High Tide Acquires Boreal Cannabis Company For $1.73M

High Tide Inc. HITI HITI (FSE:2LYA) has completed its acquisition of 100% of the equity interest of 2080791 Alberta Ltd. operating as Boreal Cannabis Company which operates two retail cannabis stores in Northern Alberta for CA$2.2 million ($1.73 million) , plus the wholesale value of inventory, which is estimated to be approximately CA$175,000 on closing and approximately CA$200,000 cash on hand at closing.

The Stores are located at 1104 Main Street SW in Slave Lake, Alberta, and 4225 50 Avenue in St. Paul, Alberta. For the three months ended January 31, 2022, Boreal generated annualized revenue of CA$3.9 million and annualized adjusted EBITDA of CA$0.6 million. The purchase price represents 3.5x annualized adjusted EBITDA for the three months ended January 31, 2022.

Deal Highlights

The acquisition was completed pursuant to the terms of a share purchase agreement, dated March 31, 2022. High Tide acquired 100% of Boreal for:

• 443,301 common shares of High Tide valued at CA$2.4 million, on the basis of a deemed price of CA$5.4312 per High Tide share, being equal to the volume weighted average price per High Tide share on the TSX Venture Exchange for the 10 consecutive trading days preceding the closing of the acquisition

• approximately CA$200,000 in cash, on account of cash on hand in Boreal.

The purchase price is subject to a post-closing working capital adjustment provision, to address any increase or decrease of working capital, inventory or cash estimated as of the closing date. The closing of the transaction remains subject to final approval from the TSXV.

Separately, High Tide granted 3,000 stock options to certain employees, exercisable over a period of three years, that fully vest over a two year period.

The company also granted stock options equivalent to $75,000 to certain consultants, exercisable for a period of three years, that fully vest over a two year period.

Photo: Courtesy of CNW Group/High Tide Inc.

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