RIV Capital To Acquire New York-Based Etain Via $247M Deal, Names New CEO

RIV Capital, Inc. RIV CNPOF will acquire ownership and control of Etain LLC and Etain IP LLC, owners and operators of legally licensed cannabis cultivation and retail dispensaries in New York state for $247 million in cash and stock.

Under the agreement, RIV Capital will acquire ownership and control of the Etain companies for around $247 million, payable through a combination of cash and newly issued Class A common shares of RIV Capital, subject to, among other things, receipt of all required regulatory approvals, including from the New York Cannabis Control Board and the New York State Office of Cannabis Management.

New President And CEO

In addition, the company also confirmed that its board of directors has named Mark Sims as 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.

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 SMG, where he also previously served as its CIO and head of business transformation. He replaces Narbé Alexandrian, who departs RIV Capital to pursue other opportunities.

“On behalf of the entire Board of Directors, I would like to congratulate Mark on this appointment. Mark has deep experience in successfully building out teams and infrastructure in complex businesses and has extensive M&A experience from his prior roles at Scotts Miracle-Gro. We are confident that Mark has the operational and leadership chops to lead our transformational pivot into the U.S. and drive the next chapter of growth for RIV Capital,” stated Asha Daniere, chair of RIV Capital’s board of directors. “I also want to thank Narbé for his valuable contributions to RIV Capital, which allowed the company to reach this critical turning point in its journey, and wish him ongoing success in his future endeavors.”

About Etain

Etain, the New York cannabis market’s only women-owned and -operated business, is one of the state’s original five medical cannabis license recipients and one of only 10 approved vertically integrated operators. Etain was founded by members of the Peckham family in Chestertown, N.Y., where the business is undergoing significant expansion in its growing and manufacturing space. Etain has four operating dispensaries, including its Manhattan flagship store and locations in Kingston, Syracuse and Westchester. 

Etain COO, Hillary Peckham stated “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.”

Transaction Terms

Approximately 80% of the purchase price will be payable upon the initial closing, with the remainder payable upon the final closing. Following closing, the former owners of Etain are expected to hold approximately 16% of the issued and outstanding Class A common shares of RIV Capital.

The former owners of Etain will be entitled to require that RIV Capital nominate a proposed member to the RIV capital board of directors, expected to be Amy Peckham, Etain’s CEO.

To finance the cash portion of the consideration payable pursuant to the transaction, RIV Capital will utilize the $150 million proceeds received from The Hawthorne Collective, Inc., a wholly-owned subsidiary of Scotts Miracle-Gro, pursuant to its convertible note investment in RIV Capital announced in August 2021. Furthermore, to provide RIV Capital with additional financing support for the acquisition, The Hawthorne Collective has agreed to advance RIV Capital $25 million at the time of the initial closing.

Photo: Courtesy of the Peckham family