High Tide Inc. (“High Tide” or the “Company“) (TSXV: HITI) (NASDAQ: 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 October 7, 2021, the Company has completed its acquisition (the “Acquisition“) of an 80% interest in Enigmaa Ltd., operating as Blessed CBD, (“Blessed“) for £9,064,000 (the “Transaction“), and will have a three-year option to acquire the remaining 20% of Blessed at any time.

Founded in 2019 with its headquarters in Scotland, Blessed has quickly grown to become one of the most popular brands for hemp-derived CBD products across the U.K., including CBD oils, creams, gummies, and capsules. In 2020 Blessed had almost 5 million site visits and an average order value of approximately £75.

This is High Tide’s fifth acquisition in the global e-commerce space in 2021, which brings High Tide’s online portfolio to a total of eight e-commerce platforms across cannabis, hemp-derived CBD, and consumption accessories, servicing customers across the U.K., E.U., and North America. These transactions have collectively contributed to increasing the Company’s annual run-rate e-commerce revenue from approximately $10.6 million at the end of October 31, 2020, to just under $60 million today.

The Acquisition was completed pursuant to the terms of a share purchase agreement (the “Acquisition Agreement“), a copy of which is available on the Company’s SEDAR profile. High Tide acquired 80% of Blessed for consideration comprised of: (i) 1,136,551 common shares of High Tide (each a “High Tide Share“) valued at £4,864,000 (the “Share Consideration“), on the basis of a deemed price of $7.2856 per High Tide Share, being equal to the volume weighted average price per High Tide Share on the TSX Venture Exchange (“TSXV“) for the ten consecutive trading days preceding the closing of the Acquisition; and (ii) £4,200,000 in cash. In addition, pursuant to the Acquisition Agreement, the purchase price is subject to a post-closing working capital adjustment provision. Under this provision, the parties will adjust the purchase price to offset any increase or decrease of the net working capital as of the closing date.

The High Tide Shares issued pursuant to the Share Consideration are subject to a statutory hold period of four months and one day.

In addition to the foregoing, Blessed’s founder has agreed to grant High Tide an option to acquire all the remaining shares in Blessed not held by High Tide, and become the sole shareholder of Blessed (the “Call Option“), at an enterprise value equal to the trailing twelve (12) months of revenue at that time multiplied by 2.2. 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 Blessed’s founder an option to put to High Tide the remaining shares in Blessed not held by High Tide (the “Put Option“), at the same enterprise value of the Call Option. The Put Option will be exercisable by Blessed’s founder for a period of two (2) years following the first anniversary of the Acquisition. The consideration under the Call Option or Put Option, if exercised, will be satisfied in High Tide Shares, on the basis of a deemed price per High Tide Share equal to the volume weighted average price per High Tide Share on the TSXV for the ten (10) consecutive trading days preceding closing of the Call Option or Put Option, as the case may be.

KPMG LLP conducted financial due diligence on behalf of High Tide for the Transaction. Garfinkle Biderman LLP and Ince Gordon Dadds LLP are acting as legal advisors for High Tide in connection with the Transaction and Carlsquare and Addleshaw Goddard LLP acted for Blessed in connection with the Transaction.

In connection with the closing of the Transaction, Blessed’s founder and Chief Executive Officer, Vithurs Thiru (known more commonly as “V“), will join the High Tide team as Senior Manager of Search (SEO) of the Company, and will help grow High Tide’s CBD business globally. In connection with V’s appointment, High Tide granted 25,000 stock options (the “Options“) to V, exercisable at CAD$7.17 per High Tide Share for a period of 3 years.