High Tide, Inc. · TSXV:HITI
High Tide — Merger or Acquisition (August 2020)
20 slides from High Tide's merger presentation, Aug 21, 2020
Slide 1: High Tide to Combine with Meta Growth
C R E AT I N G T H E L E A D E R I N C A N A D I A N C A N N A B I S R E TA I L HIGH TIDE TO COMBINE WITH META GROWTH August 21, 2020
Slide 2: Disclaimer
DISCLAIMER General This presentation (the “presentation”) is for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any equity, debt or other financial instruments of High Tide Inc. (“High Tide”), Meta Growth Corp.
Slide 3: Disclaimer
DISCLAIMER Currency, Diagrams, and Tables In this presentation, all amounts are in Canadian dollars, unless otherwise indicated. Any graphs, tables or other information in this presentation demonstrating the historical performance of High Tide and Meta Growth or of any other entity contained in this
Slide 4: Creating the Leader in Canadian Cannabis Retail
C R E AT I N G T H E L E A D E R I N C A N A D I A N C A N N A B I S R E TA I L Creates Canada’s largest cannabis Industry leading gross margin of 35%(2) retailer with 63 stores(1) and and Canada’s only positive adjusted ~$133 million(2) in annualized revenue EBITDA3 cannabis retailer to date Antici
Slide 5: Strong Geographic Footprint
Canadian Retail STRONG GEOGRAPHIC FOOTPRINT Position(1) Existing Retail Operations Near Term Opportunities #1 Retail Retail Locations Locations(2)(3) 63 8 Addressable 42 Population Achieves AGLC cap of 42 3 10 3 retail locations in AB and realizes immediate EBITDA accretion through store 26.9 optimi
Slide 6: Largest Cannabis Retailer in Canada
L A R G E S T C A N N A B I S R E TA I L E R I N C A N A D A Store Count (# of Operating Locations)(1) The combined entity will consolidate and operate high-quality retail locations 63 80 60 58 52 40 37 33 20 18 17 − (2) (3) (4) (5) Last Quarter Annualized Revenue ($mm) $133 $92 $78 $55 $17 $17 $9 S
Slide 7: Transaction Overview
TRANSACTION OVERVIEW
Slide 8: Transaction Summary
T R A N S A C T I O N S U M M A RY • High Tide to acquire all of the issued and outstanding common shares of Meta Growth (the “Transaction”) Proposed • Court approved statutory plan of arrangement Transaction • Pro forma ownership of 54.375% for High Tide and 45.625% for Meta Growth (on an as conver
Slide 9: Transaction Rationale
T R A N S A C T I O N R AT I O N A L E OPERATIONAL METRICS (COMBINED PRO FORMA) FINANCIAL METRICS (COMBINED PRO FORMA) 63 115 $133M 35% Store Count(1) Store Count Revenue Gross Margin Current (Dec-21) (Last Quarter Annualized) (Last Quarter Annualized) • Creates Canada’s largest • Growth plans inclu
Slide 10: Combination Overview
COMBINATION OVERVIEW
Slide 11: High Tide – Key Highlights
HIGH TIDE – KEY HIGHLIGHTS ESTABLISHED IN ALL DOWNSTREAM MARKETS HITI realized gross margins of 38% in its latest quarter through its diverse revenue opportunities each complementary to one another (i.e. cannabis retail Industry Leading Retail and accessories) Gross Margins Average gross margin of p
Slide 12: Meta Growth – Key Highlights
M E TA G R O W T H – K E Y H I G H L I G H T S UNIQUE RETAIL EXPERIENCES ACROSS 4 PROVINCES A Leader in the PREMIUM One of the largest cannabis retailers in Canada by sales and store count with Canadian Cannabis $53.9 million in last quarter annualized sales(1) and 33 operating locations Retail Mark
Slide 13: Size and Scale for Profitable Growth
S I Z E A N D S C A L E F O R P R O F I TA B L E G R O W T H Pro Forma + + Capitalization Market Cap $35.5 million $29.7 million(1) $65.2 million(1) Current Liquidity(2) $12.7 million + $20.6 million $33.3 million Enterprise Value $65.9 million + $49.9 million $115.8 million Operating Stores 37 + 33
Slide 14: Laying Out a Clear Path to Profitability
L AY I N G O U T A C L E A R PAT H TO P R O F I TA B I L I T Y Annual cost and operational synergies of approx. $8 million to $9 million expected within 12 months of transaction closing Last Quarter Annualized Pro Forma EBITDA Bridge ($mm) 1 Store Optimization + Leases Synergies HITI and META to clo
Slide 15: Benchmarking Against Peers
BENCHMARKING AGAINST PEERS Enterprise Value(1) ($mm) and Enterprise Value / Store $330.0 EV EV / Store 4.5x $300.0 3.9x 3.5x $270.0 2.7x $200.5 $240.0 2.5x 1.8x 1.8x $210.0 1.4x 1.5x (2) $180.0 0.7x 0.8x $115.8 $150.0 0.5x $120.0 $65.9 $48.0 $47.8 -0.5x $39.4 $90.0 $13.2 $60.0 -1.5x $30.0 − -2.5x En
Slide 16: Strengthened Balance Sheet and Increased Capital Markets Profile
STRENGTHENED BALANCE SHEET AND INCREASED C A P I TA L M A R K E T S P R O F I L E TO S U P P O R T G R O W T H + High Tide Restructures $10.8 Million of Debt Amendment and Extension of META Increased Capital Markets Profile Into Interest Free Debenture Due in 2025 Convertible Debentures & Access To
Slide 17: Industry-Leading Retail Portfolio
I N D U S T RY- L E A D I N G R E TA I L P O R T F O L I O 17
Slide 18: Combined Data and Analytics Platform
C O M B I N E D D ATA A N D A N A LY T I C S P L AT F O R M Over 55,000 pro forma members on the combined platform 47k 50%+ Database communicates with targeted of total transactions consumers who are segmented at the local Members completed by members level by delivering regular content that is spec
Slide 19: Leveraging Our Diversified Business
LEVERAGING OUR DIVERSIFIED BUSINESS WHOLESALE ONLINE Manufacturer and distributor of smoking Grasscity.com is a major e-retailer of smoking accessories and cannabis lifestyle products accessories and cannabis lifestyle products House Brands Other Brands • +10 years of operations • +7.0 million US si
Slide 20: Thank You
GROWTH THANK YOU IDE WETA