High Tide Closes Acquisition of NuLeaf Naturals
High Tide has completed its acquisition of an 80% interest in NuLeaf Naturals for
- Acquisition expected to increase annual run-rate international revenue from CAD$10.6 million to CAD$80 million.
- NuLeaf generated US$19.4 million in revenue and US$5.26 million in adjusted EBITDA for the 12 months ended September 30, 2021.
- NuLeaf's strong financial profile includes 71% gross margins and 25% adjusted EBITDA margins.
- NuLeaf's distribution growth with Sprouts Farmers Market expanded from 33 to 235 stores.
- Acquisition involves an initial significant cash outflow of US$31.24 million.
- High Tide shares issued for the acquisition are subject to a hold period of four months and one day, delaying liquidity.
-
This closing represents High Tide’s largest acquisition to-date, 6th global e-commerce related acquisition in 2021, and 3rd in the CBD space, taking international revenue from approximately
CAD at$10.6 million October 31, 2020 to approximatelyCAD annual run-rate as of today.$80 million -
NuLeaf has a strong financial profile which generated
71% gross margins and25% Adjusted EBITDA1 margins in 2020. -
Highly accretive transaction for shareholders, as NuLeaf generated revenue of
US and$19.4 Million US in Adjusted EBITDA1 for the 12 months ended$5.26 Million September 30, 2021 . -
High Tide’s internationally-diversified portfolio generates meaningful Adjusted EBITDA1, which provides the Company with an advantage when competing for bricks-and-mortar market share in
Canada . -
Co-founders
Bo Shirley andJaden Barnes retain20% ownership of NuLeaf, and have taken on consulting roles with High Tide to assist the Company’s continued expansion inthe United States and globally. -
High Tide intends to use NuLeaf’s cGMP-certified facility to produce licensed THC-infused edible and drinkable products, as
U.S. federal regulations permit.
Founded in 2014 with its headquarters in
This is High Tide’s sixth acquisition in the global e-commerce space, and third in the CBD space, in 2021. These transactions have collectively contributed to increasing the Company’s annual run-rate international revenue from approximately
The Acquisition was completed pursuant to the terms of a definitive agreement (the “Acquisition Agreement”), a copy of which is available on the Company’s SEDAR profile. High Tide acquired
The High Tide Shares issued pursuant to the Consideration are subject to a hold period of four months and one day.
In addition to the foregoing, NuLeaf’s owners have agreed to grant High Tide an option to acquire all the remaining interest in NuLeaf not held by High Tide, and become the sole owner of NuLeaf (the “Call Option”), at an enterprise value equal to the trailing twelve (12) months of Adjusted EBITDA1 at that time multiplied by 7.1. The Call Option will be exercisable at any time for a period of three (3) years following the Acquisition. In addition, High Tide has agreed to grant NuLeaf’s owners an option to put to High Tide the remaining interest in NuLeaf not held by High Tide (the “Put Option”), at the same enterprise value of the Call Option. The Put Option will be exercisable by NuLeaf’s owners for a period of eighteen (18) months following the eighteen (18) month anniversary of the Closing of the Acquisition. The consideration under the Call Option or Put Option, if exercised, will be satisfied in cash.
In connection with the closing of the Transaction, High Tide granted 60,000 stock options (the “Options”) to employees and consultants of NuLeaf, exercisable at
OPENING OF 105TH RETAIL CANNABIS STORE
High Tide also announced today that its Canna Cabana retail cannabis store located at
ABOUT NULEAF NATURALS
NuLeaf Naturals is one of America’s leading cannabinoid companies. Since 2014, NuLeaf has been committed to creating the world’s highest quality cannabinoid products in their most pure and potent form. NuLeaf’s products are produced at a cGMP-certified facility enabling them to manufacture groundbreaking cannabinoid formulations while exceeding the highest levels of regulatory compliance. The company is committed to creating safe, consistent, and effective products and has proudly received over 25,000 verified 5-star customer reviews through their e-commerce platform. NuLeaf also ranked sixteenth on the prestigious 2020 Inc 5000 list of the fastest-growing private companies in
ABOUT HIGH TIDE
High Tide is a leading retail-focused cannabis company with bricks-and-mortar as well as global e-commerce assets. The Company is the largest Canadian retailer of recreational cannabis as measured by revenue, with 105 current locations spanning
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 release.
For more information about
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This news release contains “forward-looking statements” within the meaning of applicable securities laws. All statements contained herein that are not clearly historical in nature may constitute forward-looking statements.
Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information and forward- looking statements contained herein include, but are not limited to, statements regarding: the ability of High Tide to exercise their Call Option to purchase the remaining
Forward-looking information in this news release are based on certain assumptions and expected future events, namely: that upon completion of the Transaction, High Tide’s financial condition and development plans do not change as a result of unforeseen events; there will continue to be a demand, and market opportunity, for High Tide’s product offerings; NuLeaf will have the stated working capital upon closing of the Transaction; either the Call or Put Option will be exercise; High Tide’s annual run-rate will increase to
These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements, including but not limited to: the risks associated with the cannabis and CBD industries in general; risks associated with potential legislative and/or regulatory changes by the relevant governmental and/or regulatory bodies; risk that the Company’s annual run-rate will not increase to
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.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in
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1 Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) does not have a standardized meaning prescribed by IFRS.
2 Data from
View source version on businesswire.com: https://www.businesswire.com/news/home/20211129005237/en/
Media Inquiries
Senior Vice President - Corporate and Public Affairs
omar@hightideinc.com
Investor Inquiries
Capital Markets Advisor
vahan@hightideinc.com
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