FLUENT Expands Multi-State Footprint with RIV Capital Acquisition

FLUENT, a vertically integrated, multi-state cannabis company, has completed its acquisition of RIV Capital, adding New York retail, wholesale, and cultivation operations to its existing footprint. This strategic move positions FLUENT to cover approximately 25% of the U.S. population, providing significant growth potential and regulatory catalysts in key states.

The acquisition of RIV Capital's Etain brand and operations in New York bolsters FLUENT's multi-state presence, complementing its existing operations in Florida, Texas, and Pennsylvania. With this deal, FLUENT gains access to New York's retail, wholesale, and cultivation markets, strengthening its operational capabilities and growth prospects. The combined company is expected to operate 8 cultivation and processing facilities and 42 retail dispensaries, further solidifying FLUENT's market position.

The integration of RIV Capital's New York operations into FLUENT's multi-state footprint is expected to bring significant operational efficiencies and cost synergies. With the acquisition, FLUENT gains access to RIV Capital's established infrastructure and expertise in the New York market, reducing the need for duplicate investments in facilities and personnel. Additionally, the combined company is expected to realize cost synergies of approximately US$5-10 million annually through anticipated cultivation, processing, and operating efficiencies, corporate integration, and the elimination of duplicative public company costs. By integrating RIV Capital's operations, FLUENT can focus on optimizing its existing resources and maximizing its market presence, ultimately enhancing its operational efficiency and profitability.



The acquisition of RIV Capital's New York operations also significantly strengthens FLUENT's financial position. ScottsMiracle-Gro's investment in FLUENT, following the acquisition, eliminates US$175 million of debt, transforming the company's balance sheet. This debt reduction, from approximately C$219.7 million to C$44.7 million, improves FLUENT's debt-to-equity ratio, enhancing its liquidity and reducing interest expenses. With a pro forma cash balance of approximately US$74 million, FLUENT is well-capitalized to fund highly accretive growth, enabling it to expand its multi-state footprint and invest in operational efficiencies.

FLUENT's expansion into New York's limited license market enhances its regulatory catalysts and growth potential. New York's well-staged regulatory catalysts in the near and medium term offer substantial growth opportunities. The combined company's footprint now spans four key states, positioning FLUENT to capitalize on regulatory changes and market growth, bolstering its financial position and future prospects.

In conclusion, FLUENT's acquisition of RIV Capital's New York operations significantly enhances the company's multi-state footprint, operational efficiency, and financial position. With a strong presence in key markets and a well-capitalized balance sheet, FLUENT is poised for future growth and success in the cannabis industry.