Waitr is set to acquire a cannabis dispensary compliance and point of sale company, adding to a growing pot-payments empire for the company. The Louisiana-based food and grocery delivery company is also changing its name as part of a $4.7 million legal settlement with California-based Waiter.com.
Waitr signed a letter of intent to acquire Retail Innovation Labs Inc., which does business as Cova. Waitr will acquire the company for $90 million in cash and shares in the company.
It’s one of several acquisitions the company has tackled recently, all of which have been in the payments processing space. CEO Carl Grimstad said there’s a lot going on in the deal around compliance, easy payments and potentially a delivery marriage.
“Cova’s software solution is currently utilized by approximately 2,000 dispensaries in Canada and the United States, and will provide an opportunity to offer these retailers regulatory compliant payment solutions and, when and if provincial regulations in Canada and federal and state regulations in the United States evolve, potentially the ability to offer delivery services, as well. Additionally, we believe that we may be able to adapt the Cova POS solution for restaurants in order to offer our restaurant base an integrated solution for in-house and food delivery services,” Grimstad added.
The acquisition fits a strategy Grimstad discussed in detail during the 2021 Food On Demand Conference. While he doesn’t have the war chest of the monster delivery players, the No. 4 provider is carving a niche to be a payment processor and logistics partner for restaurants and retailers, but with a specialty in cannabis.
“The biggest opportunity I see now is cannabis. We provide payment services for over 300 dispensaries currently. As the regulatory environment state by state evolves, you’re going to see us” go after the sector, said Grimstad during a discussion at the conference.
He comes from the payment processing space and, even at $2.3 billion in transactions running through Cova, it’s a space other providers aren’t likely to attack until there’s action at the federal level. That’s where Grimstad thinks he can build out a network and be ready for national cannabis action.
“You can read all the statistics. The growth in cannabis over the next five years is going to be enormous. What I like about it is, it’s super messy right now,” he added. “Until it’s federally legal, it’s going to be an opportunity because the bigger guys aren’t going to” touch it.
The company also announced it would rebrand the company to encompass the new strategy—while complying with the legal settlement that was announced as part of its second quarter financial results. The company will rebrand as ASAP and has reserved the ASAP ticker and ASAP.com.