TORONTO, Oct. 2, 2019 /CNW/ - Canopy Rivers Inc.
("Canopy Rivers") (TSX: RIV, OTC: CNPOF), a venture capital
firm specializing in cannabis, has completed a US $10 million investment (the "Investment")
in TerrAscend Canada Inc. ("TerrAscend Canada"), a
subsidiary of its portfolio company TerrAscend Corp.
("TerrAscend") (CSE: TER, OTCQX: TRSSF). The investment
includes the purchase of 13,243 units, with each unit consisting
of: (i) one unsecured convertible debenture of TerrAscend Canada
with a principal amount of CA $1,000
(the "Debentures"), and (ii) 25.2 common share purchase
warrants of TerrAscend exercisable until October 2, 2024 (the "Warrants").
TerrAscend is the first and only cannabis company with sales in
Canada, the U.S., and Europe. TerrAscend's international cannabis
portfolio includes a robust research and development platform,
domestic and international cultivation, processing, and
distribution facilities, and a portfolio of medical and adult-use
branded cannabis products, and is one of a select group of industry
operators to have been recognized with a European Good
Manufacturing Practices ("EU GMP") certification. TerrAscend is
also an active participant in the Canopy Rivers ecosystem, with
significant agreements in place with Canopy Rivers portfolio
companies PharmHouse Inc. and James E. Wagner Cultivation
Corporation.
"We think TerrAscend is uniquely positioned to meet the evolving
consumer demands in the three largest cannabis markets worldwide,"
said Narbe Alexandrian, President & CEO of Canopy Rivers. "We
strongly believe in TerrAscend's ability to execute on its global
strategy, market a diversified brand portfolio, and build on its
recent acquisitions, and this additional investment is an
affirmation of that belief."
"We are privileged to have the continued confidence and support
of Canopy Rivers, one of the preeminent investment firms
specializing in cannabis," said Michael
Nashat, CEO of TerrAscend. "This growth capital enables us
to accelerate our organic and acquisition-driven investments in our
key markets across the globe, as we execute our strategic vision of
being a truly global cannabinoid company."
Canopy Rivers, along with Canopy Growth Corporation, first
invested in TerrAscend in November
2017. In October 2018, both
parties restructured their investment in TerrAscend. This
restructuring enabled TerrAscend to pursue strategic international
transactions in the cannabis space while ensuring all parties
remained compliant with industry and securities regulations.
Transaction Overview
The Debentures will bear interest at a rate of 6.0% per annum
and will mature on October 2, 2024.
Each Debenture will be convertible into common shares or
exchangeable shares in the capital of TerrAscend at the option of
Canopy Rivers or upon the occurrence of certain events at a
conversion price of CA $5.95, a 10%
premium to the 5-day VWAP ended September
30, 2019. TerrAscend fully and unconditionally guarantees
TerrAscend Canada's obligations under the Debentures, such
guarantee to be enforceable by the payment of the equivalent value
in exchangeable shares of TerrAscend or, upon the occurrence of
certain events, in common shares or in cash.
Each Warrant will entitle Canopy Rivers to acquire one common
share of TerrAscend, at an exercise price of CA $6.49, a 20% premium to the 5-day VWAP ended
September 30, 2019, and such Warrants
will be exercisable following changes in U.S. federal laws
regarding the cultivation, distribution or possession of marijuana,
the compliance of TerrAscend with such laws, and the approval of
the securities exchanges upon which Canopy Rivers is listed.
Net proceeds from the Investment will be used by TerrAscend
Canada for general corporate purposes and will not be used in
connection with cannabis or cannabis-related operations in
the United States, unless and
until such operations comply with all applicable laws of
the United States.
About Canopy Rivers
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 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 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 Canopy Rivers 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 terms of the Investment; the conversion
of the Debentures into common shares or exchangeable shares of
TerrAscend; Canopy Rivers' right to acquire common shares of
TerrAscend pursuant to the Warrants; the use of proceeds from the
Investment; management's belief that TerrAscend is
uniquely positioned to meet evolving consumer demands in the three
largest cannabis markets worldwide; management's belief in
TerrAscend's ability to execute on its global strategy, market a
diversified brand portfolio, and build on its recent acquisitions;
the expectation that the Investment will enable TerrAscend to
accelerate its investments in key markets; 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 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; the ability of Canopy
Rivers to exercise the Warrants in order to acquire common shares
of TerrAscend; changes in the use of proceeds from the Investment;
TerrAscend's ability to complete and integrate acquisitions and
other global strategies and to market a diversified brand
portfolio; changes in consumer demands and TerrAscend's ability to
meet such demands; 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; public opinion and
perception of the cannabis industry; 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.
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 Canopy Rivers has
attempted to identify important risks, uncertainties and factors
that could cause actual results to differ materially, there may be
others that cause results not to be as anticipated, estimated or
intended. Canopy Rivers does not intend, and does not assume any
obligation, to update this forward-looking information except as
otherwise required by applicable law.
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SOURCE Canopy Rivers Inc.
