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 November 22, 2021, the Company has completed its acquisition (the “Acquisition“) of an 80% interest in NuLeaf Naturals, LLC (“NuLeaf“) for US$31,240,000 (the “Transaction“), and will have a three-year option to acquire the remaining 20% of NuLeaf at any time.

Founded in 2014 with its headquarters in Denver, Colorado, NuLeaf is a market leader focused on the production and distribution of premium cannabinoid wellness products. It has received over 25,000 verified 5 star customer reviews through its e-commerce platform. NuLeaf can produce 60,000 plant-based softgels per hour and is one of only a few manufacturers in the United States that can produce a vegan softgel. With a heightened consumer interest in health focused and sustainable products, plant-based offerings are primed for growth. NuLeaf has a strong distribution reach in the natural products channel and recently secured an expansion with Sprouts Farmers Market from 33 retail locations to an additional 235 stores. It has quickly grown to become one of the most popular brands for premium cannabinoid wellness products across the U.S., with their product portfolio including Multicannabinoid™ tinctures, softgels, and topicals. Over the 12 months ended September 30, 2021, NuLeaf had over 5.1 million site visits² and an average order value of US$120. Since its inception, NuLeaf has served approximately 330,000 unique customers through its e-commerce platform, and hundreds of thousands more through their other distribution channels. Upon closing, NuLeaf will have approximately US$500,000 of inventory and approximately US$500,000 of cash.

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 $10.6 million at the end of October 31, 2020, to just approximately $80 million annual run-rate at the end of November 30, 2021.

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 80% of NuLeaf for 4,429,809 common shares of High Tide (each a “High Tide Share“) valued at US$31,243,000 (the “Consideration“), on the basis of a deemed price of US$7.0529 per High Tide Share, being equal to the volume weighted average price per High Tide Share on the Nasdaq for the ten consecutive trading days preceding the closing of the Acquisition.

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.

KPMG LLP conducted financial due diligence on behalf of High Tide for the Transaction. Garfinkle Biderman LLP and Sichenzia Ross Ference LLP acted for High Tide in connection with the Transaction. NuLeaf was advised by Squire Patton Boggs (US) LLP and Class VI Partners, LLC in connection with the Transaction.

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 CAD$8.02 per High Tide Share for a period of 3 years.

OPENING OF 105TH RETAIL CANNABIS STORE

High Tide also announced today that its Canna Cabana retail cannabis store located at 3928 Edmonton Trail NE in Calgary, Alberta, has begun selling recreational cannabis products for adult use. This opening represents High Tide’s 105th branded retail location across Canada, and 59th in Alberta, selling recreational cannabis products and consumption accessories. The new Canna Cabana store is located within the community of Highland Park, providing convenient access for residents of numerous nearby communities in north-central Calgary, as well as for employees who work in adjacent employment centres which include several industrial sites. The location is also easily-accessible from Deerfoot Trail, which is Calgary’s most heavily-used freeway.