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HIGH TIDE ACQUIRES 50% OF CANNA CABANA RETAIL CANNABIS STORE IN SUDBURY
High Tide Inc. has acquired a 50-per-cent interest in the Canna Cabana store in Sudbury, Ont., from Saturninus Partners, the holder of a cannabis retail store authorization issued in relation to the first lottery conducted by the Alcohol and Gaming Commission of Ontario (the AGCO) on Jan. 11, 2019. The Sudbury store has a stable operating history with unaudited gross sales exceeding $6.4-million for the nine months since opening on April 20, 2019, with gross margins of approximately 27 per cent.
The transaction was completed with the consent of the AGCO following the expiry of certain restrictions on change of control established under the rules applicable to the first lottery. "High Tide is excited to add the interest in this Sudbury location, with its sustained level of high performance, to its corporately owned portfolio of stores, especially at the start of the increase in sales expected from edibles, infused beverages and concentrate products that have recently come to market," said Raj Grover, High Tide's president and chief executive officer. "This transaction is High Tide's second step towards acquiring its ownership interests in all three Canna Cabana stores in Ontario. There is no better time to continue strengthening our presence in the country's largest consumer market," Mr. Grover added. An option to acquire the other 50-per-cent interest was simultaneously exercised by a privately held, third party partner of the company.
As consideration for the transaction, the company issued to a nominee of the partners of the partnership an aggregate of 5,319,149 common shares of the company, which are subject to a four-month-and-one-day statutory hold period, as well as common share purchase warrants to purchase up to an aggregate of 2.5 million shares. Each warrant entitles the holder to acquire one share at an exercise price of 40 cents per share for a period of two years from the date of issuance. In addition, for a period of two years following the closing date, one of the outgoing partners will be entitled to receive, from the company, a royalty of 1 per cent of the gross revenues of the Sudbury store.
About High Tide Inc.
High Tide is an Alberta-based, retail-focused cannabis company enhanced by the manufacturing and wholesale distribution of smoking accessories and cannabis lifestyle products. It is a vertically integrated company in the Canadian cannabis market, with portfolio subsidiaries including Canna Cabana Inc., KushBar Inc. Grasscity.com, Smoker's Corner Ltd., RGR Canada Inc. and Famous Brandz Inc. High Tide's strategy as a parent company is to extend and strengthen its integrated value chain, while providing a complete customer experience and maximizing shareholder value.
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