- Fastendr™ is a unique and fully automated technology that
integrates retail kiosks and smart lockers to facilitate a better
buying experience through browsing, ordering and
pickup.
- The Fastendr™ technology offers faster transaction times,
increased average basket size, lower overhead and labor costs, and
provides a seamless end to end customer experience.
- High Tide through this acquisition gains ownership of the
Fastendr™ technology which will improve the Company's competitive
advantage in bricks-and mortar cannabis retail.
- A pilot conducted at Bud Room's Ottawa location found that over 60% of
customers preferred to use the Fastendr™ kiosks and spent over 20%
more when doing so.
- All existing and future Canna Cabana locations will be
equipped with this customized and innovative kiosk and smart locker
technology as it delivers a faster customer experience in busier
retail locations while also enabling the efficient operation of
smaller footprint stores.
- High Tide intends to license this technology to third
party retailers starting with the cannabis industry, and expanding
to other retail sectors across North
America and beyond.
- This technology provides High Tide with potential new
revenue generation, data collection and monetization opportunities
from third party retail locations, and will further enhance the
value of its Cabannalytics data insights offering.
- This technology also provides High Tide with an
opportunity to digitally advertise and upsell in
store to consumers at relatively low costs.
- The Bud Room retail location is currently generating
annual run rates in excess of $2.4
Million in revenue and $500,000 in Adjusted
EBITDA1
- In line with High Tide's ongoing strategy of securing top
tier entrepreneurial talent through acquisitions, Bud Room CEO
Michael Di Duca will continue to
develop and deploy the Fastendr™ technology with continued
innovations under contract with High Tide.
____________________
|
1 Adjusted
EBITDA is a non-IFRS financial measure.
|
CALGARY, AB, Jan. 5, 2022 /CNW/ - High Tide Inc. ("High
Tide" or the "Company") (TSXV: HITI) (Nasdaq: 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 taking yet another step to introduce
innovative technology into both its bricks-and-mortar retail
cannabis operations, as well as third party retailers, by entering
into a definitive agreement (the "Acquisition Agreement")
pursuant to which High Tide will acquire 100% of the equity
interest of Bud Room Inc. ("Bud Room"), as well as
assignments of the vendors' shareholder loans, for
CAD$3.6 Million (the
"Transaction") and acquire all rights to the customized
Fastendr™ retail kiosk and smart locker technology and Bud Room's
retail cannabis store located at 1910 St. Laurent Blvd in
Ottawa, Ontario.
Fastendr™ is a unique and fully automated technology that
integrates retail kiosks and smart lockers to facilitate a better
buying experience through browsing, ordering and pickup. The
technology is a catalyst to faster transaction times, increased
average basket size, lower overhead and labor costs, and provides a
seamless end-to end customer experience.
"This deal is one of the most exciting acquisitions for High
Tide to date, as it greatly enhances the customer experience in our
stores while materially reducing overhead and labor costs in our
ever-expanding retail portfolio. This technology will also allow us
to generate third-party revenue, provide data collection and
monetization opportunities, while supporting an unparalleled retail
shopping experience for our customers, said Raj Grover, President
and Chief Executive Office of High Tide. "Fastendr is a perfect
solution for smaller footprint stores as well as busier retail
locations, as it allows for more transactions in less time and with
less square footage. All Canna Cabana locations will be equipped
with this technology, with the first installations planned for
later this month in the province of Ontario. The customized Fastendr technology is
a game changer for our bricks-and-mortar retail business and has
tremendous potential to be rolled out in our ancillary business
divisions as well. This acquisition comes on the heels of several
disruptive retail innovations by High Tide, such as our "one stop
shop" and "discount club" concepts. I look forward to working with
Mike on further market leading retail initiatives as we continue
our momentum into the future," added Mr Grover.
"When High Tide initially approached us we already had several
interested parties at the table. However, it became clear
that choosing a partnership with Raj and his team was a no-brainer
for us because we felt that our innovation deserved to be in the
hands of the best Cannabis company in Canada," said Michael
Di Duca, CEO of Bud Room. "This customer-centric technology
was designed with the user experience in mind and it is my firm
belief that with High Tide's experience, history of operational
execution, and financial resources, this technology can be
effectively implemented across retail sectors on a world class
level," added Mr. Di Duca.
STRATEGIC HIGHLIGHTS
Grows High Tide's competitive advantage – As the
Canadian cannabis industry continues to become more competitive, it
is essential for successful companies to innovate, using technology
to differentiate themselves and improve the efficiency of their
operations, in order to thrive. High Tide's ownership of the
Fastendr™ technology will improve its operational efficiency
materially while also reducing operating expenses in the Company's
retail cannabis stores.
Strong opportunity to grow and diversify revenue through
licensing – Pending regulatory and exchange approvals, as
applicable, High Tide intends to grow and diversify its revenue by
licensing the self-order kiosk and smart locker technology for use
by third party cannabis retailers across North America. The
transaction also gives High Tide tremendous data collection and
monetization opportunities from its retail portfolio and third
party licensees.
Provides opportunity to further enhance ancillary business
lines – The principles of the Fastendr™ technology will be
leveraged to add further consumer focused retail innovations to
High Tide's ancillary business portfolio in the coming
months.
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, and other customary conditions
of closing, is expected to close in the coming weeks. The
consideration (the "Consideration") for the 100% of equity
interest acquired will be CAD$3.24
Million paid in common shares of High Tide ("High Tide
Shares") and CAD$360,000 cash for
the assignment of CAD$360,000 of the
vendors' shareholder loans, all on the 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
Closing.
From the Consideration, an amount equal to $300,000 will be held in escrow for a period of
twelve (12) months by High Tide's lawyers to satisfy Bud Room's
indemnity with respect to possible claims based on breaches of
representation and warranties.
ABOUT BUDROOM
BudRoom is a retail cannabis store located in Ottawa, Ontario. The store is built on the
founding principles of a technology driven customer centric
experience. BudRoom's customized and innovative Fastendr™ kiosk and
smart locker technology provides a unique and seamless customer
experience, while differentiating itself from traditional retail
business models.
ABOUT FASTENDR™
Fastendr™ is a unique and fully automated technology that
integrates retail kiosks and smart lockers to facilitate a better
buying experience through browsing, ordering and pickup. The
technology is a catalyst to faster transaction times, increased
average basket size, lower overhead and labor costs, and provides a
seamless end-to-end customer experience.
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 105 current locations spanning
Ontario, Alberta, Manitoba and Saskatchewan, and was featured in the third
annual Report on Business Magazine's ranking of Canada's Top Growing Companies in 2021. 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 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 CBDcity.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.
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, including Fastendr™ improving
High Tide's competitive advantage in bricks-and-mortar cannabis
retail, providing High Tide with potential new revenue
generation, data collection and monetization opportunities from
third party retail locations, enhancing the value of High Tide's
Cabannalytics data insights offering, and providing High Tide with
opportunities to further enhance its ancillary business lines; High
Tide's ability to implement Fastendr™ across retail sectors on a
world class level; High Tide's plans to license the Fastendr™
technology to third party retailers within the cannabis industry
and expanding to other retail sectors across North America and beyond; and High Tide's
plans to equip all existing and future Canna Cabana locations with
Fastendr™, including first installations set to occur in January,
2022.
Forward-looking information in this news release are based on
certain assumptions and expected future events, namely: that High
Tide will successfully complete the Transaction (and will 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), although considered reasonable by management of
High Tide at the time of preparation, may prove to be imprecise and
result in actual results differing materially from those
anticipated, and as such, undue reliance should not be placed on
forward-looking statements.
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; the
inability of High Tide to obtain requisite approvals, the inability
to High Tide to utilize Fastendr™ in the ways necessary to achieve
the anticipated benefits of the Fastrendr technology, decreasing
demand for High Tide's product, the inability of High Tide to
integrate the Fastendr™ technology into the Canna Cabana stores,
including the inability of High Tide to set up the first set of
installations in January, 2022, the inability of the Canna
Cabana stores to remain operational, the inability of High Tide to
license the Fastendr™ technology to third party retailers in the
cannabis industry and other retail sectors across North America and beyond.
Forward-looking statements, forward-looking financial
information and other metrics presented herein are not intended as
guidance or projections for the periods referenced herein or any
future periods, and in particular, past performance is not an
indicator of future results and the results of High Tide in this
press release may not be indicative of, and are not an estimate,
forecast or projection of High Tide future results. Forward-looking
statements contained in this news release are expressly qualified
by this cautionary statement and reflect our expectations as of the
date hereof, and thus are subject to change thereafter. High Tide
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law. Factors that
could cause anticipated opportunities and actual results to differ
materially include, but are not limited to, matters referred to
above and elsewhere in High Tide's public filings and material
change reports, which are and will be available on SEDAR.
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.