Canopy Rivers Invests Additional US $10 Million in TerrAscend

TORONTO, Oct. 2, 2019 /CNW/ - 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," said Narbe Alexandrian, President & CEO of Canopy Rivers. "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.

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.

Forward-Looking Statements

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 Canopy Rivers 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: the terms of the Investment; the conversion of the Debentures into common shares or exchangeable shares of TerrAscend; Canopy Rivers' right to acquire common shares of TerrAscend pursuant to the Warrants; the use of proceeds from the Investment; management's belief that TerrAscend is uniquely positioned to meet evolving consumer demands in the three largest cannabis markets worldwide; management's belief in TerrAscend's ability to execute on its global strategy, market a diversified brand portfolio, and build on its recent acquisitions; the expectation that the Investment will enable TerrAscend to accelerate its investments in key markets; 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 Canopy Rivers 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 Canopy Rivers. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: regulatory and licensing risks; the ability of Canopy Rivers to exercise the Warrants in order to acquire common shares of TerrAscend; changes in the use of proceeds from the Investment; TerrAscend's ability to complete and integrate acquisitions and other global strategies and to market a diversified brand portfolio; changes in consumer demands and TerrAscend's ability to meet such demands; 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; public opinion and perception of the cannabis industry; and the risk factors set out in Canopy Rivers' annual information form dated July 15, 2019, filed with the Canadian securities regulators and available on Canopy Rivers' 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 Canopy Rivers 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. Canopy Rivers 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 Canopy Rivers Inc.

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