High Tide Inc (CSE: HITI) this morning became one of the first public firms to fully own an Ontario retail operator. The firm announced this morning that it has completed the acquisition of a Canna Cabana location within the province as it works its way through acquiring all three currently operating locations within Ontario.
The retail cannabis store, located in Hamilton, Ontario, was one of the first recipients of a retail license in Ontario, with the operator being fortunate enough to be a first round winner in the province’s retail lottery framework. The location, open since April 20, 2019, has seen approximately $14 million in gross sales within its short operating history, and has reportedly maintained a gross margin of 28%.
As consideration for the acquisition, High Tide paid the operator $2.1 million in cash, plus an additional 4,761,904 common shares in the company. As of Friday’s close, those shares are valued at just under $1.0 million, bringing the total purchase price for the location to $3.1 million. In exchange, High Tide acquired all of the issued and outstanding shares in a numbered company that was owned by the retail operator who held the retail license.
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The transaction was completed with the consent of the Alcohol and Gaming Commission of Ontario. Expiry of certain conditions related to license transfer had occurred prior to the transaction.
A timeline was not provided for the acquisition of further Canna Cabana retail locations within the province, however High Tide has indicated that it intends to reach the maximum allotment of 10 retail stores in the province “as quickly as possible.”
High Tide last traded at $0.21 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.
