High Tide Inc., an Alberta-based, retail-focused cannabis corporation enhanced by the manufacturing and wholesale distribution of smoking accessories and cannabis lifestyle products, has completed the acquisition (the “Transaction“) of the Canna Cabana retail cannabis store in Hamilton, Ontario (the “Hamilton Store“). The acquisition of the Hamilton Store, one of a limited number of premier cannabis retail stores operating in the province, marks the Company’s first step towards acquiring its interest in all three current Canna Cabana locations across Ontario. The Hamilton Store has a strong operating history with unaudited gross sales exceeding $14 million for the nine months since opening on April 20, 2019, with gross margins of approximately 28%.
As consideration for the acquisition, High Tide paid to the vendor $2,097,816 in cash and issued to the Vendor 4,761,904 common shares in the capital of the Company (“HITI Shares“). The Transaction, which was completed with the consent of the Alcohol and Gaming Commission of Ontario (the “AGCO“) following the expiry of certain restrictions on change of control established under the rules applicable to the first cannabis retail lottery conducted by the AGCO on January 11, 2019 (the “First Lottery“). In connection with the Transaction, the Company acquired all of the issued and outstanding shares of a numbered company (“Newco“) that was wholly-owned by the holder of a cannabis retail store authorization issued by the AGCO in the First Lottery.
“High Tide is excited to add the Hamilton store to its corporately-owned portfolio of stores, with its large and loyal customer base and top-tier financial performance,” said Raj Grover, High Tide’s President & Chief Executive Officer. “Over the coming year, we look forward to growing our presence in the Ontario market and reaching the maximum of 10 stores per operator as quickly as possible,” Mr. Grover added. Through this Transaction, High Tide has made its first move towards significantly expanding its retail network in Canada’s most populous province.
Separately, the Company has also entered into a debt settlement agreement with an arm’s-length service provider, pursuant to which the Company intends to settle an amount of up to $103,435 owed through the issuance of up to 574,639 HITI Shares. The Company anticipates that the settlement will close on or about January 29, 2020.
High Tide is an Alberta-based, retail-focused cannabis company enhanced by the manufacturing and wholesale distribution of smoking accessories and cannabis lifestyle products. It is a vertically-integrated company in the Canadian cannabis market, with portfolio subsidiaries including Canna Cabana Inc., KushBar Inc. Grasscity.com, Smoker’s Corner Ltd., RGR Canada Inc. and Famous Brandz Inc.