RIV stock is in the red this week despite Canopy Rivers (TSX:RIV) (OTCPK:CNPOF) announcing that its joint venture with PharmHouse Inc has received a license amendment from Health Canada, which allows it to cultivate throughout its entire greenhouse.
PharmHouse to Ramp Up Production Immediately
PharmHouse said it plans to ramp up production immediately at the Ontario greenhouse in accordance with its offtake agreements with Canopy Growth (TSX:WEED) (NYSE:CGC) and TerrAscend Canada Inc (CSE:TER) (OTCQX:TRSSF). PharmHouse has committed 50% of its 2020 output to fulfill these agreements and is planning on using the remaining 50% of its capacity for both additional offtake agreements and its own private label brand. Canopy Rivers, the venture capital arm of Canopy Growth, owns a 49% stake in the venture; however, RIV stock is down 7% today.
“The receipt of our licence amendment represents a large milestone for PharmHouse,” said General Manager Tony Abbas. “Since the inception of PharmHouse, it has been our goal to bring innovation and consistency to greenhouse cannabis cultivation. With our full production capacity available to us and with the experience and market presence of our partners, we hope to change the industry concept of commercial cannabis production.” RIV stock is currently trading for $0.93 in Toronto.
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RIV Stock Struggles Amid Industry Headwinds
The cannabis investing firm posted its third-quarter results in February, which saw a net loss of C$2.7 million, compared with a net income of $1.4 million a year previous, and led to the company withdrawing its full-year guidance over multiple headwinds in the cannabis industry.
Canopy Rivers, which holds investments in numerous cannabis firms, had previously expected earnings before deductions of between C$85 million and C$100 million from its PharmHouse and Vert Mirabel holdings.
RIV stock is down over 80% in the last year amid persisting issues in the industry. Recently, the company's BioLumic investment received approval from the New Zealand Ministry of Health to apply its proprietary ultraviolet light technology to medical cannabis, which could improve crop yields by up to 60%.
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