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Nov. 29, 2021, 6:00 a.m. EST

High Tide Closes Acquisition of NuLeaf Naturals

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            --  This closing represents High Tide's largest acquisition
                to-date, 6th global e-commerce related acquisition in 2021, and
                3rd in the CBD space, taking international revenue from
                approximately CAD$10.6 million at October 31, 2020 to
                approximately CAD$80 million annual run-rate as of today.
            --  NuLeaf has a strong financial profile which generated 71% gross
                margins and 25% Adjusted EBITDA((1)) margins in 2020.
            --  Highly accretive transaction for shareholders, as NuLeaf
                generated revenue of US$19.4 Million and US$5.26 Million in
                Adjusted EBITDA(1) for the 12 months ended September 30, 2021.
            --  High Tide's internationally-diversified portfolio generates
                meaningful Adjusted EBITDA(1), which provides the Company with
                an advantage when competing for bricks-and-mortar market share
                in Canada.
            --  Co-founders Bo Shirley and Jaden Barnes retain 20% ownership of
                NuLeaf, and have taken on consulting roles with High Tide to
                assist the Company's continued expansion in the United States
                and globally.
            --  High Tide intends to use NuLeaf's cGMP-certified facility to
                produce licensed THC-infused edible and drinkable products, as
                U.S. federal regulations permit.
        
        
        


High Tide Inc. ("High Tide" or the "Company") /zigman2/quotes/222662325/delayed CA:HITI -3.38% /zigman2/quotes/201958100/composite HITI -3.77% /zigman2/quotes/206848902/delayed DE:2LYA -3.61% , a leading retail-focused cannabis company with bricks and mortar as well as global e-commerce assets, is pleased to announce, that further to its press release dated November 22, 2021, the Company has completed its acquisition (the "Acquisition") of an 80% interest in NuLeaf Naturals, LLC ("NuLeaf") for US$31,240,000 (the "Transaction"), and will have a three-year option to acquire the remaining 20% of NuLeaf at any time.

Founded in 2014 with its headquarters in Denver, Colorado, NuLeaf is a market leader focused on the production and distribution of premium cannabinoid wellness products. It has received over 25,000 verified 5 star customer reviews through its e-commerce platform. NuLeaf can produce 60,000 plant-based softgels per hour and is one of only a few manufacturers in the United States that can produce a vegan softgel. With a heightened consumer interest in health focused and sustainable products, plant-based offerings are primed for growth. NuLeaf has a strong distribution reach in the natural products channel and recently secured an expansion with Sprouts Farmers Market from 33 retail locations to an additional 235 stores. It has quickly grown to become one of the most popular brands for premium cannabinoid wellness products across the U.S., with their product portfolio including MulticannabinoidTM tinctures, softgels, and topicals. Over the 12 months ended September 30, 2021, NuLeaf had over 5.1 million site visits((2)) and an average order value of US$120. Since its inception, NuLeaf has served approximately 330,000 unique customers through its e-commerce platform, and hundreds of thousands more through their other distribution channels. Upon closing, NuLeaf will have approximately US$500,000 of inventory and approximately US$500,000 of cash.







        
        
             _______________________
        
        
                         (1) Adjusted EBITDA (earnings before interest, taxes,
                          depreciation, and amortization) does not have a standardized
                          meaning prescribed by IFRS.
        
        
        


This is High Tide's sixth acquisition in the global e-commerce space, and third in the CBD space, in 2021. These transactions have collectively contributed to increasing the Company's annual run-rate international revenue from approximately $10.6 million at the end of October 31, 2020, to just approximately $80 million annual run-rate at the end of November 30, 2021.

The Acquisition was completed pursuant to the terms of a definitive agreement (the "Acquisition Agreement"), a copy of which is available on the Company's SEDAR profile. High Tide acquired 80% of NuLeaf for 4,429,809 common shares of High Tide (each a "High Tide Share") valued at US$31,243,000 (the "Consideration"), on the basis of a deemed price of US$7.0529 per High Tide Share, being equal to the volume weighted average price per High Tide Share on the Nasdaq for the ten consecutive trading days preceding the closing of the Acquisition.

The High Tide Shares issued pursuant to the Consideration are subject to a hold period of four months and one day.

In addition to the foregoing, NuLeaf's owners have agreed to grant High Tide an option to acquire all the remaining interest in NuLeaf not held by High Tide, and become the sole owner of NuLeaf (the "Call Option"), at an enterprise value equal to the trailing twelve (12) months of Adjusted EBITDA(1) at that time multiplied by 7.1. The Call Option will be exercisable at any time for a period of three (3) years following the Acquisition. In addition, High Tide has agreed to grant NuLeaf's owners an option to put to High Tide the remaining interest in NuLeaf not held by High Tide (the "Put Option"), at the same enterprise value of the Call Option. The Put Option will be exercisable by NuLeaf's owners for a period of eighteen (18) months following the eighteen (18) month anniversary of the Closing of the Acquisition. The consideration under the Call Option or Put Option, if exercised, will be satisfied in cash.

KPMG LLP conducted financial due diligence on behalf of High Tide for the Transaction. Garfinkle Biderman LLP and Sichenzia Ross Ference LLP acted for High Tide in connection with the Transaction. NuLeaf was advised by Squire Patton Boggs (US) LLP and Class VI Partners, LLC in connection with the Transaction.







        
        
                      ___________________
        
        
        
        
                        (2) Data from Google Analytics.
        
        
        


In connection with the closing of the Transaction, High Tide granted 60,000 stock options (the "Options") to employees and consultants of NuLeaf, exercisable at CAD$8.02 per High Tide Share for a period of 3 years.

OPENING OF 105TH RETAIL CANNABIS STORE

High Tide also announced today that its Canna Cabana retail cannabis store located at 3928 Edmonton Trail NE in Calgary, Alberta, has begun selling recreational cannabis products for adult use. This opening represents High Tide's 105th branded retail location across Canada, and 59th in Alberta, selling recreational cannabis products and consumption accessories. The new Canna Cabana store is located within the community of Highland Park, providing convenient access for residents of numerous nearby communities in north-central Calgary, as well as for employees who work in adjacent employment centres which include several industrial sites. The location is also easily-accessible from Deerfoot Trail, which is Calgary's most heavily-used freeway.

ABOUT NULEAF NATURALS

NuLeaf Naturals is one of America's leading cannabinoid companies. Since 2014, NuLeaf has been committed to creating the world's highest quality cannabinoid products in their most pure and potent form. NuLeaf's products are produced at a cGMP-certified facility enabling them to manufacture groundbreaking cannabinoid formulations while exceeding the highest levels of regulatory compliance. The company is committed to creating safe, consistent, and effective products and has proudly received over 25,000 verified 5-star customer reviews through their e-commerce platform. NuLeaf also ranked sixteenth on the prestigious 2020 Inc 5000 list of the fastest-growing private companies in the United States, with a remarkable three-year growth rate of 11,495 percent.

ABOUT HIGH TIDE

High Tide is a leading retail-focused cannabis company with bricks-and-mortar as well as global e-commerce assets. The Company is the largest Canadian retailer of recreational cannabis as measured by revenue, with 105 current locations spanning Ontario, Alberta, Manitoba and Saskatchewan, and was featured in the third annual Report on Business Magazine's ranking of Canada's Top Growing Companies in 2021. The Company is also North America's first and only cannabis discount club retailer, featuring Canna Cabana, Meta Cannabis Co., and Meta Cannabis Supply Co. banners, with additional locations under development across the country. High Tide has been serving consumers for over a decade through its established e-commerce platforms including Grasscity.com, Smokecartel.com, Dailyhighclub.com, and Dankstop.com and more recently in the hemp-derived CBD space through Nuleafnaturals.com, FABCBD.com, BlessedCBD.co.uk, and CBDcity.com, as well as its wholesale distribution division under Valiant Distribution, including the licensed entertainment product manufacturer Famous Brandz. High Tide's strategy as a parent company is to extend and strengthen its integrated value chain, while providing a complete customer experience and maximizing shareholder value. Key industry investors in High Tide include Tilray Inc. /zigman2/quotes/226578748/delayed CA:TLRY -1.89% /zigman2/quotes/209129655/composite TLRY -2.20% and Aurora Cannabis Inc. /zigman2/quotes/203734337/delayed CA:ACB -5.73% /zigman2/quotes/210559470/composite ACB -6.11% .

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

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