CALGARY, Canada – High Tide Inc. is entering the fast-growing German medical cannabis market by signing a definitive agreement to acquire 51% of Purecan GmbH for approximately €4.8 million. The agreement includes an option to acquire the remaining interest in Purecan.
Purecan is an import-oriented pharmaceutical wholesaler based in Germany that holds a license to import medical cannabis, along with complete warehousing and logistics infrastructure.
Germany is one of the world’s largest importers of medical cannabis, with almost half of all imports coming from Canada. According to “The German Cannabis Report” released in October by Prohibition Partners, a London-based data and market intelligence company, medical cannabis sales in Germany are expected to exceed €420 million this year and are on pace to reach €1 billion by 2028. The same report found sales of medical cannabis in Germany increased by 30 percent in the third quarter of 2023 and accelerated even more after the passage of Germany’s Consumer Cannabis Act in April, 2024.
“I am thrilled to announce that High Tide is taking a significant step towards becoming a truly global cannabis company,” said Raj Grover, founder and Chief Executive Officer of High Tide. “By acquiring a 51% stake in Purecan, including its European wholesale and import license, its fully built warehousing and logistics infrastructure, and in-development telemedicine platform, we are strategically positioned to leverage our robust networks and relationships with Canadian licensed producers. With almost half of all German medical cannabis imports coming from Canada, this acquisition paves the way for us to emerge as a leading supplier of medical cannabis from Canada into Germany, potentially replicating our market share success in Canada.
“As I’ve said before, our German strategy is multipronged. This highly accretive acquisition provides immediate market entry into Germany while we explore opportunities for consumer research in collaboration with the Food and Drug Agency, aligning with the ordinance recently signed by Germany’s Agriculture Minister.
“In addition to capitalizing on Germany’s rapidly expanding medical cannabis market, the Purecan acquisition brings a company with strong cultural and operational alignment into the High Tide family. This alignment has been reinforced through months of in-depth collaboration and is reflected in Purecan’s impressive financials, high margins, and lean operations. We anticipate this business unit will deliver a healthy margin profile, further strengthening our existing Canadian and international business lines,” added Grover.
“Since our very first meeting with Raj and the High Tide team a few months ago, it became apparent to us that there were significant cultural and operational alignments between our companies. Given that demand for medical cannabis in Germany is currently outpacing supply, this merger provides Purecan with a unique opportunity to tap into High Tide’s unmatched procurement expertise and relationships with Canadian licensed producers who currently provide half of all medical cannabis imports into Germany. We look forward to a fruitful partnership between our two teams to create long-term value for all stakeholders involved,” said Dr. Ehsan Omari, Chief Medical Officer, Purecan GmbH.
Transaction details
The transaction, which is an arm’s length transaction, is subject to, among other things, receipt of required TSX Venture Exchange (“TSXV”) approval, and other customary conditions of closing and is expected to close in the coming weeks. It implies an enterprise valuation of €9.5 Million, representing 3.0 times Annualized Adjusted EBITDA generated during the six months ended December 31, 2024. The purchase price for the 51% acquired will be €4.8 million broken out as follows:
- €2.4 Million in common shares of High Tide (“High Tide Shares”) priced at the volume weighted average price per High Tide Share on TSXV for 10 trading days ending January 7, 2025 of C$4.53 multiplied by the Bank of Canada’s CAD to EUR rate as at January 7, 2025, of 1.4871, for a total of 792,126 shares.
- €1.2 Million in cash
- €1.2 Million in a promissory note (the “Note”). The Note will mature two years after the Closing date, bear 7% annual interest (paid quarterly), and be prepayable at any time by the Company with no penalty.
In addition to the foregoing, Purecan’s owners have agreed to grant High Tide an option to acquire the remaining interests in Purecan not held by High Tide at an enterprise value equal to the trailing twelve months of Adjusted EBITDA multiplied by 3.0. The Call Option will be exercisable at any time for a period of five years, following the eighteen-month anniversary of the Closing. In addition, High Tide has agreed to grant Purecan’s owners an option to put to High Tide the remaining interests in Purecan not held by High Tide at the same enterprise value as the Call Option during the same time period. The consideration under the Call Option or the Put Option, if exercised, will be satisfied in a combination of cash and High Tide shares, at High Tide’s discretion.
Any High Tide Shares issued in connection with the Transaction are subject to a statutory hold period of four months and one day.
About Purecan
Purecan is an import-oriented, pharmaceutical wholesaler that focuses on emerging cannabis markets. Based in Frankfurt, Germany, Purecan has developed specialized cannabis procurement expertise since 2018. Purecan holds a license to import medical cannabis into Germany and is preparing to launch a telemedicine portal for medical cannabis patients in Germany, along with complete warehousing and logistics infrastructure.
Purecan’s mission is to protect and improve human health by becoming an industry leader by providing safe, reliable and continuous access to the highest quality medicine, at competitive prices while adhering to the highest regulatory standards.
About High Tide
High Tide Inc. is a leading community-grown, retail-forward cannabis enterprise engineered to unleash the full value of the world’s most powerful plant. High Tide (HITI) is uniquely-built around the cannabis consumer, with wholly-diversified and fully-integrated operations across all components of cannabis.
High Tide was named one of Canada’s Top Growing Companies by the Globe and Mail’s Report on Business in 2024 for the fourth consecutive year and was named as one of the top 10 performing diversified industries stocks in both 2022 and 2024 TSX Venture 50. High Tide was also ranked number one in the retail category on the Financial Times list of Americas’ Fastest Growing Companies for 2023.
