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Tuesday, Jan 25, 2022
Mugglehead Magazine
Cannabis & psychedelics industry news based in Vancouver, B.C.
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High Tide sells treasury shares to raise $40M

Part of the new capital will fund two ‘specific strategic initiatives’

High Tide sells treasury shares to raise $40M
Image via High Tide

Canadian cannabis retailer High Tide Inc. (TSXV: HITI) (Nasdaq: HITI) (FSE: 2LYA) is selling stock from its treasury to raise up to $40 million in cash.

On Monday, the company said it’s established an at-the-market program to sell common shares at prevailing market prices, in ordinary brokers’ transactions on the Nasdaq Capital Market, TSX Venture Exchange, or on other American or Canadian exchanges where its common shares are available.

High Tide says it will use the net proceeds “to fund two specific strategic initiatives it is currently developing, to support the growth and development of the company’s existing operations, funding future acquisitions as well as working capital and general corporate purposes.”

Agents will be paid a cash fee of up to 2 per cent of gross proceeds for related transactions.

As of July 31, at the end of its last reported quarter, the firm had a cash position of $26.6 million. Since that report went out Sept. 14, the company made an all-stock deal to buy a majority stake in Colorado CBD-maker NuLeaf Naturals for around $39.6 million.

Read more: High Tide expands US presence with Colorado CBD acquisition deal

Read more: High Tide reports quarterly revenue up 18% to $48.1M

Keeping High Tide’s balance sheet healthy is paramount, CEO Raj Grover says in a statement.

“As previously mentioned, we have cut our debt by more than half over the past 12 months. Particularly considering our size and how active High Tide is, it is critical that we always have sufficient cash on hand to take advantage of any opportunities to create shareholder value,” he says.

“This [at-the-market] program is a very low-cost tool for us and provides an opportunity to be flexible in our approach and potentially raise some capital if and as needed to fund two strategic initiatives we are working on in particular.”

Grover said he would share more information on the initiatives “in due course.”

High Tide says the Nasdaq has been notified of the offering, which remains subject to conditional approval from the TSXV.

Company stock rose almost 2 per cent Monday to around $7.14 on the TSXV.

 

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