This news release constitutes a "designated news release" for
the purposes of the Company's prospectus supplement dated
December 3, 2021 to its short form
base shelf prospectus dated April 22,
2021.
- High Tide Emerges as Preferred Partner for Store
Acquisitions Through Companies' Creditors Arrangement Act ("CCAA")
Proceedings
- The Company is Set to Enter the British Columbia Market with
the Acquisition of Two Stores in Vancouver
CALGARY,
AB, July 7, 2022 /PRNewswire/ - High Tide Inc.
("High Tide" or the "Company") (Nasdaq: HITI) (TSXV:
HITI) (FSE: 2LYA), a leading retail-focused cannabis company with
bricks-and-mortar as well as global e-commerce assets, is pleased
to announce that it is further expanding its bricks-and-mortar
retail cannabis operations and entering the British Columbia market, through a binding
agreement (the "Acquisition Agreement") pursuant to which
High Tide will acquire two operating retail cannabis stores in
British Columbia, six operating
retail cannabis stores in Alberta,
and one operating retail cannabis store in Ontario (collectively, the "Stores")
from Choom Holdings Inc. (CSE: CHOO) (OTCQB: CHOOF) and its
subsidiaries (together, "Choom"), for CAD$5.1 million (the "Transaction"),
pending court approval on July 7,
2022.
"I am thrilled to be announcing this deal today, which
represents the third public company whose assets we have integrated
into the High Tide portfolio since November
2020, following the acquisitions of Meta Growth and Smoke
Cartel. Choom was one of the original and long-standing brands in
cannabis retail with a presence across the country and a similar
brand personality to Canna Cabana. This will make the integration
of Choom into the Canna Cabana brand seamless," said Raj Grover,
President and Chief Executive Officer of High Tide. "While Choom
had 17 operational stores before entering CCAA proceedings, we are
able to acquire the nine locations that we want across three
provinces at an attractive price of 3.8x annualized Adjusted
EBITDA[1]. With these acquisitions, we are
able to bring our innovative discount club model to Vancouver, Canada's third-largest metropolitan
area, as well as numerous new markets in Alberta where we do not yet have a presence. I
look forward to giving a warm welcome to the team members from
Choom as they join the High Tide family," added Mr. Grover.
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1Adjusted
EBITDA is a non-IFRS financial measure.
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The Stores have the following addresses:
- 191 West 2nd Avenue in Vancouver, British Columbia (the "Vancouver
West 2nd Store"). The Vancouver West 2nd
Store is located in the trendy Mount
Pleasant neighbourhood, close to numerous popular
restaurants and retail stores, as well as the Olympic Village and
Science World.
- 1391 Richards Street in Vancouver,
British Columbia (the "Vancouver Richards Store").
The Vancouver Richards Store is located in the trendy and
densely-populated Yaletown neighbourhood in downtown Vancouver.
- 7555 Montrose Road in Niagara Falls,
Ontario (the "Niagara Store"). The Niagara Store is
located in Niagara Square, an outlet mall anchored by numerous
national big box and discount retailers.
- 115 2nd Avenue West in Brooks, Alberta (the "Brooks Store").
The Brooks Store is located in the centre of Brooks, close to numerous retail
businesses.
- 5308 50th Avenue in Cold
Lake, Alberta (the "Cold
Lake 50th Avenue Store"). The Cold Lake 50th Avenue Store is part
of a commercial district in Cold Lake South containing numerous
restaurants and other businesses.
- 1020 8th Avenue in Cold
Lake, Alberta (the "Cold
Lake 8th Avenue Store"). The Cold Lake 8th Avenue Store is
located on the main east-west street in Cold Lake North, close to
several businesses, restaurants, and hotels.
- 320 Centre Street in Drumheller,
Alberta (the "Drumheller Store"). The Drumheller
Store is located in central Drumheller, close to a variety of local
businesses and restaurants.
- 2719 14th Street SW in Calgary, Alberta (the "Calgary Store").
The Calgary Store is located on a well-trafficked road in southwest
Calgary and is easily accessible
for residents of nearby communities with favourable cannabis
demographics, such as Bankview and South
Calgary.
- 10140 107th Street in Westlock, Alberta (the "Westlock
Store"). The Westlock Store is located in the town's commercial
centre, close to numerous businesses.
For the three months ended April 30,
2022, collectively, the Stores generated annualized revenue
of CAD$10.2 million and annualized
Adjusted EBITDA of CAD$1.3 million.
The purchase price represents 3.8x annualized Adjusted EBITDA
for the three months ended April 30,
2022.
TRANSACTION DETAILS
The Transaction, which is an arm's length transaction, is
subject to, among other things, receipt of required TSX Venture
Exchange ("TSXV") approval, court approval, approval from
various provincial regulators, and other customary conditions of
closing, and is expected to close in the coming weeks. The
consideration (the "Consideration") for the Stores being
acquired will be CAD$5.1 million,
which is to be satisfied through the issuance of common shares of
High Tide ("High Tide Shares") on closing of the Transaction
(the "Closing") on the basis of a deemed price per High Tide
Share equal to the volume weighted average price per High Tide
Share on TSXV for the 10 consecutive trading days preceding the
Closing. The Transaction may close in multiple tranches depending
on the speed of provincial regulatory approvals. Inclusive of the
Stores, following the Closing, High Tide will have at least 43
stores in Ontario, 2 stores in
British Columbia, 72 stores in
Alberta, and 136 stores
nationwide.
ABOUT HIGH TIDE
High Tide is a leading retail-focused cannabis company with
bricks-and-mortar as well as global e-commerce assets. The Company
is the largest non-franchised Canadian retailer of recreational
cannabis as measured by revenue, with 127 current locations
spanning Ontario, Alberta, Manitoba, and Saskatchewan. High Tide was featured in the
third annual Report on Business Magazine's ranking of Canada's Top Growing Companies in 2021 and was
named as one of the top 10 performing diversified industries stocks
in the 2022 TSX Venture 50™. The Company is also North America's first and only cannabis
discount club retailer, featuring Canna Cabana, Meta Cannabis Co.,
and Meta Cannabis Supply Co. banners, with additional locations
under development across the country. High Tide's portfolio also
includes retail kiosk and smart locker technology – Fastendr™. High
Tide has been serving consumers for over a decade through its
established e-commerce platforms including Grasscity.com,
Smokecartel.com, Dailyhighclub.com, and Dankstop.com and more
recently in the hemp-derived CBD space through Nuleafnaturals.com,
FABCBD.com, BlessedCBD.co.uk, and BlessedCBD.de, as well as its
wholesale distribution division under Valiant Distribution,
including the licensed entertainment product manufacturer Famous
Brandz. High Tide's strategy as a parent company is to extend and
strengthen its integrated value chain, while providing a complete
customer experience and maximizing shareholder value.
Neither the TSXV nor its Regulation Services Provider (as that
term is defined in the policies of the TSXV) accepts responsibility
for the adequacy or accuracy of this release.
For more information about High Tide Inc., please visit
www.hightideinc.com, its profile page on SEDAR at www.sedar.com,
and its profile page on EDGAR at www.sec.gov.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information in this news release constitutes
forward-looking statements under applicable securities laws. Any
statements that are contained in this news release that are not
statements of historical fact may be deemed to be forward-looking
statements. Forward-looking statements are often identified by
terms such as "may", "should", "anticipate", "expect", "potential",
"believe", "intend" or the negative of these terms and similar
expressions. Forward-looking statements in this news release
include statements relating to: High Tide completing the
Transaction on the terms and within the timelines set out in this
news release; High Tide receiving requisite approvals for the
Transaction; the anticipated effects of the Transaction on the
business and operations of High Tide; the Company's business
objectives and milestones and the anticipated timing of, and costs
in connection with, the execution or achievement of such objectives
and milestones (including, without limitation, proposed
Transaction); the Company's future growth prospects and intentions
to pursue one or more viable business opportunities; the
development of the Company's business and future activities
following the date hereof; expectations relating to market size and
anticipated growth in the jurisdictions within which the Company
may from time to time operate or contemplate future operations;
expectations with respect to economic, business, regulatory and/or
competitive factors related to the Company or the cannabis industry
generally; the impact of the COVID-19 pandemic on the Company's
current and future operations; the market for the Company's current
and proposed product offerings, as well as the Company's ability to
capture market share; the Company's strategic investments and
capital expenditures, and related benefits; the distribution
methods expected to be used by the Company to deliver its product
offerings; the competitive landscape within which the Company
operates and the Company's market share or reach; the performance
of the Company's business and the operations and activities of the
Company; the Company adding the number of additional cannabis
retail store locations the Company proposes to add to the Company's
business upon the timelines indicated herein; the Company's ability
to generate cash flow from operations and from financing
activities; the Company's ability to obtain, maintain, and renew or
extend, applicable authorizations, including the timing and impact
of the receipt thereof; the realization of cost savings, synergies
or benefits from the Company's recent and proposed acquisitions,
and the Company's ability to successfully integrate the operations
of any business acquired within the Company's business; the
Company's intention to devote resources to the protection of its
intellectual property rights, including by seeking and obtaining
registered protections and developing and implementing standard
operating procedures; the anticipated sales from continuing
operations for the financial year of the Company ending
October 31, 2022; and High Tide's
plans to extend and strengthen its integrated value chain, while
providing a complete customer experience and maximizing shareholder
value.
Forward-looking information in this news release are based on
certain assumptions and expected future events, namely: that High
Tide will have the ability to successfully complete the Transaction
(and will have the ability to obtain all requisite approvals) on
the terms and within the timelines anticipated by High Tide; High
Tide's financial condition and development plans do not change as a
result of unforeseen events; there will continue to be a demand,
and market opportunity, for High Tide's product offerings; current
and future economic conditions will neither affect the business and
operations of High Tide nor High Tide's ability to capitalize on
anticipated business opportunities); current and future members of
management will abide by the Company's business objectives and
strategies from time to time established by the Company; the
Company will retain and supplement its board of directors and
management, or otherwise engage consultants and advisors having
knowledge of the industries (or segments thereof) within which the
Company may from time to time participate; the Company will have
sufficient working capital and the ability to obtain the financing
required in order to develop and continue its business and
operations; the Company will continue to attract, develop, motivate
and retain highly qualified and skilled consultants and/or
employees, as the case may be; no adverse changes will be made to
the regulatory framework governing cannabis, taxes and all other
applicable matters in the jurisdictions in which the Company
conducts business and any other jurisdiction in which the Company
may conduct business in the future; the Company will be able to
generate cash flow from operations, including, where applicable,
distribution and sale of cannabis and cannabis products; the
Company will be able to execute on its business strategy as
anticipated; the Company will be able to meet the requirements
necessary to obtain and/or maintain authorizations required to
conduct the business; general economic, financial, market,
regulatory, and political conditions, including the impact of the
COVID-19 pandemic, will not negatively affect the Company or its
business; the Company will be able to successfully compete in the
cannabis industry; cannabis prices will not decline materially; the
Company will be able to effectively manage anticipated and
unanticipated costs; the Company will be able to conduct its
operations in a safe, efficient and effective manner; general
market conditions will be favourable with respect to the Company's
future plans and goals; the Company will reach the anticipated
sales from continuing operations for the financial year of the
Company ending October 31, 2022; the
Company will continue to grow its online retail portfolio through
further strategic and accretive acquisitions; the Company will add
the additional cannabis retail store locations to the Company's
business and remain on a positive growth trajectory; and the
Company will complete the development of its cannabis retail
stores.
These statements involve known and unknown risks,
uncertainties and other factors, which may cause actual results,
performance or achievements to differ materially from those
expressed or implied by such statements, including but not limited
to: the risks associated with the cannabis and CBD industries in
general; the inability of High Tide to close the Transaction upon
the terms and/or timelines indicated herein or at all; the
inability of High Tide to obtain requisite approvals; the inability
of High Tide to pursue more retail acquisitions in the future; the
Company's inability to attract and retain qualified members of
management to grow the Company's business and its operations;
unanticipated changes in economic and market conditions (including
changes resulting from the COVID-19 pandemic) or in applicable
laws; the impact of the publications of inaccurate or unfavourable
research by securities analysts or other third parties; the
Company's failure to complete future acquisitions, including the
Transaction or enter into strategic business relationships;
interruptions or shortages in the supply of cannabis from time to
time available to support the Company's operations from time to
time; unanticipated changes in the cannabis industry in the
jurisdictions within which the Company may from time to time
conduct its business and operations, including the Company's
inability to respond or adapt to such changes; the Company's
inability to secure or maintain favourable lease arrangements or
the required authorizations necessary to conduct the business and
operations and meet its targets; the Company's inability to secure
desirable retail cannabis store locations on favourable terms;
risks relating to projections of the Company's operations; the
Company's inability to effectively manage unanticipated costs and
expenses, including costs and expenses associated with product
recalls and judicial or administrative proceedings against the
Company; risk that the Company will not reach the anticipated sales
from continuing operations for the financial year of the Company
ending October 31, 2022; risk that
the Company will be unable to continue to integrate and expand its
CBD brands; risk that the Company will be unable to grow its online
retail portfolio through further strategic and accretive
acquisitions; risk that the Company will be unable to add
additional cannabis retail store locations to the Company's
business; and risks that the Company will be unable to complete the
development of any or all of its cannabis retail stores.
Readers are cautioned that the foregoing list is not
exhaustive. Readers are further cautioned not to place undue
reliance on forward-looking statements, as there can be no
assurance that the plans, intentions or expectations upon which
they are placed will occur. Such information, although considered
reasonable by management at the time of preparation, may prove to
be incorrect and actual results may differ materially from those
anticipated.
Forward-looking statements contained in this press release
are expressly qualified by this cautionary statement and reflect
the Company's expectations as of the date hereof and are subject to
change thereafter. The Company undertakes no obligation to update
or revise any forward-looking statements, whether as a result of
new information, estimates or opinions, future events or results or
otherwise or to explain any material difference between subsequent
actual events and such forward-looking information, except as
required by applicable law.
This news release does not constitute an offer to sell or
a solicitation of an offer to buy any of the securities in
the United States of America. The
securities have not been and will not be registered under the
United States Securities Act of 1933 (the "1933 Act") or any state
securities laws and may not be offered or sold within the United States or to U.S. Persons (as
defined in the 1933 Act) unless registered under the 1933 Act and
applicable state securities laws, or an exemption from such
registration is available.
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SOURCE High Tide Inc.