Cansortium Stabilizes Finances with Riv Capital Merger
The TDR Three Key Takeaways regarding Cansortium Holdings and Riv Capital merger:
- Cansortium Holdings stabilizes finances with $70 million cash post Riv Capital merger.
- Consortium’s reduced net debt of $5 million post-merger, Anthony Varrell stated.
- Anthony Varrell commented, If adult use passes in Florida they could go to $200 million a year in the state of Florida.
The merger between Cansortium Holdings (OTC: CNTMF) and Riv Capital (CSE: RIV) are in the headlines in the cannabis industry. This step has not only stabilized Cansortium’s financial situation but also opened up new avenues for growth. Anthony Varrell, the co-host of “Trade to Black” podcast, highlighted the immediate impact on Cansortium’s balance sheet, stating, “The main concern with Cansortium was their balance sheet. And that concern has now been resolved. They now have $70 million in cash.”
Robert Beasley, CEO of Cansortium, emphasized the strategic benefits, stating, “The plan to bring together these two companies with core strengths in key growth states is expected to position us to drive near-term synergies, capitalize on opportunities for long-term value creation while continuing to provide high-quality service to customers who call Florida and New York home with the FLUENTTM brand experience.”
This merger has dramatically reduced Cansortium’s net debt. Varrell emphasized, “Cansortium now only has $5 million in net debt as a result of the merger.” The combined financial strength is expected to drive strategic expansion, particularly in Florida and Pennsylvania. The revenue potential in Florida is particularly notable, with Varrell commenting, “If adult use passes in Florida and we activate it in May, they could go to a $200 million a year run rate in the state of Florida.”
The ownership split post-merger gives Cansortium shareholders 51% of the new entity, while Riv Capital shareholders hold 49%. This balance reflects the strategic value seen in both companies. Varrell explained, “Cansortium shareholders come away with 51 percent of the deal. Riv Capital shareholders come away with 49 percent of the deal.” William Smith, Executive Chair of Cansortium, noted, “With the addition of the New York cannabis market, Cansortium is expected to hold the distinction of operating in 4 of the 5 highest population states in the U.S. following the closing of the transaction.”
The merger aims to leverage the combined cash reserves for growth. Varrell noted, “I think the main takeaway or the main headline that I’m reading from this is they keep mentioning that they’re going to leverage the cash that’s in the deal now for strategic growth.” Mike Totzke, interim CEO and COO of Riv Capital, echoed this sentiment, stating, “The Combined Company will enable Riv Capital to deliver on its vision of becoming an established multi-state operator, capable of deploying capital for strategic investments beyond New York.”The stock market has shown a mixed reaction to the merger. Cansortium’s stock price, trading around 16-17 cents, reflects investor sentiment. Varrell provided context, saying, “Cansortium’s trading at 16 cents, 17.1 points at 17.1 cents as of yesterday.” Chris Hagedorn, President of Hawthorne and director of Riv Capital, added, “Hawthorne and ScottsMiracle-Gro are fully supportive of the deal, and we expect that the Combined Company will unlock value drivers to the benefit of our shareholders as well as those of Riv Capital and Cansortium.” Want to be updated on all things Psychedelic, Cannabis, AI, and Crypto? Subscribe to our Daily Baked in Newsletter!
