Canopy Rivers Announces Organizational Changes to Streamline Operations

Changes are focused on cost reduction and cash generation to enhance long-term shareholder value

TORONTO, May 28, 2020 /CNW/ - Canopy Rivers Inc. ("Canopy Rivers" or the "Company") (TSX: RIV, OTC: CNPOF) today announced a series of operational changes designed to optimize its organizational structure, streamline operations, and preserve and maximize cash-on-hand.

As part of its strategic and operational review of the business, the Company announced today the following changes:

• A material reduction in the Company's operating cash outflows, including a reduction in headcount, directors' compensation, marketing expenses, and general corporate expenses of a minimum of 35% from the Company's fiscal 2020 operating cash outflows on a normalized basis;
• A focus on generating positive cash flow from operations for fiscal 2021 (year ended March 31, 2021); and
• A focus on maximizing returns on existing assets.

The Company also reaffirms its intention, under its previously announced normal course issuer bid (the "NCIB"), to repurchase subordinated voting shares in accordance with its NCIB. Pursuant to the previously announced NCIB, the Company is permitted to repurchase up to 10% of the subordinated voting shares in the public float.

"We believe that sharpening our focus on financial discipline, operational excellence, and opportunistic capital deployment on our investment pipeline will yield long-term results for shareholders," said Narbe Alexandrian, President & CEO. "In addition, the strategic utilization of our NCIB could be an important tool to provide attractive returns to shareholders."

"Our cash on hand from our prior capital raises and returns from certain investments will allow us to deploy capital opportunistically moving forward, both towards new investment opportunities and in conjunction with our NCIB," continued Alexandrian. "These unprecedented times, while difficult, are revealing investment opportunities at attractive valuations, and we intend to actively execute on our investment pipeline during this time. Our expectation is that our efforts to achieve positive operational cash flow, conserve and deploy capital on a strategic basis, and focus on our core business objectives will better align our share price with our underlying net asset value."

About Canopy Rivers
Canopy Rivers is a venture capital firm specializing in cannabis. Its unique investment and operating platform is structured to pursue investment opportunities in the emerging global cannabis sector. Canopy Rivers identifies strategic counterparties seeking financial and/or operating support. Canopy Rivers has developed an investment ecosystem of complementary cannabis operating companies that represent various segments of the value chain across the emerging cannabis sector. As the portfolio continues to develop, constituents will be provided with opportunities to work with Canopy Growth Corporation (TSX: WEED, NYSE: CGC) and collaborate amongst themselves, which Canopy Rivers believes will maximize value for its shareholders and foster an environment of innovation, synergy and value creation for the entire portfolio.

Forward-Looking Statements
This news release contains statements which constitute "forward-looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of Canopy Rivers and its portfolio companies with respect to future business activities and operating performance. To the extent any forward-looking information in this news release constitutes "financial outlooks" within the meaning of applicable Canadian securities laws, the reader is cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such financial outlooks. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and includes information regarding: the anticipated reduction in operating cash outflows during fiscal 2021; the Company's focus on generating positive cash flow from operations for fiscal 2021; the ability to maximize returns on existing assets; the ability to deliver long-term results for shareholders; the utilization of the Company's NCIB providing attractive returns to shareholders; the Company's future deployment of capital; the presence of investment opportunities at attractive valuations; the alignment of the Company's share price with its underlying net asset value; and expectations for other economic, regulatory, business, and/or competitive factors.

Investors are cautioned that forward-looking information is not based on historical fact but instead reflects management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although Canopy Rivers believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of Canopy Rivers. Financial outlooks, as with forward-looking information generally, are, without limitation, based on the assumptions and subject to various risks as set out herein. Our actual financial position and results of operations may differ materially from management's current expectations. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: changes in the business activities, goals and plans of the Company, including changes in the Company's investment plans or with respect to its normal course issuer bid; risks related to the outbreak of the COVID-19 pandemic and its continued impact on global economic, business and political conditions; changes in the Company's share price which may impact the Company's intentions with respect to its normal course issuer bid; regulatory and licensing risks; changes in cannabis industry growth and trends; changes in consumer preferences and demands; changes in general economic, business and political conditions, including changes in the financial markets; the global regulatory landscape and enforcement related to cannabis, including political risks and risks relating to regulatory change; risks relating to anti-money laundering laws; compliance with extensive government regulation, including Canopy Rivers' interpretation of such regulation; public opinion and perception of the cannabis industry; divestiture risks; and the risk factors set out in Canopy Rivers' annual information form dated July 15, 2019, filed with the Canadian securities regulators and available on Canopy Rivers' profile on SEDAR at www.sedar.com.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Canopy Rivers has attempted to identify important risks, uncertainties and factors that could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. Canopy Rivers does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.

SOURCE Canopy Rivers Inc.

Media: Rob Small, Senior Manager, Public Relations & Communications, [email protected]; Investor Relations: [email protected]