Plans to enter the New York wholesale market in early Q4 2023
Expects to launch adult-use retail sales by year end at one of its flagship locations, with two additional locations to follow in 2024
Completes expansion of Etain’s Chestertown cultivation and production facility, with planting expected in the coming weeks
TORONTO – RIV Capital Inc. (“RIV Capital” or the “Company”) (CSE: RIV) (OTC: CNPOF), an acquisition and investment firm with a focus on building a leading multistate platform with one of the strongest portfolios of brands in key strategic U.S. markets, today provided a regulatory and operational update following the New York State Cannabis Control Board (“CCB”) and New York State Office of Cannabis Management’s (“OCM”) release of revised adult-use (“AU”) cannabis draft regulations.
The revised regulations include a significantly shortened waiting period for Etain’s entry into the retail AU market, now allowing for one co-located store by year end and the second and third co-located stores after June 29, 2024 (compared to the initial draft regulations’ three-year waiting period). Also included are changes to the timing of market entry fees, which would now include $5 million due at the time of licensure, $5 million due within 180 days of opening the 2nd store, $5 million due when $100 million in revenue is achieved, and the last $5 million due when $200 million in revenue is achieved. The fees collected will be used to support social equity applicants.
“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,” said Mike Totzke, COO and interim CEO of RIV Capital. “While we continue to review the updated regulation package, we believe the revised draft regulations are more reflective of the Marijuana Regulation & Taxation Act’s vision and the diverse and prominent cannabis market New York is set to become. We appreciate that the Cannabis Control Board and Office of Cannabis Management have recognized current market conditions and are preserving patient access to medical cannabis while accelerating access to legal dispensaries for all New Yorkers. In the meantime, we are focused on completing the expansion of our cultivation and processing capabilities to prepare for our entry into the AU market, educating more people on the benefits of medical cannabis, and elevating NY cannabis brands, specifically from women entrepreneurs.”
Yesterday’s passage of the revised New York cannabis market regulations will be followed by a 45-day comment period. With the expectation that the regulations will be finalized shortly thereafter, Etain is planning to commence AU wholesale sales early in the fourth quarter of 2023.
On April 27th, New York governor Kathy Hochul announced an agreement to address key priorities in the fiscal year 2024 state budget, which included efforts to combat the illicit market by expanding the enforcement powers of the OCM and Department of Taxation and Finance to give those agencies the ability to impose a wide array of penalties for engaging in illicit market sales, including closing operations and levying significant fines on illegal cannabis operations.
Mr. Totzke added, “We commend the legislature and governor for striking the right balance between sensible and necessary enforcement against the illicit market. These new measures will help ensure that New Yorkers are consuming safe products while better positioning the legal cannabis market, including its social equity participants, for success.”
Operational Update
For the past six months, the Company has been preparing to become a leading vertically integrated operator in the New York cannabis market. The final phase of construction on the expansion of Etain’s cultivation and production facility in Chestertown, New York has been completed, and planting is underway. The facility enhancement is expected to triple Etain’s original cultivation capacity and support research and development activities to drive product innovation. The Company believes that this significant capacity expansion, alongside other operational improvements and the ongoing construction of its previously announced flagship facility in Buffalo, will optimally position it to enter the AU market and quickly establish a leadership position later this year. The Company looks forward to providing a more comprehensive operational update in the near term.
