RIV Capital Expresses Optimism for New York Cannabis Market Amid Regulatory Developments

LOS ANGELES– RIV Capital remains optimistic about its position in the New York cannabis market, as highlighted during the company’s fourth-quarter and fiscal year-end 2023 earnings call. Interim CEO Mike Totzke expressed confidence in RIV’s New York-based cannabis business, particularly with the completion of the expansion of Etain’s Chestertown-based cultivation and production infrastructure. This expansion is expected to triple the current cultivation capacity.

However, the success of RIV Capital’s endeavors in the challenging New York market hinges on the realization of the latest draft regulations. Totzke emphasized the company’s plans to enter the adult-use wholesale market in the fourth quarter if the regulations come into effect. Notably, Etain products are already available in 75% of medical dispensaries across the state.

Matt Mundy, the Chief Strategy Officer and General Counsel, highlighted the significant progress represented by the updated draft regulations from the New York State Cannabis Control Board and New York State Office of Cannabis Management. He anticipates that these regulations will benefit the market by providing existing operators with additional opportunities to sell their products.

Mundy also discussed recent actions taken by New York Governor Kathy Hochul to combat the illicit cannabis market, including expanding the enforcement powers of the Office of Cannabis Management and the Department of Taxation and Finance. These measures aim to impose stricter penalties for engaging in illicit market sales.

In terms of financial performance, RIV Capital reported a gross profit of $200,000 for the quarter but incurred a net loss of $23.6 million. This net loss included a $16 million charge related to a settlement agreement announced on February 23, which involved repurchasing approximately 33.7 million common shares for cancellation. However, CFO Eddie Lucarelli emphasized that the company ended the fiscal year with nearly $98 million in cash and short-term investments, placing them in an enviable liquidity position.

In his closing remarks, Totzke expressed confidence in the New York market, citing the recent regulatory developments discussed by Mundy. He also mentioned that alongside RIV Capital’s entry into the adult-use market later this year, they are working towards finalizing a value accretive transaction aimed at driving stakeholder value.