RIV Capital CEO Departs, Revenue Shows Slight Improvement in Q3 2022, and Company Looks to Unlock Intrinsic Value
LOS ANGELES– Canadian cannabis investment company RIV Capital announced on Tuesday that CEO Mark Sims was leaving the company with immediate effect. The departure came as the company revealed its financial results for the quarter ending 31 December 2022. Despite a slight increase in revenue, RIV Capital reported a net loss of $9.8m, compared with $2.7m during the same period the previous year. The loss per share for the quarter was $0.06. Mike Totzke, previously COO, was appointed interim CEO as the board searches for a permanent replacement.
Sims was instrumental in the acquisition of Etain, a New York medical operator that cost RIV Capital over $200m and delivered just $5.4m in sales over nine months ending December 2022. The company has also recently settled a dispute with one of its investors, JW Asset Management, over the acquisition of Etain.
Despite being shut out of the adult-use market in New York, Etain is focusing on wholesale cannabis and will provide the product to conditional adult-use dispensaries opening in the state this year. RIV Capital’s current inability to participate in the adult-use market is due to it being a vertical operation, which is not allowed. However, the company is working with the New York Office of Cannabis Management to try to enter the market. Any expansion would require additional capital expenditures in the range of $35,000 to $40,000.
RIV Capital has cash resources of $125m, a strategic partnership with Hawthorne, and one of only 10 vertical licences in New York. The company believes that these assets represent significant intrinsic value that has yet to be realised. It has established a strategic growth committee to develop and lead growth strategies, including potential strategic M&A. Chris Hagedorn, a board member and president of Hawthorne, will chair the committee.
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