High Tide to Enter German Medical Cannabis Market Through Acquisition of Purecan GmbH
High Tide Inc. (HITI) has announced its entry into the German medical cannabis market through the acquisition of a 51% stake in Purecan GmbH for €4.8 Million. Purecan is a profitable pharmaceutical wholesaler with a German import license, warehousing infrastructure, and an in-development telemedicine portal.
The transaction values Purecan at €9.5 Million, representing 3.0x Annualized Adjusted EBITDA. Purecan demonstrates strong financials with a €15 million December revenue run rate, ~40% gross margins, and 29% EBITDA margins. The purchase includes €2.4M in High Tide shares, €1.2M in cash, and €1.2M in a promissory note.
High Tide plans to leverage its Canadian cannabis procurement expertise, built on over $1.5 billion in cumulative cannabis sales, to establish a significant presence in Germany's medical cannabis market, which is projected to reach €1 billion by 2028.
High Tide Inc. (HITI) ha annunciato il suo ingresso nel mercato tedesco della cannabis medicinale attraverso l'acquisizione di una partecipazione del 51% in Purecan GmbH per 4,8 milioni di euro. Purecan è un grossista farmaceutico redditizio con una licenza di importazione tedesca, infrastrutture di magazzinaggio e un portale di telemedicina in fase di sviluppo.
La transazione valuta Purecan a 9,5 milioni di euro, rappresentando 3,0 volte l'EBITDA annualizzato rettificato. Purecan dimostra solidi indicatori finanziari con un fatturato di 15 milioni di euro a dicembre, margini lordi di circa il 40% e margini EBITDA del 29%. L'acquisto include 2,4 milioni di euro in azioni di High Tide, 1,2 milioni di euro in contante e 1,2 milioni di euro in una cambiale.
High Tide prevede di sfruttare la sua esperienza nell'approvvigionamento di cannabis canadese, costruita su oltre 1,5 miliardi di dollari in vendite cumulative di cannabis, per stabilire una presenza significativa nel mercato tedesco della cannabis medicinale, che si prevede raggiunga 1 miliardo di euro entro il 2028.
High Tide Inc. (HITI) ha anunciado su entrada en el mercado alemán de cannabis medicinal a través de la adquisición del 51% de Purecan GmbH por 4,8 millones de euros. Purecan es un mayorista farmacéutico rentable con una licencia de importación alemana, infraestructura de almacenamiento y un portal de telemedicina en desarrollo.
La transacción valora a Purecan en 9,5 millones de euros, lo que representa 3,0 veces el EBITDA ajustado anualizado. Purecan demuestra sólidos resultados financieros con un flujo de ingresos de 15 millones de euros en diciembre, márgenes brutos del 40% aproximadamente y márgenes EBITDA del 29%. La compra incluye 2,4 millones de euros en acciones de High Tide, 1,2 millones de euros en efectivo y 1,2 millones de euros en una nota promisoria.
High Tide planea aprovechar su experiencia en la adquisición de cannabis en Canadá, construida sobre más de 1.5 mil millones de dólares en ventas acumuladas de cannabis, para establecer una presencia significativa en el mercado alemán de cannabis medicinal, el cual se proyecta que alcanzará los 1.000 millones de euros para 2028.
High Tide Inc. (HITI)는 480만 유로에 Purecan GmbH의 51% 지분을 인수함으로써 독일 의료용 대마초 시장에 진입한다고 발표했습니다. Purecan은 독일 수입 면허, 물류 인프라 및 개발 중인 원격 의료 포털을 보유한 수익성 있는 제약 도매업체입니다.
이번 거래는 Purecan을 950만 유로로 평가하며, 이는 연간 조정된 EBITDA의 3.0배에 해당합니다. Purecan은 1500만 유로의 12월 매출 목표와 약 40%의 총 마진, 29%의 EBITDA 마진을 보이며 강력한 재무 성과를 보여줍니다. 이번 구매에는 High Tide의 주식 240만 유로, 현금 120만 유로 및 약속어음 120만 유로가 포함됩니다.
High Tide는 캔나다에서의 대마초 조달 전문성을 활용하여, 15억 달러 이상의 누적 대마초 매출을 바탕으로 독일 의료용 대마초 시장에 знач한 존재감을 확립할 계획입니다. 이 시장은 2028년까지 10억 유로에 이를 것으로 예상됩니다.
High Tide Inc. (HITI) a annoncé son entrée sur le marché allemand du cannabis médical par l'acquisition d'une participation de 51% dans Purecan GmbH pour 4,8 millions d'euros. Purecan est un grossiste pharmaceutique rentable avec une licence d'importation allemande, une infrastructure d'entreposage et un portail de télémédecine en développement.
La transaction valorise Purecan à 9,5 millions d'euros, représentant 3,0 fois l'EBITDA ajusté annualisé. Purecan démontre des résultats financiers solides avec un chiffre d'affaires de 15 millions d'euros pour décembre, environ 40% de marge brute et 29% de marge EBITDA. L'achat comprend 2,4 millions d'euros en actions High Tide, 1,2 million d'euros en espèces et 1,2 million d'euros sous forme d'une note à ordre.
High Tide prévoit de tirer parti de son expertise en matière d'approvisionnement de cannabis au Canada, s'appuyant sur plus de 1,5 milliard de dollars en ventes cumulées de cannabis, pour établir une présence significative sur le marché allemand du cannabis médical, qui devrait atteindre 1 milliard d'euros d'ici 2028.
High Tide Inc. (HITI) hat seinen Eintritt in den deutschen Markt für medizinisches Cannabis durch den Erwerb von 51% der Anteile an Purecan GmbH für 4,8 Millionen Euro angekündigt. Purecan ist ein profitabler pharmazeutischer Großhändler mit einer deutschen Importlizenz, Lagerinfrastruktur und einem in Entwicklung befindlichen Telemedizinportal.
Die Transaktion bewertet Purecan mit 9,5 Millionen Euro, was das 3,0-fache des annualisierten bereinigten EBITDA entspricht. Purecan weist starke Finanzkennzahlen auf, mit einem Umsatz von 15 Millionen Euro im Dezember, etwa 40% Bruttomargen und 29% EBITDA-Margen. Der Kauf beinhaltet 2,4 Millionen Euro in High Tide Aktien, 1,2 Millionen Euro in bar und 1,2 Millionen Euro in einer Schuldanerkennung.
High Tide plant, seine Erfahrung im Beschaffungswesen von Cannabis in Kanada, die auf über 1,5 Milliarden Dollar an kumulierten Cannabiverkäufen basiert, zu nutzen, um eine signifikante Präsenz auf dem deutschen Markt für medizinisches Cannabis zu etablieren, der bis 2028 voraussichtlich 1 Milliarde Euro erreichen wird.
- Strong financial metrics: Purecan's €15M revenue run rate with 40% gross margins and 29% EBITDA margins
- Strategic entry into German market with existing import license and infrastructure
- Reasonable acquisition valuation at 3.0x EBITDA
- Option to acquire remaining stake in Purecan
- Immediately accretive acquisition with established profitable operations
- €1.2M debt financing through promissory note at 7% interest
- Share dilution through issuance of 792,126 new shares
- Potential future dilution if remaining stake is acquired
Insights
This strategic acquisition marks a transformative move for High Tide. The €4.8 million deal for 51% of Purecan represents an attractive valuation at 3.0x EBITDA, significantly below industry averages. Purecan's 40% gross margins and 29% EBITDA margins demonstrate exceptional operational efficiency. The structured payment mix of shares, cash and a promissory note minimizes immediate cash outflow while maintaining financial flexibility.
The inclusion of both Call and Put Options over the remaining 49% stake creates a clear path for full ownership, with the 5-year exercise window providing strategic timing flexibility. The deal's enterprise value of €9.5 million appears particularly attractive given Purecan's €15 million annual revenue run rate.
The German medical cannabis market presents substantial growth potential, with projections reaching €1 billion by 2028. High Tide's entry timing is optimal, following Germany's Consumer Cannabis Act implementation which has accelerated market growth. The strategic value of Purecan's import license cannot be overstated - with nearly 50% of German cannabis imports sourcing from Canada, High Tide can leverage its extensive Canadian LP relationships to capture significant market share.
The acquisition provides immediate market access and infrastructure, bypassing lengthy licensing processes. Purecan's telemedicine portal development aligns with growing digital health trends in Germany, potentially creating additional revenue streams and patient accessibility.
This acquisition represents immediate value creation potential. High Tide's $1.5 billion cumulative Canadian cannabis sales experience positions them to optimize Purecan's supply chain and potentially improve margins further. The deal structure is particularly noteworthy - the 7% interest-bearing promissory note and share-based component help preserve cash while sharing upside potential with sellers.
The transaction's 3.0x EBITDA multiple is remarkably attractive compared to industry averages of 8-12x, suggesting significant value creation potential. The deal should be immediately accretive to High Tide's earnings, with Purecan's strong margins enhancing the company's overall profitability profile.
Acquisition Will Give High Tide Majority Stake in Purecan's Profitable Operations, German Import License, Warehousing and Logistics Infrastructure, and In-Development Telemedicine Portal
The Company Intends to Leverage its Procurement Expertise and Licensed Producer Relationships Associated with its over
- Purecan has a strong financial profile showcasing a December revenue run rate of approximately
€15 million , with approximately40% gross margins and29% EBITDA margins. - High Tide intends to leverage its Canadian Licensed cannabis procurement expertise, built on over
$1.5 billion - High Tide continues to diversify into high margin revenue streams within its ecosystem to further strengthen the Company's innovative Canadian brick-and-mortar retail model, including through this highly accretive acquisition.
- With German medical cannabis sales increasing rapidly after the adoption of the Consumer Cannabis Act this past April, this acquisition provides a base for the Company to expand into other European medical cannabis markets in due course1.
Purecan is a profitable, import-oriented pharmaceutical wholesaler based in
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1 Source: https://prohibitionpartners.com/reports/the-german-cannabis-report/ |
2 Source: https://mjbizdaily.com/german-cannabis-imports-rise-to-34-tons/ |
3 Source: https://prohibitionpartners.com/reports/the-german-cannabis-report/ |
4 Source: https://prohibitionpartners.com/reports/the-germany-cannabis-report/ |
QUOTES
"I am thrilled to announce that High Tide is taking a significant step towards becoming a truly global cannabis company. By acquiring a
"As I've said before, our German strategy is multipronged. This highly accretive acquisition provides immediate market entry into
"In addition to capitalizing on
"Since our very first meeting with Raj and the High Tide team a few months ago, it became apparent to us that there were significant cultural and operational alignments between our companies. Given that demand for medical cannabis in
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, and other customary conditions of closing and is expected to close in the coming weeks. It implies an enterprise valuation of
€2.4 Million in common shares of High Tide ("High Tide Shares") priced at the volume weighted average price per High Tide Share on TSXV for 10 trading days ending January 7, 2025 ofC multiplied by the Bank of$4.53 Canada 's CAD to EUR rate as at January 7, 2025, of 1.4871, for a total of 792,126 shares.€1.2 Million in cash€1.2 Million in a promissory note (the "Note"). The Note will mature two years after the Closing date, bear7% annual interest (paid quarterly), and be prepayable at any time by the Company with no penalty.
In addition to the foregoing, Purecan's owners have agreed to grant High Tide an option to acquire the remaining interests in Purecan not held by High Tide, (the "Call Option"), at an enterprise value equal to the trailing twelve months of Adjusted EBITDA multiplied by 3.0. The Call Option will be exercisable at any time for a period of five (5) years, following the eighteen (18) month anniversary of the Closing. In addition, High Tide has agreed to grant Purecan's owners an option to put to High Tide the remaining interests in Purecan not held by High Tide (the "Put Option"), at the same enterprise value as the Call Option during the same time period. The consideration under the Call Option or the Put Option, if exercised, will be satisfied in a combination of cash and High Tide shares, at High Tide's discretion.
Any High Tide Shares issued in connection with the Transaction are subject to a statutory hold period of four months and one day.
ABOUT PURECAN
Purecan is an import-oriented, pharmaceutical wholesaler that focuses on emerging cannabis markets. Based in
Purecan's mission is to protect and improve human health by becoming an industry leader by providing safe, reliable and continuous access to the highest quality medicine, at competitive prices while adhering to the highest regulatory standards.
ABOUT HIGH TIDE
High Tide, Inc. is the leading community-grown, retail-forward cannabis enterprise engineered to unleash the full value of the world's most powerful plant and is the second-largest cannabis retailer globally by store count2. High Tide (HITI) is uniquely-built around the cannabis consumer, with wholly-diversified and fully-integrated operations across all components of cannabis, including:
Bricks & Mortar Retail: Canna Cabana™ is the largest cannabis retail chain in
Retail Innovation: Fastendr™ is a unique and fully automated technology that employs retail kiosks to facilitate a better buying experience through browsing, ordering and pickup.
Consumption Accessories: High Tide operates a suite of leading accessory e-commerce platforms across the world, including Grasscity.com, Smokecartel.com, Dailyhighclub.com, and Dankstop.com.
Brands: High Tide's industry-leading and consumer-facing brand roster includes Queen of Bud™, Cabana Cannabis Co™, Daily High Club™, Vodka Glass™, Puff Puff Pass™, Dopezilla™, Atomik™, Hue™, Evolution™ and more.
CBD: High Tide continues to cultivate the possibilities of consumer CBD through Nuleafnaturals.com, FABCBD.com, blessedcbd.de and blessedcbd.co.uk.
Wholesale Distribution: High Tide keeps that cannabis category stocked with wholesale solutions via Valiant™.
Licensing: High Tide continues to push cannabis culture forward through fresh partnerships and license agreements under the Famous Brandz™ name.
High Tide consistently moves ahead of the currents, having been named one of
Neither the TSX Venture Exchange 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.
CONTACT INFORMATION
Media Inquiries
Omar Khan
Chief Communications and Public Affairs Officer
High Tide Inc.
omar@hightideinc.com
403-770-3080
Investor Inquiries
Vahan Ajamian
Capital Markets Advisor
High Tide Inc.
vahan@hightideinc.com
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release may contain "forward-looking information" and "forward-looking statements within the meaning of applicable securities legislation. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of such future events. The forward-looking statements herein include, but are not limited to, statements regarding: the ability for the Company to expand into other European medical cannabis markets in due course, the ability for the telemedicine portal to launch, whether all conditions will be met, including TSXV approval, and that the transaction will successfully close, whether the company will exercise its option to acquire the remaining interest in Purecan, the company's ability to leverage its existing cannabis procurement expertise and to become a leading supplier of medical cannabis in
CAUTIONARY NOTE REGARDING FUTURE ORIENTED FINANCIAL INFORMATION
This press release may contain future oriented financial information ("FOFI") within the meaning of applicable securities legislation about prospective results of operations, financial position or cash flows, which is subject to the same assumptions, risk factors, limitations, and qualifications as set out in the above "Cautionary Note Regarding Forward-Looking Statements". FOFI is not presented in the format of a historical balance sheet, income statement or cash flow statement. FOFI does not purport to present the Company's financial condition in accordance with IFRS as issued by the International Accounting Standards Board, and there can be no assurance that the assumptions made in preparing the FOFI will prove accurate. The actual results of operations of the Company and the resulting financial results will likely vary from the amounts set forth in the analysis presented, and such variation may be material (including due to the occurrence of unforeseen events occurring subsequent to the preparation of the FOFI). The Company and management believe that the FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments as of the applicable date. However, because this information is highly subjective and subject to numerous risks, readers are cautioned not to place undue reliance on the FOFI as necessarily indicative of future results. Except as required by applicable securities laws, the Company undertakes no obligation to update such FOFI.
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SOURCE High Tide Inc.
FAQ
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