TORONTO, Feb. 23, 2021 /PRNewswire/ - RIV Capital Inc. (formerly Canopy Rivers Inc.) ("RIV Capital" or the "Company") (TSX: RIV) (OTC: CNPOF) is pleased to announce the completion of the previously announced plan of arrangement (the "Arrangement") involving Canopy Growth Corporation ("Canopy Growth") (TSX: WEED) (NASDAQ: CGC).

Pursuant to the Arrangement, RIV Capital, through its wholly-owned subsidiary, RIV Capital Corporation (formerly Canopy Rivers Corporation) ("RCC"), transferred its interests in TerrAscend Corp. ("TerrAscend"), TerrAscend Canada Inc. ("TerrAscend Canada"), Les Serres Vert Cannabis Inc. ("Vert Mirabel") (other than the shares transferred to Serres Bertrand as described below), and The Tweed Tree Lot Inc. ("Tweed Tree Lot") (collectively, the "Transferred Assets") to Canopy Growth in exchange for approximately $115 million in cash, 3,647,902 common shares of Canopy Growth (having a value of approximately $170.3 million as at the close of trading on the Toronto Stock Exchange (the "TSX") on February 22, 2021), and the cancellation of all 36,468,318 Multiple Voting Shares ("MVS") and 15,223,938 Subordinate Voting Shares ("SVS") of RIV Capital held by Canopy Growth.

Concurrent with the closing of the Arrangement, and following the previously announced exercise by Les Serres Stéphane Bertrand Inc. ("Serres Bertrand") of its right of first refusal to purchase its proportionate interest in the common shares of Vert Mirabel (the "ROFR Shares") from RIV Capital, the Company also received a $3.4 million cash payment from Serres Bertrand for 117 ROFR Shares, representing 11.7% of the issued and outstanding common shares of Vert Mirabel.

The Arrangement delivers immediate benefits to the Company beyond the significant cash and share consideration it received from Canopy Growth. The value received by RIV Capital, after taking into account the cancellation of the MVS and SVS held by Canopy Growth, is accretive to minority shareholders. In addition, the Arrangement eliminates the Company's dual class share structure, which provides the Company with enhanced strategic flexibility and a more attractive capital structure for the purposes of investments, acquisitions, and capital-raising.

"The closing of this transaction is a milestone for RIV Capital and our shareholders as we continue to pivot towards the prospering U.S. market," said Narbé Alexandrian, President and CEO, RIV Capital. "We believe that the evolving regulatory environment and market conditions make now an ideal time to enter the U.S., the most attractive cannabis market in the world. Over the past several years, we have developed the strategic relationships and domain expertise needed to succeed in the U.S. With the substantial capital and strategic flexibility acquired in this deal, we believe that we are uniquely positioned to take advantage of the opportunities in the U.S. market, and believe our strategic pivot will generate positive returns for our shareholders."

In the coming months, the Company plans to pursue one or several material investment(s) in, or acquisition(s) of, U.S.-based cannabis companies. The U.S. market has developed at a year-over-year compound annual growth rate of 22% since 2017, and is expected to grow to approximately US$31.4 billion by 2024.^¹ As legislators at both the state and federal levels eye legalization or other efforts at regulatory reform, the total addressable market for adult-use cannabis is expected to continue to grow at a material rate in the coming years. Accordingly, the Company believes that there are a number of opportunities in both legal and soon-to-be-legal states to transact with operators that could benefit from RIV Capital's industry expertise, liquidity, and public listing status. To the extent that such investments or acquisitions are inconsistent with the policies of the TSX, the Company may initiate the process to de-list from the TSX and list its securities on a stock exchange that does not prohibit such investments or acquisitions at such time.

Concurrent with completion of the Arrangement, Canopy Growth's nominees on the Company's board of directors resigned from the board. The Company intends to replace the departing directors with new directors having skills and experience that complement those of the remaining directors, taking into account the Company's new strategy and focus. As Canopy Growth is no longer the controlling shareholder, has no board representation, and does not have any financial interests in RIV Capital, the Company will now comprehensively re-evaluate its business and investment strategy and pursue previously unavailable opportunities. All existing governance agreements between Canopy Growth and the Company have been terminated and, as a result, any adverse effects in the market resulting from a lack of clarity as to the Company's overarching corporate strategy will be eliminated.

Early Warning Disclosure Regarding TerrAscend

Completion of the Arrangement resulted in a 100% decrease in RIV Capital's interest in TerrAscend and TerrAscend Canada.

Immediately prior to the completion of the Arrangement, RIV Capital beneficially owned (i) 19,445,285 exchangeable shares in the capital of TerrAscend, (ii) warrants to purchase 2,225,714 common shares in the capital of TerrAscend at an exercise price of C$5.95 per share, (iii) warrants to purchase 333,723 common shares in the capital of TerrAscend at an exercise price of C$6.49 per share, and (iv) a loan in the principal amount of approximately $13.2 million owed by TerrAscend Canada to RCC (collectively, the "TerrAscend Securities").

Following the completion of the Arrangement, RIV Capital no longer beneficially owns or exercises control over any of the TerrAscend Securities. While RIV Capital currently has no immediate plans or intentions with respect to the securities of TerrAscend, depending on regulatory changes, market conditions, general economic and industry conditions, trading prices, TerrAscend's business, financial conditions and prospects and/or other relevant factors, RIV Capital may develop such plans or intentions in the future and, at such time, may from time to time acquire additional securities of TerrAscend.

A copy of the early warning report filed by RIV Capital with respect to the TerrAscend Securities will be available under RIV Capital's profile on SEDAR at www.sedar.com or by contacting the Company at [email protected].

RIV Capital's head office is located at 40 King St. West, Suite 2504, Toronto, Ontario, M5H 3Y2.

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1} Arcview Research and BDS Analytics, "The State of Legal Marijuana Markets - 6th Edition" (2019).

About RIV Capital

RIV Capital is an investment and acquisition company specializing in cannabis with a portfolio of 14 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.

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. 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 Company's expectation with respect to the Company's anticipated focus on, ability to execute on, and expected success in, its strategy in the U.S. cannabis market; the anticipated benefits of the Arrangement; the anticipated benefits of the collapse of the dual-class share structure; the attractiveness of the Company's shares as acquisition currency following the Arrangement; the potential de-listing from the TSX and listing on an alternative exchange; the future composition of the Company's board; the possible future investment and acquisition opportunities available to the Company; the expected increase in the size of the U.S. cannabis market; the business and investment strategy of the Company following completion of the Arrangement and any investments or acquisitions in furtherance thereof; plans with respect to TerrAscend securities; and the Company's 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. The Company's 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: competitive conditions in the cannabis industry that may impact the Company; the status of cannabis as a controlled substance; the legislative and regulatory structure governing the cannabis industry in Canada and the U.S.; credit liquidity, and additional financing risks for the Company and its investees; the entry into the U.S. market by the Company; the potential for the Company's board of directors and shareholders to be prosecuted for aiding and abetting violations of U.S. federal law; enhanced scrutiny of the Company's investments and operations if the Company invests in or operates U.S. cannabis businesses; the effect of operating or investing in the U.S. on the Company's existing contractual arrangements and business relationships; the risks associated with U.S. banking and anti-money laundering laws and regulations; the classification of the Company's income as proceeds of crime and the ability of the Company to declare or pay dividends or effect other distributions or the repatriation of funds back to Canada; 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 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 annual information form for the year ended March 31, 2020 and the Company's management information circular in connection with the Arrangement, 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.

SOURCE RIV Capital Inc.

RIV Capital Closes Plan of Arrangement Involving Canopy Growth, Paving Way for Entry Into U.S. Market