TORONTO, March 25, 2019 (GLOBE NEWSWIRE) -- PRESS RELEASE -- Canopy Rivers Inc. has announced that Canopy Growth Corporation and its portfolio company, Spot Therapeutics Inc., have received a cultivation license from Health Canada for its Fredericton-based production and distribution facility. The newly licensed facility will operate under the flagship Tweed banner and is another important pillar in the Canopy family of companies’ commitment to establishing a local presence, engaging local trades and creating economic opportunities within the provinces and communities the companies serve.
In 2017, Canopy Growth solidified its expansion strategy in Atlantic Canada when it acquired Spot and made significant local funding commitments in collaboration with Canopy Rivers, ultimately resulting in Canopy Growth being rewarded with one of the first provincial supply contracts in the cannabis industry, pursuant to a landmark MOU with the government of New Brunswick.
Canopy Rivers purchased the production facility at that time and entered into a long-term lease with Canopy Growth with respect to the facility, and also provided a significant capital commitment for the development of the New Brunswick-based project via a repayable debenture. The receipt of Spot’s cultivation license represents a triggering event under the debenture and initiates a long-term cash flow stream that is anticipated to be approximately $2.85 million per year, with a 25-year term. Commencement of the cash flow stream is expected to begin in September 2019.
“The long-term income stream from Spot, combined with our existing royalty portfolio, will further stabilize Canopy Rivers’ operating cash flow profile and provide us with additional financial resources to deploy as we continue to make investments in industry verticals we believe offer long-term strategic value for our portfolio partners and shareholders,” said Eddie Lucarelli, CFO of Canopy Rivers.
For more information regarding the company’s investment in Spot, please refer to the joint management information circular of Canopy Rivers Corporation and the Company dated Aug. 8, 2018, filed with Canadian securities regulators and available on the company’s profile on SEDAR at www.sedar.com.
