Cannabis MSO Cansortium Merges with RIV Capital

Cansortium and RIV Capital Complete Merger, Expanding Fluent’s Footprint and Market Reach

The much-anticipated merger between Florida-based cannabis multistate operator Cansortium, operating under the Fluent brand, and Toronto-headquartered RIV Capital closed successfully on Thursday. The deal marks a significant milestone in the cannabis industry, combining Fluent’s established U.S. presence with RIV Capital’s expertise and assets.

Details of the Cansortium-RIV Capital Merger Agreement

Under the terms of the merger, Fluent acquired all issued and outstanding Class A common shares of RIV Capital in exchange for Fluent shares. The transaction, initially detailed by MJBizDaily in May, has restructured ownership of the combined entity.

Key highlights of the merger include:

RIV Capital shareholders received 1.245 Fluent common shares for each RIV share they held.

Fluent shareholders now own approximately 51.25% of the combined entity.

RIV Capital shareholders and The Hawthorne Collective, a subsidiary of ScottsMiracle-Gro, control 48.75% of the merged company.

Leadership and Operational Focus Post-Merger

Robert Beasley, who has served as Cansortium’s CEO since 2020, has been appointed chief executive officer of the combined company. The newly merged entity will continue to operate under the Fluent brand.

Beasley emphasized the strategic value of the merger, stating:
“Not only does this move accelerate (Fluent’s) entry into one of the largest and fastest growing cannabis markets in the world, but it expands our retail door count to 42, adding our first wholesale division and expanding our house of brands.”

Retail Expansion and Market Entry

The merger significantly broadens Fluent’s retail footprint, now encompassing 42 stores across multiple states. Additionally, Fluent gains access to the growing adult-use cannabis market in New York through RIV Capital’s ownership of the Etain marijuana brand.

RIV Capital had acquired Etain Health for $247 million in 2022, further cementing its presence in the New York market. This strategic entry positions Fluent to compete in one of the fastest-evolving cannabis markets globally.

Financial Strength and Growth Opportunities

To support the merger and its future ambitions, Cansortium secured a senior credit agreement in late November for up to $96.5 million. Combined with RIV Capital’s $33 million in cash reserves, Fluent is well-positioned to pursue strategic acquisitions in key markets such as New York and Pennsylvania.

The company also plans to explore new opportunities in other states, leveraging its increased liquidity and operational expertise. Beasley highlighted the company’s commitment to long-term growth and profitability, stating:
“Looking ahead, we remain focused on sustainable, long-term growth and will continue to drive efficiencies across all areas of the business to achieve our profitability and cash generation goals for our shareholders.”

Impacts on Trading and Market Presence

With the completion of the merger, Fluent shares will continue to trade on the Canadian Securities Exchange (CSE) under the ticker symbol TIUM.U and on the OTCQB as CNTMF. Meanwhile, RIV shares are expected to be delisted from the CSE following market close on Thursday.

Historical Context and Industry Implications

The merger between Cansortium and RIV Capital represents a notable development in the cannabis industry. RIV Capital, formerly known as Canopy Rivers, was spun off from Canadian cannabis giant Canopy Growth in 2020. The involvement of The Hawthorne Collective, which invested in RIV in 2021, further underscores the growing interest from major players in the evolving cannabis market.

Fluent’s Path to Expansion

The merger creates a more robust and competitive Fluent brand, equipped to tackle new challenges and seize opportunities in the cannabis market. The combination of retail expansion, market entry into New York, and strong financial backing sets the stage for Fluent to achieve sustained growth and operational excellence.

As the cannabis industry continues to grow and evolve, Fluent’s strengthened position highlights the importance of strategic mergers in navigating the complexities of this rapidly expanding sector.