FLUENT Completes Acquisition of RIV Capital, Adding New York Retail, Wholesale and Cultivation Operations to its Multi-State Footprint
FLUENT has completed its acquisition of RIV Capital, marking one of the largest U.S. cannabis transactions of 2024. The all-stock transaction expands FLUENT's retail presence to 42 locations and adds New York operations to its multi-state footprint. The deal brings approximately US$33 million in cash to FLUENT's balance sheet and eliminates US$160 million of debt through The Hawthorne Collective's exchange of convertible notes for non-voting Exchangeable Shares.
Under the agreement, RIV Capital shareholders received 1.245 FLUENT shares for each RIV share held. FLUENT shareholders now hold 51.25% of the combined company, while RIV Capital shareholders and The Hawthorne Collective hold 48.75%. Robert Beasley continues as CEO of the combined entity, which will operate under the FLUENT name and maintain its current trading symbols (CSE: TIUM.U, OTCQB: CNTMF).
FLUENT ha completato l'acquisizione di RIV Capital, segnando una delle più grandi transazioni nel settore della cannabis negli Stati Uniti nel 2024. L'operazione, interamente in azioni, amplia la presenza al dettaglio di FLUENT a 42 sedi e integra le operazioni di New York nel suo footprint multistatale. L'accordo porterà circa 33 milioni di dollari in contante al bilancio di FLUENT e eliminerà 160 milioni di dollari di debito attraverso l'exchange di note convertibili in azioni non votanti da parte di The Hawthorne Collective.
Secondo l'accordo, gli azionisti di RIV Capital hanno ricevuto 1.245 azioni di FLUENT per ciascuna azione RIV detenuta. Gli azionisti di FLUENT possiedono ora il 51,25% della società combinata, mentre gli azionisti di RIV Capital e The Hawthorne Collective detengono il 48,75%. Robert Beasley continua come CEO dell'entità combinata, che opererà con il nome di FLUENT e manterrà i suoi attuali simboli di negoziazione (CSE: TIUM.U, OTCQB: CNTMF).
FLUENT ha completado su adquisición de RIV Capital, marcando una de las transacciones más grandes de cannabis en EE. UU. en 2024. La transacción, completamente en acciones, expande la presencia de FLUENT en 42 ubicaciones y agrega operaciones en Nueva York a su huella multijurisdiccional. El acuerdo aporta aproximadamente 33 millones de dólares en efectivo al balance de FLUENT y elimina 160 millones de dólares en deudas mediante el intercambio de notas convertibles por acciones convertibles sin derecho a voto de The Hawthorne Collective.
Bajo el acuerdo, los accionistas de RIV Capital recibieron 1.245 acciones de FLUENT por cada acción de RIV que poseían. Los accionistas de FLUENT ahora poseen el 51,25% de la empresa combinada, mientras que los accionistas de RIV Capital y The Hawthorne Collective tienen el 48,75%. Robert Beasley continúa como CEO de la entidad combinada, que operará bajo el nombre de FLUENT y mantendrá sus símbolos de negociación actuales (CSE: TIUM.U, OTCQB: CNTMF).
FLUENT가 RIV Capital의 인수를 완료하였으며, 이는 2024년 미국에서 가장 큰 대마초 거래 중 하나로 기록됩니다. 모든 주식 거래인 이번 인수는 FLUENT의 소매 매장을 42개로 확장하고 뉴욕의 사업을 다주州 내 네트워크에 추가합니다. 이 거래는 FLUENT의 대차대조표에 약 3300만 달러의 현금을 추가하고, The Hawthorne Collective의 전환가능어음의 현금 없는 교환을 통해 1억6000만 달러의 부채를 제거합니다.
계약에 따라 RIV Capital의 주주들은 보유한 RIV 주식 1주당 1.245주의 FLUENT 주식을 받았습니다. FLUENT의 주주들은 이제 통합 회사의 51.25%를 보유하고 있으며, RIV Capital의 주주들과 The Hawthorne Collective는 48.75%를 보유하고 있습니다. 로버트 비즐리는 통합된 회사의 CEO로 계속 재직하며, 해당 회사는 FLUENT라는 이름 하에 운영되며 현재의 거래 기호(CSE: TIUM.U, OTCQB: CNTMF)를 유지합니다.
FLUENT a finalisé son acquisition de RIV Capital, ce qui marque l'une des plus grandes transactions de cannabis aux États-Unis en 2024. La transaction, entièrement en actions, étend la présence de FLUENT à 42 points de vente et ajoute des activités à New York à son empreinte multi-état. L'accord apporte environ 33 millions de dollars en liquidités au bilan de FLUENT et élimine 160 millions de dollars de dettes grâce à l'échange de notes convertibles de The Hawthorne Collective contre des actions non votantes échangeables.
Selon l'accord, les actionnaires de RIV Capital ont reçu 1,245 actions de FLUENT pour chaque action RIV détenue. Les actionnaires de FLUENT détiennent désormais 51,25 % de l'entreprise combinée, tandis que les actionnaires de RIV Capital et The Hawthorne Collective détiennent 48,75 %. Robert Beasley reste PDG de l'entité combinée, qui opérera sous le nom de FLUENT et conservera ses symboles de cotation actuels (CSE: TIUM.U, OTCQB: CNTMF).
FLUENT hat die Übernahme von RIV Capital abgeschlossen, die eine der größten Cannabis-Transaktionen in den USA im Jahr 2024 markiert. Die gesamte Transaktion in Aktien erweitert die Einzelhandelpräsenz von FLUENT auf 42 Standorte und fügt die New Yorker Aktivitäten zu ihrer multistaatlichen Präsenz hinzu. Das Geschäft bringt etwa 33 Millionen US-Dollar in bar in die Bilanz von FLUENT und beseitigt 160 Millionen US-Dollar Schulden durch den Austausch von wandelbaren Anleihen gegen nicht stimmberechtigte wandelbare Aktien der Hawthorne Collective.
Im Rahmen des Abkommens erhielten die Aktionäre von RIV Capital 1,245 FLUENT-Aktien für jede gehaltene RIV-Aktie. Die Aktionäre von FLUENT halten nun 51,25% des fusionierten Unternehmens, während die Aktionäre von RIV Capital und The Hawthorne Collective 48,75% halten. Robert Beasley bleibt CEO des fusionierten Unternehmens, das unter dem Namen FLUENT operieren und seine aktuellen Handelszeichen (CSE: TIUM.U, OTCQB: CNTMF) beibehalten wird.
- Acquisition adds New York retail, wholesale, and cultivation operations
- Brings US$33 million in cash to balance sheet
- Eliminates US$160 million of debt through note exchange
- Expands retail presence to 42 locations
- Enters New York market where legal retail sales exceed $1 Billion
- Share dilution with existing shareholders reduced to 51.25% ownership
- Integration costs and risks associated with merging operations
Accelerates FLUENT’s entry into one of the largest and fastest growing cannabis markets in the world
Enables FLUENT banner to expand its retail door count to 42, add on its first wholesale division as well as continue to expand its house of brands
One of the largest U.S. cannabis transactions of 2024, further bolstering FLUENT’s balance sheet with approximately US
Acquires RIV Capital’s assets and cash balance in a debt-free, all stock transaction: The Hawthorne Collective completes exchange of its existing Convertible Notes in RIV Capital for a new class of non-voting Exchangeable Shares of Cansortium, eliminating US
Conference Call to be Held Today, December 19, 2024, at 4:00 p.m. (Eastern Time)
TAMPA, Fla., Dec. 19, 2024 (GLOBE NEWSWIRE) -- Cansortium Inc. (CSE: TIUM.U) (OTCQB: CNTMF) (“FLUENT” or the “Company”), a vertically-integrated, multi-state cannabis company operating under the FLUENT™ brand, and RIV Capital Inc. (CSE: RIV) (OTC: CNPOF) (“RIV Capital”), a vertically integrated cannabis company operating the Etain™ brand in New York, are pleased to announce the completion of the previously announced arrangement with RIV Capital (the “Transaction”), whereby FLUENT acquired all of the issued and outstanding Class A common shares (the “RIV Capital Shares”) of RIV Capital in exchange for FLUENT Shares (as defined below) pursuant to the terms of an arrangement agreement dated May 30, 2024 (as amended, the “Arrangement Agreement”).
Under the terms of the Arrangement Agreement, RIV Capital shareholders (the “RIV Capital Shareholders”) received 1.245 of a common share of FLUENT (the “FLUENT Shares”) in exchange for each RIV Capital Share held. As a result, shareholders of FLUENT (the “FLUENT Shareholders”) hold approximately
Under the terms of the Arrangement Agreement, Robert Beasley has been named Chief Executive Officer of the Combined Company. The RIV Shares are expected to be delisted from the CSE at market close on December 19, 2024. The Company will cause RIV Capital to apply to the relevant Canadian securities regulatory authorities to cease to be a reporting issuer under applicable Canadian securities laws.
Management Commentary
“I am thrilled to complete this transaction, and I would like to thank our combined teams for all of their hard work over the past few months and our shareholders for their strong support,” said Robert Beasley, Chief Executive Officer of FLUENT. “Together, we have created one of the most well-positioned cannabis operators in the industry, with a strategic footprint in four key growth markets and a strong balance sheet which will allow us to act on accretive growth opportunities. With integration activities well underway, our teams have continued to uncover synergies that, combined with our history of operational excellence, will enable us to build an efficient, profitable organization.”
Mr. Beasley added, “With New York legal retail sales on pace to exceed
“This is a transformational deal for RIV Capital and represents the culmination of substantial work for both FLUENT and RIV Capital,” said David Vautrin, former Chief Revenue Officer and Interim Chief Executive Officer of RIV Capital and, upon closing, Chief Commercial Officer of FLUENT. “As evidenced by past performance, we believe FLUENT is one of the most fundamentally sound and now one of the most well-positioned multi-state operators in the United States. I am looking forward to fully unlocking the potential of this combined team to drive value for our shareholders.”
Hawthorne Notes Exchange
Further to the Company’s press release dated May 30, 2024, the Company and The Hawthorne Collective entered into an exchange and protection agreement on December 18, 2024 (the “Exchange and Protection Agreement”), pursuant to which The Hawthorne Collective exchanged its existing unsecured convertible notes in the aggregate principal amount of US
The foregoing description of the Exchange and Protection Agreement is not complete and is qualified in its entirety by reference to the full text of the Exchange and Protection Agreement, a copy of which will be filed on the Company’s profile on SEDAR+ at www.sedarplus.ca.
Investor Rights Agreements
In connection with the Hawthorne Notes Exchange, the Company and The Hawthorne Collective also entered into an investor rights agreement (the “Hawthorne Investor Rights Agreement”), providing for, among other things, the right of The Hawthorne Collective to nominate up to two members to the board of directors of the Company (the “FLUENT Board”), so long as The Hawthorne Collective and its affiliates maintain certain specified beneficial ownership requirements as set forth in the Hawthorne Investor Rights Agreement. In addition, for so long as the beneficial ownership requirement is satisfied, The Hawthorne Collective is entitled to certain participation rights in order to maintain its pro rata equity ownership position in the Company in connection with any offering of FLUENT Shares, or securities exercisable, convertible or exchangeable for FLUENT Shares, by the Company, subject to certain exceptions, and certain other customary rights, including demand registration rights, piggyback rights and information rights.
In addition, further to the Company’s press release dated November 26, 2024, the Company and certain of its affiliates and William Smith, a director and the Executive Chair of the Company, and certain companies controlled by Mr. Smith (together with Mr. Smith, collectively, the “Smith Group”), have entered into an investor rights agreement (the “Smith Investor Rights Agreement”) in connection with that certain amended and restated termination agreement dated November 26, 2024, providing for, among other things, the Smith Group’s continued right to nominate two members of the FLUENT Board, so long as the Smith Group and its affiliates maintain certain specified beneficial ownership requirements as set forth in the Smith Investor Rights Agreement. The Smith Investor Rights Agreement contains substantially similar terms as the Hawthorne Investor Rights Agreement, including certain participating and piggyback registration rights.
The foregoing descriptions of the Hawthorne Investor Rights Agreement and the Smith Investor Rights Agreement are not complete and are qualified in their entirety by reference to the full texts of the Hawthorne Investor Rights Agreement and the Smith Investor Rights Agreement, copies of which will be filed on the Company’s profile on SEDAR+ at www.sedarplus.ca.
Additional Information for RIV Capital Shareholders
Pursuant to the Transaction, former RIV Capital Shareholders are entitled to receive 1.245 FLUENT Shares for each RIV Capital Share held. In order to receive FLUENT Shares in exchange for RIV Capital Shares, former registered RIV Capital Shareholders must complete, sign, date and return (together with their certificate or DRS statement representing their RIV Capital Shares) the letter of transmittal that was mailed to them prior to closing of the Transaction. The letter of transmittal has been filed by RIV Capital under RIV Capital’s profile on SEDAR+ at www.sedarplus.ca and on RIV Capital’s website at www.rivcapital.com. The letter of transmittal is also available by contacting Odyssey Trust Company, the depositary for the Transaction, by telephone at (587) 885-0960 or by email at: corp.actions@odysseytrust.com.
Financial and Legal Advisors
ATB Securities Inc. acted as financial advisor to FLUENT and Paradigm Capital Inc. provided an independent fairness opinion to the FLUENT Board. Wildeboer Dellelce LLP and Shumaker, Loop & Kendrick, LLP acted as Canadian and United States legal counsel, respectively, to FLUENT.
Moelis & Company LLC acted as financial advisor to RIV Capital and provided a fairness opinion to the board of directors of RIV Capital (the “RIV Capital Board”). INFOR Financial Inc. provided an independent fairness opinion to the RIV Capital Board. Cassels Brock & Blackwell LLP and Goodwin Procter LLP acted as Canadian and United States legal counsel, respectively, to RIV Capital.
Conference Call
FLUENT will host a conference call and live audio webcast today at 4:00 p.m. Eastern time to discuss the Transaction as well as its financial and operating results for the third quarter ended September 30, 2024.
Date: Thursday, December 19, 2024
Time: 4:00 p.m. Eastern time
Toll-free dial-in number: (844) 763-8274
International dial-in number: (412) 717-9224
Link: FLUENT Conference Call
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.
The conference call will also be available for replay via the News & Events section of FLUENT investor relations website at https://investors.getFLUENT.com/.
About Cansortium Inc.
FLUENT is a vertically-integrated cannabis company with licenses and operations in Florida, New York, Pennsylvania and Texas. The Company operates under the FLUENT™ brand and is dedicated to being one of the highest quality cannabis companies for the communities it serves. This is driven by FLUENT’s unrelenting commitment to operational excellence in cultivation, production, distribution and retail. The Company is headquartered in Tampa, Florida. The FLUENT Shares trade on the CSE under the symbol “TIUM.U” and on the OTCQB Venture Market under the symbol “CNTMF”. For more information about the Company, please visit www.getFLUENT.com.
About RIV Capital
RIV Capital is a firm dedicated to developing a leading multi-state platform with a strong portfolio of cannabis brands focused on key strategic markets in the U.S. Backed by in-house expertise and cannabis domain knowledge, RIV Capital aims to grow its own brands and partner with established U.S. cannabis operators and brands to bring them to new markets and build market share. RIV Capital established the foundational building blocks of its active U.S. strategy with its previously announced acquisition of Etain. Through its strategic relationship with The Hawthorne Collective, a subsidiary of The ScottsMiracle-Gro Company (“ScottsMiracle-Gro”), RIV Capital is The Hawthorne Collective’s preferred vehicle for cannabis-related investments not under the purview of other ScottsMiracle-Gro subsidiaries.
Forward-Looking Information
Certain information in this news release may constitute forward-looking information within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent the Company's expectations, estimates, and projections regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company's control.
Forward-looking information is necessarily based on many opinions, assumptions, and estimates that, while considered reasonable by the Company as of the date of this news release, are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in the public filings of the Company and RIV Capital filed with Canadian securities regulators and available under the Company’s and RIV Capital’s respective profiles at www.sedarplus.ca. These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct.
The Company, through several of its subsidiaries, is directly involved in the manufacture, possession, use, sale, and distribution of cannabis in the adult-use and medical cannabis marketplace in the United States. Local state laws where the Company operates permit such activities however, investors should note that there are significant legal restrictions and regulations that govern the cannabis industry in the United States. Cannabis remains a Schedule I drug under the United States Controlled Substances Act, making it illegal under federal law in the United States to, among other things, cultivate, distribute, or possess cannabis in the United States. Financial transactions involving proceeds generated by, or intended to promote, cannabis-related business activities in the United States may form the basis for prosecution under applicable United States federal money laundering legislation.
While the approach to enforcement of such laws by the federal government in the United States has trended toward non-enforcement against individuals and businesses that comply with adult-use and medical cannabis programs in states where such programs are legal, strict compliance with state laws with respect to cannabis will neither absolve the Company of liability under United States federal law, nor will it provide a defense to any federal proceeding which may be brought against the Company. The enforcement of federal laws in the United States is a significant risk to the business of the Company and any proceedings brought against the Company thereunder may adversely affect operations and financial performance.
The forward-looking statements contained in this news release are made as of the date of this news release, and the Company expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.
For further information: www.getFLUENT.com.
Company Contact
Robert Beasley, CEO
(850) 972-8077
investors.getFLUENT.com
Investor Relations Contact
investors@cansortiuminc.com
_____________________
1 Cash balance of RIV Capital as of December 19, 2024.
2 All references to "$" in this news release are to United States dollars.
3 Based on total outstanding principal and unpaid interest amount of approximately C
4 New York State Cannabis Control Board. (2024, December 11). During Last Cannabis Control Board Meeting Of 2024, Office Provides Year End Milestones, Including 261 Licensed Adult-Use Cannabis Dispensaries Open Across The State. https://cannabis.ny.gov/system/files/documents/2024/12/december-2024-ccb-release.pdf
FAQ
What is the exchange ratio for RIV Capital shares in the FLUENT acquisition?
How much cash does the RIV Capital acquisition add to FLUENT's (CNTMF) balance sheet?
What is the ownership structure of FLUENT (CNTMF) after the RIV Capital acquisition?
How much debt was eliminated through The Hawthorne Collective's note exchange in the FLUENT (CNTMF) deal?
How many retail locations does FLUENT (CNTMF) now have after the RIV Capital acquisition?
