Etain Obtains Approval to Commence Sales to New York’s Adult-Use Market

Receives state regulatory approval from the New York Cannabis Control Board to transition to adult-use operations

TORONTO, Dec. 8, 2023 /PRNewswire/ – RIV Capital Inc. (“RIV Capital”) (CSE: RIV) (OTC: CNPOF), an acquisition and investment firm with a focus on building a leading multistate platform with one of the strongest portfolios of cannabis brands in key strategic U.S. markets, today announced that the New York Cannabis Control Board (the “CCB”) approved Etain, LLC’s (the “Company”) transition to an adult-use operator with cultivation, processing, distribution, and retail operations.

Since submitting its adult-use application to the CCB, the Company has proactively engaged with policymakers, community stakeholders, and industry members, including dispensary owners, to ensure a smooth transition as the state opens New York’s adult-use market to new operators.  The Company will now be able to provide its assortment of products, including high-quality flower, pre-rolls, vapes, and edibles, to the adult-use market as well as maintain its medical operations. In addition to expanding into adult-use wholesale operations, the Company anticipates opening its first co-located medical and adult-use retail dispensary in early 2024, followed by two additional co-located adult-use retail dispensaries on or around July 1, 2024.

“This is a transformational moment not only for RIV and Etain but for the New York market at large,” said Mike Totzke, COO and interim CEO of RIV Capital. “The excitement surrounding this expansion of the New York adult-use cannabis market is palpable. We are ready to begin this new chapter and it is a true testament to our team, their expertise, their passion, and the hard work we have done to prepare for this moment. Etain is already a well-established medical operator in New York with its products available in approximately 90% of medical dispensaries across the state, and we look forward to bringing this same focus and attention to our adult-use operations, including our first co-located retail store which we expect to announce shortly. We are ready to continue our work, collaboratively, to build on Etain’s founding principles and help create a responsible, inclusive, and sustainable industry.” 

Mr. Totzke added, “Our recently expanded cultivation and manufacturing capacity means that we are ready to proudly serve both medical patients and adult-use consumers, as well as offer a diversified product selection to reach new consumers. We are thrilled with this latest advancement in our transition to adult-use operations and are now eagerly anticipating the launch of our retail adult-use storefronts in 2024.” 

Matt Mundy, Chief Strategy Officer and General Counsel of RIV Capital added, “I’d like to thank the Cannabis Control Board and the Office of Cannabis Management for their strong vote of confidence in both our application and our operations. We are committed to supporting both existing medical patients and adult-use consumers across the state, as well as the principles and ideals that the New York market is being built on.”

In preparation for adult-use operations, the Company is in the process of completing several significant upgrades to its footprint across New York. It has expanded its capacity at its Chestertown facility to improve output as well as enhance its research and development capabilities to diversify its product and brand offerings further.

RIV Capital is an acquisition and investment firm with a focus on building a leading multistate platform with one of the strongest portfolios of cannabis brands in key strategic U.S. markets. 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, Inc. (“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.

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 RIV Capital, its portfolio companies, and Etain 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 RIV Capital’s strategies, objectives, goals, opportunities and plans, including in respect of Etain and its product portfolio; RIV Capital’s ability to appropriately scale Etain’s existing infrastructure, processes and systems and the development of a robust adult-use retail and wholesale program; the timing and ability of RIV Capital and Etain to open its first co-located medical and adult-use retail dispensary in early 2024, and two additional co-located dispensaries on or around July 1, 2024; RIV Capital’s expectations regarding the U.S. cannabis market; expectations regarding adult-use cannabis market opportunities in New York and the benefits of the New York adult-use cannabis market; expectations regarding adult-use sales in the state of New York; plans to update Etain’s existing retail locations and the potential to build new locations; RIV Capital’s expectations regarding Etain’s position in the New York cannabis market; RIV Capital’s expectations and plans regarding Etain’s business, including its market share, sales, brand, products and locations; RIV Capital’s expectations regarding growth opportunities; and 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 RIV Capital 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 RIV Capital, its portfolio companies, and/or Etain.

Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: RIV Capital’s ability to execute its go-forward strategy; stock market volatility; changes in the business activities, focus and plans of RIV Capital, Etain and RIV Capital’s investees and the timing associated therewith; the timing of any changes to federal laws in the U.S. to allow for the general cultivation, distribution, and possession of cannabis; regulatory and licensing risks; changes in cannabis industry growth and trends; changes in general economic, business and political conditions, including changes in the financial markets; the global regulatory landscape and enforcement related to cannabis, including political risks and risks relating to regulatory change; risks relating to anti-money laundering laws; compliance with extensive government regulation, including RIV Capital’s interpretation of such regulation; public opinion and perception of the cannabis industry; divestiture risks; and the risk factors set out in RIV Capital’s management’s discussion and analysis dated November 28, 2023 and annual information form dated March 31, 2023 filed with the Canadian securities regulators and available on RIV Capital’s profile on SEDAR+ at www.sedarplus.com.

The Company has invested in and acquired, and intends to in the future invest in and/or acquire, companies that are involved in the manufacture, possession, use, sale, and distribution of cannabis in the recreational and medicinal cannabis marketplace in the United States. Local state laws where such operations occur 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 U.S. 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 U.S. 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 recreational and medicinal 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 U.S. 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 the Company’s operations and financial performance.

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 RIV Capital 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. RIV Capital does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.

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SOURCE RIV Capital Inc.