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 it is taking yet another step to expand its bricks-and-mortar retail cannabis operations, by entering into a definitive agreement pursuant to which High Tide will acquire 100% of the equity interest of 1171882 B.C. Ltd., operating as Jimmy’s Cannabis Shop BC (“Jimmy’s”), as well as assignments of the vendors’ shareholder loans, resulting in High Tide’s acquisition of two of the five retail cannabis stores currently operated by Jimmy’s in British Columbia (the “Stores”) for $5.3 Million (the “Transaction”). The Stores are located at 1225 Cranbrook Street North, Cranbrook and 1543 Victoria Street, Prince George.
The Cranbrook store is located near the base camp of the Kootenay Rockies and is within a short drive of award-winning golf courses and nature trails. It is also situated within a commercial complex that includes a prominent local grocery store as well as a multinational hotel chain. The Prince George store is situated within the largest city in northern British Columbia, which is also close to the crossroads of provincial highways 16 and 97. The store itself is located within a commercial plaza including a national pharmacy chain and a major discount clothing retailer.
For the trailing four months ended May 31, 2022, the Stores generated annualized revenue of $5.4 Million and annualized Adjusted EBITDA1 of $1.0 Million. The purchase price represents 5.25x annualized Adjusted EBITDA for the trailing four months ended May 31, 2022.
“I am pleased that since opening our first BC Canna Cabana location in Fort St. John this past June, we continue to grow in Canada’s third largest province both organically, and through accretive acquisition opportunities. These two geographically strategic locations in the BC interior, combined with our existing Vancouver storefronts as well as our Fort St. John location that provides us coverage in Northern BC, positions us nicely across the province setting us up for more success in the coming months,” said Raj Grover, President and Chief Executive Officer of High Tide. “Our innovative discount club model, which focuses on value-centric regular users has been a hit nationally, and I am very excited to continue rolling it out across BC. Given our strong ongoing growth trajectory, brand recognition and customer loyalty, I anticipate reaching BC’s current store cap of eight before the end of this calendar year.” added Mr. Grover.
The Transaction, which is an arm’s length transaction, is subject to, among other things, receipt of the required approvals from the TSX Venture Exchange (“TSXV”) and the Liquor and Cannabis Regulation Branch (BC), and the satisfaction of other customary conditions of closing, and is expected to close in the coming weeks. The consideration (the “Consideration”) for the 100% of equity interest acquired will be $5 Million and $300,000 for the assignment of $300,000 of the vendors’ shareholder loans, all paid in common shares of High Tide (“High Tide Shares”) on closing (the “Closing”) on the basis of a deemed price per High Tide Share equal to the 10-day volume weighted average price of the High Tide Shares on the Nasdaq Stock Exchange (“Nasdaq”) ending on the trading day that is three business days prior to the Closing date, subject to a floor price equal to the Discounted Market Price (as defined by the TSXV) as of the date this news release hereof. The purchase price represents 5.25x the annualized Adjusted EBITDA for the trailing four months ended May 31, 2022. From the Consideration, an amount equal to $3.7 Million will be subject to a contractual hold period of four months and one day from the date of Closing.
1 Adjusted EBITDA is a non-IFRS financial measure.
Jimmy’s strives to find a balance between being a boutique and a neighbourhood store using a heritage theme that is both reflective of the individual communities in which it does business and chronicling Jimmy’s cultural relationship with cannabis over the past 100 years. At Jimmy’s, we love to have fun, but we also have the knowledge, background, and training to ensure clients can purchase responsibly.
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 non-franchised cannabis retail chain in Canada, with 140 current locations spanning British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. The Company is also North America’s first cannabis discount club retailer, under the Canna Cabana banner, which is the single-largest cannabis retail brand in Canada, with additional locations under development across the country. For more information about High Tide, please visit www.hightideinc.com