RE:RE:RE:RE:RE:RE:RE:Full Disclosure: Les Serres Vert Cannabis Inc only 43.3% CGCCanopy Rivers was created May 2018 and was to be a wholly owned subsidiary of Canopy Growth. Yes they were to act as a capital financing support subsidiary.
But the news release from Jan 10/18 states Canopy Growth is only at a 30 percent equity level of Canopy Rivers.
So in this Quebec deal now, Canopy Growth ownership is diluted to a 43.3% share of the joint venture. And the Canopy Growth portion will still have corporate overhead charges against it. Canopy Rivers will not be absorbing any of the corporate overhead costs.
The deeper I look into this the more of a scam it looks like. Canopy Rivers should act as a wholly owned subsidiary of Canopy Growth. Then there is no conflict of interest. But between May 2017 and Jan 2018 the equity interest of Canopy Rivers went from 100% to 30%. Insiders have stealthily acquired the other 70%.
There is a definite conflict of interest here. And management is violating their fiduciary responsibilities to Canopy Growth shareholders.
I cannot figure out a legitament reason to have it structured like this for the benefit of Canopy Growth. Looks like smoke and mirrors for the benefit of Canopy insiders.
PS.
The strategic investment with Terrascend Corp on Nov 15/17 also involved Canopy Rivers which waters down the benefit to Canopy Growth shareholders, providing TerrAscend makes money.