Canopy Rivers Tightens Belt, Cuts Employees
Submitted by Marijuana News
Canopy Rivers Inc. (OTC: CNPOF) is laying off employees and cutting back on spending as the company focuses on positive cash flow. The venture capital firm that specializes in cannabis companies said that it is streamlining its operations to preserve its cash on hand.
However, Canopy Rivers said it is still planning on repurchasing some of its subordinated voting shares and that is can buy up to 10% of these shares. The stock was lately trading at $1.02 per share.
The company said in a statement that it is making 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.
“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.”
The company is still active in the investing side. Just a couple of weeks ago Canopy Rivers made a C$2 million investment in Dynaleo Inc., an Edmonton -based company focused on white-label manufacturing edible cannabis gummies for the Canadian market. In a statement, the company said, “Through this investment in what the Company anticipates may become a leading industrial scale Canadian gummies manufacturer, Canopy Rivers believes it is capitalizing on a significant opportunity in what is currently an underserved and underdeveloped segment of the cannabis market. Once Dynaleo receives the required licensing from Health Canada, it expects to begin operating its 27,000 sq. ft. purpose-built facility with the goal of producing enough gummies to take a sizable bite out of the projected edibles market.”
The company will report its financial results for the fourth quarter and fiscal year ended March 31, 2020, before markets open on Wednesday, June 3, 2020.
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