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.
CALGARY, AB, March 3, 2022 /CNW/ - 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 taking yet another step to expand its
bricks-and-mortar retail cannabis operations, by entering into a
definitive agreement (the "Acquisition Agreement") pursuant
to which High Tide will acquire four operating retail cannabis
stores in Ontario (the
"Stores") under the name Crossroads Cannabis
("Crossroads"), for CAD$2.5
Million (the "Transaction"). The Stores are located
in Stratford, Woodstock, Hanover and Markdale. The Stratford store is located in a retail plaza
anchored by a national discount grocery chain. The Woodstock store is located in a shopping
centre anchored by a large national home improvement store. The
Hanover store is located in a
power centre with numerous anchors including national grocery and
big box retail chains. The Markdale store is well-located immediately
beside the provincial liquor retailer. For the three months ended
December 31, 2021, Crossroads
generated annualized revenue of CAD$7.6
Million and annualized Adjusted
EBITDA1 of CAD$0.7
Million. The purchase price represents 3.5x annualized
Adjusted EBITDA for the three months ended December 31, 2021.
![High Tide Inc. logo (CNW Group/High Tide Inc.) High Tide Inc. logo (CNW Group/High Tide Inc.)](https://mma.prnewswire.com/media/1758748/op2.jpg)
"Since its inception, Crossroads has been a very popular
cannabis retail brand in the communities that it serves. The
Stratford Crossroads location was the first to open in the city and
has meaningful levels of goodwill from early customers in the
community." said Raj Grover, President and Chief Executive Officer
of High Tide. "As consolidation in the Canadian retail cannabis
space has picked up steam, we have become the acquirer of choice.
This has allowed us to be strategic in determining where to expand
within Ontario, bringing our
innovative discount club model to communities which we have not yet
been able to serve directly. The pandemic has resulted in longer
lead times to open stores organically, and by consolidating the
retail landscape through accretive acquisitions, we are keeping up
the momentum of overall store expansion. We expect to announce more
retail store acquisitions in the near term as we move towards our
goal of reaching 150 stores by the end of calendar 2022. I would
like to give a warm welcome to the Crossroads team as they join the
High Tide family," added Mr. Grover.
"As I observed how the retail market has matured in Ontario, it became crystal clear to me that
consolidation would be the path to true longevity. I recognized the
exceptional foresight and leadership in Raj and his committed team,
and I'm delighted to now be associated with High Tide and Canna
Cabana's future growth and success," said Robert Rowe, Sole Proprietor of Crossroads.
_______________________
|
1 Adjusted
EBITDA is a non-IFRS financial measure.
|
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, Alcohol and Gaming Commission of
Ontario approval, and other
customary conditions of closing, is expected to close in the coming
weeks. The consideration (the "Consideration") for the
Stores being acquired will be CAD$2.5
Million paid in common shares of High Tide ("High Tide
Shares") 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. On Closing the stores will include $285,000 of inventory. The purchase price
represents 3.5x annualized Adjusted EBITDA1 for the
three months ended December 31, 2021.
Including the Crossroads Stores, following Closing, High Tide will
have at least 37 stores in Ontario
and 115 stores nationwide.
The High Tide Shares issued pursuant to the Consideration will
be subject to a statutory hold period of four months and one day
from Closing.
Separately, the Company has now issued the shares that were
disclosed in its press release dated February 18, 2022.
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 111 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 Fastendr™
technology. 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, and BlessedCBD.co.uk, 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.
ABOUT CROSSROADS
Crossroads is a family owned and operated company, and works
hard to make all their guests feel like part of the family. Their
stores offer a clean and welcoming environment to help make
customers new to cannabis feel comfortable. Crossroads offers an
industry leading range of products at affordable and competitive
prices. Their local staff are knowledgeable and passionate about
cannabis and driven to help customers navigate their journey.
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; Mr. Grover's expectation to
announce more retail acquisitions in the future; Mr. Grover's
statement with respect to High Tide's goal of reaching 150 stores
by the end of calendar 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), 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
of High Tide to pursue more retail acquisitions in the future, the
inability of High Tide to acquire more stores and to reach 150
stores by the end of calendar 2022, the inability of High Tide to
extend and strengthen its integrated value chain, while providing a
complete customer experience and maximizing shareholder
value.
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.