High Tide Inc. ("High Tide" or the "Company") (NASDAQ: HITI) (TSXV: HITI) (FSE: 2LYA), a leading retail-focused cannabis company with bricks-and-mortar as well as global e-commerce assets, is pleased to announce that it is taking yet another step to expand its bricks-and-mortar retail cannabis operations, by entering into a definitive agreement (the "Acquisition Agreement") pursuant to which High Tide will acquire 100% of the equity interest of Livonit Foods Inc. operating as Bud Heaven ("Bud Heaven") which operates two retail cannabis stores in Ontario (the "Stores") for CAD$2.8 Million (the "Transaction"). The Stores are located at 77 Manitoba Street, and 125 Muskoka Road Highway  118 West, in Bracebridge. The Manitoba Street store is located in the heart of Downtown Bracebridge, which has been voted among the "10 most historic downtowns in Ontario"1, offering a wide variety of shops and restaurants, serving as a hub for tourist traffic. The Muskoka Road Highway 118 West store is in a retail plaza anchored by national discount grocery, as well as a provincial liquor chain. The Stores are the only retail cannabis stores that are currently operational in the Town of Bracebridge. For the three months ended October 31, 2021, Bud Heaven generated annualized revenue of CAD$4.7 Million and annualized Adjusted EBITDA2 of CAD$0.8 Million. The purchase price represents 3.5x annualized Adjusted EBITDA for the three months ended October 31, 2021.

"With this announcement, we are continuing to consolidate the Ontario cannabis retail space at accretive multiples for our shareholders. By acquiring Bud Heaven, Canna Cabana will become a meaningful player in Ontario's cottage country, a region where we have not had a presence previously," said Raj Grover, President and Chief Executive Officer of High Tide.

"This transaction is part of our ongoing strategy to bring our very well-received discount club model to communities of all sizes across Ontario. Bud Heaven is a particularly attractive acquisition as the first legal cannabis retailer to serve the Muskoka Region, with a strong customer base. More consolidation is in the works for Canna Cabana in the near-team, as we grow our footprint both organically and through accretive acquisitions. I would also like to give a warm welcome to the Bud Heaven team as they join the High Tide family," added Mr. Grover.

"Bud Heaven has been privileged to serve the Bracebridge cannabis community. Given High Tide's financial resources and deep retail expertise, particularly considering their highly-successful discount club model, this transaction will allow the Bud Heaven team to continue serving our customers with the same passion for years to come, staying true to our roots which include a high level of cannabis knowledge, friendly service, good value, and extensive product assortment," said J. Stevens, President & Founder of Bud Heaven.

Transaction Details

The Transaction, which is an arm's length transaction, is subject to, among other things, receipt of required TSX Venture Exchange ("TSXV") approval, Alcohol and Gaming Commission of Ontario approval, and other customary conditions of closing, is expected to close in the coming weeks. The consideration (the "Consideration") for the Stores being acquired will be CAD$2.8 Million paid in common shares of High Tide ("High Tide Shares") on the closing of the Transaction (the "Closing") 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 Closing. The purchase price represents 3.5x annualized Adjusted EBITDA for the three months ended October 31, 2021. Upon the closing of Bud Heaven, as well as the Crossroads transaction announced earlier this month, High Tide will have at least 40 stores in Ontario and 119 stores nationwide. 

From the Consideration, an amount equal to approximately $280,000 will be held in escrow for a period of twelve (12) months by High Tide's lawyers to satisfy Bud Heaven's indemnity with respect to possible claims based on breaches of representation and warranties.