Calgary-headquartered cannabis retailer High Tide Inc. and Toronto-based Meta Growth Corp. will merge in a new deal that they say will make them the largest legal cannibis network in Canada.
The companies say the merger will give them a combined 63 stores across Ontario, Alberta, Manitoba and Saskatchewan and make it the single largest Canadian cannabis retailer by revenue with about $133 million in annualized revenue.
The companies plan to double their current footprint to about 115 locations by the end of 2021 by focusing mostly on Ontario.
Under the agreement, Meta’s shareholders will receive 0.824 of a High Tide share for each Meta share they hold. Meta shareholders are expected to hold a 45.6 per cent stake in the combined company.
The companies expect the merger to deliver annual cost and operational synergies between $8 million and $9 million within 12 months of closing of the deal and will list High Tide on the TSX Venture Exchange once the deal is complete.
High Tide chief executive Raj Grover will lead the combined company going forward while Meta chief executive Mark Goliger and chief financial officer Mike Cosic will ensure that there is an orderly transition.
“The combination with META is a watershed moment in High Tide’s evolution as we become Canada’s largest and strongest cannabis retailer,” Grover said in a news release.
“Over the last decade High Tide has built a strong foundation for sustainable growth.
Goliger said the merger is intended to lead to enhanced shareholder value. “The new company is now bigger, better and stronger with positive momentum to help break through to new levels and profitability,” he said.
— Canadian Press with Paul Bucci, Canadian Evergreen
This report by The Canadian Press was first published Aug. 21, 2020.