High Tide Closes Acquisition of Bud Heaven, Adding Two Established Cannabis Retail Stores in Ontario

Published: June 2, 2022

High Tide Closes Acquisition of Bud Heaven, Adding Two Established Cannabis Retail Stores in Ontario

High Tide Inc., a leading retail-focused cannabis company with bricks-and-mortar as well as global e-commerce assets, is pleased to announce that further to its press release dated March 30, 2022, the Company has completed its acquisition of 100% of the equity interest of Livonit Foods Inc. operating as Bud Heaven which operates two retail cannabis stores in Ontario (the “Stores“) for CAD$2.8 Million. 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, and located adjacent to a provincial liquor store. The Stores are the only retail cannabis stores that are currently operational in the Town of Bracebridge. For the three months ended October 31, 2021Bud 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.

Transaction Details
The Acquisition was completed pursuant to the terms of a share purchase agreement dated March 29, 2022 (“Acquisition Agreement“). High Tide acquired 100% of Bud Heaven for CAD$2.8 Million, by issuing 564,092 common shares of High Tide (each a “High Tide Share“) and will pay CAD$1 Million, in cash, upon settlement of the post-closing working capital adjustment. Pursuant to the Acquisition Agreement, High Tide had the option to pay an amount equal to the difference between the volume weighted average price per High Tide Share on the TSX Venture Exchange (“TSXV“) for the ten consecutive trading days preceding closing of the Acquisition, and the Discounted Market Price (as such term is defined in the TSXV policies), as of the date the Acquisition was initially announced, which allowed High Tide to pay the cash portion of the Purchase Price instead of issuing additional High Tide Shares.

Pursuant to the Acquisition Agreement, the purchase price is subject to a post-closing working capital adjustment provision. Under this provision, the parties will adjust the purchase price to offset any increase or decrease of the net working capital as of the closing date. The closing of the Acquisition remains subject to final approval from the TSXV

1

Source: https://www.bracebridge.ca/en/explore/Downtown-Bracebridge.aspx#.

2

Adjusted EBITDA is a non-IFRS financial measure.


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 124 current locations spanning OntarioAlberta, 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™.  For more information about High Tide Inc., please visit www.hightideinc.com,

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.