INVESTOR PRESENTATION - FEBRUARY 2021 - Canopy Rivers
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INVESTOR
PRESENTATION
FEBRUARY 2021
TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com
Disclaimer
The information contained in this presentation has been prepared by RIV Capital Inc. (“RIV Capital” or the “Company”) and contains confidential information pertaining to the business and
operations of the Company and its Investees (as defined herein). The information contained in this presentation (a) is provided as at the date hereof and is subject to change without notice, and
such changes may be material, (b) does not purport to contain all of the information that may be necessary or desirable to fully and accurately evaluate an investment in the Company, and (c) is
not to be considered as a recommendation by the Company that any person make an investment in RIV Capital.
This presentation does not constitute (i) a solicitation of a proxy, consent or authorization with respect to any securities or (ii) an offer to sell, a solicitation of an offer to buy, or a
recommendation to purchase any security of RIV Capital, or any of its affiliates (and there shall not be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be
unlawful prior to the registration or qualification under the securities laws of any such jurisdiction). You should not construe the contents of this presentation as legal, tax, accounting or
investment advice or a recommendation. You should consult your own counsel and tax and financial advisors as to legal and related matters concerning the matters described, and by accepting
this presentation, you confirm that you are not relying upon the information contained herein to make any decision.
This presentation is confidential and is being provided to you solely for your information and may not be reproduced, in whole or in part, in any form or forwarded or further distributed to any
other person. Any forwarding, distribution or reproduction of this presentation in whole or in part is unauthorized. By accepting and reviewing this presentation, you acknowledge and agree (i)
to maintain the confidentiality of this presentation and the information contained herein, (ii) to protect such information in the same manner you protect your own confidential information, which
shall be at least a reasonable standard of care, and (iii) not to utilize any of the information contained herein except to assist with your evaluation of a potential investment in the Company.
No representation or warranty (whether express or implied) is made by the Company and the Investees or any of their respective directors, officers, affiliates, advisors or employees as to the
accuracy, completeness or reasonableness of the information, statements, opinions or matters (express or implied) arising out of, contained in or derived from this presentation or provided in
connection with it, or any omission from this presentation. None of the Company, the Investees or their respective directors, officers, affiliates, advisors and employees accept any responsibility
or liability to you or to any other person or entity arising out of this presentation.
No securities commission or securities regulatory authority in Canada, the United States or any other jurisdiction has in any way passed upon the accuracy or adequacy of this presentation.
Unless otherwise indicated, all financial information in this presentation is reported in Canadian dollars.
T HI R D P A RTY I NF O R M ATI ON
This presentation includes market and industry data which was obtained from various publicly available sources and other sources believed by RIV Capital to be true. Although RIV Capital
believes it to be reliable, the Company has not independently verified any of the data from third party sources referred to in this presentation, or analyzed or verified the underlying reports relied
upon or referred to by such sources, or ascertained the underlying assumptions relied upon by such sources. The Company does not make any representation as to the accuracy of such
information. This presentation also includes data and financial information which was obtained by RIV Capital from various Investees. Although RIV Capital believes it to be reliable, it has not
independently verified all of the data from Investees referred to in this presentation or ascertained the underlying assumptions relied upon by such Investees. The Company does not make any
representation as to the accuracy of such information.
F O R WARD-LO OKING I NF O R M ATI ON
This presentation 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. To the extent any forward-looking information in this presentation
constitutes "financial outlooks" within the meaning of applicable Canadian securities laws, the reader is cautioned that this information may not be appropriate for any other purpose and the
reader should not place undue reliance on such financial outlooks.
TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com 2
Disclaimer (continued)
Forward-looking information is often identified by the words “may”, “would”, “could”, “should”, “will”, “anticipate”, “believe”, “expect”, “intend”, “seek”, “positioned”, “project”, “risk”, “plan”,
“estimate” or similar expressions, and forward-looking information in this presentation includes, but is not limited to, information and statements regarding: the Company’s and the Investees’
expected future financial results, goals, plans, business activities and opportunities, competitive advantages and ability to create value as well as consumer and industry trends, including RIV
Capital’s analysis thereof, market size, growth opportunities; expectations regarding the Investees’ customers, potential monetization events and benefits of the Investees’ products, services and
technologies; the Company’s belief that operating businesses in the U.S. cannabis market experience uncertain and constrained access to capital; the possibility of broader cannabis reform and
the federal legalization of cannabis in the U.S.
Forward-looking information contained in this presentation is based on certain assumptions, including assumptions regarding the expected financial performance of the Company and the
Investees, economic conditions, consumer and industry trends, market size and growth opportunities. While management believes these assumptions to be reasonable, based on information
available as of the current date, 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. Financial outlooks, as with forward-looking information generally, are, without limitation, based on the
assumptions and subject to various risks as set out herein.
Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: a lack of control over the operations of the
Company’s investees (the “Investees”); compliance with laws; changes in laws, regulations and guidelines; infectious diseases, including the novel coronavirus pandemic; challenging global
financial conditions; business strategy risk; risks inherent in strategic alliances and investments; risks associated with divestment and restructuring; additional financing risk; volatility of the price
of the Company’s Class A Common Shares; the attractiveness of the Company’s Class A Common Shares as an acquisition currency; competition risks; dependence upon key personnel; conflicts of
interest; the fact that cannabis is a controlled substance in the United States; risks associated with legalization developments in the United States and growth in the U.S. cannabis market; risks
associated with the United States Agricultural Improvement Act of 2018; credit and liquidity risks; security over underlying assets; risks associated with material contracts; impairment of
investment in PharmHouse Inc.; litigation involving PharmHouse Inc.; the outcome of the CCAA (as defined herein) proceedings or the sale and solicitation process with respect to PharmHouse
Inc.; internal controls; expansion into foreign jurisdictions; limited operating history; difficulty to forecast; fluctuations in cannabis prices; reputational risk; catastrophic events, natural disasters,
severe weather and disease; management of growth; equity price risk; anti-money laundering laws and regulation risks; anti-bribery law violations; litigation; cybersecurity and privacy risks;
unknown defects and impairments; security over underlying assets; entry bans into the United States; hedging risk; classification as a passive foreign investment company; risks related to
dividend payments; restrictions on the acquisition or use of properties by foreign investors; reliance on Investee licences; failure of certain Investees to obtain necessary licenses; reliance on
Investee facilities; access to capital for the Investees; governmental regulations; operating risks for Investees; increased operational, regulatory and other risks; lack of access to United States
bankruptcy protections; the compatibility of existing technologies in cannabis; testing and trials for certain Investees’ products; operations in emerging markets; ability to forecast certain
Investees’ production; competitive conditions for the Investees; the ability of the Investees to acquire customers; constraints on the Investees’ ability to market products; risks inherent in an
agricultural business; wholesale price volatility; recent announcements and risks regarding vaping products; product recalls by the Investees; product liability risks for the Investees;
environmental and employee health and safety regulations; reliance of certain Investees on key inputs; reliance of the Investees on suppliers and skilled labour; research and development; rapid
technological change; the slow acceptance of Investee products; inflation; corruption and fraud risk; intellectual property risks; insurance risks; certain Investees’ vulnerability to rising energy
costs; transportation risks associated with the delivery of certain Investees’ products; and the other risk factors more fully described in the Company's Annual Information Form dated June 2,
2020 and the Company’s Management Information Circular dated January 15, 2021, each 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.
TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com 3
RIV Capital is an investment firm
specializing in cannabis.
Our mission is to capitalize on the building
momentum in the U.S. cannabis market and pursue
large investments in, or acquisitions of,
established U.S.-based operating businesses.
TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com 4
Evolution into RIV Capital
Our evolution into RIV Capital is the result of
a transformative transaction which created
Strong balance sheet
significant benefits to our shareholders.
The recently closed plan of arrangement unlocks
significant value, substantially strengthens our
Access to new investment
balance sheet with the addition of $118 million in
opportunities
cash and 3.65 million common shares in Canopy
Growth, and enables the Company to access
exciting investment opportunities in the U.S. market.
Significant value
Our goal is to deliver value to our shareholders by
and liquidity
leveraging our balance sheet, network and domain
expertise to accelerate the growth of the companies
we invest in or acquire.
TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com 5
Focus on high growth U.S. market
We believe that the best opportunities in cannabis today
are in the high growth U.S. market. As federal and state
US$31.4B
regulations continue to evolve and capital markets Estimated Potential U.S. Market Size4
remain underdeveloped, we believe that we are entering (2024)
the U.S. market at an advantageous point.
The U.S. market continues to see
significant growth with accelerating
U.S. cannabis market size (2017–2020)1
regulatory momentum
YoY CAGR: 22% US$15.8B
US$12.4B
2020 cannabis sales: US$15.8B1
US$10.5B
US$8.6B Total fully legal states: 152
Medical: 362 / Adult-Use: 152
Addressable population: 233MM3
Medical: 233MM3 / Adult-Use: 111MM3
2017A 2018A 2019A 2020A
State legalization figures exclude Washington, D.C.
1 Arcview Research and BDS Analytics, “The State of Legal Marijuana Markets – 6th Edition” (2019)
2As of November 4, 2020 post 2020 ballot results
3State population based on latest release from United States Census Bureau as of July 1, 2019 TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com 6
4As per Arcview Research
Regulatory momentum expected to increase in 2021
Key potential catalysts
Current and prospective legal states Fundamentals for state growth
• Several states declared cannabis businesses ‘essential’ during
WA COVID-19 pandemic.
AK
ME
OR
MT ND
MN VT
• Legal cannabis accounts for ~321,000 full-time equivalent jobs in the U.S.
ID
WI
NH
MA
The number of jobs in the U.S. cannabis industry increased by 161% in the
NY
last four years.1
SD
MI CT
WY RI
IA PA
NJ
NV
UT
NE
OH DE • Regulatory momentum in New York, Pennsylvania, Virginia, Connecticut,
IN
and New Mexico.
CA IL WV MD
CO
VA
KS KY DC
MO
NC
TN
AZ
NM
OK
AR SC Supportive federal administration
GA
AL
• The Biden administration is supportive of broader cannabis reform, with
MS
TX LA
Senate Majority Leader Chuck Schumer announcing steps to prioritize
FL
cannabis reform measures and release a federal cannabis legalization
HI
proposal in 2021.
• With Congress showing an increased focus and prioritization on cannabis-
related legislation, a number of potentially significant bills, including the
Adult-Use State Medical-Use State Prospective Legal State STATES Act2, the MORE Act3, and the SAFE Banking Act4, could be
potentially taken up by this Congress.
Industry advocating for reform
• Formed in Feb 2021, U.S. Cannabis Council unites the cannabis reform
efforts of cannabis businesses, associations, and advocacy organizations.
1LeaflyJobs Report (2021)
2Strengthening the Tenth Amendment Through Entrusting States Act
3Marijuana Opportunity Reinvestment and Expungement Act of 2019 TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com 7
4Secure and Fair Enforcement Banking Act
VALUE PROPOSITION TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com
A diversified global platform and portfolio
PORTFOLIO
RIV Capital has various investments in disruptive
cannabis companies that present both potential
strategic value and monetization opportunities.
GEOGRAPHIC EXPOSURE
Through our portfolio, we have cannabis-related
exposure in Canada, the U.S., and New Zealand.
Additional details on portfolio companies in Appendix. TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com 9
Unparalleled industry insights and deal flow
RIV Capital has assessed and conducted due diligence on pitches from companies across 10 verticals of
the cannabis value chain. These insights inform our expertise on how the industry is developing and
enable us to form strategic relationships with leaders both in and outside the cannabis industry.
Agriculture & Cultivation & Processing Consumer Software & Retail & Media &
Food Sciences Production Products & Data Distribution Content
Accessories
Pharma & Wellness
Biotech Products
Hardware
TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com 10Strong balance sheet and capital structure
Investment portfolio Ownership and capitalization summary
Equity Indicative
Investee Investment Structure Stake1 Value2
(fully diluted) (millions) Basic Shares # of Shares % of Basic % of FDSO
Preferred Equity 9% $12.7
JW Asset Management, LLC 33,433,334 23.6% 20.0%
Common Equity / Convertible Debenture / Royalty Interest
25% $7.7
/ Warrants Other Shareholders 108,020,453 76.4% 64.8%
Convertible Debentures / Preferred Shares / Warrants 27%3 $6.4 Total Basic Shares Outstanding 141,453,787 100.0% 84.8%
Royalty Interest N/A $5.4
Dilutive Securities
Convertible Promissory Note / Preferred Equity 8% $5.1
Options 9,636,668
Common Equity / Warrants 11% $3.7
Warrants 14,400,000
Convertible Promissory Note / Preferred Equity 11% $2.8
Restricted Share Units 385,192
Common Equity 17%4 $2.3
Performance Share Units 925,000
Common Equity 6% $2.15
Fully Diluted Shares Outstanding 166,800,647
Convertible Promissory Note / Preferred Equity / Warrants 19% $1.0
Subtotal: $49.2
1Represents equity stake as at December 31, 2020.
2Please refer to the Company’s interim consolidated financial statements for the quarter ended December 31, 2020 for further information.
3Excludes control warrant.
4Equity stake in LeafLink Services International ULC, a separate entity from LeafLink, Inc. Please refer to Appendix for further information.
5Based on the closing price of common shares as of February 23, 2021. TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com 11Uniquely positioned to capitalize on opportunities in the U.S.
Domain expertise. Assessed pitches from companies around the world and across the
cannabis value chain, giving us unparalleled insights into how the industry is developing.
Strategic relationships. Connected to a global network of some of the industry’s
foremost leaders.
Strong balance sheet and liquidity. Cash position, liquid securities, and monetizable
portfolio assets position the company well to invest in or acquire U.S.-based companies.
Attractive capital structure. Advantageous for acquisitions, investments, and capital
raises.
Strategic flexibility. Ability to evolve business strategy as needed in the absence of a
controlling shareholder.
TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com 12APPENDIX TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com
Industry leading professionals
Narbé Alexandrian Eddie Lucarelli
P R E S ID ENT A ND CE O CH I E F F I NA NCIA L
Venture Capital OF F I CER
Concept to Mergers & Acquisitions
Commercialization Corporate Finance
Experienced team of professionals from tier one firms
Matt Mundy Mary Dimou
CH I E F S T R ATEGY S E NI OR D I R E CT OR,
OF F I CER A ND BU S I NESS D E V E L OPMENT
G E NER A L COU NSEL
Mergers & Acquisitions Venture Capital
Corporate Governance Scientific Research &
Development
TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com 14Governance leadership and oversight
Asha Daniere 1,2,3 Richard Mavrinac 1,2,3
CH A I R A ND DI R E CTOR
D I R E CTOR
Legal Grocery Retail
Mergers & Acquisitions Mergers & Acquisitions
Board of directors with unique and complementary insights
Joe Mimran 1,2,3 Narbé Alexandrian
D I R E CTOR DI R E CTOR ,
P R E S IDENT A ND CE O
Brand Development Venture Capital
Fashion Retail Concept to Commercialization
1Member of the Conflicts Review Committee; Asha Daniere is the Chair of the Conflicts Review Committee.
2Member of the Compensation, Nominating and Governance Committee; Joe Mimran is the Chair of the
Compensation, Nominating and Governance Committee.
3Member of the Audit Committee; Richard Mavrinac is the Chair of the Audit Committee. TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com 15Insight & guidance
Julian Burzynski Philip Donne
S T R ATEGI C A D V I S OR S T R ATEGI C A D V I S OR
Alcohol & Beverage Marketing & Advertising
Sales & Distribution Grocery Retail
Business leaders with proven track records in their respective industries
Meg Lovell John Ruffolo Thirty Five Ventures
S T R ATEGI C A D V I S OR S T R ATEGI C A D V I S OR S T R ATEGI C A D V I S OR
Legal Venture Capital Brand Development
Mergers & Acquisitions Technology Sports & Entertainment
TSX:RIV | OTC:CNPOF | @rivcapital | rivcapital.com 16INVESTMENT SUMMARY
CAPITAL COMMITTED
ROYALTY 1
& CONTRIBUTED
$20.0 million $20.0 million
royalty purchase
price
20-year term
Leader in extraction, cultivation, award-winning genetics, Annual minimum
value added products, and iconic brands of $4.0 million
AT A GLANCE
Creemore, ON Indoor and 20,000 sq. ft indoor Licensed
Exclusive Canadian licensee of Cultivation, processing, and Outdoor 570,000 sq. ft outdoor December
SLANG Worldwide Inc. and sales licences Facility 2014
Green House Seed Co. brands
including Strain Hunters, Secured supply agreement with
O.penVAPE and District Edibles OCS; O.pen products available
in British Columbia
1RIV Capital determined that there is a significant risk that Agripharm would not be able to meet its financial obligations pursuant to the
royalty agreement based on underlying business conditions. Accordingly, RIV Capital recognized a provision for expected credit losses
on the royalty receivable of $2,853,000 and $3,636,000 for the three and nine months ended December 31, 2020, respectively and
adjusted its cash flow assumptions used in its fair value estimate for the royalty interest to reflect a projection of royalty cash flows that
Agripharm would be expected to be able to service. For more information, refer to RIV Capital’s Q3 FY2021 MD&A and slide 3 – Forward-
Looking Information.
17INVESTMENT SUMMARY
CAPITAL COMMITTED CONVERTIBLE PROMISSORY
EQUITY
& CONTRIBUTED NOTE
$2.7 million $0.7 million face value $2.0 million
11% ownership interest
6% interest rate
Innovative company in the plant physiology
and photobiology domains
AT A GLANCE
Palmerston North, Ag-tech and 10 global Proprietary
New Zealand Plant Sciences partnerships across Engineering
agricultural industry
Proprietary technology Treatments for Backed by leading ag-
enables precise control transplanted seedlings tech investors
of UV light through UV and seeds
photomorphogenesis, a • Finistere Ventures –
key factor in regulating Treatments for cannabis focused on ag-tech and
plant growth achieved 59% dry flower supported by industry
mass gains in recent trials leaders like Nutrien
Short-duration UV
treatments that target Demonstrated cannabinoid • Rabo Food and Agri
key traits and outcomes increases of 25% or higher Innovation Fund –
for crops in each of THCA, CBGA, launched by Rabobank,
CBG, CBD, and CBC a global leader in
Expected long-term agriculture financing
benefits include Lab and early-stage trials
increased yield and have been completed on
disease resistance soybeans, corn, lettuce,
and strawberries
18INVESTMENT SUMMARY
CAPITAL COMMITTED CONVERTIBLE
WARRANT
& CONTRIBUTED DEBENTURE
$5.1 million $5.1 million face value Right to purchase $3.5
million in common
14% interest rate shares at a $40.0
million fully diluted
valuation
Media and technology company producing
multimedia content for the cannabis industry
AT A GLANCE
Operates a news and Acquisitions include:
entertainment website and Saint John, NB Multi-platform network 138K+ Social
video content network for Revolution Strategy –
Media
cannabis consumers full-service marketing Followers
communications agency
The 420 Games – events
company hosting athletic
competitions that highlight
cannabis consumptionINVESTMENT SUMMARY
CAPITAL COMMITTED EQUITY AND
& CONTRIBUTED WARRANTS
$2.0 million 11% equity interest
1.0 million warrants at an
exercise price of $1.42 per
warrant
Licensed manufacturer of edible cannabis
gummies for the Canadian market
AT A GLANCE
The purpose-built manufacturing Dynaleo expects it will develop
a customer pipeline that Edmonton, AB Edible cannabis 27,000 sq. ft. Licensed
plant contains specialized and
manufacturing facility June 2020
automated production includes both licensed
equipment that is intended to producers as well as traditional
produce CBD and THC edibles consumer packaged goods
companies
Dynaleo has the capability to
customize gummies in a wide Dynaleo signed letters of
range of flavours, textures, intent with Pantry and High12
colours, shapes and sizes to meet Brands
customers’ needs and regulatory
requirements
Please refer to slide 3 – Forward-Looking Information.INVESTMENT SUMMARY
CAPITAL COMMITTED CONVERTIBLE
EQUITY
& CONTRIBUTED DEBENTURE
$12.0 million $6.0 million face value $3.0 million
committed, with $9.0
million contributed 12% interest rate 27% ownership
interest (excluding the
control warrant) upon
full commitment and
Plant-based food and beverage company seeking to
conversion
make healthy and sustainable the new normal
AT A GLANCE
Company-owned Purpose-built, SQF-, Greenhouse Juice
stores and network HACCP- and organic- tackles new Mississauga, ON Beverage 35,000 sq. ft Founded in
of grocery chain and certified production innovation challenges Manufacturing 2014
Facility
food service partners facility
with hundreds of Implementing non-
retail locations Provides Greenhouse thermal UV technology
across Canada Juice with flexibility to for cold-pressed juices
remain on the cutting
Includes: Loblaws, edge of functional Developing non-dairy
Whole Foods, Sobeys, beverage trends, while milk emulsions free of
Thrifty Foods, Farm remaining competitive additives, gums or
Boy, IGA, Fresh St. on price and quality stabilizers
Markets, Pusateri’s
Please refer to slide 3 – Forward-Looking Information.
21INVESTMENT SUMMARY
CAPITAL COMMITTED CONVERTIBLE PROMISSORY EQUITY
& CONTRIBUTED NOTE
$5.4 million $1.1 million face value $4.3 million
8% interest rate 8% ownership interest
Cannabis market intelligence platform providing
real-time insights to producers and processors
AT A GLANCE
Bellevue, ~150 Customers Real-Time Data
Washington Insights
Currently integrated Strategic alliance Founder/CEO Cy Scott
with 13 different with Nielsen (NYSE: co-founded Leafly in
point-of-sale NLSN) 2010, and helped grow
system providers to the company into a
pull sales data for Combining capabilities successful exit with
retail intelligence to deliver greater Privateer Holdings
visibility and insight
Tracks performance into market trends,
and trends across 10 consumer sentiment,
categories and over the competitive
70 subcategories landscape, and
interaction points
within CPG categories
22INVESTMENT SUMMARY
CAPITAL COMMITTED EQUITY
& CONTRIBUTED
$1.5 million 25% ownership interest
(excluding the control warrant)
Brand platform focused on the adult-use cannabis
beverage and herbal supplement beverage markets
AT A GLANCE
Mississauga, ON Beverage Founded in
Manufacturing 2019
Licensed for research and Facility
Current products in market
development activities are phytotonic beverages
under the Cannabis Act featuring active herbal
ingredients
Herbert has applied for a
processing licence and is Beverages are designed for
building a dedicated distribution across North
purpose-built, food-grade, America
and GMP-compliant
production and processing
facilityINVESTMENT SUMMARY
CAPITAL COMMITTED CONVERTIBLE EQUITY
& CONTRIBUTED PROMISSORY NOTE
AND WARRANTS
$4.3 million $1.0 million $3.3 million
8% interest rate 19% ownership
interest
high is a cannabis beauty brand from High Beauty
AT A GLANCE
Northern Distributed by Founded in
California 33 retailers to 2018
Founded by organic Retail partners include: Made with cannabis
over 2,800
beauty pioneer sativa seed oil – high stores
Melissa Jochim Macy’s, IPSY, Sprouts, products are free of all
Anthropologie, Indigo, psychoactive substances
Melissa has Hudson's Bay, Shoppers from the cannabis plant
formulated skincare Drug Mart, Douglas,
products including: Amazon, and Today’s Therapeutic benefits to
Alba Botanica,
Blossom Organics, and Shopping Choice, among the skin include:
Juice Beauty others. neutralizing inflammation,
balancing moisture levels,
Melissa holds 14 New canBE brand preventing free-radical
patents for her available on Walmart.com damage
skincare formulations and in 1,760 CVS locations
24INVESTMENT SUMMARY
CAPITAL COMMITTED EQUITY
& CONTRIBUTED
$2.6 million 17% ownership interest
Joint venture, LeafLink International, with LeafLink Inc., leveraging
its B2B marketplace and supply chain technology platform for
deployment throughout regulated cannabis markets outside the U.S.
AT A GLANCE
LeafLink LeafLink Inc. 5,800+ Retailers 27 Territories
International Operations in New and 1,900+
Operations in York and Los Angeles Brands
LeafLink Inc. connects 5,800+ LeafLink Inc.’s SaaS marketplace Toronto, ON
cannabis retailers across 27 simplifies the supply chain
territories with 1,900+ brands
Retailers can manage wholesale
Facilitates US$3+ billion in gross inventory, enabling them to shop
merchandise value annually from multiple vendors, request
samples, review orders and more
LeafLink Financial closed a
US$250 million credit facility, one Vendors can access order
of the largest debt financing management, customer
deals completed in cannabis relationship management,
inventory tracking and reporting
25INVESTMENT SUMMARY 1
Joint venture (JV) formed in May 2018 with principals of leading North American greenhouse
vegetable producer/distributor (the PharmHouse Majority Shareholder)
Since JV formation, RIV Capital invested $11.0 million in common equity, and provided a $40.0
million shareholder loan, a $2.5 million secured demand promissory note, and a $1.2 million
unsecured demand promissory note. RIV Capital also guaranteed PharmHouse’s $90.0 million
syndicated credit facility
Over a two-year period, PharmHouse completed the retrofit of its state-of-the-art cannabis
facility in Leamington, Ontario, and received its full cultivation licence in February 2020, which
enabled it to commence growing activities pursuant to offtake agreements with Canopy Growth
and TerrAscend Canada
Offers contract growing services, producing high quality
cannabis for licensed producers and brands at low In August 2020, it was determined that PharmHouse may have insufficient liquidity and capital
production costs. resources to achieve its business objectives and meet its financial obligations. Shortly after,
PharmHouse filed for creditor protection under the Companies’ Creditors Arrangement Act
(CCAA)
RIV Capital entered an agreement to provide debtor-in-possession (DIP) financing of up to $9.7
million to enable PharmHouse to continue its day-to-day operations during the CCAA
proceedings
PharmHouse is currently undergoing a Sale and Investment Solicitation process to solicit
interest in, and opportunities for, a sale of, or investment in, all or part of PharmHouse’s assets
or business, which may include a restructuring, recapitalization, or other form of reorganization
of PharmHouse’s business and affairs
PharmHouse has a genetic PharmHouse’s 1.3 million sq. ft. As at December 31, 2020, RIV Capital determined that the principal amounts advanced
library with more than 50 greenhouse features 10 pursuant to its shareholder loan, secured demand promissory note, unsecured demand
strains promissory note, and DIP financing, as well as the interest receivable across these debt
growing rooms and a 190k sq. ft. instruments, may not be recoverable and recognized a full provision for expected credit losses
propagation and nursery space, on these balances on its statement of comprehensive loss. Additionally, the Company estimated
Licensed producers and brands enabling year-round, the carrying value of the financial liability related to its guarantee of the PharmHouse
growing with PharmHouse can consistent, and low-cost syndicated credit facility to be $32.5 million and recognized a financial guarantee liability for
supply their own genetics or production at scale this amount on its statement of financial position, as well as a corresponding provision for
expected credit losses on its statement of comprehensive loss.
choose from this library of high
THC or CBD strains In Feb 2021, RIV Capital received a statement of claim filed by the PharmHouse majority
shareholder concerning certain disputes relating to PharmHouse. The Claim is substantially
similar to a claim previously filed in September 2020, which was subsequently discontinued. As
with the previously filed statement of claim, RIV Capital views the Claim as it relates to its
actions to be completely without merit and intends to vigorously defend its position at the
appropriate time and in the appropriate forum.
1For more information, refer to RIV Capital’s Q3 FY2021 MD&A and slide 3 – Forward-Looking Information.INVESTMENT SUMMARY
CAPITAL
CONVERTIBLE EQUITY AND
COMMITTED ROYALTY
DEBENTURE WARRANTS
& CONTRIBUTED
$11.0 million $1.0 million $5.0 million $5.0 million royalty
purchase price
12% interest rate 25% ownership
interest 20-year term
Small batch, craft cannabis recognized by the Ontario 0.3 million warrants Annual minimum of
Cannabis Store (OCS) for its premium product at an exercise price $0.9 million1
of $0.75 per warrant
AT A GLANCE
Expansion potential Strategically Experienced team with
and low located in Hamilton, diverse and Hamilton, ON Indoor Facility 40,000 sq. ft Licensed
development risk Ontario complementary licensed November 2018
backgrounds
Advanced facility Close proximity to key
being developed in transportation
Extensive experience
three phases: onsite infrastructure
in regulated
testing, breeding and
industries, retail
tissue culture Large urban population
distribution and
laboratories, and to attract personnel
pharmaceutical
proprietary extraction and access a significant
development
infrastructure customer base
1Annualpayments above are based on the contractual terms of the underlying instruments in effect as at December 31, 2020
and may not reflect actual cash amounts received by the Company. Please refer to slide 3 – Forward-Looking Information.INVESTMENT SUMMARY
CAPITAL COMMITTED EQUITY
& CONTRIBUTED
$3.3 million 6% ownership interest
Publicly-traded (TSXV:YSS) (WKN: A2PMAX) cannabis retailer
with a vision to become the trusted destination for cannabis in AT A GLANCE
Canada
Alberta, Canada 19 Licensed Expansion plans into
Operating Retail Ontario
Locations
Established Alberta growth profile Operational and management
experience in retail, hospitality
Strategic portfolio of locations, and controlled industries
favorable demographics, strong
balance sheet, and prudent capital Competitive advantage driven by
management position company for commercial real estate knowledge
growth when supply issues are and long-term relationships
resolved
The YSS retail experience is built on
Addition of retail presence in five fundamental pillars: convenience,
Saskatchewan value, selection, team, and trust
CA$5.8 million revenue and CA$561K
store-level EBITDA in Q3 2020
28INVESTMENT SUMMARY
CAPITAL COMMITTED EQUITY
& CONTRIBUTED
$13.5 million 9% ownership interest
Plant science innovator with proprietary technologies that aim
to sustainably increase photosynthesis, improve plant yield and
enhance nutritional profiles for a variety of crops
AT A GLANCE
San Diego, CA Ag-tech and Positive Trial Tested in New
Converting more Multi-year field trials Strong partnerships Plant Sciences Results with Row Zealand, U.S.
sunlight and CO 2 into across diverse plant and experienced team Crops and Canada
energy for plant growth species
Multi-year partnership
Benefits for farmers: Initial commercial with Corteva
better productivity focus on major row Agriscience, recent spin-
and profit margins crops out of DowDupont – one
of the largest soy and
PhotoSeed seed
Benefits for
technology tested in
consumers: higher Partnership with
the U.S., Canada and
nutritional profiles Gro Alliance, the
New Zealand
and a sustainable largest, independently
way to meet growing owned contract seed
ZeaKal has officially
demand corn and soybean seed
started its research
program in hemp production company in
the U.S.
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