TORONTO, July 16, 2019 /CNW/ - Canopy Rivers Inc. (the
"Company" or "Canopy Rivers") (TSXV: RIV) (OTC:
CNPOF) today released its financial results for the three and
twelve months ended March 31, 2019.
The Company's audited consolidated financial statements for the
twelve months ended March 31, 2019,
and its full Management's Discussion and Analysis (the
"MD&A") for the three and twelve months ended
March 31, 2019, 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/financials. All
financial information in this press release is reported in Canadian
dollars, unless otherwise indicated.
"It was a year full of milestones and significant achievements
for Canopy Rivers," said Narbe Alexandrian, President and Chief
Executive Officer of Canopy Rivers. "Anchored by our go public
transaction and listing on the TSX Venture Exchange, eight new
investments, and landmark transactions for certain portfolio
companies, we have strategically positioned ourselves as an
accelerator of growth for companies that we believe are situated to
be leaders in the cannabis industry. We are excited for the future
as we continue to discover, evaluate, and invest in ways that
expand our footprint into new channels and markets globally,
ultimately creating value for our shareholders," continued
Alexandrian. "With positive global sentiment towards cannabis on
the rise, and Canada's
legalization of edibles, extracts, and topicals coming into force
in the fall, we are optimistic about the growth potential of the
cannabis industry in the coming years."
Fourth Quarter and Fiscal Year 2019 Financial
Highlights:
Financial
Highlights
|
|
|
|
|
|
(Expressed in CDN
$000's, except per share amounts)
|
|
|
|
|
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As
at
31-Mar-19
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|
As
at
31-Mar-18
|
|
|
Cash
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$
|
104,183
|
|
$
|
46,299
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Total
assets
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419,285
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209,139
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Total
liabilities
|
|
11,099
|
|
|
16,909
|
Total shareholders'
equity
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|
408,186
|
|
|
192,230
|
|
|
|
|
|
|
|
Three months
ended
31-Mar-19
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|
Three months
ended
31-Mar-18
|
|
|
Operating
income
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$
|
6,082
|
|
$
|
19,543
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Operating
expenses
|
|
7,512
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|
|
2,384
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Net operating income
(loss)
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(1,430)
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17,159
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Net income
(loss)
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(1,826)
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14,590
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Other comprehensive
income (net of tax)
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|
22,418
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|
|
28,893
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Total comprehensive
income
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|
20,592
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|
|
43,483
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|
|
|
|
|
|
Basic earnings (loss)
per share ("EPS")
|
$
|
(0.01)
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$
|
0.12
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Diluted
EPS
|
$
|
(0.02)
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$
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0.11
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|
|
|
|
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Cash flows provided
by operating activities
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700
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|
|
206
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Cash flows used in
investing activities
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|
(33,047)
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|
|
(2,972)
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Cash flows provided
by financing activities
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|
89,601
|
|
|
24,905
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|
|
|
|
|
|
|
Twelve
months ended
31-Mar-19
|
|
340 days
ended
31-Mar-18
|
|
|
Operating
income
|
$
|
38,477
|
|
$
|
50,211
|
Operating
expenses
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|
30,450
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|
|
7,306
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Net operating
income
|
|
8,027
|
|
|
42,905
|
Net
income
|
|
3,918
|
|
|
36,361
|
Other comprehensive
income (loss) (net of tax)
|
|
(34,271)
|
|
|
38,603
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Total comprehensive
income (loss)
|
|
(30,353)
|
|
|
74,964
|
|
|
|
|
|
|
Basic EPS
|
$
|
0.03
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$
|
0.37
|
Diluted
EPS
|
$
|
0.02
|
|
$
|
0.36
|
|
|
|
|
|
|
Cash flows provided
by (used in) operating activities
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|
(2,633)
|
|
|
128
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Cash flows used in
investing activities
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|
(129,614)
|
|
|
(33,847)
|
Cash flows provided
by financing activities
|
|
190,131
|
|
|
80,018
|
"With more than $195 million in
gross proceeds raised from equity financings and more than
$115 million of capital deployed into
new and existing investments over fiscal 2019, we continue to
position ourselves as leading allocators of capital in this new and
emerging global industry," said Eddie
Lucarelli, Chief Financial Officer of Canopy Rivers. "This
past fiscal year represented a period of significant capacity
build-out and operational investment at our portfolio companies. We
are excited to see our partners complete their build-out activities
over the next few quarters, allowing their underlying businesses to
scale and accelerate their individual paths towards the generation
of meaningful EBITDA across the Company's ecosystem."
Fourth Quarter 2019 Corporate and Portfolio
Highlights:
Over the last year, the cannabis industry has continued to
evolve, as regulators around the world continue to discuss the
benefits of cannabis legalization, sparking interest from large
traditional corporate entities and institutional investors alike.
The Company expects that, as larger investors enter the sector,
cannabis companies will gain more traction, leading to higher
valuations and further increasing institutional investor appetite.
With public perception around cannabis use shifting and an
increasing addressable consumer base, cannabis consumption and
demand are exhibiting steady growth. This is creating a global
market with potential for operators across dozens of sectors that
go beyond traditional plant-touching verticals. Management has
observed that operators in the cannabis industry are turning their
attention towards the cannabis beverage market, cannabidiol
("CBD"), building brands, and using data to make more
informed business decisions.
In particular, in Canada and
the United States, fiscal 2019 saw
a move away from cultivation assets towards ancillary cannabis
businesses and brands. Ancillary businesses provide products and
services related to the broader cannabis economy. These businesses
are subject to fewer rules and regulations, and, in management's
experience, have historically been easier and less expensive to
scale. Cannabis brands are also gaining momentum. Canopy Rivers
anticipates that, as cannabis moves from being a product to an
ingredient, brands will begin to dominate the industry. Typically,
trusted brand products offer stable and reliable user experiences
that, in turn, drive customer loyalty and command higher
margins.
The cannabis industry is still in its infancy relative to how
big the market is expected to become. The combined market
capitalization of the three largest public companies in each of the
tobacco, pharma, beverage and spirits industries is approximately
US$200-600 billion. In comparison,
the three largest public companies in cannabis currently have a
combined market capitalization of US$40
billion, fueling management's belief that there continues to
be a large opportunity for growth in the cannabis sector.
Among these positive regulatory shifts and emerging trends,
Canopy Rivers and its portfolio companies reported several
significant milestones during the fourth quarter of fiscal year
2019:
- PharmHouse Inc. ("PharmHouse") secured an $80 million syndicated credit facility, led by
the Bank of Montreal and Canadian
Imperial Bank of Commerce, to fund necessary project equipment and
construction costs at a rate of interest that is expected to
average in the mid-to-high 5% per annum range over its three-year
term.
- Canopy Rivers completed a $9
million convertible debenture investment in 10831425 Canada
Ltd. d/b/a/ Greenhouse Juice Company ("Greenhouse Juice"), a
dynamic plant-based food and beverage company that intends to
expand its business model to focus on developing natural health and
wellness beverages infused with full-spectrum CBD extracts, pure
CBD isolates, and other non-psychoactive cannabinoids.
- Canapar SrL, a subsidiary of portfolio company Canapar Corp.
("Canapar"), announced the commencement of construction on a
new CBD extraction and processing facility in Sicily, Italy, that is expected to be
completed by the end of 2019. Once completed, management
anticipates that this facility will be the largest in Europe and believes that the facility will be
capable of processing 600 metric tons of hemp biomass annually into
CBD isolates and derivative products for distribution in the
European market. Also, during the quarter, Canopy Rivers announced
it had completed a $9.4 million
equity investment in Canapar. The investment represented the second
tranche of the $17.4 million
investment commitment made in December
2018 and increased Canopy Rivers' ownership position in
Canapar to 49% on a non-diluted basis.
- TerrAscend Corp. ("TerrAscend") (CSE: TER; OTCQX: TRSSF)
completed its acquisition of substantially all of the assets of
Grander Distribution, LLC (subsequently renamed "Arise Bioscience
Inc."), a leader in the development, manufacture and distribution
of innovative hemp-derived products.
- Canopy Rivers completed a $1.5
million equity investment in 10663522 Canada Inc. d/b/a
Herbert, a unique brand platform
that will focus on the adult-use cannabis beverage and edibles
market through anticipated commercial relationships with Greenhouse
Juice.
- Canopy Rivers closed a bought deal prospectus offering of
13,225,000 subordinated voting shares at a price of $4.80 per share. Concurrent with this offering,
Canopy Growth Corporation ("Canopy Growth") (TSX:WEED,
NYSE:CGC) purchased 6,250,000 subordinated voting shares on a
private placement basis, also at a price of $4.80 per share, increasing its ownership
interest in Canopy Rivers to approximately 27.1% of the issued and
outstanding shares (including all subordinated voting shares and
multiple voting shares) of Canopy Rivers on a non-diluted basis.
The aggregate gross proceeds to Canopy Rivers was approximately
$93.5 million.
- Headset, Inc. ("Headset") formed a strategic alliance
with Nielsen Holdings plc ("Nielsen") to provide U.S.
cannabis market data and analytics to consumer-packaged goods
companies monitoring the cannabis industry. Headset also entered an
additional strategic alliance with Nielsen and Deloitte LLP to
provide data-driven insights related to federally regulated
cannabis consumption and sales in Canada.
- Canopy Rivers completed a US$2
million equity investment in Leaflink Services International
ULC ("Leaflink International"), a joint venture with
LeafLink, Inc. ("LeafLink"). Leaflink International brings
LeafLink's dominant business-to-business marketplace and supply
chain technology platform to regulated cannabis markets outside of
the U.S.
- Spot Therapeutics Inc. received a cultivation licence from
Health Canada for its Fredericton-based production and distribution
facility. The receipt of the license represented a triggering event
for Canopy Rivers in the form of a 25-year cash flow stream that is
anticipated to be approximately $2.9
million per year and is expected to begin in September 2019.
- James E. Wagner Cultivation Corporation ("JWC") (TSXV:
JWCA, OTCQX: JWCAF) received a cultivation licence from Health
Canada for approximately 22,000 square feet of its second facility
in Kitchener, Ontario, which at
full scale will be a 345,000 square foot commercial production and
distribution complex. JWC also capitalized on its proprietary
technology, GrowthSTORM™, by licensing the system to Wellness Farms
Inc. for use in the cultivation of cannabis plants.
- Civilized Worldwide Inc. ("Civilized") entered into
several new partnerships with strong brand partners, including: (i)
Insight Productions, a Canadian production company; and (ii)
Cannabis Club TV (CCTV), an in-dispensary television network. These
partnerships are aimed at developing and distributing original
digital content. Civilized also acquired The 420 Games and
rebranded the event as the Civilized Games.
Subsequent Corporate and Portfolio Updates:
To date, Canopy Rivers has made investments in 18 companies, and
in doing so has established a diversified portfolio of cannabis and
cannabis-related companies. The Company strives to offer strategic
support to its portfolio partners, as well as to facilitate
synergies within the Canopy Rivers ecosystem. The following
represents a brief summary of certain additional milestones
achieved by Canopy Rivers and/or its portfolio companies subsequent
to the end of the fourth quarter and fiscal year 2019:
- Canopy Rivers appointed Narbe Alexandrian as President and
Chief Executive Officer.
- Bruce Linton stepped down as
Chairman and Director of Canopy Rivers. John Bell has since been appointed as Chairman
of the Board of Directors.
- Canopy Rivers completed a US$2.5
million investment in High Beauty, Inc., creator of
industry-leading cannabis beauty brand high. high is
formulated using cannabis sativa seed extracts, which are free of
psychoactive substances including THC and CBD, in combination with
certified organic plant oils, high-potency antioxidants and pure
plant essential oils.
- TerrAscend completed several strategic transactions, including
the completion of its acquisition of the retail dispensary network
known as "The Apothecarium". TerrAscend also received
European Union Good Manufacturing Practice (GMP) certification and
announced a sales and distribution agreement with iuvo Therapeutics
GmbH, a German pharmaceutical wholesaler with a cannabis-specific
import and distribution license for the European Union. TerrAscend
successfully completed a $69 million
non-brokered private placement and intends to use the proceeds to
fund its United States acquisition
strategy, working capital and for general corporate purposes.
TerrAscend also received an amendment to its licence from Health
Canada allowing for the sale of cannabis oils which it will do
through its medical marketplace, Solace Health.
- PharmHouse entered into a significant supply agreement with
Canopy Growth. The agreement commits an incremental 20% of
PharmHouse's flowering space in its 1.3 million square foot modern
greenhouse to Canopy Growth over a three-year period. This is in
addition to the 10% of capacity that PharmHouse previously
committed to Canopy Growth until December
31, 2020.
- Canopy Rivers completed a US$1.5
million investment in BioLumic Ltd., creator of a
sustainable ultraviolet light crop yield enhancement technology.
The investment marked Canopy Rivers' first in the agriculture
technology field.
- Agripharm Corp. received its outdoor cultivation licence from
Health Canada and began growing its first outdoor crop at its
Creemore, Ontario, location using
award winning Green House Seed Co. genetics.
- JWC announced that both of its facilities are at full
production capacity. JWC also received a licence amendment from
Health Canada allowing for the sale of formulated cannabis oil from
JWC's pilot facility.
- Les Serres Vert Cannabis Inc. ("Vert Mirabel"), a portfolio company of Canopy
Rivers and a subsidiary of Canopy Growth, received its final
cultivation licence from Health Canada. All 700,000 square feet of
operating space at Vert Mirabel's greenhouse is now licensed for
cannabis production.
- Canopy Rivers completed a US$10
million equity investment in ZeaKal, Inc., a California-based plant science innovator with
a novel plant genetics technology called PhotoSeed™ that
increases photosynthesis, improves plant yield, and enhances
nutritional profiles for a variety of agricultural crops.
- Civilized and ZoomerMedia Limited ("Zoomer") entered
into a collaboration agreement to create educational and
entertainment cannabis content for distribution through Zoomer's
media properties on all platforms, including TV, radio, print,
digital, and events. Civilized also hosted its second World
Cannabis Congress, a two-day conference designed to initiate
conversations around policy, corporate social responsibility,
research, and emerging trends in the cannabis industry.
- Solo Growth Corp. changed its name to YSS Corp. ("YSS")
(TSXV: YSS). YSS acquired a call right and established a licensing
agreement with Sweet Tree Modern Apothecary Ltd ("Sweet
Tree"). With the addition of Sweet Tree, YSS now has four
licensed-operating retail locations in Alberta. YSS has six more Alberta Gaming,
Liquor and Cannabis Commission ("AGLC") licensed stores in
Alberta, all of which are expected
to be open by end of August 2019, two
additional retail locations in Alberta that have passed AGLC inspection and a
strategic portfolio of under construction, leased and prospective
locations.
For more information regarding the Company and its portfolio,
please refer to the MD&A and the Company's Annual Information
Form, which have been filed with the Canadian securities regulators
and are available under the Company's profile on SEDAR at
www.sedar.com.
About Canopy Rivers Inc.
Canopy Rivers is a unique investment and operating platform
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 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 the Company 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 including: the global sentiment
towards, and public perception of, cannabis; the focus of operators
in the cannabis industry; the Company's strategic positioning and
the impact of its investment strategy; the future activities and
development of the Company's portfolio companies; cannabis
regulatory reform; the growth of the global cannabis industry and
its potential for operators; trends and developments in the
cannabis industry; the use of proceeds by PharmHouse under its
credit facility and the average rate of interest thereon;
the expansion of Greenhouse Juice's business model; the focus of
Herbert on the adult-use cannabis
beverage and edibles market; the timing for completion
of Canapar SrL's extraction and processing facility as well as its
size and capacity once complete; the timing and amount of the
cash flow stream that the Company will receive from Spot; the
intended use by TerrAscend of the proceeds from its non-brokered
private placement; the Company's relationship with its portfolio
partners; the benefits of ZeaKal, Inc.'s PhotoSeed™
technology; and 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 the Company 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 the Company. 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; competition; changes in
cannabis industry growth and trends; changes in the Company's
strategic positioning and investment strategy; changes in the
business of the Company's portfolio companies; changes in general
economic, business and political conditions, including changes in
the financial markets; potential conflicts of interest; the
regulatory landscape and enforcement related to cannabis, including
political risks and risks relating to regulatory change; changes in
the Company's relationship with Canopy Growth and its portfolio
companies; changes in applicable laws; compliance with extensive
government regulation; changes in the global sentiment towards, and
public opinion of, the cannabis industry; and the risk factors set
out in the Company's annual information form dated July 15, 2019, filed with Canadian securities
regulators and available on the Company's 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 the Company 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. The
Company 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.
www.canopyrivers.com
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SOURCE Canopy Rivers Inc.