Meta Growth Corp., a Canadian recreational cannabis retailer, today announced that it has executed definitive purchase agreements for stores in both Waterloo and Kitchener.
Waterloo Store
META has executed a share purchase agreement to acquire the Bud & Sally recreational cannabis retail store in Waterloo, Ontario for total cash consideration of $1,150,001, of which ~ $300,000 relates to inventory. 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.
The Bud & Sally store opened in March 2020, and achieved $131,965 in weekly revenue for the week ended July 11, 2020, with a 36.3% gross margin. John Radostits, CEO of Bud & Sally said, “I am delighted that our Waterloo store is joining META’s retail enterprise network. This is an exciting opportunity for our dedicated and talented team to benefit from the support offered by one of Canada’s leading recreational cannabis retailers.”
Kitchener Store
In addition, META announced that it has also executed an asset purchase agreement to acquire the Meta Cannabis Co. branded recreational cannabis store in Kitchener, Ontario for total consideration of approximately $1,400,000, of which ~ $160,000 relates to inventory. The consideration is comprised of $150,000 in cash and the assumption of approximately $1,250,000 in related party debt. For the week ended July 11, 2020, the Kitchener store achieved $139,332 in weekly revenue, with a 37.7% gross margin. META previously announced on May 26, 2020 that it executed a binding letter of intent to purchase the Kitchener store. The closing of the acquisition is subject to the AGCO authorizing the change of control of the business to META, as well as other customary closing conditions.
“We are excited to be adding Bud & Sally and Meta Kitchener to our portfolio of corporate stores” said Mark Goliger, CEO of Meta Growth. “These two acquisitions complement META’s organic growth strategy in Ontario where we are advancing through the Retail Store Authorization process. We look forward to continuing to serve the Bud & Sally patrons with the exceptional customer service that they have become accustomed to from the beautifully appointed store in the heart of Waterloo which benefits from ~ $460,000 of capital expenditures.”
Postponement of Filing of Q3 Financial Statements and MD&A under Temporary Exemption
The Company also wishes to announce that filing of its interim financial statements for the nine month period ended May 31, 2020 (“Q3 Financial Statements”) and associated management’s discussion and analysis (“Q3 MD&A”, and collectively with the Q3 Financial Statements, the “Q3 Filings”) have been postponed as the Company attempts to catch-up to its filing schedule after postponing the filing of its Q2 Financial Statements and MD&A because of resource constraints associated with COVID-19.
Although the Q3 Filings would ordinarily have been filed on or before July 31, 2020, pursuant to OSC Ontario Instrument 51-502 – Temporary Exemption from Certain Corporate Finance Requirements (the “Order”), the Company has up to an additional 45 days from the deadline otherwise applicable under Ontario securities laws to file the Q3 Filings, provided that it complies with certain requirements set out in the Order. Accordingly, the Company is relying on the relief contained in the Order for its Q3 Financial Statements required by section 4.4 of National Instrument 51-102 and its Q3 MD&A required by subsection 5.1(2) of National Instrument 51-102.
The Company estimates that the Q3 Filings will be filed no later than September 11, 2020. During the extension period, until the Company has filed and announced the required Q3 Filings, management and other insiders of the Company will be subject to an insider trading black-out policy that reflects the principles in Section 9 of National Policy 11-207 – Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions.
There have been no material business developments since the date of the Company’s interim financial statements for the six months ended February 29, 2020, which were filed on May 21, 2020, other than: (i) the announcement that the Company executed a binding letter of intent to purchase the Meta Cannabis Co. branded recreational cannabis store in Kitchener, Ontario, disclosed in a press release issued on May 26, 2020; (ii) the closure of the sale of the Company’s common shares in Tetra Pty Ltd to THC Global Group Limited, disclosed in a press release issued on June 1, 2020; (iii) the divestiture of the Company’s Canadian medical clinics business unit to The Clinic Network Canada Inc., disclosed in a press release issued on June 26, 2020; and (iv) the acquisition of the Meta Cannabis Co. branded recreational cannabis store in Toronto, Ontario, disclosed in a press release issued on July 2, 2020.
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.
