High Tide Inc (CSE: HITI) appears to be focused heavily on the Ontario market, with the firm announcing this morning that it has acquired a 50% stake in a Sudbury, Ontario Canna Cabana retail location. The news follows the announcement yesterday that it had wholly-acquired a location in Hamilton, Ontario.
The acquisition, which was completed with the consent of the Alcohol and Gaming Commission of Ontario, will see High Tide purchase 50% of the interest in the retail store authorization from that of Saturninus Partners. An option to purchase the other 50% of the store was simultaneously exercised by an undisclosed privately-held third party partner of High Tide.
The Sudbury store, much like the Canna Cabana retail location in Hamilton, was a first round recipient in the retail store lottery held the AGCO. In the nine months since opening on April 20, 2019, the firm has generated revenues of $6.4 million with a gross margin of approximately 27%, which is significantly lower than that of the Hamilton location.
In consideration for the 50% acquisition of the operator, High Tide issued a total of 5,319,149 common shares of the firm, which hold a value of approximately $1.06 million as of yesterdays close. A total of 2,500,000 common share purchase warrants were also issued, which have an exercise price of $0.40 and an expiry of two years. Also included in the transaction is a 1% royalty on all gross revenues of the Sudbury location, which will remain in place for a period of two years from the date of close.
High Tide last traded at $0.20 on the CSE.
Information for this briefing was found via Sedar and High Tide Inc. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
