High Tide Inc. (“High Tide”) (TSXV:HITI) (NASDAQ: HITI)
(FRA:2LYA) and Halo Collective Inc.(formerly Halo Labs Inc.)
(“Halo”) (NEO: HALO, OTCQX: AGEEF, Germany: A9KN) are
pleased to announce the closing of High Tide’s sale of KushBar
retail cannabis assets to Halo (“Asset Sale”), on the terms
set out in the amended and restated asset purchase agreement (the
“Amended Agreement”), previously announced on September 1,
2020.
Under the Asset Sale, High Tide sold its three (3) operating
KushBar retail cannabis stores (the “Portfolio”) to a
wholly-owned subsidiary of Halo (“Halo KushBar”) for $5.7
million, payable in the form of:
a)
a deposit of $3.5 million which has already been paid to High
Tide by way of issuance of 13,461,538 Halo common shares to High
Tide at a deemed price of $0.26 per common share. These shares were
sold during 2020.
b)
a convertible promissory note which was issued by Halo on
closing of the Asset Sale (the “Initial Note”) in the
principal amount of $1.8 million with a conversion rate of $0.16
per Halo common share; and
c)
a convertible promissory note to be issued by Halo on the
12-month anniversary of closing (the “Earnout Note”;
together with the Initial Note, the “Halo Notes”) in the
principal amount of $400,000 with a conversion rate of $0.16 per
Halo common share, provided that certain revenue thresholds are
met. If the Portfolio has produced aggregate revenue of less than
the set threshold during the prior 12 months, then the principal
amount of the Earnout Note will be reduced dollar for dollar.
The Halo Notes are secured by a share pledge granted by Halo
over all of the shares of Halo KushBar, and are also to be
guaranteed by Halo KushBar on a limited recourse basis through the
pledge of the Portfolio.
The parties worked together to successfully secure the necessary
regulatory licences and approvals from Alberta Gaming, Liquor and
Cannabis (“AGLC”).
Halo will continue to engage High Tide to substantially oversee
all aspects of its retail cannabis operations with respect to the
Portfolio and will pay High Tide ongoing royalties for regulatory
advisory services and retail management through blended monthly
payments.
About High Tide Inc.
High Tide is a retail-focused cannabis company enhanced by the
manufacturing and distribution of consumption accessories. The
Company is the most profitable Canadian retailer of recreational
cannabis as measured by Adjusted EBITDA1, with 86 current locations
spanning Ontario, Alberta, Manitoba and Saskatchewan. High Tide's
retail segment features the Canna Cabana, Meta Cannabis Co., Meta
Cannabis Supply Co. and NewLeaf Cannabis banners, with additional
locations under development across the country. High Tide has been
serving consumers for over a decade through its established
ecommerce platforms including Grasscity.com, Smokecartel.com and
Dailyhighclub.com, and more recently in the hemp-derived CBD space
through CBDcity.com and FABCBD.com 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. Key industry investors
in High Tide include Tilray Inc. (TSX: TLRY) (Nasdaq: TLRY) and
Aurora Cannabis Inc. (TSX: ACB) (Nasdaq: ACB).
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 and its profile page on SEDAR at
www.sedar.com.
About Halo Collective Inc.
Halo is a leading, vertically integrated cannabis company that
cultivates, extracts, manufactures, and distributes quality
cannabis flower, oils, and concentrates and has sold approximately
nine million grams of oils and concentrates since inception. Halo
continues to evolve its business and scale efficiently, partnering
with trustworthy leaders in the industry, who value Halo's
operational expertise in bringing top-tier products to market.
Halo is led by a strong, diverse, and innovative management team
with deep industry knowledge and blue-chip experience. The company
is currently operating in the United States in California and
Oregon. The Company sells cannabis products principally to
dispensaries under its brands, Hush, Mojave, and Exhale, and under
partnership or license with DNA Genetics, Terphogz and FlowerShop*,
a cannabis lifestyle and conceptual wellness brand in which G-Eazy
is a partner and key member of FlowerShop*.
As part of continued expansion and vertical integration in the
U.S., Halo boasts several grow operations throughout Oregon and two
planned in California. In Oregon, the Company has a combined nine
acres of outdoor cultivation, including East Evans Creek, a
six-acre grow site in Jackson County, Blue Sky Farms, a two acre
grow site located in Jackson County and Winberry Farms, a one-acre
grow site located 30 miles outside Eugene in Lane County. In
California, the Company is building out Ukiah Ventures; a planned
30,000-square-foot indoor grow and cannabis processing facility
including up to an additional five acres of industrial land to
expand this indoor grow site. Recently, Halo partnered with Green
Matter Holding to purchase Bar X Farm in Lake County, developing up
to 80 acres of cultivation which would comprise the largest single
licensed grow in California.
Halo also has acquired a range of software development assets,
including technology platforms CannPOS, Cannalift, and, more
recently, CannaFeels. Halo also owns the discrete sublingual dosing
technology, Accudab. The Company intends to spin-off these assets
along with its intellectual property and patent applications into
its subsidiary Halo Tek Inc. and complete a distribution to
shareholders on a record date to be determined by Halo.
For further information regarding Halo, see Halo’s disclosure
documents on SEDAR at www.sedar.com.
Forward-Looking Information
Certain statements in this news release are forward-looking
information or forward-looking statements. Such information and
statements, referred to herein as “forward-looking statements” are
made as of the date of this news release or as of the date of the
effective date of information described in this news release, as
applicable. Forward-looking statements relate to future events or
future performance and reflect current estimates, predictions,
expectations or beliefs regarding future events. Any statements
that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions
or future events or performance (generally, forward-looking
statements can be identified by use of words such as “outlook”,
“expects”, “intend”, “forecasts”, “anticipates”, “plans”,
“projects”, “estimates”, “envisages, “assumes”, “needs”,
“strategy”, “goals”, “objectives”, or variations thereof, or
stating that certain actions, events or results “may”, “can”,
“could”, “would”, “might”, or “will” be taken, occur or be
achieved, or the negative of any of these terms or similar
expressions, and other similar terminology) are not statements of
historical fact and may be forward-looking statements.
Such forward-looking statements are based on assumptions that
may prove to be incorrect. Examples of assumptions in this news
release include but are not limited to: (i) Halo’s issuance of the
Earnout Note, if applicable, to High Tide; and (ii) Halo continuing
to engage High Tide to substantially oversee all aspects of its
retail cannabis operations with respect to the Portfolio and paying
High Tide ongoing royalties for regulatory advisory services and
retail management through blended monthly payments. While the
Company considers these assumptions to be reasonable in the
circumstances, there can be no assurance that such expectations
will prove to be correct. Inherent in the forward-looking
statements are known and unknown risks, uncertainties and other
factors that could cause actual results, performance or
achievements, or industry results, to differ materially from any
results, performance or achievements expressed or implied by such
forward-looking statements. The forward-looking statements
contained herein are current as of the date of this news release.
Except as required by law, neither High Tide nor Halo has any
obligation to advise any person if it becomes aware of any
inaccuracy in or omission from any forward-looking statement, nor
does it intend, or assume any obligation, to update or revise these
forward-looking statements to reflect new events or circumstances.
Any and all forward-looking statements included in this news
release are expressly qualified by this cautionary statement, and
except as otherwise indicated, are made as of the date of this news
release.
1 Adjusted EBITDA is a non-IFRS financial measure.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210715005608/en/
Media Inquiries: High Tide Inc. Omar Khan Senior Vice President,
Corporate and Public Affairs omar@hightideinc.com, Tel. 1 (647)
985-4401
Investor Inquiries: High Tide Inc. Vahan Ajamian Capital Markets
Advisor vahan@hightideinc.com
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