High Tide Inc. ( HITI ) will acquire a retail cannabis store in Mississauga, Ontario, currently operating as Cantopia for CA$600,000 ($438,417).

Canadian cannabis retailer confirmed Wednesday it has entered into a definitive asset purchase agreement dated June 25, 2024 under which it will acquire Cantopia. The store is located in Mississauga at a bustling retail plaza surrounded by several small businesses. It is adjacent to an internationally recognized quick-serve restaurant and is steps away from a national discount retailer and a Canadian discount grocery chain.

“High Tide has always been focused on quality over quantity when looking at M&A opportunities, and this acquisition is another example of our targeted strategy," stated Raj Grover, founder and chief executive officer of High Tide. "Since the end of calendar 2022, we have been focusing on greenfield growth, adding 24 locations organically with effectively no M&A. As it has been and continues to be a buyers’ market, we have been patient pursuing only the highest quality opportunities while not chasing any deals or giving into unrealistic seller’s expectations, unlike some of our peers."

For the three months ended May 31, 2024, Cantopia generated annualized revenue of CA$2.3 million and annualized Adjusted EBITDA of $400,000. The purchase price represents 1.5x annualized adjusted EBITDA for the three months ended May 31, 2024.

“As the Canadian retail cannabis market is going through heightened consolidation, many operators are assessing the current macro conditions and the limited options available to them. Joining the High Tide family allows these retailers to weather the storm while providing us with fully operational sites with strong revenues for reasonable multiples. I am pleased to add another highly accretive store to our outstanding retail portfolio and look forward to more strategic and accretive M&A as the opportunities arise,” Grover concluded.

Price Action

High Tide shares were trading flat at $2.2 per share during Wednesday's pre-market session.

See Also: High Tide Reports $34.5M Cash Position, Sells 1,400 Shares In Q2, Expands Cannabis Footprint