This news release constitutes a "designated
news release" for the purposes of the Company's prospectus
supplement dated December 3, 2021, to
its short form base shelf prospectus dated April 22, 2021
CALGARY,
AB, Sept. 19, 2022 /CNW/ - 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, further to its press release dated August 18, 2022, it has closed a $19 million senior secured credit facility (the
"Credit Facility") with connectFirst Credit Union
Ltd. ("connectFirst"), with an initial 5-year term, at
connectFirst's floor interest rate.
"I am extremely pleased that we have successfully closed the
Credit Facility with connectFirst today. Our business has been on
an impressive upward trajectory for the past few years, and we are
now able to further capitalize on this strong momentum with this
facility in place. Our growth has been amplified since we launched
our innovative discount club model in October 2021, and we are now operating 140 Canna
Cabana locations across Canada
with 36 additional stores having been added to our portfolio year
to date through organic growth and accretive acquisitions. Our goal
is to continue gaining market share rapidly by increasing our store
count to 150 by the end of this calendar year and to 200 by the end
of 2023. This Credit Facility from connectFirst will help us do
exactly that and give us the ability to pour even more fuel on the
fire," said Raj Grover, President and Chief Executive Officer of
High Tide.
"We will have access to $19
million, upon completion of customary conditions, which we
can use to open more stores organically, invest in working capital
and capital expenditures without having to issue equity to fund
these growth drivers. We expect that as our business continues to
grow, and as we execute on our communicated business plan, the
amount of funding we can obtain from connectFirst will also
increase in tandem, propelling our rapid expansion in the future. I
would like to take this opportunity to thank connectFirst and look
forward to building our relationship further," added Mr.
Grover.
"High Tide is a clear leader in cannabis retail, not just in our
home province of Alberta, but
across Canada, with a foothold in
other international markets. We are proud to be able to support
companies like High Tide and help them expand further. We hope that
today's announcement will lead to a long and mutually fruitful
relationship between our two companies," said Sourav Neogi, Relationship Manager, Corporate
and Commercial Banking at connectFirst.
CREDIT FACILITY TERMS
- $19 Million Term Debt: Accessible
on request by High Tide, blended principal and interest
payments.
- Low Interest Rate: High Tide secured connectFirst's floor
interest rate, due to the strength of High Tide's business.
- Financial Covenants: The Credit Facility will have a quarterly
tested financial covenant of debt service coverage ratio of not
less than 1.40:1, a monthly current ratio covenant of not less than
1.25:1, and a quarterly tested covenant of funded debt to earnings
before interest, taxes, depreciation and amortization ratio of not
more than 3:1, beginning with the quarter ending January 31, 2023. High Tide's 12-month forecast
projects it to be comfortably in compliance with all financial
covenants.
Echelon Capital Markets ("Echelon") acted as the
exclusive financial advisor to High Tide in connection with setting
up the Credit Facility. In connection with their services, Echelon
is entitled to a cash commission equal to: (i) 1% of the aggregate
amount of the Credit Facility and (ii) 1% of the amount drawdown on
the Credit Facility.
ABOUT CONNECTFIRST
connectFirst, one of the largest and most successful credit
unions in Canada, is a
full-service financial institution with over $6 billion in assets under administration.
connectFirst employs 750 Albertans who provide a range of financial
products and advice in more than 40 communities across central and
southern Alberta. It serves over
125,000 members through a community-focused approach to
banking.
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 140 current locations spanning
Ontario, Alberta, British
Columbia, Manitoba, and
Saskatchewan. The Company is also
North America's first cannabis
discount club retailer, under the Canna Cabana banner, which is the
single-largest cannabis retail brand in Canada with additional locations under
development across the country. High Tide's portfolio also includes
retail kiosks and smart locker technology – Fastendr™. High Tide
has been serving consumers for over a decade through its
established e-commerce platforms including Grasscity.com,
Smokecartel.com, Dailyhighclub.com, and Dankstop.com and more
recently in the hemp-derived CBD space through Nuleafnaturals.com,
FABCBD.com, BlessedCBD.co.uk, BlessedCBD.de, and Amazon United
Kingdom, as well as its wholesale distribution division under
Valiant Distribution, including the licensed entertainment product
manufacturer Famous Brandz. High Tide was featured in the third
annual Report on Business Magazine's ranking of Canada's Top Growing Companies in 2021 and was
named as one of the top 10 performing diversified industries stocks
in the 2022 TSX Venture 50™. High Tide's strategy as a parent
company is to extend and strengthen its integrated value chain,
while providing a complete customer experience and maximizing
shareholder value.
For more information about High Tide, please visit
www.hightideinc.com and its profile pages on SEDAR at
www.sedar.com and EDGAR at www.sec.gov.
Neither the TSX Venture Exchange (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.
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 statements relating to: the anticipated use of the Credit
Facility on the business and operations of the Company; the Company
adding the number of additional cannabis retail stores that the
Company proposes to add to the Company's business within the
timeframes outlined herein; the Company satisfying the customary
conditions required for advancement of funds under the Credit
Facility; the Company's ability to maintain and drawdown on the
Credit Facility; the Company's business objectives and milestones
and the anticipated timing of, and costs in connection with, the
execution or achievement of such objectives and milestones and any
additional funding that may be offered by connectFirst under the
Credit Facility or another credit facility; the effects of the
Credit Facility on the Company's business; the development of the
Company's business and future activities following the date hereof;
the performance of the Company's business and the operations and
activities of the Company; the Company completing the development
of its cannabis retail stores; the Company's plans to extend and
strengthen its integrated value chain, while providing a complete
customer experience and maximizing shareholder value; the receipt
of regulatory approvals, including the approval of the TSXV; the
Company's ability to obtain, maintain, and renew or extend,
applicable authorizations, including the timing and impact of the
receipt thereof; and the Company continuing to grow its online
retail portfolio through further strategic and accretive
acquisitions.
Forward-looking information in this news release are based on
certain assumptions and expected future events, namely: that the
Company will have the ability satisfy the conditions required for
the advancement of funds under the Credit Facility; the Company
will have the ability to maintain, and continue to be able to
drawdown, from the Credit Facility; the Credit Facility being
utilized as outlined herein; the Credit Facility having the
anticipated effects on the Company's business; the Company having
access to additional funds under the Credit Facility or another
credit facility; the Company'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 the Company's
product offerings; current and future economic conditions will
neither affect the business and operations of the Company nor the
Company's ability to capitalize on anticipated business
opportunities; fluctuations in prevailing interest rates and the
costs of borrowing by the Company generally and under the Credit
Facility to remain at levels within the Company's forecasts; the
Company will have sufficient working capital and the ability to
maintain the funding required in order to develop and continue its
business and operations; the Company will continue to attract,
develop, motivate and retain highly qualified and skilled
consultants and/or employees, as the case may be; no adverse
changes will be made to the regulatory framework governing
cannabis, taxes and all other applicable matters in the
jurisdictions in which the Company conducts business and any other
jurisdiction in which the Company may conduct business in the
future; the Company will be able to generate cash flow
from operations, including, where applicable, the distribution and
sale of cannabis and cannabis products; the Company will be able to
execute on its business strategy as anticipated; the Company will
be able to meet the requirements necessary to obtain and/or
maintain authorizations required to conduct the business; general
economic, financial, market, regulatory, and political conditions,
including the impact of the COVID-19 pandemic, will not negatively
affect the Company or its business; the Company will be able to
successfully compete in the cannabis industry; cannabis prices will
not decline materially; the Company will be able to effectively
manage anticipated and unanticipated costs; the Company will be
able to conduct its operations in a safe, efficient and effective
manner; general market conditions will be favourable with respect
to the Company's future plans and goals; the Company will extend
and strength its integrated value chain, provide a complete
customer experience and maximize shareholder value; the Company
will add the additional cannabis retail store locations to the
Company's business and remain on a positive growth trajectory; the
Company will complete the development of its cannabis retail store;
the Company will continue to grow its online retail portfolio
through further strategic and accretive acquisitions; the Company
will reach the anticipated sales from continuing operations for the
financial year of the Company ending October
31, 2022; the Company will complete its proposed
acquisitions; the Company will hit its forecasted revenue and sales
projections for the fourth quarter of 2022; same-store sales will
continue to increase in the fourth quarter of 2022 and beyond; the
Company will make meaningful increases to its revenue profile; the
Company will continue to increase its revenue through the fourth
fiscal quarter of 2022, and the remainder of the year; the Company
will complete its current at-the-market equity offering program
(the "ATM Program"); the Company's will use of the net
proceeds from the ATM Program and/or any future offering as
planned; the Company will list the Common Shares offered in the ATM
Program and/or any future offering; and the Company will continue
to grow its online retail portfolio through further strategic and
accretive acquisitions; and the Company will build upon its
existing momentum in the international hemp-derived CBD and
consumption accessories e-commerce sectors; and the Company will
continue to integrate and expand its CBD brands.
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 cannabidiol
industries in general; the Company's inability to satisfy the
conditions required for the advancement of funds under the Credit
Facility and/or utilize the Credit Facility on the terms and within
the timelines anticipated or at all; risk that the Company will be
unable to maintain and/or be unable to continue to drawdown from
the Credit Facility on the terms and within the timelines
anticipated; risk that the Company will not receive access to
additional funds under the Credit Facility and/or additional credit
facilities; risk that the Credit Facility will not have the
anticipated effect on the Company's business and operations; risk
that increases in the prevailing interest rates will increase the
costs of borrowing by the Company generally and under the Credit
Facility to levels not considered in the Company's forecasts; risks
associated with the cannabis and CBD industries in general; the
inability of the Company to obtain requisite approvals for its
operations; the inability of the Company to pursue more retail
acquisitions in the future; the Company's inability to attract and
retain qualified members of management to grow the Company's
business and its operations; unanticipated changes in economic and
market conditions (including changes resulting from the COVID-19
pandemic) or in applicable laws; the impact of the publications of
inaccurate or unfavourable research by securities analysts or other
third parties; the Company's failure to complete future
acquisitions or enter into strategic business relationships;
interruptions or shortages in the supply of cannabis from time to
time available to support the Company's operations from time to
time; unanticipated changes in the cannabis industry in the
jurisdictions within which the Company may from time to time
conduct its business and operations, including the Company's
inability to respond or adapt to such changes; the Company's
inability to secure or maintain favourable lease arrangements or
the required authorizations necessary to conduct the business and
operations and meet its targets; the Company's inability to secure
desirable retail cannabis stores on favourable terms; risks
relating to Company's projections; the Company's inability to
effectively manage unanticipated costs and expenses, including
costs and expenses associated with product recalls and judicial or
administrative proceedings against the Company; risk that the
Company will be unable to continue to integrate and expand its CBD
brands; risk that the Company will be unable to grow its online
retail portfolio through further strategic and accretive
acquisitions; risk that the Company will be unable to add
additional cannabis retail store locations to the Company's
business and/or remain on a positive growth trajectory; risks that
the Company will be unable to complete the development of any or
all of its cannabis retail stores; the inability of the Company to
extend and strengthen its integrated value chain, while providing a
complete customer experience and maximizing shareholder value;
risk that the Company will not reach the anticipated sales from
continuing operations for the financial year of the Company ending
October 31, 2022; risk that the
Company will not hit its forecasted revenue and sales projections
for the fourth quarter of 2022; risk that same-store sales will not
increase, but decease and/or plateau; risk that the Company will be
unable to increase its revenue profile; risk that the Company will
be unable to increase its revenue through the fourth fiscal quarter
of 2022, and the remainder of the year, but that it will decease
and/or plateau; risk that the Company will be unable to build upon
its existing momentum in the international hemp-derived CBD and
consumption accessories e-commerce sectors; risk the Company will
not complete the ATM Program; the Company's inability to list the
Common Shares offered in the ATM Program and/or any future
offering; the Company's failure to utilize the use of proceeds from
the ATM Program and/or any future offering as expected; risks
surrounding the legality of delta-8 tetrahydrocannabinol
("Delta-8") derived from hemp; risks surrounding the
uncertainty and legality of Delta-8 and delta-9
tetrahydrocannabinol ("Delta-9") state to state; risk that
the United States Drug Enforcement Administration could consider
the Company's Delta-8 products an illegal controlled substance
under the Controlled Substances Act (the "CSA") or Federal
Analogue Act in the United States;
risk that that state or federal regulators or law enforcement could
take the position that the Delta-8 and Delta-9 products and/or
in-process hemp extract are/is a Schedule I controlled substance in
violation of the CSA and similar state laws; risk that the
Company's Delta-9 products could be considered by state law
enforcement and state regulators to be marijuana illegal under
state laws criminalizing the possession, distribution, trafficking
and sale of marijuana; risk that should the Company become subject
to enforcement action by federal or state agencies, the Company
could: (i) be forced to stop offering some or all of it Delta-8 and
Delta-9 products or stop all business operations, (ii) be subject
to other civil or criminal sanctions, (iii) be required to defend
against such enforcement and if unsuccessful could cause the
Company to cease its operations; and risk that enforcement or
regulatory action at the United
States federal and/or state level could adversely impact the
listings of the Common Shares on the TSXV and Nasdaq Capital
Market.
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, forward-looking financial
information and other metrics presented herein are not intended as
guidance or projections for the periods referenced herein or any
future periods, and in particular, past performance is not an
indicator of future results and the results of the Company in this
press release may not be indicative of, and are not an estimate,
forecast or projection of the Company's future results.
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. The Company disclaims 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. 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 the
Company's public filings and material change reports, which are and
will be available on SEDAR.
Forward-looking statements contained in this press release
are expressly qualified by this cautionary statement and reflect
the Company's expectations as of the date hereof and are subject to
change thereafter. The Company undertakes no obligation to update
or revise any forward-looking statements, whether as a result of
new information, estimates or opinions, future events or results or
otherwise or to explain any material difference between subsequent
actual events and such forward-looking information, except as
required by applicable law.
CAUTIONARY NOTE REGARDING
FUTURE ORIENTED FINANCIAL INFORMATION
This press release may contain future-oriented financial
information ("FOFI") within the meaning of Canadian
securities legislation, about prospective results of operations,
financial position or cash flows, based on assumptions about future
economic conditions and courses of action, which FOFI is not
presented in the format of a historical balance sheet, income
statement or cash flow statement. The FOFI has been prepared by
management to provide an outlook of the Company's activities and
results and has been prepared based on a number of assumptions
including the assumptions discussed under the heading above
entitled "Cautionary Note Regarding Forward-Looking Statements" and
assumptions with respect to the costs and expenditures to be
incurred by the Company, capital expenditures and operating costs,
taxation rates for the Company and general and administrative
expenses. Management does not have, or may not have had at the
relevant date, firm commitments for all of the costs, expenditures,
prices or other financial assumptions which may have been used to
prepare the FOFI or assurance that such operating results will be
achieved and, accordingly, the complete financial effects of all of
those costs, expenditures, prices and operating results are not, or
may not have been at the relevant date of the FOFI, objectively
determinable.
Importantly, the FOFI contained in this press release are, or
may be, based upon certain additional assumptions that management
believes to be reasonable based on the information currently
available to management, including, but not limited to, assumptions
about: (i) the future pricing for the Company's products, (ii) the
future market demand and trends within the jurisdictions in which
the Company may from time to time conduct the Company's business,
(iii) the Company's ongoing inventory levels, and operating cost
estimates, and (iv) the Credit Facility and the Company's continued
ability to drawdown on the Credit Facility. The FOFI or financial
outlook contained in this press release do not purport to present
the Company's financial condition in accordance with International
Financial Reporting Standards 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 in any such document, 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 at the applicable date. However, because this
information is highly subjective and subject to numerous risks
including the risks discussed under the heading above entitled
"Cautionary Note Regarding Forward-Looking Statements" and under
the heading "Risk Factors" in the Company's public disclosures,
FOFI or financial outlook within this press release should not be
relied on as necessarily indicative of future results.
Readers are cautioned not to place undue reliance on the
FOFI, or financial outlook contained in this press release. Except
as required by Canadian securities laws, the Company does not
intend, and does not assume any obligation, to update such
FOFI.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in
the United States of America. The
securities have not been and will not be registered under the
United States Securities Act of 1933 (the "1933 Act") or any state
securities laws and may not be offered or sold within the United States or to U.S. Persons (as
defined in the 1933 Act) unless registered under the 1933 Act and
applicable state securities laws, or an exemption from such
registration is available.
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SOURCE High Tide Inc.