TORONTO, May 26, 2020 /CNW/ - Meta Growth Corp. (TSXV: META) ("Meta Growth", "META" or the "Company"), a leading Canadian recreational cannabis retailer, today announced that it has executed a binding letter of intent to purchase the Meta Cannabis Co. branded recreational cannabis store in Kitchener, Ontario ("META Kitchener"). The acquisition is structured as a share purchase agreement ("Definitive Agreement") with a purchase price of approximately $1,500,000, comprised of $250,000 in cash and the assumption of approximately $1,250,000 in related party debt. The cash component of the purchase price is to be paid on closing with no additional consideration or earn-outs. The closing of the acquisition is subject to the Alcohol and Gaming Commission of Ontario ("AGCO") authorizing the change of control of the business to META, as well as other customary closing conditions.
On January 9, 2020, META announced that it entered into an agreement with Patricia Gertrude Donnelly, one of the winners of the Ontario cannabis store lottery, whereby META would be engaged as a consulting partner and service provider to support the store's operations. As part of these support services, META played an instrumental role in the design and construction of the retail store, which opened on time and on budget on February 28, 2020.
During March 2020, the first month of operation for META Kitchener, the store generated over $700,000 in revenue with a 35% gross margin and store level EBITDA of $117,000, even as COVID-19 began to materially impact commerce in Ontario. With the Government of Ontario imposing restrictions on cannabis retailers in April to manage COVID-19, META's experienced team of operators and marketers were able to implement a compliant online ordering and curbside pickup model, named MetaXpress Pickup™, that allowed the store to re-open on the timeline set by the province. As of May 19, 2020, META Kitchener returned to normal business practices and hours of operation with the store open for customers to enter, while still offering both MetaXpress curbside pickup and delivery.
"Since the closing of our $10 million bought deal financing in February 2020, we have maintained that our strategic priority is to reach the maximum number of stores available per operator in Ontario as quickly as possible" said Mark Goliger, CEO of Meta Growth. "This acquisition gets us one step closer to executing on our strategy. Having been approved by the AGCO for a Cannabis Retail Operator Licence and having submitted Retail Store Authorization applications for sites throughout Ontario, we have done everything within our control to enter the Ontario market as quickly as possible and in a fiscally responsible manner. We look forward to our initial cap of ten Ontario stores opening as these stores are forecasted to have a significant positive impact on our profitability and get us to the critical mass required in terms of store count to be generating positive EBITDA".
About Meta Growth Meta Growth is a leader in secure, safe and responsible access to legal recreational cannabis in Canada. Through its Canada-wide network of Meta Cannabis Co.™, Meta Cannabis Supply Co.™ and NewLeaf Cannabis™ recreational cannabis retail stores, Meta Growth enables the public to gain knowledgeable access to Canada's network of authorized Licensed Producers of cannabis. Meta Growth is listed on the TSX Venture Exchange under the symbol (TSXV: META).
For more information on Meta Growth, visit: metagrowth.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward looking statements or information. Forward-looking statements and information in this news release includes, but is not limited to, the negotiation and entering into of the Definitive Agreement, closing of the acquisition of the transactions contemplated by the binding letter of intent, approval by applicable regulatory bodies of the transaction, opening and operating additional cannabis retail stores in Ontario, and the Company generating positive EBITDA. Although the Company believes that the expectations and assumptions on which the forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because the Company cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results and developments may differ materially from those that are currently contemplated by these statements depending on, among other things, risks relating to the negotiation and execution of the Definitive Agreement and closing of the transactions contemplated under the letter of intent; receipt of Retail Store Authorizations for Ontario cannabis retail stores; the ability of the Company to submit additional store authorization applications and receipt of related Retail Store Authorizations; future legislative and regulatory developments; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; general business, economic, competitive, political, regulatory and social uncertainties; the delay or failure to receive regulatory approvals; the COVID-19 pandemic nationally and globally which could have a material adverse impact on the Company's business, operations and financial results, including disruptions in supply chains, as well as a deterioration of general economic conditions including national and/or global recessions and the response of governments to the COVID-19 pandemic in respect of the operation of retail stores; and the recreational cannabis industry in Canada generally. The Company cautions that the foregoing list of risks and uncertainties is not exhaustive. The forward-looking statements and information contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statement or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
SOURCE Meta Growth Corp.
For further information: Meta Growth, Mark Goliger, Chief Executive Officer, Meta Growth, Tel: 647-689-6382, [email protected]; Media Inquiries, Matt Ryan, VP of Marketing, Meta Growth, Tel: 647-633-9330, [email protected]