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High Tide secures $10-million credit facility for Ontario expansion
Calgary-based cannabis retailer High Tide is adding $10-million to its expansion war chest.
High Tide, parent company of the Canna Cabana, Smoker’s Corner and Kush Bar retail chains, announced details of the loan early Tuesday morning after its stock was halted Monday, pending news. Toronto-based Windsor Private Capital will be providing the funds, starting with an initial amount of $6-million with a further $4-million being made available subject to certain conditions.
The loan will bear an annualized interest rate of 11.5 per cent, payable monthly. High Tide has also agreed to pay Windsor a placement fee of 3.5 per cent of the initial amount, equivalent to roughly $210,000. The company intends to use the money primary to fund an expansion into Ontario, where the chain already has a handful of Canna Cabana locations but is hoping to open dozens more now that the province has returned to an open allocation process for cannabis retail licenses.
Windsor also has the option of converting the debt into equity at a conversion price of $0.17 per share, which is roughly equivalent to the most recent closing price of High Tide’s Canadian Securities Exchange-listed shares.
The deal comes at a time when cannabis companies are struggling to raise capital. Last month, Quebec-based licensed producer Hexo suffered a dramatic decline in the value of its own stock after selling new shares at what one analyst called a “massive” discount. Then, just last week, Vancouver-based Invictus MD announced it was cancelling previously announced plans to raise $5.7-million by selling convertible debentures.
– Jameson Berkow