Meta Growth (CVE: META), formerly National Access Cannabis, announced tonight that the deal to sell their cannabis clinics division has fallen apart.
Meta originally planned to sell the assets for about $4 million to Evergreen Pacific Insurance Corp.
Now that medical patients can sign up with any licensed producer and have products shipped directly to their door, the value of the clinic model is a shadow of what it once was.
Meta was selling this asset because it was consuming cash and didn’t have much of a future.
Mark Goliger, Meta’s CEO commented that he believes the business will eventually be sold, but no potential timeline was provided.
What Happens Now for Meta Growth?
Meta definitely could have used the $4 million to buy up more dispensaries or continue building out their footprint organically, but the money won’t make or break the company.
Meta had $8 million in cash as of the end of August and was only burning about $2 million per quarter.
Most importantly management announced that they have pushed out the maturity of a soon-to-be-due loan by 3 years and entered into a new loan agreement that gives them an extra $11 million of borrowing capacity.
So while the failure of this deal is disappointing, Meta is not facing any kind of a cash crunch yet.
With Ontario planning to open up the province to private retail this year, 2020 will be an exciting year of dispensary growth for Meta now that they have adequate cash to fund their retail strategy.
Meta was down less than 2% in trading today on the TSX Venture Exchange.