High Tide Inc 6-K, filed Jun 2, 2021
High Tide Inc. (HITI)
About this 6-K
High Tide Inc filed this 6-K on June 2, 2021.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of June 2021
Commission File Number 001-40258
HIGH TIDE INC.
(Translation of registrant’s name into English)
11127 – 15 Street N.E., Unit 112
Calgary, Alberta
Canada T3K 2M4
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☐ Form 40-F ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): __
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): __
EXPLANATORY NOTE
On June 1, 2021, High Tide Inc. issued a press release titled: “High Tide Continues Organic Growth with Two Stores in Alberta.” A copy of this press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
On June 1, 2021, High Tide Inc. issued a Material Change Report dated June 1, 2021 relating to the closing of its previously-announced “bought deal” offering. A copy of the Material Change Report is filed herewith as Exhibit 99.2 and incorporated herein by reference.
EXHIBIT INDEX
| Exhibit | Description | |
| 99.1 | Press release dated June 1, 2021 titled: “High Tide Continues Organic Growth with Two Stores in Alberta.” | |
| 99.2 | Material Change Report dated June 1, 2021. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| HIGH TIDE INC. | ||
| Date: June 1, 2021 | By: | /s/ Raj Grover |
| Raj Grover | ||
| President and Chief Executive Officer | ||
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Exhibit 99.1
FOR IMMEDIATE RELEASE
High Tide Continues Organic Growth with Two Stores in Alberta
CALGARY, June 1st, 2021 /CNW/ – High Tide Inc. (“High Tide” or the “Company”) (TSXV: HITI) (OTCQB: HITID) (FRA:2LYA), a retail-focused cannabis corporation enhanced by the manufacturing and distribution of consumption accessories, announced today that its Alberta-based Canna Cabana retail stores located at 10822 50 Street SE, Unit #14 in Calgary, and 4806 50 Avenue in Vegreville, have begun selling recreational cannabis products for adult use. These openings bring High Tide’s total branded retail locations selling recreational cannabis products and consumption accessories across Canada to 87. Staying true to High Tide’s strategy of driving organic growth in profitable neighbourhoods, both stores are located within established retail corridors.
“I am pleased that despite the ongoing pandemic, our team has managed to continue driving High Tide’s organic growth strategy,” said Raj Grover, President and Chief Executive Officer of High Tide. “Although Ontario’s pandemic related restrictions on construction continue to impact the pace of store buildouts in that province, we have pivoted our efforts to ramp up the rollout of new stores in other jurisdictions and are hopeful that Ontario’s restrictions will ease before the summer construction season gets into full swing. We anticipate more Ontario store openings shortly after construction restrictions are lifted,” added Mr. Grover.
About High Tide Inc.
High Tide is a retail-focused cannabis company enhanced by the manufacturing and distribution of consumption accessories. The Company is the most profitable Canadian retailer of recreational cannabis as measured by Adjusted EBIDTA1, with 87 current locations spanning Ontario, Alberta, Manitoba and Saskatchewan. High Tide’s retail segment features the Canna Cabana, KushBar, Meta Cannabis Co., Meta Cannabis Supply Co. and NewLeaf Cannabis banners, with additional locations under development across the country. High Tide has been serving consumers for over a decade through its numerous consumption accessory businesses including e-commerce platforms Grasscity.com, Smokecartel.com, CBDcity.com, FABCBD.com and its wholesale distribution division under Valiant Distribution, including the licensed entertainment product manufacturer Famous Brandz. 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. Key industry investors in High Tide include Tilray Inc. (TSX:TLRY) (NYSE:TLRY) and Aurora Cannabis Inc. (NYSE:ACB) (TSX:ACB).
Neither 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.
1 Adjusted EBITDA is a non-IFRS financial measure.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this news release are forward-looking information or forward-looking statements. Such information and statements, referred to herein as “forward-looking statements” are made as of the date of this news release or as of the date of the effective date of information described in this news release, as applicable. Forward-looking statements relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (generally, forward-looking statements can be identified by use of words such as “outlook”, “expects”, “intend”, “forecasts”, “anticipates”, “plans”, “projects”, “estimates”, “envisages, “assumes”, “needs”, “strategy”, “goals”, “objectives”, or variations thereof, or stating that certain actions, events or results “may”, “can”, “could”, “would”, “might”, or “will” be taken, occur or be achieved, or the negative of any of these terms or similar expressions, and other similar terminology) are not statements of historical fact and may be forward-looking statements.
Such forward-looking statements are based on assumptions that may prove to be incorrect, including but not limited to the ability of High Tide to execute on its business plan and that High Tide will receive one or multiple licenses from Alberta Gaming, Liquor & Cannabis, British Columbia’s Liquor Distribution Branch, Liquor, Gaming and Cannabis Authority of Manitoba, Alcohol and Gaming Commission of Ontario or the Saskatchewan Liquor and Gaming Authority permitting it to carry on its Canna Cabana Inc. and KushBar Inc. businesses. High Tide considers these assumptions to be reasonable in the circumstances. However, there can be no assurance that any one or more of the government, industry, market, operational or financial targets as set out herein will be achieved. Inherent in the forward-looking statements are known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements, or industry results, to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements.
The forward-looking statements contained herein are current as of the date of this news release. Except as required by law, High Tide does not have any obligation to advise any person if it becomes aware of any inaccuracy in or omission from any forward-looking statement, nor does it intend, or assume any obligation, to update or revise these forward-looking statements to reflect new events or circumstances. Any and all forward-looking statements included in this news release are expressly qualified by this cautionary statement, and except as otherwise indicated, are made as of the date of this news release.
CONTACT INFORMATION
Media Inquiries
Omar Khan
Senior Vice President, Corporate and Public Affairs
omar@hightideinc.com
Tel. 1 (647) 985-4401
Investor Inquiries
Vahan Ajamian
Capital Markets Advisor
High Tide Inc.
Tel. 1 (403) 265-4207
Email: vahan@hightideinc.com
Exhibit 99.2
FORM 51-102F3
MATERIAL CHANGE
REPORT
Item 1: Name and Address of Company
High Tide Inc. (the “Company”)
Unit 112, 11127 - 15 Street N.E.
Calgary, Alberta
T3K 2M4
Item 2: Date of Material Change
May 26, 2021
Item 3: News Release
The Company disseminated a news release through Newsfile Corp. on May 26, 2021 in respect of the material change and filed the news release on SEDAR at www.sedar.com.
Item 4: Summary of Material Change
On May 26, 2021, the Company announced that it had closed its previously announced “bought deal” offering (the “Offering”), pursuant to which the Company issued an aggregate of 2,415,000 units of the Company (each, a “Unit”) at a price of $9.60 per Unit, for aggregate gross proceeds of $23,184,000 including the full exercise of the over- allotment option granted to the Underwriters (as defined in the news release attached hereto as Schedule “A”).
Item 5.1: Full Description of Material Change
Please see the news release attached hereto as Schedule “A” for a full description of the material change. The below discussion contains the disclosure required by Multilateral Instrument 61-101 – Protection of Minority Shareholders in Special Transactions (“MI 61-101”).
Following the announcement of the Offering, Mr. Rahim Kanji and Mr. Shimmy Posen, the Chief Financial Officer, and the Corporate Secretary of the Company, respectively (collectively, the “Participating Insiders”) expressed an intention to participate in the Offering and acquire up to an aggregate of 105,000 Units pursuant to the Offering. Subsequently, the Participating Insiders participated in the Offering and acquired an aggregate of 105,000 Units pursuant to the Offering.
The participation of the Participating Insiders in the Offering constituted a “related party transaction”, as such term is defined in MI 61-101, and MI 61-101 would have, in the normal course, required the Company to receive minority shareholder approval for, and obtain a formal valuation for the subject matter of the transaction in accordance with MI 61-101, prior to the completion of such transaction. However, the Company relied on exemptions from the formal valuation and the minority shareholder approval requirements of MI 61-101, available to the Company under Section 5.5(b) and Section 5.7(1)(a) of MI 61-101, respectively, in each case on the basis that the fair market value of the Participating Insiders’ participation in the Offering did not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101.
The terms of the Offering were reviewed and approved by the board of directors of the Company, a majority of whom are independent for purposes of applicable Canadian securities laws. The purpose and business reasons for the transaction is to raise sufficient capital for opening new retail cannabis store locations, completing strategic acquisitions, the repayment of debt, and general corporate and working capital purposes, as well as for such other purposes as to be described in the prospectus supplement dated May 22, 2021 to the short form prospectus of the Company dated April 22, 2021 prepared and filed by the Company in connection with the Offering. The effect of the Offering on the Company’s business and affairs is that the Company has secured funds to be used for the aforementioned purposes.
After reasonable enquiry, the Company is not aware of any “prior valuation” (as defined in MI 61-101) that has been made in the 24 months prior to the date hereof and that relates to the subject matter of or is otherwise relevant to the proposed participation of the Participating Insiders, in the Offering.
The Company did not file a material change report more than 21 days before the closing of the Offering (the “Closing Date”) disclosing the proposed participation by the Participating Insiders due to the limited time between the launch date of the Offering and the Closing Date. The Company closed the Offering on an expedited basis for sound business reasons, in order to capitalize on the current, strong market demand for the securities of the Company.
Item 5.2: Disclosure for Restructuring Transactions
Not applicable.
Item 6: Reliance on subsection 7.1(2) of National Instrument 51-102 (Confidentiality)
Not applicable.
Item 7: Omitted Information
No information has been omitted on the basis that it is confidential information.
Item 8: Executive Officer
For additional information with respect to this material change, the following person may be contacted:
High Tide Inc.
Raj Grover
Chief Executive Officer
Tel: (403) 770-9435
Email: raj@hightideinc.com
Item 9: Date of Report
June 1, 2021.
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SCHEDULE “A”
(See attached.)
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High Tide Announces Closing of $23 Million Bought Deal Equity Financing, Including Exercise in Full of Over-Allotment Option
Calgary, Alberta--(Newsfile Corp. - May 26, 2021) - High Tide Inc. (TSXV: HITI) (OTCQB: HITID) (FSE: 2LYA) (“High Tide” or the “Company”) a retail-focused cannabis corporation enhanced by the manufacturing and distribution of consumption accessories, is pleased to announce the closing of its previously announced “bought deal” offering (the “Offering”) of units of the Company (the “Units”), including the exercise in full of the underwriters’ over-allotment option. The Offering was led by ATB Capital Markets Inc. and Echelon Wealth Partners Inc., together with Beacon Securities Limited, Desjardins Securities Inc. and Roth Canada, ULC (collectively, the “Underwriters”), and A.G.P./Alliance Global Partners, as a United States placement sub agent.
In connection with the Offering, the Company issued an aggregate of 2,415,000 Units at a price of $9.60 per Unit, for aggregate gross proceeds of $23,184,000. Each Unit is comprised of one common share of the Company (each, a “Common Share”) and one-half of one Common Share purchase warrant (each whole warrant, a “Warrant”). Each Warrant entitles the holder thereof to acquire one Common Share of the Company for a period of 36 months from closing of the Offering at an exercise price of $12.25 per Warrant, subject to an accelerated expiry if the ten trading day volume-weighted average price of the Common Shares on the TSX Venture Exchange (the “TSXV”) is equal to or greater than
$19.20 per Common Share.
The TSXV has conditionally approved the listing of (i) the Common Shares and (ii) the Common Shares issuable upon the exercise of: (A) the Warrants, (B) the broker warrants issued to the Underwriters, and (C) the Warrants comprising the Units underlying such broker warrants. Listing will be subject to the Company fulfilling all the listing requirements of the TSXV.
The net proceeds of the Offering will be used for opening new retail cannabis store locations, completing strategic acquisitions, the repayment of debt, general corporate and working capital purposes.
Garfinkle Biderman LLP acted as legal advisors to the Company in connection with the Offering. Stikeman Elliott LLP acted as legal advisors to the Underwriters in connection with the Offering.
No securities regulatory authority has either approved or disapproved of the contents of this news release. This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities, in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from U.S. registration requirements and applicable U.S. state securities laws.
Related Party Transaction
Mr. Rahim Kanji and Mr. Shimmy Posen, the Chief Financial Officer and Corporate Secretary of the Company, respectively (collectively, the “Participating Insiders”) participated in the Offering and acquired an aggregate of 105,000 Units pursuant to the Offering. The participation of the Participating Insiders in the Offering constitutes a “related party transaction”, as such term is defined in Multilateral Instrument 61-101 - Protection of Minority Shareholders in Special Transactions (“MI 61-101”) and would require the Company to receive minority shareholder approval for and obtain a formal valuation for the subject matter of, the transaction in accordance with MI 61-101, prior to the completion of such transaction. However, in completing the Offering, the Company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101, in each case on the basis that the fair market value of the Participating Insiders’ participation in the Offering does not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101. The Company did not file a material change report more than 21 days before the closing date of the Offering (the “Closing Date”) due to the limited time between the launch date of the Offering and the Closing Date.
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ABOUT HIGH TIDE INC.
High Tide is a retail-focused cannabis company enhanced by the manufacturing and distribution of consumption accessories. The Company is the most profitable Canadian retailer of recreational cannabis as measured by Adjusted EBIDTA,[1] with 85 current locations spanning Ontario, Alberta, Manitoba and Saskatchewan. High Tide’s retail segment features the Canna Cabana, KushBar, Meta Cannabis Co., Meta Cannabis Supply Co. and NewLeaf Cannabis banners, with additional locations under development across the country. High Tide has been serving consumers for over a decade through its numerous consumption accessory businesses including e-commerce platforms Grasscity.com, Smokecartel.com, FABCBD.com and CBDcity.com, and its wholesale distribution division under Valiant Distribution, including the licensed entertainment product manufacturer Famous Brandz. 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. Key industry investors in High Tide include Tilray Inc. (TSX: TLRY) (NASDAQ: TLRY) and Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB).
Neither 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 (i) the anticipated use of proceeds, and (ii) the receipt of regulatory approvals, including the approval of the TSXV. While High Tide considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Readers are cautioned not to place undue reliance on forward-looking statements.
Forward-looking statements also necessarily involve known and unknown risks, including, without limitation, High Tide’s inability to obtain the required regulatory approvals to complete the Offering on the proposed terms and timeline; risks associated with general economic conditions; adverse industry events; marketing costs; loss of markets; future legislative and regulatory developments involving the retail cannabis markets; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the retail cannabis industries generally; income tax and regulatory matters; the ability of High Tide to implement its business strategy; competition; currency and interest rate fluctuations; the COVID-19 pandemic nationally and globally and the response of governments to the COVID-19 pandemic in respect of the operation of retail stores and other risks. Readers are 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. Readers are further cautioned that the assumptions used in the preparation of such forward-looking statements, including, but not limited to, the assumption that: (i) High Tide’s financial condition and development plans do not change as a result of unforeseen events, (ii) there will continue to be a demand and market opportunity for High Tide’s product offerings, (iii) current and future economic conditions will neither affect the business and operations of High Tide nor High Tide’s ability to capitalize on anticipated business opportunities, (iv) the Company will receive all necessary approvals, including TSXV approval, and (v) High Tide will use the use of proceeds for the purposes set out above. Although considered reasonable by management of High Tide at the time of preparation, these assumptions may prove to be imprecise and result in actual results differing materially from those anticipated, and as such, undue reliance should not be placed on forward- looking statements.
| [1] | Adjusted EBITDA is a non-IFRS financial measure. |
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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 High Tide in this press release may not be indicative of, and are not an estimate, forecast or projection of High Tide’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. High Tide disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of newinformation, 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 High Tide’s public filings and material change reports, which are and will be available on SEDAR.
MEDIA INQUIRIES
Omar Khan
Senior Vice President, Corporate and Public Affairs
High Tide Inc.
Tel. 1 (647) 985-4401
Email: omar@hightideinc.com
INVESTOR INQUIRIES
Vahan Ajamian
Capital Markets Advisor
High Tide Inc.
Tel. 1 (403) 265-4207
Email: vahan@hightideinc.com
NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/85334
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