Aggregate charges of $112.3 million recognized on PharmHouse
investments
Appreciation of 101% in TerrAscend share price
– current implied TerrAscend investment value of $214.5 million1
Continued growth and expansion within
portfolio
TORONTO, Nov. 9, 2020 /PRNewswire/ - Canopy Rivers
Inc. ("Canopy Rivers" or the "Company") (TSX: RIV)
(OTC: CNPOF) today released its unaudited condensed interim
consolidated financial statements and management's discussion and
analysis ("MD&A") for the three and six months ended
September 30, 2020 ("Q2
2021").
"Our quarter was framed with a sharp focus on PharmHouse. We
provided debtor-in-possession financing to enable PharmHouse to
remain operational as it commenced its CCAA process and our team
has been working towards securing the best possible outcome for our
shareholders," said Narbe Alexandrian, President and CEO, Canopy
Rivers. "While supporting PharmHouse has been our priority, we are
confident we will put this challenging situation behind us and
remain encouraged by the progress across our portfolio. This
quarter, we participated in Headset's bridge round as it continues
to bring its industry-leading analytical tools to new markets, High
Beauty launched a new product line, and BioLumic's most recent
cannabis field trials showed promising gains in dried flower mass
and cannabinoid content."
"Most notably, the value of TerrAscend's common shares increased
by 101% during the quarter, and the implied value of our investment
in TerrAscend is now approximately $214
million," added Alexandrian. "After a U.S. election that
potentially spells good outcomes for the cannabis sector, including
the legalization of adult-use cannabis in New Jersey, we are pleased to have our U.S.
exposure through our holdings of exchangeable shares in one of the
nation's leading multistate operators. We believe that we will be
well positioned to capitalize on opportunities in the U.S. once we
are permitted to do so."
Q2 2021 Financial Results2
|
|
|
|
|
|
|
|
|
Select Summary of
Quarterly Results
|
|
Three months
ended
|
|
Three months
ended
|
|
Six months
ended
|
|
Six months
ended
|
|
|
30-Sep-20
|
|
30-Sep-19
|
|
30-Sep-20
|
|
30-Sep-19
|
Operating income
(loss) (before equity method investees and fair value
changes)
|
$
|
(5,795)
|
$
|
2,171
|
$
|
(3,133)
|
$
|
4,312
|
Operating
expenses
|
|
1,555
|
|
6,192
|
|
4,224
|
|
11,959
|
Net operating loss
(before equity method investees and fair value changes)
|
|
(7,350)
|
|
(4,021)
|
|
(7,357)
|
|
(7,647)
|
Equity method
investees and fair value changes
|
|
(36,211)
|
|
(1,241)
|
|
(38,566)
|
|
(697)
|
Other
PharmHouse-related charges(1)
|
|
(70,756)
|
|
-
|
|
(70,756)
|
|
-
|
Net operating
loss
|
|
(114,317)
|
|
(5,262)
|
|
(116,679)
|
|
(8,344)
|
Net loss
|
|
(110,381)
|
|
(4,406)
|
|
(113,807)
|
|
(7,372)
|
Other comprehensive
income (loss) (net of tax)
|
|
23,417
|
|
(28,252)
|
|
34,118
|
|
(34,036)
|
Total comprehensive
loss
|
|
(86,964)
|
|
(32,658)
|
|
(79,689)
|
|
(41,408)
|
|
|
|
|
|
|
|
|
|
Basic loss per share
("EPS")
|
$
|
(0.58)
|
$
|
(0.02)
|
$
|
(0.60)
|
$
|
(0.04)
|
Diluted
EPS
|
$
|
(0.58)
|
$
|
(0.02)
|
$
|
(0.60)
|
$
|
(0.04)
|
|
|
|
|
|
|
|
|
|
Cash flows used in
operating activities
|
|
(1,055)
|
|
(669)
|
|
(1,862)
|
|
(3,457)
|
Cash flows used in
investing activities
|
|
(4,927)
|
|
(5,327)
|
|
(6,854)
|
|
(18,029)
|
Cash flows provided
by (used in) financing activities
|
|
(2)
|
|
25
|
|
(80)
|
|
82
|
(1) Excludes the
Company's share of loss from its investment in PharmHouse common
shares, which is captured in "Equity method investees and fair
value changes"
|
"Naturally, we are extremely disappointed by the recent
developments at PharmHouse and their impact on our financial
results for this quarter, which reflect significant charges across
various financial instruments we hold," said Eddie Lucarelli, CFO, Canopy Rivers. "While the
Company's underlying net asset value continues to be supported by
the sustained appreciation of our investment in TerrAscend, we
remain critically focused on resolving PharmHouse's current
situation and maximizing value preservation for our
shareholders."
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Six months
ended
|
|
Six months
nded
|
|
|
30-Sep-20
|
|
30-Sep-19
|
|
30-Sep-20
|
|
30-Sep-19
|
Royalty, interest,
and lease income (before provisions)
|
$
|
4,066
|
$
|
2,171
|
$
|
6,733
|
$
|
4,312
|
Provision for credit
losses on interest and royalty receivables
|
|
|
|
|
|
|
|
|
PharmHouse
|
|
(8,939)
|
|
-
|
|
(8,939)
|
|
-
|
Other
|
|
(922)
|
|
-
|
|
(927)
|
|
-
|
Operating income
(loss)
(before equity method investees and fair value
changes)
|
$
|
(5,795)
|
$
|
2,171
|
$
|
(3,133)
|
$
|
4,312
|
|
|
|
|
|
|
|
|
|
Consulting and
professional fees
|
$
|
350
|
$
|
1,183
|
$
|
726
|
$
|
1,675
|
General and
administrative expenses
|
|
1,287
|
|
1,998
|
|
2,629
|
|
3,545
|
Share-based
compensation
|
|
(555)
|
|
2,968
|
|
354
|
|
6,654
|
Depreciation and
amortization expense
|
|
45
|
|
43
|
|
87
|
|
85
|
Restructuring
costs
|
|
428
|
|
-
|
|
428
|
|
-
|
Operating
expenses
|
$
|
1,555
|
$
|
6,192
|
$
|
4,224
|
$
|
11,959
|
|
|
|
|
|
|
|
|
|
Net operating
loss
(before equity method investees and fair value
changes)
|
$
|
(7,350)
|
$
|
(4,021)
|
$
|
(7,357)
|
$
|
(7,647)
|
|
|
|
|
|
|
|
|
|
Canopy Rivers reported a net operating loss of $7.4 million (before equity method investees and
fair value changes) for the quarter.
Royalty, interest, and lease income (before provisions for
credit losses) was $4.1 million for
the quarter. This includes income from the Company's various
royalty, convertible debenture, and loan agreements, among other
items. Offsetting this income was a provision for credit losses of
$9.9 million for the quarter, which
primarily related to interest accrued on the Company's $40.0 million shareholder loan to PharmHouse Inc.
("PharmHouse") of $8.9
million.
Operating expenses were $1.6
million for the quarter, compared with $6.2 million for the same period last year.
Share-based compensation was negative for the quarter as the
Company recorded a significant recapture of previously-recognized
share-based compensation expense as a result of stock option
forfeitures. Operating expenses included $1.3 million of general and administrative
expenses relating to employee and director compensation, marketing
and business development, and other public company costs, as well
as $0.4 million of professional fees
relating to legal, audit, tax, accounting, and other regulatory
advisory fees. Also included in operating expenses were
$0.4 million in advisory fees
relating to the Claim and Restructuring (each as defined and
discussed in further detail below).
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Six months
ended
|
|
Six months
ended
|
|
|
30-Sep-20
|
|
30-Sep-19
|
|
30-Sep-20
|
|
30-Sep-19
|
Share of loss from
equity method investees
|
|
|
|
|
|
|
|
|
PharmHouse
|
$
|
(32,607)
|
$
|
(453)
|
$
|
(37,025)
|
$
|
(695)
|
Other
|
|
(550)
|
|
(229)
|
|
(117)
|
|
(955)
|
Net change in fair
value of financial assets at FVTPL
|
|
(3,054)
|
|
(559)
|
|
(1,424)
|
|
953
|
Other
PharmHouse-related charges
|
|
|
|
|
|
|
|
|
Provision for credit
losses on loans receivable
|
|
(45,756)
|
|
-
|
|
(45,756)
|
|
-
|
Provision for credit
losses on financial guarantee liability
|
|
(25,000)
|
|
-
|
|
(25,000)
|
|
-
|
Equity method
investees and fair value changes
|
$
|
(106,967)
|
$
|
(1,241)
|
$
|
(109,322)
|
$
|
(697)
|
The Company's share of loss from equity method investees
(excluding PharmHouse) was $0.6
million for the quarter. The Company's equity method
investees include Canapar Corp. ("Canapar"), 10663522 Canada
Inc. d/b/a/ Herbert ("Herbert"), High Beauty, Inc. ("High
Beauty"), LeafLink Services International ULC
("LeafLink"), and Radicle Medical Marijuana Inc.
("Radicle").
The Company also reported a net decrease in the fair value of
financial assets that are reported at fair value through profit or
loss ("FVTPL") of $3.1 million
for the quarter. The net decrease was primarily driven by negative
changes in the estimated fair values of the Company's royalty
investment in Agripharm Corp. ("Agripharm") and convertible
debenture investments in 10831425 Canada Ltd. d/b/a/ Greenhouse
Juice Company ("Greenhouse Juice"), and was partially offset
by positive changes in the estimated fair values of the Company's
royalty investment in The Tweed Tree Lot Inc. ("Tweed Tree
Lot"), and term loan investment to TerrAscend Canada Inc.
("TerrAscend Canada"), along with the associated warrants
issued by TerrAscend Corp. ("TerrAscend").
In light of recent developments at PharmHouse, described in
further detail below, the Company performed a recoverability
assessment as at September 30, 2020,
to estimate the differences between the recoverable amounts of its
investments in various PharmHouse-related financial assets and
their respective carrying values. The Company estimated the
recoverable amount of PharmHouse en bloc to determine the quantum
of charges to be recognized in respect of its various financial
assets. Due to the lack of profitable operating history of
PharmHouse as a cannabis entity, the Company estimated the net
proceeds to be received pursuant to an orderly liquidation of
PharmHouse's assets and then compared this amount to the carrying
values of various PharmHouse-related financial instruments held by
the Company, in sequence based on the priority of claims on
PharmHouse's assets held by various stakeholders (the
"PharmHouse Recoverability Assessment").
Based on the PharmHouse Recoverability Assessment, the Company
estimated that the recoverable amount of PharmHouse's assets en
bloc may be less than the principal amount drawn on PharmHouse's
$90.0 million non-revolving
syndicated credit facility (the "PharmHouse Credit
Facility"), which the Company has guaranteed (the
"PharmHouse Guarantee"). Accordingly, the Company recognized
the following charges during the quarter:
- Share of loss from investment in PharmHouse common shares (due
to impairment adjustments) of $32.6
million;
- Provision for credit losses on the Company's loans receivable
with PharmHouse of $45.8 million;
and
- Provision for credit losses on the PharmHouse Guarantee
liability of $25.0 million.
The Company's financial liability in respect of the PharmHouse
Guarantee was estimated to be $25.0
million as at September 30,
2020, on the basis of a number of assumptions and estimates
regarding the recoverable amount of PharmHouse's assets under an
orderly liquidation scenario where the greenhouse facility is no
longer used for cannabis operations. A further deterioration in
PharmHouse's credit worthiness, an inability to generate sufficient
future cash flows, or a significant decrease in the value of the
PharmHouse assets will expose the Company to the risk of additional
losses. There is a risk that the actual net proceeds that
PharmHouse would realize upon an orderly liquidation of its assets
is less than that estimated, which could materially increase the
Company's financial liability in respect of the PharmHouse
Guarantee.
After consideration of operating income, operating expenses,
equity method investees, FVTPL fair value changes, and PharmHouse
charges, among other items, Canopy Rivers reported a net loss of
$110.4 million for the quarter.
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Six months
ended
|
|
Six months
ended
|
|
|
30-Sep-20
|
|
30-Sep-19
|
|
30-Sep-20
|
|
30-Sep-19
|
TerrAscend
|
$
|
30,500
|
$
|
(20,000)
|
$
|
33,500
|
$
|
(30,000)
|
Vert
Mirabel
|
|
(3,400)
|
|
(8,237)
|
|
6,100
|
|
1,144
|
YSS
|
|
(218)
|
|
(435)
|
|
(218)
|
|
(1,197)
|
Headset
|
|
(100)
|
|
47
|
|
(300)
|
|
(36)
|
Zeakal
|
|
(300)
|
|
154
|
|
(900)
|
|
(246)
|
BioLumic
|
|
61
|
|
-
|
|
61
|
|
-
|
Dynaleo
|
|
835
|
|
-
|
|
835
|
|
-
|
Other
|
|
-
|
|
(4,129)
|
|
(976)
|
|
(8,843)
|
Gross change in
fair value of financial assets at FVTOCI
|
$
|
27,378
|
$
|
(32,600)
|
$
|
38,102
|
$
|
(39,178)
|
OCI income tax
expense (recovery)
|
|
3,962
|
|
(4,313)
|
|
3,962
|
|
(5,916)
|
Net change in fair
value of financial assets at FVTOCI(1)
|
$
|
23,416
|
$
|
(28,287)
|
$
|
34,140
|
$
|
(33,262)
|
(1) In
addition to the fair value change noted above, net change in fair
value of financial assets at FVTOCI also includes FX gains/losses
related to equity method investees denominated in USD
currency
|
Other comprehensive income was $23.4
million, net of tax, for the quarter, which includes a net
increase in the fair value of financial assets that are reported at
fair value through other comprehensive income ("FVTOCI") of
$27.4 million. The net increase was
primarily attributable to the positive change in the fair value of
the Company's exchangeable share investment in TerrAscend.
Total comprehensive loss for the quarter was $87.0 million.
|
|
|
|
|
|
|
As
at
|
|
As
at
|
Period
ended
|
|
30-Sep-20
|
|
31-Mar-20
|
Cash
|
$
|
37,928
|
$
|
46,724
|
Loans
receivable
|
|
-
|
|
42,450
|
Equity method
investees
|
|
13,379
|
|
50,543
|
Financial assets at
FVTPL
|
|
78,290
|
|
80,170
|
Financial assets at
FVTOCI
|
|
106,905
|
|
64,599
|
Other
assets
|
|
9,165
|
|
15,899
|
Total
assets
|
$
|
245,667
|
$
|
300,385
|
|
|
|
|
|
Financial guarantee
liability
|
$
|
25,000
|
$
|
-
|
Other
liabilities
|
|
1,726
|
|
2,107
|
Total shareholders'
equity
|
|
218,941
|
|
298,278
|
Total liabilities
and shareholders' equity
|
$
|
245,667
|
$
|
300,385
|
PharmHouse Update
On August 14, 2020, the Company
announced that it had formed a special committee comprised of the
Company's independent directors (the "Special Committee") to
oversee the Company's investment in PharmHouse, including the
offtake agreements with Canopy Growth Corporation ("Canopy
Growth") and TerrAscend Canada, and the PharmHouse Guarantee,
as well as to consider potential alternatives for the Company
regarding its investment in PharmHouse.
While the Special Committee's review of the Company's investment
in PharmHouse continues, there were several notable developments
during and subsequent to the quarter:
- On September 14, 2020, the
Company received a statement of claim (the "Claim") filed by
the PharmHouse majority shareholder concerning certain disputes
relating to PharmHouse. The Claim makes a number of allegations
against the Company, Canopy Growth, TerrAscend, and TerrAscend
Canada, including claims relating to bad faith, fraud, civil
conspiracy, breach of the duty of honesty and good faith in
contractual relations, and breach of fiduciary duty, and claims
relating to PharmHouse's offtake agreements with Canopy Growth and
TerrAscend Canada. The Company considers the Claim as it relates to
its own actions to be completely without merit and intends to
vigorously defend its position. The Company has not recognized any
provision relating to the Claim. Pursuant to an endorsement from
the Ontario Superior Court of Justice (the "Court") dated
October 30, 2020, the PharmHouse
majority shareholder is to discontinue the Claim and has agreed not
to issue a new claim in respect of this matter prior to
January 1, 2021.
- On September 15, 2020, PharmHouse
obtained an order (the "Initial Order") from the Court
granting PharmHouse creditor protection under the Companies'
Creditors Arrangement Act ("CCAA") (the "CCAA
Proceedings"). Ernst & Young Inc. was appointed by the
Court to act as the Monitor of PharmHouse in the CCAA Proceedings
while PharmHouse explores a restructuring of its business and
operations (the "Restructuring").
- Pursuant to the Initial Order, Canopy Rivers entered an
agreement to provide a debtor-in-possession interim, non-revolving
credit facility up to a maximum principal amount of $7.2 million (the "DIP Financing"). The
DIP Financing matures on December 29,
2020. Based on current circumstances, the Company
anticipates that PharmHouse will require additional capital beyond
that available pursuant to the DIP Financing prior to the
conclusion of the CCAA Proceedings.
- On October 29, 2020, PharmHouse
received approval from the Court to initiate a Sale and Investment
Solicitation Process ("SISP") to identify interest in, and
opportunities for, a sale of, or investment in, all or part of
PharmHouse's assets or business. This may include a restructuring,
recapitalization, or other form of reorganization of PharmHouse's
business and affairs. The phase one deadline for offers under the
SISP will be on or about November 30,
2020.
- The Company is working collaboratively with the syndicate of
lenders under the PharmHouse Credit Facility during the CCAA
Proceedings. No repayments of principal have occurred and the
current outstanding balance remains $90.0
million, with interest payable monthly.
-
- Note: The Company's press release dated April 16, 2020, incorrectly stated that the
commencement date of principal repayments under the PharmHouse
Credit Facility was extended to March 31,
2021. The Conversion Date (as defined in the PharmHouse
Credit Agreement) was extended to March 31,
2021, and the principal repayment commencement date was
extended to September 30, 2020.
The Company will continue to provide updates on the
Restructuring and other aspects of the CCAA Proceedings as
required.
Q2 2021 Corporate and Portfolio Updates
The following represents a summary of key developments at Canopy
Rivers and its other portfolio companies during Q2 2021:
Canopy Rivers
- Asha Daniere was named Chair of
the Board of Directors (the "Board").
- Canopy Rivers also welcomed Garth
Hankinson, CFO of Constellation Brands, to the
Board.
- Canopy Rivers participated in Headset Inc.'s ("Headset")
bridge financing, helping the company to continue to expand to new
markets in the U.S. and Canada.
Headset's bridge round closed at US$3.2
million.
- Olivier Dufourmantelle, Canopy Rivers' Chief Operating Officer,
will be leaving the Company to pursue new opportunities, effective
November 13, 2020. The Company thanks
him for his contributions and wishes him the best in his future
endeavours. The Company does not expect to hire a replacement for
Mr. Dufourmantelle at this time.
Portfolio
- TerrAscend again had several notable announcements during the
quarter. Its success, alongside increased market optimism around
cannabis in the U.S., helped TerrAscend's share value increase from
$2.87 on June
30, 2020 to $9.75 as of the
close of markets on November 6, 2020.
During the quarter, the company opened an Apothecarium location in
Berkeley, California. TerrAscend
also received approval to cultivate cannabis at its New Jersey facility and open its first
Apothecarium dispensary in the state. Finally, in August,
TerrAscend announced strong second quarter results, reporting net
sales of $47.2 million. The Company
owns 19,445,285 exchangeable shares of TerrAscend that are
convertible into common shares upon the occurrence of certain
events. The Company also owns an additional 2,559,437 common share
purchase warrants of TerrAscend, exercisable upon the occurrence of
similar events as the conversion of the exchangeable shares.
Assuming the conversion and exercise of both instruments, this
would imply a value of $214.5 million
for the Company's investment in TerrAscend as of the close of
markets on November 6,
2020.[3]
- High Beauty introduced canBE, a new line of natural, aloe-based
products combining hemp seed oil, organic plant oils, essential
vitamins, antioxidants, and bioflavonoids. canBE is now available
on Walmart.com and in 1,760 CVS locations across the U.S. High
Beauty has also signed a contract to sell canBE in Kohls in early
2021. High Beauty's products are now available in 33 retailers,
totalling over 2,800 stores, in Canada, the U.S., and Europe.
- BioLumic Ltd.'s ("BioLumic") proprietary UV light
treatment for cannabis achieved 59% dry flower mass gains in its
most recent trials. The tests have demonstrated cannabinoid
increases of 25% or higher in each of THCA, CBGA, CBG, CBD, and
CBC. BioLumic was also named a finalist for the 2020 KiwiNet
Research Commercialisation Awards, recognizing impact from science
through successful research commercialization.
- Agripharm obtained an amendment to its licence from Health
Canada enabling it to sell certain U.S.-based SLANG-branded
products in Canada. Furthermore,
Agripharm secured a supply agreement to provide the Ontario
Cannabis Store with dried flower (and edibles at a later date) from
Green House Seed Co., for which Agripharm holds an exclusive
licence in Canada.
- Headset launched Headset Insights in Oregon and Massachusetts. It also launched the free
version of this tool, Headset Insights Pulse, in Michigan, expanding its coverage of the North
American market.
- Dynaleo Inc. ("Dynaleo") entered into a supply agreement
with High12 Brands to manufacture and package gummies for the
Canadian adult-use market. Dynaleo and High12 Brands expect that
these products will be available to consumers by the end of this
calendar year.
- YSS Corp. ("YSS") announced its second quarter results,
reporting a 12% revenue increase quarter-over-quarter. Subsequent
to the Company's quarter end, YSS opened its 18th store, YSS
Hamptons, in Edmonton.
Construction is underway on the company's next two stores,
including its first Ontario-based
store in Waterloo.
This press release should be read in conjunction with the
Company's unaudited condensed interim consolidated financial
statements and MD&A for the three and six months ended
September 30, 2020, which are
available under the Company's profile on SEDAR at www.sedar.com and
on the Company's website at www.canopyrivers.com/investors. All
financial information in this press release is reported in Canadian
dollars, unless otherwise indicated.
For more information regarding the Company and its portfolio
companies, please refer to the MD&A and the Company's annual
information form dated June 2, 2020 ("AIF"), also
available under the Company's profile on SEDAR at www.sedar.com and
on the Company's website at www.canopyrivers.com/investors.
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[1]
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Based on the closing
price of the TerrAscend common shares on the Canadian Securities
Exchange as of November 6, 2020 and assuming the conversion of all
exchangeable shares and common share purchase warrants in the
capital of TerrAscend held by Canopy Rivers. These instruments are
not currently convertible or exercisable, and will not be
convertible or exercisable until the earlier of: (i) federal
legalization of permissibility in the United States regarding the
general cultivation, distribution and possession of marijuana in
the United States, and (ii) the stock exchange(s) on which
securities of Canopy Rivers or its affiliates are listed, if any,
permit listed issuers to invest in entities that are engaged in the
cultivation, distribution or possession of marijuana in states
within the United States where it is legal to do so.
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[2]
|
The financial
highlights in this summary are presented in CA$
thousands.
|
[3]
|
Based on the closing
price of the TerrAscend common shares on the Canadian Securities
Exchange as of November 6, 2020 and assuming (i) the conversion of
all exchangeable shares in the capital of TerrAscend held by Canopy
Rivers. These exchangeable shares are not currently convertible and
will not be convertible until the earlier of: (A) the date that
federal laws regarding the cultivation, distribution and possession
of marijuana in the United States are changed, such that TerrAscend
is fully compliant with federal regulation in the United States;
and (B) the stock exchange(s) on which securities of Canopy Rivers
or its affiliates are listed have amended its policies to permit
listed issuers to invest in entities that are engaged in the
cultivation, distribution or possession of marijuana in the states
in the United States where it is legal to do so; and (ii) the
exercise of all common share purchase warrants in the capital of
TerrAscend held by Canopy Rivers. These warrants are not currently
exercisable and will not be exercisable until similar events
occur.
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About Canopy Rivers Inc.
Canopy Rivers is a venture capital firm specializing in
cannabis with a portfolio of 18 companies across various segments
of the cannabis value chain. We believe that bringing together
people, capital, and ideas raises the potential of the entire
cannabis industry. By leveraging our industry insights, in-house
expertise, and thesis-driven approach to investing, we aim to
provide shareholders with exposure to specialized and disruptive
cannabis companies. Our mission is to invest in innovators across
the cannabis value chain, help them grow, and ultimately create
value by guiding these companies towards a monetization event.
Together with our portfolio, we are helping build the cannabis
industry of tomorrow, today.
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. To
the extent any forward-looking information in this news release
constitutes "financial outlooks" within the meaning of applicable
Canadian securities laws, the reader is cautioned that this
information may not be appropriate for any other purpose and the
reader should not place undue reliance on such financial outlooks.
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 potential outcomes for the cannabis
sector as a result of the U.S. election; the results from
BioLumic's cannabis field trials; expectations regarding the
Company's ability to capitalize on the opportunity in the United States once it is federally
permissible to do so; the estimated recoverable amount of
PharmHouse's assets en bloc; the expected amount of the Company's
liability in respect of the PharmHouse Guarantee; expectations with
respect to the SISP; the expectation that PharmHouse will require
additional capital beyond that available pursuant to the DIP
Financing prior to the conclusion of the CCAA Proceedings; the
expectation that the Company will not hire a replacement for Mr.
Dufourmantelle; the expectation that High Beauty's canBE products
will be sold in Kohls in early 2021; the sale of Agripharm edibles
from Green House Seed Co. to the Ontario Cannabis Store in the
future; the supply of Dynaleo and High12 Brands' products to the
Canadian adult-use market by the end of the calendar year; the
Company's expected focus and priorities for the coming quarters;
the Company's belief that it is well-positioned for U.S. market
development through its investment in TerrAscend as well as its
expectations regarding the conversion and implied value of its
TerrAscend exchangeable shares; 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 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. Financial
outlooks, as with forward-looking information generally, are,
without limitation, based on the assumptions and subject to various
risks as set out herein. Our actual financial position and results
of operations may differ materially from management's current
expectations. Among the key factors that could cause actual results
to differ materially from those projected in the forward-looking
information are the following: risks associated with the
termination, renegotiation and enforcement of material contracts;
credit, liquidity and additional financing risks for the Company
and its investees; litigation risks; stock market volatility;
regulatory and licensing risks; cannabis pricing risks; changes in
cannabis industry growth and trends; changes in the business
activities, focus and plans of the Company and its investees and
the timing associated therewith; the Company's actual financial
results and ability to manage its cash resources; changes in
general economic, business and political conditions, including
challenging global financial conditions and the impact of the novel
coronavirus pandemic; competition risks; 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 investees; changes in applicable laws;
compliance with extensive government regulation, including the
Company's interpretation of such regulation; changes in the global
sentiment towards, and public opinion of, the cannabis industry;
reliance on material contracts; risk of default by investees;
divestiture risks; and the risk factors set out in the Company's
AIF, filed with the 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 that 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.
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SOURCE Canopy Rivers Inc.