High Tide (HITI.V) announces today that it has entered into a share purchase agreement with the shareholders of 102105699 Saskatchewan Ltd. pursuant to which High Tide will acquire all issued and outstanding shares of the Corporation for CAD$2,900,000.
“I am excited that we are adding these six new locations which will bring High Tide’s total retail footprint in Saskatchewan to ten stores upon completion and solidify our position as a leading cannabis retailer in the province,” said Raj Grover, High Tide’s President & Chief Executive Officer.
Following the acquisition’s completion, High Tide will acquire a portfolio of six retail cannabis locations in Regina, Saskatchewan, out of which one is operational and five are in various stages of construction. However, all locations are expected to be operational by the end of 2021.
When I think of cannabis, the first few provinces that come to mind are Ontario, British Columbia, Alberta and Quebec. After all, these are the four largest cannabis markets in Canada, accounting for more than 84% of the country’s legal recreational cannabis sales in December 2020. However, Canada’s six remaining provinces have some skin in the game too. In particular, Saskatchewan achieved recreational cannabis sales of CAD$11.8 million in December 2020. Sure, this number pales in comparison to a province like Ontario, which generated $94.6 million in the same period, but Saskatchewan’s population is significantly dwarfed by Ontario’s.
With this in mind, Saskatchewan’s cannabis sector is growing slowly but steadily. In October 2018, Saskatchewan used a lottery system to determine who would be able to open legal retail cannabis stores in the province. In April 2018, Saskatchewan received 1,500 applications for 51 permits in 32 communities and First Nations. However, in 2019 Saskatchewan opted to scrap this system, permitting municipalities to decide how many stores to open in their communities. Since then, Regina has established 13 cannabis stores, but this number may soon increase to 24 in order to combat black market cannabis sales.
“…Furthermore, within the City of Regina, there are currently only 13 operating retail cannabis stores of which one will be ours, with five more to come shortly. This transaction is especially beneficial to High Tide because retail cannabis margins in Saskatchewan are higher than the Canadian average, and new licenses are difficult to come by given various municipal zoning restrictions in Regina,” added Mr. Grover.
Overall, High Tide is positioned nicely to capitalize on Saskatchewan’s growing cannabis market. Moreover, with a total of six retail stores on the horizon, the Company will be able to strengthen its presence in Regina and Saskatchewan as a whole.
High Tide’s share price opened at $8.78, up from a previous close of $8.85. The Company’s shares are up 0.56% and are currently trading at a high of $8.90 as of 10:50AM ET. This indicates that there has been some change following the news.