CALGARY,
AB, July 28, 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 has seized the shares of Halo
Kushbar Retail Inc. ("Kushbar"), which owns three operating
cannabis retail stores in Alberta
(the "Kushbar Stores").
As previously disclosed on July 15,
2021, High Tide sold the Kushbar Stores to Halo Collective
Inc. (formerly Halo Labs Inc.) ("Halo"), for $5.7 million, of which $3.9 million was already satisfied. Part of the
consideration High Tide received from Halo was a convertible
promissory note in the principal amount of $1.8 million (the "Note"). Due to ongoing
breaches of the amended and restated asset purchase agreement
between Halo and High Tide, High Tide accelerated the maturity of
the Note and has seized the shares of Kushbar pursuant to a share
pledge agreement between the parties. Therefore, High Tide, who
previously received $3.9 million as
payment for the sale of the Kushbar Stores, now has reacquired
control of the Kushbar Stores. High Tide anticipates obtaining full
ownership of Kushbar in early August
2022.
"Halo's default on the Note has given us the opportunity to
capitalize on the goodwill and popularity of the Kushbar Stores,
which are situated in great locations. I am pleased to welcome
these three established stores back into the High Tide family. Two
of the three Alberta locations are
in markets where we don't currently have a presence. The Kushbar
Stores are on an annual revenue run rate of $3.25 million for the three months ended
June 2022. This represented a 10%
increase versus the three months ended March
2022," said Raj Grover, President and Chief Executive
Officer of High Tide. "As we transition these stores into Canna
Cabana, introducing our innovative discount club model in these
communities, we expect to be able to further improve the operations
of these stores. As an update, I'm proud to report that our Cabana
Club loyalty program has now exceeded 670,000 members," added Mr.
Grover.
BONUS SHARE ISSUANCE
Further to the Company's press release dated June 2, 2022, at the Company's annual general and
special meeting of shareholders held on June
2, 2022, the shareholders approved an issuance of common
shares in the capital of the Company ("Common Shares") to
certain employees and consultants of Smoke Cartel USA, Inc., a wholly owned subsidiary of the
Company ("Smoke Cartel"), pursuant to the terms of their
employment and consulting agreements, as amended (collectively, the
"Agreements").
Pursuant to the terms of the Agreements, as Smoke Cartel reached
certain milestones, including Smoke Cartel achieving gross revenues
of at least US$12,000,000, the
employees and consultants were entitled to an earn-out in the
aggregate sum of US$2,000,000 (the
"Earn-Out"). The Company intends on satisfying the Earn-Out
obligation through the issuance of an aggregate of 500,000 Common
Shares at a deemed price of US$4.00
per Common Share, subject to TSX Venture Exchange ("TSXV")
approval (the "Bonus Shares"). The Bonus Shares will be
subject to the applicable hold periods under Canadian and United
State securities laws.
CANCELLATION OF ESCROWED
SHARES
As previously disclosed on July 6,
2021, 25% of the High Tide shares issued as consideration
for the acquisition of DHC Supply LLC operating as Daily High Club
("Daily High Club") were held in escrow to insure certain
indemnification obligations if claims arise. Such a claim arose and
High Tide was indemnified for $58,250
which resulted in High Tide canceling 28,553 shares that were
previously held in escrow.
GRANT OF OPTIONS
In addition, High Tide has granted 21,000 stock options (the
"Options") to certain employees, pursuant to the terms of
the Company's fixed 20% equity incentive omnibus plan. Each Option
is exercisable at the TSX Venture Exchange close price the day
before this press release, expires three years from the date of
grant and vests over a two-year period. Each Option is exercisable
to purchase one Common Share.
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 Canadian retailer of recreational cannabis as
measured by revenue, with 131 current locations spanning
Ontario, Alberta, British
Columbia, Manitoba, and
Saskatchewan. The Company is also
North America's first cannabis
discount club retailer, under the Canna Cabana banner, which is the
single-largest cannabis retail brand in Canada 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,, BlessedCBD.de, and Amazon UK, as well as its
wholesale distribution division under Valiant Distribution,
including the licensed entertainment product manufacturer Famous
Brandz. 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™. 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.
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.
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.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking information"
within the meaning of applicable Canadian securities legislation.
These statements relate to future events or future performance. The
use of any of the words "could", "intend", "expect", "believe",
"will", "projected", "estimated" and similar expressions and
statements relating to matters that are not historical facts are
intended to identify forward-looking information and are based on
the Company's current belief or assumptions as to the outcome and
timing of such future events.
The forward-looking information and forward-looking
statements contained herein include, but are not limited to,
statements regarding: High Tide obtaining full ownership of Kushbar
upon the terms and timelines disclosed herein; High Tide
transitioning the Kushbar Stores into Canna Cabana, introducing
their innovative discount club model in these communities and
further improving the operations of the Kushbar Stores; the Company
receiving TSXV approval for the Bonus Share issuance and issuing
the Bonus Shares; 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; the
development of the Company's business and future activities
following the date hereof; 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;
the Company will complete the development of its cannabis retail
stores; 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 obtain all requisite approvals on the terms and within
the timelines anticipated by High Tide; High Tide obtaining full
ownership of Kushbar upon the terms and timelines disclosed herein;
High Tide transitioning the Kushbar Stores into Canna Cabana,
introducing their innovative discount club model in these
communities and further improving the operations of the Kushbar
Stores; the Company receiving TSXV approval for the Bonus Share
issuance and issuing the Bonus Shares; 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: High Tide's inability to obtain full ownership of Kushbar upon
the terms and timelines disclosed herein or at all; High Tide being
unable to transition the Kushbar Stores into Canna Cabana,
introduce their innovative discount club model in these communities
and/or further improve the operations of the Kushbar Stores; the
Company not receiving TSXV approval for the Bonus Share issuance
and being unable to issue the Bonus Shares; High Tide's inability
to obtain the required regulatory approvals on the proposed terms
and timeline or at all; the risks associated with the cannabis and
CBD industries in general; the inability of High Tide to obtain
requisite approvals for its operations; 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 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/or remain on a positive growth trajectory;
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.
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.
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SOURCE High Tide Inc.