High Tide Closes Acquisition Of Jimmy's Cannabis Shop In British Columbia

High Tide Inc. HITI HITI 2LYA, a retail-focused cannabis company with a brick-and-mortar presence as well as global e-commerce assets, announced that it has completed its acquisition of 100% of the equity interest of 1171882 B.C. Ltd., operating as Jimmy's Cannabis Shop BC, 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 for $5.3 million.

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 within a short drive of award-winning golf courses and nature trails, per a press release. Moreover, the Prince George's 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 closing of the transaction brings the company’s nationwide store count to 149, including six in British Columbia. Also, Hide Tide anticipates the organic opening of its location in Kamloops, BC, imminently.

According to the press release, "for the trailing four months ended May 31, 2022, the Stores generated annualized revenue of $5.4 Million and annualized Adjusted EBITDA of $1.0 Million. The purchase price represents 5.25x annualized Adjusted EBITDA for the trailing four months ended May 31, 2022."

Details Of The Transaction

The acquisition was completed pursuant to the terms of a share purchase agreement, dated September 28, 2022. High Tide acquired 100% of Jimmy’s for 2,595,533 common shares of High Tide valued at $5.3 million, on the basis of a deemed price of C$2.0365 per High Tide share. The closing of the transaction remains subject to final approval from the TSX Venture Exchange (“TSXV”). Pursuant to the acquisition agreement, 70% of the High Tide Shares issued are subject to a four-month hold, per the press release.

What About The Company Expansion In The US?

Recently, High Tide Inc. CEO Raj Grover told Benzinga that when it comes to U.S. expansion, it's still an "uphill battle" due to lack of regulation.

"Our main focus with respect to U.S. expansion and our advocacy right now is to try and see if capital markets provisions currently found within other cannabis bills can be incorporated into SAFE+," Grover said. "We consider success in this regard to be an uphill battle in the short term; however, medium to long-term success is possible."

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Photo: Courtesy of CNW Group/High Tide Inc.