CALGARY, AB, July 7, 2022 /CNW/ - PRESS RELEASE - High Tide Inc., a retail-focused cannabis company with bricks-and-mortar as well as global e-commerce assets, has announced that it is further expanding its bricks-and-mortar retail cannabis operations and entering the British Columbia market, through a binding agreement pursuant to which High Tide will acquire two operating retail cannabis stores in British Columbia, six operating retail cannabis stores in Alberta, and one operating retail cannabis store in Ontario from Choom Holdings Inc. and its subsidiaries for CAD$5.1 million, pending court approval on July 7, 2022.
"I am thrilled to be announcing this deal today, which represents the third public company whose assets we have integrated into the High Tide portfolio since November 2020, following the acquisitions of Meta Growth and Smoke Cartel. Choom was one of the original and long-standing brands in cannabis retail with a presence across the country and a similar brand personality to Canna Cabana. This will make the integration of Choom into the Canna Cabana brand seamless," said Raj Grover, president and CEO of High Tide. "While Choom had 17 operational stores before entering CCAA proceedings, we are able to acquire the nine locations that we want across three provinces at an attractive price of 3.8x annualized Adjusted EBITDA. With these acquisitions, we are able to bring our innovative discount club model to Vancouver, Canada's third-largest metropolitan area, as well as numerous new markets in Alberta where we do not yet have a presence. I look forward to giving a warm welcome to the team members from Choom as they join the High Tide family."
The stores have the following addresses:
- 191 West 2nd Avenue in Vancouver, British Columbia. The Vancouver West 2nd Store is located in the trendy Mount Pleasant neighborhood, close to numerous popular restaurants and retail stores, as well as the Olympic Village and Science World.
- 1391 Richards Street in Vancouver, British Columbia. The Vancouver Richards Store is located in the trendy and densely-populated Yaletown neighborhood in downtown Vancouver.
- 7555 Montrose Road in Niagara Falls, Ontario. The Niagara Store is located in Niagara Square, an outlet mall anchored by numerous national big box and discount retailers.
- 115 2nd Avenue West in Brooks, Alberta. The Brooks Store is located in the center of Brooks, close to numerous retail businesses.
- 5308 50th Avenue in Cold Lake, Alberta. The Cold Lake 50th Avenue Store is part of a commercial district in Cold Lake South containing numerous restaurants and other businesses.
- 1020 8th Avenue in Cold Lake, Alberta. The Cold Lake 8th Avenue Store is located on the main east-west street in Cold Lake North, close to several businesses, restaurants, and hotels.
- 320 Centre Street in Drumheller, Alberta. The Drumheller Store is located in central Drumheller, close to a variety of local businesses and restaurants.
- 2719 14th Street SW in Calgary, Alberta. The Calgary Store is located on a well-trafficked road in southwest Calgary and is easily accessible for residents of nearby communities with favorable cannabis demographics, such as Bankview and South Calgary.
- 10140 107th Street in Westlock, Alberta. The Westlock Store is located in the town's commercial center, close to numerous businesses.
For the three months ended April 30, 2022, collectively, the stores generated annualized revenue of CAD$10.2 million and annualized adjusted EBITDA of CAD$1.3 million. The purchase price represents 3.8x annualized adjusted EBITDA for the three months ended April 30, 2022.
The transaction, which is an arm's length transaction, is subject to, among other things, receipt of required TSX Venture Exchange (TSXV) approval, court approval, approval from various provincial regulators, and other customary conditions of closing, and is expected to close in the coming weeks. The consideration for the stores being acquired will be CAD$5.1 million, which is to be satisfied through the issuance of common shares of High Tide on closing of the transaction on the basis of a deemed price per High Tide Share equal to the volume weighted average price per High Tide Share on TSXV for the 10 consecutive trading days preceding the closing. The transaction may close in multiple tranches depending on the speed of provincial regulatory approvals. Inclusive of the stores, following the closing, High Tide will have at least 43 stores in Ontario, 2 stores in British Columbia, 72 stores in Alberta, and 136 stores nationwide.