RIV Capital Provides Regulatory and Operational Update on New York’s Revised Cannabis Regulations

NEW YORK — RIV Capital Inc, an acquisition and investment firm focused on developing a leading multistate platform with a robust portfolio of brands in strategic U.S. markets, has shared a regulatory and operational update following the release of New York’s revised adult-use cannabis draft regulations by the New York State Cannabis Control Board (CCB) and the New York State Office of Cannabis Management (OCM).

The revised regulations bring notable changes, including a significantly shortened waiting period for Etain’s entry into the retail adult-use market. Etain will now be allowed to open one co-located store by the end of this year, with the second and third co-located stores becoming operational after June 29, 2024. This adjustment represents a departure from the initial draft regulations, which imposed a three-year waiting period. Additionally, the updated regulations introduce changes to the timing of market entry fees. Under the revised structure, licensees will be required to pay $5 million at the time of licensure, an additional $5 million within 180 days of opening the second store, $5 million upon reaching $100 million in revenue, and a final $5 million when $200 million in revenue is achieved. The collected fees will contribute to supporting social equity applicants.

Mike Totzke, COO and interim CEO of RIV Capital, expressed enthusiasm regarding the revised regulations, stating, “Rapidly opening more licensed dispensaries is the most immediate way to encourage a thriving, adult-use market in New York. The adjustments to the proposed waiting period will provide an opportunity to co-locate an adult-use dispensary before the end of this year and give consumers access to safe, high-quality cannabis.” Totzke also acknowledged the significance of the revised draft regulations in aligning with the vision of the Marijuana Regulation & Taxation Act and emphasized the company’s commitment to expanding cultivation and processing capabilities in preparation for entry into the adult-use market.

The newly passed regulations will now undergo a 45-day comment period before being finalized. With expectations of a prompt finalization, Etain is planning to commence wholesale sales in the adult-use market in the early fourth quarter of 2023.

In a separate development, New York Governor Kathy Hochul recently announced an agreement within the fiscal year 2024 state budget to combat the illicit market. This agreement expands the enforcement powers of the Office of Cannabis Management and the Department of Taxation and Finance, enabling them to impose penalties, such as closing operations and levying substantial fines, on illegal cannabis businesses.

RIV Capital commended the legislature and governor for striking a balance between enforcement against the illicit market and ensuring consumer safety. The company believes that these measures will help foster a safe and thriving legal cannabis market while providing support to social equity participants.

On the operational front, RIV Capital has been diligently preparing to become a leading vertically integrated operator in the New York cannabis market. The final phase of expansion at Etain’s cultivation and production facility in Chestertown, New York, has been completed, with planting already underway. This enhancement is expected to triple Etain’s original cultivation capacity, support research and development efforts, and facilitate product innovation. The company’s expansion efforts, along with ongoing construction of its flagship facility in Buffalo, position it to establish a leadership position in the adult-use market later this year.

RIV Capital, through its strategic relationship with The Hawthorne Collective, Inc., a subsidiary of ScottsMiracle-Gro, aims to grow its own brands and collaborate with established U.S. cannabis operators and brands to expand into new markets and gain market share.

As RIV Capital progresses towards its goals in the dynamic New York cannabis market, the company anticipates providing a comprehensive operational update in the near future.