High Tide To Buy Cannabis Shop Bud Room For $2.83M In Stock, Acquiring Fastendr Retail Kiosk & Smart Locker Technology

Retail-oriented marijuana operator High Tide Inc. HITI HITI (FSE:2LYA) will buy of Bud Room Inc., a cannabis store in Ottawa for CA$3.6 million ($2.83 million) in stock.

The Calgary, Alberta-based cannabis company confirmed Wednesday it has signed a purchase agreement to acquire 100% of the equity interest of Bud Room Inc. as well as assignments of the vendors’ shareholder loans, all rights to the customized Fastendr retail kiosk and smart locker technology and Bud Room’s retail cannabis store located at 1910 St. Laurent Blvd in Ottawa, Ontario.

Fastendr is a unique and fully automated technology that integrates retail kiosks and smart lockers to facilitate a better buying experience through browsing, ordering and pickup. The technology is a catalyst to faster transaction times, increased average basket size, lower overhead and labor costs, and provides a seamless end-to end customer experience.

“This deal is one of the most exciting acquisitions for High Tide to date, as it greatly enhances the customer experience in our stores while materially reducing overhead and labor costs in our ever-expanding retail portfolio,” Raj Grover, president and CEO of High Tide stated. “This technology will also allow us to generate third-party revenue, provide data collection and monetization opportunities, while supporting an unparalleled retail shopping experience for our customers. Fastendr is a perfect solution for smaller footprint stores as well as busier retail locations, as it allows for more transactions in less time and with less square footage.”

Strategic Highlights

• Boosting High Tide’s competitive advantage in Canadian cannabis space through the advancement of the efficiency of the company’s operations and reduction of operating expenses;
• Providing a chance to grow and diversify revenue through licensing;
• Obtaining data collection and monetization opportunities from its retail portfolio and third party licensees;
• Enabling the company to further enhance ancillary business lines.

The Deal Details

The transaction, subject to various approvals including that from the TSX Venture Exchange, is expected to close in the upcoming weeks.

The consideration amount is CA$3.24 million and will be paid in common shares of High Tide and CA$360,000 payable in cash for the assignment of CAD$360,000 of the vendors’ shareholder loans.

From the consideration, an amount equal to $300,000 will be held in escrow for a period of twelve months by High Tide’s lawyers to satisfy Bud Room’s indemnity with respect to possible claims based on breaches of representation and warranties.

 “When High Tide initially approached us we already had several interested parties at the table. However, it became clear that choosing a partnership with Raj and his team was a no-brainer for us because we felt that our innovation deserved to be in the hands of the best Cannabis company in Canada,” Michael Di Duca, CEO of Bud Room said in a statement. “This customer-centric technology was designed with the user experience in mind and it is my firm belief that with High Tide’s experience, history of operational execution, and financial resources, this technology can be effectively implemented across retail sectors on a world class level.”

Price Action

High Tide’s shares closed Tuesday market session 2.17% lower at $4.5 per share.

Photo: Courtesy of High Tide