it an attractive transaction partner for cannabis operators, including those in the U.S., looking for access to capital and a path to liquidity.”

Under the deal, Canopy Growth’s nominees to Rivers’ board of directors will resign, and Rivers will change its corporate name. The deal is expected to close in the first quarter of 2021.

“With our new strategy in place, it is appropriate for us to divest our interest in Canopy Rivers to increase our focus as a company,” Canopy Growth CEO David Klein said in a news release.

Read the full article here.

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