ScottsMiracle-Gro Helps RIV Capital 'Grow Great Things' With $150M Strategic Investment

RIV Capital Inc. RIV CNPOF announced Wednesday it has finalized the purchase by The Hawthorne Collective, Inc. a cannabis-focused subsidiary of ScottsMiracle-Gro SMG of an unsecured convertible note from RIV Capital for $150 million.

Pursuant to the Investment, RIV Capital received a capital injection of $150 million, to be used for general corporate and other lawful purposes, that will help accelerate the launch and expansion of its U.S. cannabis operating and brand platform. The Investment also establishes RIV Capital as The Hawthorne Collective’s preferred vehicle for investments not currently under the purview of The Hawthorne Gardening Company (“Hawthorne”), ScottsMiracle-Gro’s subsidiary focuses on indoor and hydroponic growing supplies.

Upon completion of the Investment, RIV Capital increased the size of its Board of Directors to seven and added three nominees of The Hawthorne Collective to the Board: Chris Hagedorn, Mark Sims and Gary Vaynerchuk.

“The closing of the investment from The Hawthorne Collective comes at a key moment for RIV Capital,” Narbé Alexandrian, president and CEO, RIV Capital stated. “The ongoing uncertainty around the status of U.S. federal cannabis legalization continues to sideline significant amounts of capital, creating attractive acquisition opportunities in strategic markets. We believe we are well-positioned to capitalize on these opportunities, given our strong balance sheet and acquisition currency, and develop our operating and brand platform.”

With approximately CA$400 million in available capital, and taking into account certain restrictions relating to the proceeds from the Investment, RIV Capital plans to acquire, invest in, launch and/or develop U.S. operators and brands across financially and strategically attractive states to create a multistate platform.

As previously disclosed, the closing of the Investment was conditional on the Company’s ability to list its Class A common shares on the Canadian Securities Exchange and de-list its Common Shares from the Toronto Stock Exchange.

Price Action

RIV’s shares were trading 8.66% higher at $1.26 per share at the time of writing Wednesday late morning.

Photo: Courtesy of Esteban Lopez on Unsplash