In exciting news, RIV Capital has announced their acquisition of shares from JW Asset Management at a significant premium. RIV Capital, an acquisition and investment firm focused on building a leading multistate platform with a strong portfolio of cannabis brands, has entered into a settlement agreement with JWAM. The agreement includes the repurchase and cancellation of 33,733,334 RIV Capital Class A common shares currently owned by JWAM, as well as the reimbursement of certain legal expenses. This settlement resolves a previous application filed by JWAM against RIV Capital and allows both parties to move forward in a positive manner. With this settlement behind them, RIV Capital now has the opportunity to focus on operationalizing their assets and exploring new opportunities within and outside of New York.
RIV Capital Acquires Shares from JW Asset Management at a Premium
Background Information
RIV Capital Inc. has made a significant acquisition, purchasing shares from JW Asset Management (JWAM) at a premium. RIV Capital is an acquisition and investment firm focused on building a leading multistate platform with a strong portfolio of cannabis brands in strategic markets across the United States.
Settlement Agreement Details
RIV Capital has entered into a settlement agreement with JWAM, resulting in the dismissal of JWAM’s application related to RIV Capital’s acquisition of Etain, LLC and Etain IP, LLC. Under the terms of the settlement agreement, RIV Capital has repurchased and cancelled all RIV Capital Class A common shares currently owned or controlled by JWAM, totaling 33,733,334 shares. The purchase price for the shares is U.S.$19,625,000. RIV Capital has also reimbursed JWAM for certain legal expenses amounting to U.S.$375,000.
Withdrawal of Special Meeting Requisition
As part of the settlement, JWAM and its affiliated funds have withdrawn their requisition for a special meeting of RIV Capital’s shareholders, which was scheduled for June 6, 2023. This meeting will now be cancelled. The withdrawal of the requisition is a positive development for RIV Capital, allowing the company to focus on its operations and future growth plans.
Background of JWAM’s Application
JWAM filed the application against RIV Capital in May 2022, soon after RIV Capital acquired ownership and control of Etain, LLC and Etain IP, LLC, which operate legally licensed cannabis cultivation and retail dispensaries in New York. The application sought a remedy requiring the repurchase of JWAM’s shares by RIV Capital at a price of C$1.65 per share.
Statement from Mark Sims
Mark Sims, Director, President, and Chief Executive Officer of RIV Capital, expressed his satisfaction with the mutually beneficial agreement reached between RIV Capital and JWAM. Sims highlighted the unique assets of RIV Capital, including industry-leading liquidity, a reputable strategic partner, and a vertical license in New York. He emphasized that the settlement mitigates the risks associated with JWAM’s application and allows RIV Capital to focus on operationalizing New York and exploring new opportunities.
Hawthorne/JWAM Settlement
In addition to the settlement with JWAM, RIV Capital announced the settlement of litigation between The Hawthorne Collective, JWAM, Jason Wild, and certain related parties of JWAM. The Hawthorne Collective has advised RIV Capital that, as part of the settlement, Jason Wild and JWAM have agreed not to interfere with The Hawthorne Collective’s agreements with RIV Capital or any rights set forth in those agreements. This settlement further strengthens RIV Capital’s position and resolves any potential disruptions to its operations.
Securities Law Matters
The repurchase of JWAM’s shares is considered a “related party” transaction under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. RIV Capital is exempt from the formal valuation requirements and minority approval requirements of MI 61-101 due to its relationship with The Hawthorne Collective, a control person of the company, and their support for the repurchase of the JWAM shares.
About RIV Capital
RIV Capital is an acquisition and investment firm focused on building a leading multistate platform with one of the strongest portfolios of brands in key strategic U.S. markets. The company aims to grow its own brands and partner with established U.S. cannabis operators and brands to expand into new markets and increase market share. RIV Capital’s strategic relationship with The Hawthorne Collective, a subsidiary of The Scotts Miracle-Gro Company, further enhances its ability to make cannabis-related investments and pursue growth opportunities.
Closing Thoughts
The acquisition of JWAM’s shares at a premium and the settlement of the litigation with JWAM and The Hawthorne Collective mark significant milestones for RIV Capital. These developments allow the company to move forward with confidence, focusing on operationalizing New York and exploring new opportunities for growth. RIV Capital’s strong portfolio of brands and strategic partnerships position it as a key player in the U.S. cannabis market.
