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 30, 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 100% of the equity interest of
Livonit Foods Inc. operating as Bud Heaven ("Bud Heaven")
which operates two retail cannabis stores in Ontario (the "Stores") for CAD$2.8 Million (the "Transaction"). The
Stores are located at 77 Manitoba Street, and 125 Muskoka Road
Highway 118 West, in Bracebridge. The Manitoba Street store is
located in the heart of Downtown
Bracebridge, which has been voted among the "10 most
historic downtowns in Ontario"1, offering a
wide variety of shops and restaurants, serving as a hub for tourist
traffic. The Muskoka Road Highway 118 West store is in a retail
plaza anchored by national discount grocery, as well as a
provincial liquor chain. The Stores are the only retail cannabis
stores that are currently operational in the Town of Bracebridge. For the three months
ended October 31, 2021, Bud Heaven
generated annualized revenue of CAD$4.7
Million and annualized Adjusted
EBITDA2 of CAD$0.8 Million. The purchase price represents
3.5x annualized Adjusted EBITDA for the three months ended
October 31, 2021.
![High Tide Inc. March 30, 2022 (CNW Group/High Tide Inc.) High Tide Inc. March 30, 2022 (CNW Group/High Tide Inc.)](https://mma.prnewswire.com/media/1776336/High_Tide_Inc__High_Tide_to_Acquire_Bud_Heaven__Adding_Two_Estab.jpg)
"With this announcement, we are continuing to consolidate the
Ontario cannabis retail space at
accretive multiples for our shareholders. By acquiring Bud Heaven,
Canna Cabana will become a meaningful player in Ontario's cottage country, a region where we
have not had a presence previously," said Raj Grover, President and
Chief Executive Officer of High Tide. "This transaction is part of
our ongoing strategy to bring our very well-received discount club
model to communities of all sizes across Ontario. Bud Heaven is a particularly
attractive acquisition as the first legal cannabis retailer to
serve the Muskoka Region, with a strong customer base. More
consolidation is in the works for Canna Cabana in the near-team, as
we grow our footprint both organically and through accretive
acquisitions. I would also like to give a warm welcome to the Bud
Heaven team as they join the High Tide family," added Mr.
Grover.
_________________________________________
|
1 Source:
https://www.bracebridge.ca/en/explore/Downtown-Bracebridge.aspx#
|
2 Adjusted EBITDA is
a non-IFRS financial measure.
|
|
"Bud Heaven has been privileged to serve the Bracebridge cannabis community. Given High
Tide's financial resources and deep retail expertise, particularly
considering their highly-successful discount club model, this
transaction will allow the Bud Heaven team to continue serving our
customers with the same passion for years to come, staying true to
our roots which include a high level of cannabis knowledge,
friendly service, good value, and extensive product assortment,"
said J. Stevens, President & Founder of Bud Heaven.
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$2.8
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. The purchase price represents 3.5x annualized Adjusted
EBITDA for the three months ended October
31, 2021. Upon the closing of Bud Heaven, as well as the
Crossroads transaction announced earlier this month, High Tide will
have at least 40 stores in Ontario
and 119 stores nationwide.
From the Consideration, an amount equal to approximately
$280,000 will be held in escrow for a
period of twelve (12) months by High Tide's lawyers to satisfy Bud
Heaven's indemnity with respect to possible claims based on
breaches of representation and warranties.
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 113 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 TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) 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 BUD HEAVEN
Bud Heaven was the first legal cannabis retailer to operate in
the Muskoka Region and has been privileged to serve the local
cannabis community since their first store opened in 2020. Their
business culture is based on a passion for cannabis, supporting
their customers' well-being, integrity, inclusiveness, and
diversity. They pride themselves on their knowledgeable team and
their technological savvy, which allow them to optimize their
operations and customers' experiences.
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; 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 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.
High Tide to Acquire Bud Heaven, Adding Two Established Retail
Cannabis Stores in Ontario
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SOURCE High Tide Inc.