Pay Day – Canopy Rivers Invests $10 Mil in TerrAscend

TORONTO, Oct. 2, 2019 – Canopy Rivers Inc. ("Canopy Rivers") (TSX: RIV, OTC: CNPOF), a venture capital firm specializing in cannabis, has completed a US$10 million investment (the "Investment") in TerrAscend Canada Inc. ("TerrAscend Canada"), a subsidiary of its portfolio company TerrAscend Corp. ("TerrAscend") (CSE: TER, OTCQX: TRSSF). The investment includes the purchase of 13,243 units, with each unit consisting of: (i) one unsecured convertible debenture of TerrAscend Canada with a principal amount of CA $1,000 (the "Debentures"), and (ii) 25.2 common share purchase warrants of TerrAscend exercisable until October 2, 2024 (the "Warrants").

TerrAscend is the first and only cannabis company with sales in Canada, the U.S., and Europe. TerrAscend's international cannabis portfolio includes a robust research and development platform, domestic and international cultivation, processing, and distribution facilities, and a portfolio of medical and adult-use branded cannabis products, and is one of a select group of industry operators to have been recognized with a European Good Manufacturing Practices ("EU GMP") certification. TerrAscend is also an active participant in the Canopy Rivers ecosystem, with significant agreements in place with Canopy Rivers portfolio companies PharmHouse Inc. and James E. Wagner Cultivation Corporation. 

We think TerrAscend is uniquely positioned to meet the evolving consumer demands in the three largest cannabis markets worldwide. Narbe Alexandrian, President & CEO of Canopy Rivers.

Alexandrian went on to say that "we strongly believe in TerrAscend's ability to execute on its global strategy, market a diversified brand portfolio, and build on its recent acquisitions, and this additional investment is an affirmation of that belief."

"We are privileged to have the continued confidence and support of Canopy Rivers, one of the preeminent investment firms specializing in cannabis," said Michael Nashat, CEO of TerrAscend. "This growth capital enables us to accelerate our organic and acquisition-driven investments in our key markets across the globe, as we execute our strategic vision of being a truly global cannabinoid company."

Canopy Rivers, along with Canopy Growth Corporation, first invested in TerrAscend in November 2017. In October 2018, both parties restructured their investment in TerrAscend. This restructuring enabled TerrAscend to pursue strategic international transactions in the cannabis space while ensuring all parties remained compliant with industry and securities regulations.

Transaction Overview

The Debentures will bear interest at a rate of 6.0% per annum and will mature on October 2, 2024. Each Debenture will be convertible into common shares or exchangeable shares in the capital of TerrAscend at the option of Canopy Rivers or upon the occurrence of certain events at a conversion price of CA $5.95, a 10% premium to the 5-day VWAP ended September 30, 2019. TerrAscend fully and unconditionally guarantees TerrAscend Canada's obligations under the Debentures, such guarantee to be enforceable by the payment of the equivalent value in exchangeable shares of TerrAscend or, upon the occurrence of certain events, in common shares or in cash.

Each Warrant will entitle Canopy Rivers to acquire one common share of TerrAscend, at an exercise price of CA $6.49, a 20% premium to the 5-day VWAP ended September 30, 2019, and such Warrants will be exercisable following changes in U.S. federal laws regarding the cultivation, distribution or possession of marijuana, the compliance of TerrAscend with such laws, and the approval of the securities exchanges upon which Canopy Rivers is listed.

Net proceeds from the Investment will be used by TerrAscend Canada for general corporate purposes and will not be used in connection with cannabis or cannabis-related operations in the United States, unless and until such operations comply with all applicable laws of the United States.

Disclaimer: Past performance is not an indicator of future performance.

Disclaimer: past performance is not an indicator of future performance.

About Canopy Rivers

Canopy Rivers is a unique investment and operating platform structured to pursue investment opportunities in the emerging global cannabis sector. Canopy Rivers identifies strategic counterparties seeking financial and/or operating support. Canopy Rivers has developed an investment ecosystem of complementary cannabis operating companies that represent various segments of the value chain across the emerging cannabis sector. As the portfolio continues to develop, constituents will be provided with opportunities to work with Canopy Growth Corporation (TSX: WEED, NYSE: CGC) and collaborate among themselves, which Canopy Rivers believes will maximize value for its shareholders and foster an environment of innovation, synergy and value creation for the entire ecosystem.

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Louis O'Neill
Louis O'Neill

Louis is a writer based in Sydney with a focus on social and political issues. Having interviewed local politicians and entrepreneurs, Louis now focuses on cannabis culture, legislation & reform.

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