A recent press release issued by Canopy says……Canopy Rivers Sells Interest in Italy-Based Canapar. Maybe it wasn’t the best idea to pump $US25 Million into a Sicilian cannabis outfit !
TORONTO, Dec. 30, 2020 /PRNewswire/ – Canopy Rivers Inc. (“Canopy Rivers” or the “Company“) (TSX: RIV) (OTC: CNPOF), through its wholly-owned subsidiary, Canopy Rivers Corporation, has entered into a definitive share purchase agreement (the “Share Purchase Agreement“), effective as of December 30, 2020, with RAMM Pharma Corp. (“RAMM“) (CSE: RAMM), pursuant to which the Company has sold its 49% common equity interest in Canapar Corp. (“Canapar“) to RAMM for consideration of up to $9.0 million (the “Transaction“).
Under the terms of the Share Purchase Agreement, on closing, RAMM delivered a cash payment of $7.0 million to Canopy Rivers to purchase the Company’s 29,833,333 common shares in Canapar. The Transaction also includes contingent consideration of $2.0 million, to be paid upon achievement of certain operational milestones. The contingent portion of the consideration will be satisfied, at RAMM’s sole discretion, in either cash or through the issuance of common shares in RAMM to the Company.
“The divestment of our equity interest in Canapar represents an important reallocation of capital as we adjust our go-forward investment strategy,” said Narbé Alexandrian, President and CEO, Canopy Rivers. “We thank Canapar for their work and partnership. As Canopy Rivers turns a new page, however, it’s important to narrow our focus and recalibrate our capital deployment and exposure to better align with our new strategic direction.”
Canopy Rivers initially invested in Sicily-based Canapar in the summer of 2018, and subsequently led a $25 million financing in early 2019. Since that time, regulatory and market challenges have caused significant delays in Canapar’s timeline for commercialization relative to the company’s original expectations.