The 3-year contract commits 20% of
PharmHouse's cannabis production to Canopy Growth
TORONTO, May 9, 2019 /PRNewswire/ - Canopy Rivers
Inc. ("Canopy Rivers" or the "Company") (TSXV: RIV)
(OTC: CNPOF) is pleased to announce that its portfolio company
PharmHouse Inc. ("PharmHouse") has entered into a second
offtake agreement (the "Agreement") with Canopy Growth
Corporation ("Canopy Growth") (TSX: WEED) (NYSE: CGC) for
the purchase of cannabis from its 1.3 million square foot
greenhouse facility upon licensing. The Agreement commits an
additional 20% of PharmHouse's flowering space to Canopy Growth for
the next three years, in addition to the 10% that was originally
committed in May 2018. The Agreement
provides for the delivery to Canopy Growth of a minimum of 25,000
kg of cannabis per year and a maximum of 45,000 kg of cannabis per
year.
"PharmHouse continues to show tremendous progress at the
facility, and the joint venture is quickly developing as a key
pillar for value creation and synergy within the Canopy Rivers
portfolio ecosystem," said Olivier Dufourmantelle, Chief Operating
Officer of Canopy Rivers. "Thanks to the collaborative
contributions of our joint venture partners, the ongoing support
and guidance of Canopy Rivers, and the strategic insight of Canopy
Growth throughout the licensing process, we are excited to announce
an incremental supply partnership that mutually benefits all three
parties."
This new supply arrangement provides PharmHouse with additional
revenue visibility and financial de-risking for a significant
portion of the expected production from the flagship facility.
Canopy Rivers holds a 49% equity interest in the PharmHouse joint
venture and has played an active role in sourcing and negotiating
production and supply agreements, which now cover approximately 50%
of expected annual output. The incremental 50% of output remains
unencumbered for the development of PharmHouse's own suite of
brands and products.
"This offtake agreement represents a significant step forward
for PharmHouse. By effectively committing and selling 50% of our
near-term cannabis production, we favorably position PharmHouse for
the development of a proprietary suite of products and brands
and/or the pursuit of incremental contract manufacturing
agreements," said Tony Abbas,
General Manager of PharmHouse. "The fact that we are executing yet
another agreement with an industry titan like Canopy Growth sends a
strong signal about the quality of our operations and the
confidence in our team's ability to deliver."
The 1.3 million square foot facility in Leamington represents the first stage of a
planned global strategic relationship between Canopy Rivers and its
PharmHouse joint venture partner, a company formed by the leading
principals and operators of a North American agriculture
conglomerate. The parties seek to leverage their relationship
networks and respective strengths in cannabis, global commercial
agriculture, marketing, and distribution to pursue regulated
cannabis opportunities together on a global scale.
About PharmHouse:
Formed by Canopy Rivers and a company formed by the leading
principals and operators of a North American agriculture
conglomerate, the PharmHouse joint venture operates out of an
ultramodern 1.3 million greenhouse facility in Leamington, Ontario, constructed in 2017 using
the latest in commercial agriculture technology and featuring
state-of-the-art automation systems. Canopy Rivers, along with its
PharmHouse joint venture partners, are actively upgrading and
supplementing the facility in preparation for licensing. In
January 2019, PharmHouse entered into
a syndicated credit facility providing up to C$80 million of secured debt financing.
PharmHouse has secured multiple offtake agreements for an aggregate
50% of the production capacity upon licensing.
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 works collaboratively with
Canopy Growth Corporation (TSX: WEED, NYSE: CGC) to identify
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 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: PharmHouse's future revenue, production and
output including its own suite of brands and products; the receipt
of a cultivation license by PharmHouse; PharmHouse's continued
progress and ability to create value and synergy in the Canopy
Rivers ecosystem; the benefits of the Agreement for the parties
thereto; the signal sent by the Agreement and the impact of the
Agreement on PharmHouse's financial risk; the favourable
positioning of PharmHouse for the development of a proprietary
suite of products and brands and/or the pursuit of incremental
contract manufacturing agreements; the relationship between Canopy
Rivers and PharmHouse and their plan to pursue opportunities on a
global scale; and other expectations for 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 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; PharmHouse's actual
financial performance, product and brand development, production
and capacity; the ability of PharmHouse to obtain a
cultivation license under applicable legislation in Canada; the ability of PharmHouse and
Canopy Rivers to collaborate and for PharmHouse to contribute to
the Canopy Rivers ecosystem; competition for global, regulated
cannabis opportunities; 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' final short form prospectus dated February 21, 2019, filed with 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
which 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.
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.
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SOURCE Canopy Rivers Inc.