Waitr Holdings' $90M Deal With Cannabis Dispensary Software Company Collapses Before The Finish Line

Waitr will no longer be acquiring a software firm that specializes in serving cannabis dispensary retailers.

The Lafayette-based delivery app’s parent company, Waitr Holdings Inc. WTRH, announced in December that it had signed a non-binding letter of intent to buy Retail Innovation Labs Inc., which does business as Cova. Under the terms of the deal, Waitr was meant to purchase Cova for $90 million in cash and stock.

Cova, which specializes in software to streamline management and compliance processes for marijuana shops, services nearly 2,100 dispensaries. 

At the time the deal was announced, Carl Grimstad, Waitr CEO and board chair said the total value of cannabis transactions processed on Cova were estimated at $2.3 billion.

Friendly Divorce

In a Securities and Exchange Commission filing Thursday, reported The Advocate of Baton Rouge, Waitr said both sides had “mutually agreed” to spike the acquisition.

Waitr said it will look for ways to provide Cova customers with “access to third parties that provide payment processing solutions.”

Waitr announced last year it would team up with Flow Payments to create a legal delivery platform for cannabis dispensaries. It completed its purchase of Flow Payments and two other companies, ProMerchant and Cape Cod Merchant Services, in August 2021.

Waitr's SEC filing indicates the company wants to continue expanding its delivery offerings, though it does not mention cannabis specifically, according to The Advocate.

In January, Waitr announced its stock price had been too low for too long, which puts the company at risk of being delisted from the NASDAQ. Waitr has until July to raise its price.

Earnings

Waitr announced Friday that it pulled in $38.6 million in revenue in the fourth quarter of 2021, compared to $46.8 million for the same quarter in 2020. It posted a net loss of $8.1 million in the fourth quarter of 2021 after posting net income of $2.6 million for the same period a year earlier. 

Waitr's stock was down 3.9% at 0.46 cents per share on Friday after the close.

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