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.
Cautionary Statements
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.