Canopy Growth Spinout Canopy Rivers Readies to Join the Cannabis Revolution

Canopy Growth Corp (TSE:WEED) (NYSE:CGC) (FRA:11L1) made a smart move back in 2017: they launched Canopy Rivers Corporation, a streaming platform that would finance newcomers to the cannabis ACMPR program in exchange for repayment in a portion of the investee’s crop. It is a novel innovation similar to the mining industry’s streaming royalty structures, that sees mines get financed in exchange for repayment in the mineral produced.

But as it happened, the well-capitalized boys at Rivers, as it is affectionately referred to by insiders, discovered that limiting themselves to just cannabis applicants was, well, limiting. They decided to finance many cogs in the great cannabis industry wheel, which has now resulted in a portfolio of holdings across cultivation, extraction, consumer-facing brands, distribution, medical and recreational products, as well as media and agri-tech.

Rivers has raised a total of about $75 million to date, of which just under a third was provided by Canopy Growth Corp, resulting in the mothership owning 29 percent of the outstanding shares of Rivers, and its employees, partners and Canopy Growth collectively controlling 46 percent.

Rivers has 8 investee companies currently, of which some are public and some may go public in the future. The table below lays out the type of structure and stake.

Canopy Rivers is anticipated to seek a public listing at some point, though no announcement has been made.

The management team of Canopy Rivers includes a team of institutional players with deep experience in valuation, and who have a reputation of being tough with management teams who might think they walk on water.

Rivers today announced that it was beefing up its board with some heavy hitters, including Joe Mimran, the founder of Club Monaco and Joe Fresh, as well as being one of the original Dragon’s Den “Dragons”.

Bruce Linton will be on the Board, who has driven the success of Canopy Growth Corp since its beginning, and Daniel Pearlstein, former analyst with M Partners fleshes out the team.

Rivers was co-founded by Sean McNulty and Peter Hatziioannou of XIB Consulting, has been instrumental in raising capital and identifying opportunities in the cannabis space since its onset. They will continue to be an integral part of the business of Canopy Rivers.

I do not personally own shares of Canopy Rivers (yet), and so I can say somewhat objectively that I think this is one emerging cannabis industry provided that I expect will provide a positive experience for investors.

Original article: Canopy Growth Spinout Canopy Rivers Readies to Join the Cannabis Revolution

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