Canopy Rivers Portfolio Company TerrAscend Gains Traction in New Jersey Medical Cannabis Market
NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES
TORONTO, Dec. 18, 2018 (GLOBE NEWSWIRE) — Canopy Rivers Inc. (“Canopy Rivers” or the “Company”) (TSXV: RIV) today provided an update that an entity controlled by its portfolio company TerrAscend Corp. (“TerrAscend”) (CSE: TER; OTCQX: TRSSF), NETA NJ LLC (“NETA”), has been selected by the State of New Jersey Department of Health to apply for final approval to operate a vertically integrated Alternative Treatment Center (ATC), which would permit it to cultivate, process and sell medical cannabis in the state.
The State of New Jersey received a total of 146 applications to cultivate, process and sell medical cannabis. NETA was the highest scoring applicant in the most densely populated region in the state, and one of only six successful applicants statewide. Each application was scored by a six-member selection committee selected to provide expertise across a wide range of areas, including plant sciences, diversity and inclusion, and all regulatory aspects of the medicinal marijuana program. These successful applicants were chosen as part of the state’s plan to expand the medicinal marijuana program to include an increased number of eligible conditions for the growing patient population, which now has almost 40,000 participating patients.
In October, Canopy Rivers agreed to a restructuring of its investment in TerrAscend in order to accommodate TerrAscend’s strategic pursuits, while also maintaining strict compliance with industry regulations and the policies of the various securities exchanges which it is subject to. Pursuant to the restructuring, Canopy Rivers Corporation exchanged its common shares for exchangeable shares in the capital of TerrAscend that will only become convertible into common shares following changes in U.S. federal laws regarding the cultivation, distribution or possession of cannabis, the compliance of TerrAscend with such laws and the approval of the various securities exchanges that Canopy Rivers is subject to. The exchangeable shares are not listed on a recognized stock exchange and, until converted into common shares, the holders thereof will not be entitled to voting rights, dividends or other rights upon dissolution of TerrAscend. Given that the growth, cultivation, production and sale of cannabis is not currently federally legal in the US and there can be no assurances that it will be legalized, Canopy Rivers expects to record a write down on its investment in TerrAscend in the third quarter related to the reorganization, unless circumstances change.
Canopy Rivers does not engage in any U.S. cannabis-related activities as defined in Canadian Securities Administrators Staff Notice 51-532.
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 works collaboratively with Canopy Growth (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.
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 and includes information regarding the business and operations of NETA, the U.S. cannabis market, 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: ability of NETA to operate a vertically integrated ATC; potential conflicts of interest; changes in general economic, business and political conditions, including changes in the financial markets; the U.S. regulatory landscape and enforcement related to cannabis, including political risks and risks relating to regulatory change; changes in applicable laws; the expansion of the New Jersey medicinal marijuana program; the size of the patient population; compliance with extensive government regulation; public opinion and perception of the cannabis industry; risks related to the U.S. cannabis industry generally; as well as the risk factors set out in the joint management information circular of Canopy Rivers Corporation and the Company dated August 8, 2018, filed with Canadian securities regulators and available on the Company’s issuer profile on SEDAR at www.sedar.com.
As cannabis remains illegal under federal law in the U.S., financial transactions involving proceeds generated by, or intended to promote, cannabis-related business activities in the U.S. may form the basis for prosecution under applicable U.S. federal money laundering legislation. Strict compliance with state laws does not absolve a company of liability under U.S. federal law, nor will it provide a defense to any federal proceeding. Accordingly, future business activities of TerrAscend may violate U.S. federal law and may have a material adverse effect on the business, operations and financial condition of the Company as a result of various reputational, contractual and legal risks associated with the Company holding the exchangeable shares.
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.
For further information, please contact:
Canopy Rivers Inc.
Sr. Director, Investor Relations & Communications
Executive Vice President, Strategy