Cansortium and RIV Capital to Merge, Expanding Cannabis Footprint Across Four States

LOS ANGELES- Cansortium, a Florida-based vertically integrated cannabis operator, is set to merge with RIV Capital, operator of the Etain Health cannabis brand in New York. Under the merger terms, Cansortium will acquire all issued and outstanding Class A common shares of RIV Capital in exchange for Cansortium shares.

Shareholders of Toronto-based RIV Capital will receive 1.245 Cansortium shares for each RIV share. Post-merger, Cansortium shareholders will hold approximately 51.25% of the combined entity, while RIV shareholders and The Hawthorne Collective, a ScottsMiracle-Gro subsidiary, will hold about 48.75%. The merger still requires shareholder approval.

The combined company will operate eight cultivation and processing facilities and 42 stores in Florida, New York, Pennsylvania, and Texas. It will have a pro forma cash balance of roughly $74 million to support growth and achieve cost efficiencies estimated between $5 million and $10 million annually. The merger will relieve The Hawthorne Collective of $175 million in debt.

Cansortium will retain its name and continue to trade on the over-the-counter markets as CNTMF and on the Canadian Securities Exchange as TIUM.U. The company will maintain its headquarters in Tampa, Florida, with Cansortium CEO Robert Beasley continuing as CEO of the merged entity.

Beasley emphasized the focus on growth, profitability, and operating efficiencies to deliver strong cash flows for shareholders. Cansortium’s revenue increased by 11% in 2023, reaching $97.3 million.

ScottsMiracle-Gro’s CEO Jim Hagedorn highlighted the strategic value of the merger, noting it aligns with their 2021 investment in RIV Capital and positions the combined company to expand in major U.S. markets.

The merger, expected to close by the fourth quarter of this year, is anticipated to deliver significant cost savings and operational efficiencies.