With contentious headlines now in the rearview mirror, RIV Capital (OTC: CNPOF) seems to be chugging along as New York’s legal cannabis industry ugly cries every night.
The company hosted its fourth quarter and fiscal year-end 2023 earnings call Thursday, during which interim CEO Mike Totzke expressed optimism about the RIV’s position in the New York cannabis market.
“We substantially completed the expansion of Etain’s Chestertown-based cultivation and production infrastructure,” Totzke told investors, referencing the company’s New York-based cannabis business, where he expects to be able to triple the current cultivation capacity.
Whether success can follow that move in the beleaguered state, however, is dependent in large part on the latest New York draft regulations becoming reality. If they do, Totzke highlighted the company’s plans to enter the adult-use wholesale market in the fourth quarter. And Etain products already are available in 75% of medical dispensaries across the state.
Matt Mundy, chief strategy officer and general counsel, noted that the recent updated draft regulations by the New York State Cannabis Control Board and New York State Office of Cannabis Management represent “substantial progress.”
“We expect this to be a substantial benefit for the market as it will provide the existing operators with much needed additional doors to sell into,” Mundy said.
Mundy also spoke about recent actions by New York Gov. Kathy Hochul to combat the illicit cannabis market, including an agreement announced on April 27 to expand the enforcement powers of the Office of Cannabis Management and Department of Taxation and Finance. The move would allow for a wider array of penalties for engaging in illicit market sales.
The company reported a gross profit of $200,000 for the quarter and a net loss of $23.6 million, whichincluded a $16 million charge related to a settlement agreement announced on Feb. 23, where RIV repurchased about 33.7 million common shares for cancellation.
Despite the net loss, CFO Eddie Lucarelli said the company ended the fiscal year with nearly $98 million of cash and short-term investments, stating this put them in an “enviable liquidity position.”
“The recent regulatory developments that Matt discussed” are contributing to their confidence in the New York market, Totzke said in his closing remarks. He added, “While we are focused on executing our entry into the adult-use market later this year, we also are working to close a value accretive transaction that will drive stakeholder value.”