High Tide Inc. (Nasdaq: HITI) has announced plans to acquire Boreal Cannabis Company, a Canada-based cannabis retailer, in a stock-cash deal.
High Tide operates as a counterculture chain, which engages in the manufacture and retail of cannabis accessories. Shares of HITI declined 3.1% at the time of writing.
The purchase price consists of CAD$2.2 million, along with inventory at its wholesale value. This portion of the price is to be paid in High Tide’s common stock. Further, the cash on hand as of the deal closing date is to be paid in cash.
Further, the company said that the deal is subject to certain approvals, including TSX Venture Exchange, Alberta Gaming, Liquor and Cannabis Commission, which are likely to be received in the weeks to come.
As part of the deal, High Tide will acquire both the Boreal’s retail stores located in Alberta, which will bring High Tide’s total nationwide store count to 121.
High Tide’s President and CEO, Raj Grover, said, “This announcement is yet another example of how we continue to strategically advance our retail store footprint across Canada through organic growth and accretive acquisitions with a focus on regions where we are currently lighter on exposure, such as northern Alberta which has a dynamic economy that supports working families, a key consumer demographic for Canna Cabana.”
Analysts’ Take
Recently, Echelon Wealth Partners analyst Andrew Semple maintained a Buy rating on High Tide with a price target of $12.8 (181.9% upside potential from current levels).
Semple noted, “High Tide remains our highest conviction investment idea in Canadian cannabis. We note the potential for additional upside to our model as High Tide continues to make accretive acquisitions, and with further updates to the discount club model progress.”
The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on two Buys and one Hold. HITI’s average price target of $9.20 implies 102.6% upside potential to current levels. Shares of HITI have lost 1.3% so far this year.
Positive Sentiments
TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on High Tide, as 5.7% of investors increased their exposure to HITI stock over the past 30 days.
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