In our last issue, we reported on RIV Capital, an investment firm backed by Scotts Miracle-Gro that planned to help Brad Termini build a cannabis campus in Buffalo. RIV entered the NY market by paying $247 million to acquire Etain LLC, NY’s only women-owned and operated medical cannabis company in the State. Etain LLC was one of the initial 10 vertically integrated companies approved in NY’s medical cannabis program.
Due to concerns about multi-state operators being locked out of NY’s recreational cannabis market and the lack of enforcement of the illicit market, RIV Capital was forced to report a goodwill impairment charge of $138.9 million related to the Etain acquisition. An impairment charge is an accounting term used to describe a drastic reduction or loss in the recoverable value of an asset.
This is the second major acquisition in NY's cannabis industry that has gone awry following uncertainty about the state's rollout of adult-use sales. Ascend Wellness Holdings backed out of their planned acquisition of MedMen after they sued to try and close the deal. According to former Ascend CEO Abner Kurtin, MedMen's assets had deteriorated substantially.
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