Female-Owned Etain Sells To Riv Capital For $247 Million

Etain, the New York cannabis market’s only women-owned and -operated business and one of the state’s original five medical cannabis license holders has been sold to RIV Capital, Inc. (CSE: RIV) (OTC: CNPOF) for $247 million. RIV Capital will acquire ownership and control of the Etain companies once it gets regulatory approvals, including from the New York Cannabis Control Board and the New York State Office of Cannabis Management.

At one point in New York, there was a restriction that a minority-owned cannabis company could only sell to another minority-owned company so it remains to be seen if this will be enforced. RIV Capital is funded by Scotts Miracle-Gro (NYSE: SMG), so essentially Scotts is buying a cannabis company. RIV is paying $212 million in cash and $35 million in stock.

Etain COO, Hillary Peckham said, “This agreement marks the most significant transaction for a women-owned business in cannabis history. While the Peckham family will be stepping back from control of the company, we will be actively partnered with RIV Capital on preserving the ethos of the Etain brand and utilizing our combined efforts to continually find and make new spaces for women in cannabis. RIV Capital clearly recognized the potential for women-led brands to flourish in the cannabis industry, and we are proud that our work at Etain has led us to this point in time.”

Etain is one of only 10 approved vertically integrated operators in the state of New York. It was also the only New York operator with a female CEO and that has ended too. Mark Sims was named President and CEO of RIV Capital, to lead the company’s formal entry into the U.S. market and expansion into licensed adult-use operations in New York. Mr. Sims is a current director of RIV Capital, a role he will retain, and most recently was Senior Vice President of Strategy and M&A for The Scotts Miracle-Gro Company (NYSE: SMG), where he also previously served as its CIO and head of the business transformation. He replaces Narbé Alexandrian, who departs RIV Capital to pursue other opportunities.

“The pending acquisition of the Etain business is the first step in the execution of the RIV Capital strategy, shifting from an investor in the cannabis value chain to a full-fledged operator of licensed cannabis cultivation and dispensary facilities in the U.S.,” Mr. Sims said. “By capitalizing on growth opportunities in New York’s emerging market and building upon Etain’s foundation in the medical space, we intend to accelerate our strategy and continue to deliver value for shareholders.”

Etain was founded by members of the Peckham family in Chestertown, N.Y., where the business is undergoing a significant expansion in growing and manufacturing space. Etain has four operating dispensaries, including its Manhattan flagship store and locations in Kingston, Syracuse, and Westchester. The company also had a robust wholesale business in the state.

“I am excited for the future of RIV Capital and our mission of providing the highest-quality products for consumers. Our plan is to grow the Etain brand while creating a platform to bring successful, authentic West Coast brands to New York,” Mr. Sims continued. “We are thrilled to make New York the foundational cornerstone of our platform, and believe that its outsized cultural influence, limited license program, and pending implementation of adult-use sales make it a uniquely attractive state.”

RIV Capital said it plans to invest additional capital and resources into four new dispensaries, and to support the construction of a new state-of-the-art flagship indoor cultivation facility, tailored to specifically address the premium New York market.

“We’re fully supportive of RIV Capital’s strategy and plans to grow Etain,” said Hawthorne Collective President Chris Hagedorn. “This is a significant step forward for both. Just as importantly, it will establish an important foundation upon which The Hawthorne Collective and, therefore, ScottsMiracle-Gro, can participate in the larger marketplace as the legal and regulatory environment evolves.”

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.


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