- Creates a Leading Canadian Cannabis Retailer with 65 Operating Retail Locations1 and
$148 million in Annualized Revenue2 - Both companies have already begun executing on post-closing integration initiatives, which are expected to result in approximately 60% of theinitially identified annual synergies being realized almost immediately
- High Tide to commence trading on the
TSX Venture Exchange onNovember 19, 2020 under the same "HITI" stock symbol
Key Transaction Highlights:
- With the closing of the Arrangement, High Tide becomes the largest cannabis retailer in
Canada based on 65 currently operating retail locations1 and$148 million of annualized revenue2. - High Tide is ranked #1 in
Ontario based on nine currently operating corporate stores (following the completion of the Arrangement)3 and has two additional branded stores in the province. High Tide is also pleased to announce that META has recently received a retail store authorization for its corporately-owned location at698 Queen Street East inToronto , which is situated in the trendyRiverside district. Anticipated to open onNovember 20, 2020 , this will increase High Tide'sOntario -related portfolio to 12 operating locations. - High Tide is also a leader in
Alberta with 42 established stores following completion of the Arrangement and has a strong market presence inManitoba andSaskatchewan . - High Tide and META have been collaboratively executing on the combined integration plan, which is expected to result in substantial annual cost and operational synergies – approximately 60% of which is expected to be realized almost immediately.
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1 | As of the date hereof, the estimated ranking is based on High Tide's operating number of fully- and jointly-owned corporate locations and branded stores as compared to the same number disclosed by its publicly-traded peers. |
2 | Estimate is based on most recent interim financial statements of High Tide and META. On an annualized basis, the combined entity has gross profit of |
3 | As of the date hereof, the estimated ranking is based on High Tide's operating number of fully- and jointly-owned corporate locations as compared to the same number disclosed by its publicly-traded peers. High Tide currently has 8 corporately-owned stores, 1 jointly-owned store, and 2 branded stores in |
Recent Convertible Debenture Amendments and Pro-Forma Balance Sheet
High Tide is pleased to announce that it has extended the maturity date of
With a strong balance sheet of approximately
Management Commentary
"A decade of experience in the cannabis industry has led High Tide to this transformational achievement, as we begin a new era of growth by becoming
Transaction Details
Pursuant to the terms of the Arrangement, holders of common shares of META ("META Shares") received 0.824 (the "Exchange Ratio") High Tide Shares for each META Share held. In total, High Tide acquired 237,941,274 META Shares in exchange for 196,063,610 High Tide Shares, resulting in former META shareholders holding approximately 45.0% of the total number of issued and outstanding High Tide Shares. Therefore, immediately after closing, there are currently 436,153,806 High Tide Shares issued and outstanding.
Immediately prior to the closing of the Arrangement, all directors and certain officers of META resigned, and META is now a wholly-owned subsidiary of High Tide. Current High Tide board members
It is anticipated that the META Shares will be de-listed from the
High Tide is expected to commence trading on the TSXV on
Pursuant to the letter of transmittal mailed to shareholders of META as part of the materials in connection with the special meeting of shareholders of META held on
Further information about the closing of the Arrangement is available on the SEDAR profile of High Tide on SEDAR at www.sedar.com.
Listed META Warrants and Debentures
Prior to the completion of the Arrangement, META had outstanding warrants and debentures that were, respectively, exercisable or convertible into META Shares and were listed on the TSXV:
- META.WT – warrants exercisable at a price of
$0.29 with an expiry date ofFebruary 6, 2023 (the "Listed Warrants") issued pursuant to a warrant indenture betweenMETA andTSX Trust datedFebruary 6, 2020 (the "Warrant Indenture"); and - META.DB –
$21,150,000 in secured convertible debentures convertible at a price of$1.08 with a maturity date ofNovember 30, 2021 (the "Listed Debentures") issued pursuant to a debenture indenture betweenMETA andTSX Trust datedNovember 23, 2018 (the "Debenture Indenture").
Following the completion of the Arrangement, the Listed Warrants, with the exception of any Listed Warrants that have been exercised prior to closing of the Arrangement, will become 40,076,412 warrants of High Tide, each exercisable for one High Tide Share at a price of
The holders of Listed Debentures owning or exercising control over more than 66 2/3% of the outstanding principal amount of Listed Debentures, have executed agreements providing for, among other things, a waiver of certain provisions of the Debenture Indenture in so far as the Arrangement constitutes a Change of Control (as defined in the Debenture Indenture), and also consented to amend the conversion price of the Listed Debentures such that, following the Arrangement, the conversion price is
Following the completion of the Arrangement, the Listed Debentures, with the exception of any Listed Debentures that have been converted prior to closing of the Arrangement, will remain debt obligations of META but will become convertible into High Tide Shares. The Listed Debentures will be listed for trading as debentures of High Tide on the TSXV under the symbol "HITI.DB" on
Pursuant to the terms of the Arrangement Agreement, and as required by the Warrant Indenture and the Debenture Indenture, High Tide and META have entered into a supplemental warrant indenture and supplemental debenture indenture in respect of the Warrant Indenture governing the Listed Warrants and the Debenture Indenture governing the Listed Debentures, respectively. Copies of each of the supplemental indentures are available on High Tide's and META's respective SEDAR profiles at www.sedar.com.
Financial and
About META
META is a leader in secure, safe and responsible access to legal recreational cannabis in
About High Tide
High Tide is a retail-focused cannabis company enhanced by the manufacturing and distribution of cannabis lifestyle accessories. Following completion of the Arrangement, High Tide is the largest Canadian retailer of recreational cannabis as measured by revenue, with 65 current locations spanning
Neither the CSE nor its Market Regulator (as that term is defined in the policies of the CSE), accepts responsibility for the adequacy or accuracy of this news release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.
Cautionary Note Regarding Forward-Looking Statements
Certain information in this news release constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expect", "potential", "believe", "intend" or the negative of these terms and similar expressions. Forward-looking statements in this news release include, but are not limited to, statements with respect to accretive earnings, anticipated revenue, initially identified operational and annual cost synergies of approximately
Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.
Forward-looking statements contained in this news release are expressly qualified by this cautionary statement and reflect our expectations as of the date hereof, and thus are subject to change thereafter. High Tide and META disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. This news release has been approved by the board of directors of each of High Tide and META. Factors that could cause anticipated opportunities and actual results to differ materially include, but are not limited to, matters referred to above and elsewhere in High Tide's and META's public filings and material change reports that will be filed in respect of this Transaction which are and will be available on SEDAR.
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