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High Tide Buys Cannabis Store Bud Room

High Tide (TSE: HITI) announced Wednesday it has signed a deal to acquire 100% of the interest in Bud Room Inc., as well as assignments of shareholder loans from the sellers, for C$3.6 million. 

High Tide will also acquire all rights to the Fastendr™ personalized retail kiosk and smart locker technology, and to the Bud Room cannabis retail store located in Ottawa, Ontario. 

Enhancing the Customer Experience 

Fastendr™ is a unique, fully automated technology that integrates retail kiosks and smart lockers to facilitate a better shopping experience through navigation, ordering, and pickup.

The technology is a catalyst for accelerating transaction times, increasing average cart size, reducing overhead and labor costs, and delivering a seamless end-to-end customer experience. 

High Tide’s possession of Fastendr™ technology will significantly improve its operational efficiency, while reducing operating expenses at the company’s retail cannabis stores. 

High Tide intends to grow and diversify revenue by licensing the technology ordering kiosks and smart lockers for use by third-party cannabis retailers in North America.

The transaction also provides High Tide with huge data collection and monetization opportunities from its retail portfolio and third-party licensees. 

Fastendr™ technology principles will be leveraged to add further consumer-focused retail innovations to High Tide’s ancillary business portfolio in the coming months. 

Management Commentary 

High Tide president and CEO Raj Grover said, “This deal is one of the most exciting acquisitions for High Tide to date, as it greatly enhances the customer experience in our stores while materially reducing overhead and labor costs in our ever-expanding retail portfolio. This technology will also allow us to generate third-party revenue, provide data collection and monetization opportunities, while supporting an unparalleled retail shopping experience for our customers.” 

Grover added, “Fastendr is a perfect solution for smaller footprint stores as well as busier retail locations, as it allows for more transactions in less time and with less square footage. All Canna Cabana locations will be equipped with this technology, with the first installations planned for later this month in the province of Ontario. The customized Fastendr technology is a game changer for our bricks-and-mortar retail business and has tremendous potential to be rolled out in our ancillary business divisions as well. This acquisition comes on the heels of several disruptive retail innovations by High Tide, such as our “one stop shop” and “discount club” concepts. I look forward to working with Mike on further market leading retail initiatives as we continue our momentum into the future.” 

Wall Street’s Take 

On November 24, Desjardins analyst John Chu kept a Buy rating on HITI and a C$13.50 price target. This implies 132.8% upside potential.  

Consensus among Wall Street analysts is that HITI is a Strong Buy, based on three Buys and one Hold. The average High Tide price target of C$13.78 implies 137.5% upside potential to current levels. 

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