CALGARY, April 10, 2019 /CNW/ – High Tide Inc. (“High Tide” or the “Company”) (CSE:HITI) (OTCQB:HTDEF) (FRA:2LY), an Alberta-based, retail-focused cannabis corporation enhanced by the manufacturing and wholesale distribution of smoking accessories and cannabis lifestyle products, today announced that it has launched a non-brokered private placement for the sale of up to 10,000 convertible debentures of High Tide (the “Debentures”), at a price of $1,000 per Debenture, for gross proceeds of up to $10 million Canadian dollars (the “Offering”). The Offering is anchored by an order from Aphria Inc. (TSX: APHA) (NYSE: APHA), a leading global cannabis company, in the amount of $4.5 million Canadian dollars. The net proceeds of the Offering will be used by the Company to fund the construction of Canna Cabana, KushBar and Smoker’s Corner stores, complete strategic acquisitions as well as for general working capital purposes.
The Debentures will bear interest at a rate of 10% per annum, payable annually upfront in common shares of High Tide based on the 10-day volume weighted average price prior to the closing date of the Offering. The Debentures are convertible to common shares of High Tide at a price of $0.75 per common share at the option of the holder and will mature two years from the closing date of the Offering. The Convertible Debentures will include a restriction on conversion to ensure the Company maintains compliance with s. 7 of O. Reg. 468/18 of the Cannabis Licence Act, 2018, which restricts ownership and control of the Company, directly or indirectly, by one or more licensed producers or their affiliates, to 9.9 per cent of the Company.
The Company shall have a right to prepay or redeem a part or the entire principal amount of the Debentures at par plus accrued and unpaid interest at any time by providing notice prior to the redemption date. The Convertible Debentures will be unsecured obligations of the Company and will rank pari passu in right of payment of principal and interest and will be issued pursuant to the terms of a debenture certificate to be entered into between the Company and a debenture holder. The closing of the Offering is expected to occur on such date or dates as agreed to between the Company and the investors, with initial closing of the first tranche on or about April 12, 2019.