High Tide Closes $19 Million Non-Dilutive Credit Facility with connectFirst Credit Union
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 /PRNewswire/ – 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.
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.
Raj Grover, President and Chief Executive Officer of High Tide
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.
“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.
- $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.
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.