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Toronto, Ontario – January 14, 2019 – Canopy Rivers Inc. (the “Company” or “Canopy Rivers”) (TSXV:RIV) today announced its investment in Greenhouse Juice Company (“Greenhouse”), a dynamic plant-based food and beverage company. Canopy Rivers has committed $9 million in a convertible debt financing package (the “Financing”) that includes secured and unsecured debt, warrant coverage, and board representation rights. Proceeds from this financing will be used to supplement Greenhouse’s national expansion and initiatives for the development of natural health and wellness beverages infused with cannabidiol (“CBD”).
Greenhouse is a proudly Canadian company delivering organic, plant-based food and beverages. Founded in January 2014, Greenhouse has expanded from a single retail outlet to an omnichannel business with 15 corporate-owned retail stores, an e-commerce delivery service (www.greenhouse.ca), and a growing network of distribution partners with hundreds of retail locations, including both big box and specialty boutiques. Greenhouse operates out of a purpose-built, food grade and GMP-compliant production and processing facility, one of the most sophisticated of its kind on the east coast of North America.
We believe CBD is poised to become a major ingredient within consumer packaged goods wellness products. Over five years, Greenhouse has built a successful, well-recognized beverage brand and a state-of-the-art manufacturing facility capable of producing a wide range of products.
Narbe Alexandrian, VP Business Development at Canopy Rivers
We see high-quality, low-sugar beverages as being ideal for infusion with non-psychoactive CBD, and we believe Greenhouse’s expansion into CBD-based products will further solidify its leadership position in the health and wellness space.
Products containing CBD, an active ingredient derived from cannabis plants, including hemp, are increasing in popularity as the health benefits of this natural and versatile compound are becoming more widely explored. CBD can be used in a variety of ways and is typically consumed as an ingestible oil or applied topically. Management believes that Greenhouse is an established leader among its peers and has the brand awareness and infrastructure required to bring CBD consumer products to market at scale. As a wellness ingredient, CBD is a natural fit for Greenhouse’s existing range of organic, plant-based, functional beverages. Greenhouse is developing a new line of products that will utilize full-spectrum CBD extracts, pure CBD isolates, and other non-psychoactive cannabinoids.
“As a plant-based health and wellness brand, Greenhouse is excited to continue our mission by expanding across Canada and extending into CBD-based beverages,” said Anthony Green, CEO of Greenhouse. “CBD shows evidence-based potential as a potent, non-psychoactive wellness ingredient and Greenhouse is uniquely positioned to be a trusted leader in this new space. We’re very excited to partner with Canopy Rivers, a global player in cannabis innovation, to introduce our brand to a growing audience and unlock the wellness potential of CBD-based beverages.”
The Financing includes a $6 million senior secured convertible debenture with a 12% yield, three-year term, and fixed conversion price. The second tranche is comprised of a $3 million unsecured convertible debenture with an automatic conversion mechanism based upon certain sales performance milestones at Greenhouse, and full warrant coverage on certain sales performance milestones as well. Additionally, the Company will receive incremental warrants entitling Canopy Rivers to increase its economic interest in Greenhouse under certain circumstances, as well as other governance-related rights.
About Canopy Rivers Inc.
Canopy Rivers is a unique investment and operating platform structured to pursue investment opportunities in the emerging global cannabis sector. Canopy Rivers works collaboratively with Canopy Growth (TSX: WEED, NYSE: CGC) to identify 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 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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