| Business Combinations | 5. Business Combinations In accordance with IFRS 3, Business Combinations, these transactions meet the definition of a business combination and, accordingly, the assets acquired, and the liabilities assumed have been recorded at their respective estimated fair values as of the acquisition date. A. Meta Growth Corp. Acquisition ā ā ā ā Total consideration $ Common shares 35,290 Conversion feature of convertible debt 9,008 Warrants 2,739 Options 86 Restricted stock units 154 ā 47,277 Purchase price allocation Cash and cash equivalents 10,209 Trade and other receivables 2,015 Inventory 3,547 Prepaid expenses 2,479 Marketable securities 635 Notes receivable 262 Property and equipment 6,849 Loan receivable 756 Intangible assets - license 30,900 Right of use asset 12,490 Goodwill 32,247 Non-controlling interest (1,821) Accounts payable and accrued liabilities (6,336) Deferred tax liability (1,933) Lease liability (12,887) Convertible debenture (18,809) Notes payable (13,326) ā 47,277 ā On November 18, 2020, the Company closed the acquisition of 100% of the outstanding common shares of Meta Growth Corp (āMeta Growthā or āMETAā). Pursuant to the terms of the Arrangement, holders of common shares of META (āMETA Sharesā) received 0.824 (the āExchange Ratioā) High Tide Shares for each META Share held. In total, High Tide acquired 237,941,274 META Shares in exchange for 196,063,610 High Tide Shares pre-consolidation (13,070,907 post-consolidation shares), resulting in former META shareholders holding approximately 45.0% of the total number of issued and outstanding High Tide Shares. In accordance with IFRS 3, Business Combinations (āIFRS 3ā), the substance of this transaction constituted a business combination. Management gathered the relevant information that existed at the acquisition date to determine the fair value of the net identifiable assets acquired. As such, the initial purchase price was allocated based on the Companyās estimated fair value of the identifiable assets acquired on the acquisition date. Management finalized its purchase price allocation for the fair value of identifiable intangible assets, property plant and equipment, right of use asset, non-controlling interest, income taxes and the allocation of goodwill. The goodwill is primarily related to the opportunities to grow the retail cannabis business, expanded access to capital and greater financial flexibility. Goodwill is not deductible for tax purposes. For the year ended October 31, 2021, Meta Growth accounted for $63,016 in revenues and $11,451 in net loss. If the acquisition had been completed on November 1, 2020, the Company estimates it would have recorded an increase of $3,422 in revenues and an increase of $401 in net loss for the year ended October 31, 2021. The Company also incurred $1,359 in transaction costs, which have been expensed to finance and other costs during the period. ā B. Smoke Cartel, Inc. Acquisition ā ā ā ā Total consideration $ Cash 2,512 Common shares 8,396 Contingent consideration 1,319 ā 12,227 Purchase price allocation Cash and cash equivalents 1,680 Intangible assets - Brand 3,820 Intangible assets - Software 7,217 Goodwill 2,594 Accounts payable and accrued liabilities (1,093) Deferred Tax Liability (1,991) ā 12,227 ā On March 24, 2021, the Company closed the acquisition of 100% of the outstanding common shares of Smoke Cartel Inc. (āSmoke Cartelā). Pursuant to the terms of the Arrangement, the consideration was comprised of: (i) 9,540,754 common shares of High Tide pre-consolidation (636,050 post-consolidation shares), having an aggregate value of $8,396; (ii) $2,512 in cash; and (iii) a contingent consideration depending on certain revenue targets being achieved by December 31, 2021. Contingent consideration of $1,319 was calculated using Monte Carlo simulation due to the uncertain nature of the potential future revenues of the Company. During the year, the Company finalized the future obligation owed and recorded a loss on the contingent consideration of $1,671 through profits and loss. In accordance with IFRS 3, Business Combinations (āIFRS 3ā), the substance of this transaction constituted a business combination. Management is in the process of gathering the relevant information that existed at the acquisition date to determine the fair value of the net identifiable assets acquired. As such, the initial purchase price was provisionally allocated based on the Companyās estimated fair value of the identifiable assets acquired on the acquisition date. The values assigned are, therefore, preliminary, and subject to change. Management continues to refine and finalize its purchase price allocation for the fair value of working capital. The goodwill acquired is primarily related to the opportunities to grow the business, expanded access to capital and greater financial flexibility. Goodwill is not deductible for tax purposes. For the year ended October 31, 2021, Smoke Cartel accounted for $7,535 in revenues and $52 in net loss. If the acquisition had been completed on November 1, 2020, the Company estimates it would have recorded an increase of $5,846 in revenues and a decrease of $743 in net loss for the year ended October 31, 2021. The Company also incurred $97 in transaction costs, which have been expensed to finance and other costs during the period. ā C. 2686068 Ontario Inc. Acquisition ā ā ā ā Total consideration $ Cash 5,980 ā 5,980 Purchase price allocation Cash and cash equivalents 3 Inventory 120 Property and equipment 274 Intangible assets - license 5,627 Right of use asset 1,148 Goodwill 1,611 Lease liability (1,148) Accounts payable and accrued liabilities (164) Deferred Tax Liability (1,491) ā 5,980 ā On April 28, 2021, the Company closed the acquisition of 100% of the outstanding common shares of 2686068 Ontario Inc. (ā2686068ā). Pursuant to the terms of the Arrangement, the consideration was comprised of $5,980 in cash. In accordance with IFRS 3, Business Combinations (āIFRS 3ā), the substance of this transaction constituted a business combination. Management gathered the relevant information that existed at the acquisition date to determine the fair value of the net identifiable assets acquired. As such, the initial purchase price was allocated based on the Companyās estimated fair value of the identifiable assets acquired on the acquisition date. Management finalized its purchase price allocation for the fair value of identifiable intangible assets, income taxes and the allocation of goodwill. The goodwill is primarily related to the opportunities to grow the retail cannabis business. For the year ended October 31, 2021, 2686068 accounted for $1,117 in revenues and $1,407 in net loss. If the acquisition had been completed on November 1, 2020, the Company estimates it would have recorded an increase of $1,107 in revenues and an increase of $123 in net loss for the year ended October 31, 2021. ā ā ā D. Fab Nutrition, LLC. Acquisition ā ā ā ā Total consideration $ Cash 15,193 Common Shares ā 3,439 ā 18,632 Purchase price allocation Cash and cash equivalents 642 Accounts receivable ā 125 Inventory 403 Property and equipment 22 Intangible assets - brand 7,801 Goodwill 13,584 Accounts payable and accrued liabilities (552) Deferred tax liability ā (2,131) Non-controlling interest (1,262) ā 18,632 ā On May 10, 2021, the Company closed the acquisition of 80% of the outstanding common shares of Fab Nutrition, LLC. (āFABCBDā). Pursuant to the terms of the Arrangement, the consideration was comprised of: (i) $15,193 in cash; and (ii) 6,151,915 pre-consolidation common shares of High Tide (410,128 post-consolidation), having an aggregate value of $3,439. In connection with the acquisition agreement, 9,679,778 pre-consolidation common shares of the Company (645,319 post-consolidation) were placed in escrow for a period of 24 months. Every 6 months 25% of escrow shares are released to the minority shareholder of FABCBD. Over the 24 month period, as the shares are earned by passage of time, the Company recognizes share-based compensation expense through profit and loss. The acquisition agreement also includes a call and put option that could result in the Company acquiring the remaining 20% of common shares in FABCBD not acquired upon initial acquisition. The Company analyzed the value in the call option and considers it to be at fair value, and therefore has no value related to the acquisition. As the put option is a contractual obligation, it gives rise to a financial liability calculated with reference to the agreement and is discounted to its present value at each reporting date using the discounted cash flow model. The initial obligation under the put option was recorded as a current liability with the offset recorded as equity on the Consolidated Statements of Financial Position, at its fair value at acquisition of $3,722. For the year ended October 31, 2021, the Company recognized $1,084 as a gain on revaluation of derivative liability in the statement of net loss and comprehensive loss. In accordance with IFRS 3, Business Combinations (āIFRS 3ā), the substance of this transaction constituted a business combination. Management is in the process of gathering the relevant information that existed at the acquisition date to determine the fair value of the net identifiable assets acquired. As such, the initial purchase price was provisionally allocated based on the Companyās estimated fair value of the identifiable assets acquired on the acquisition date. The values assigned are, therefore, preliminary, and subject to change. Management continues to refine and finalize its purchase price allocation for the fair value of working capital. The goodwill acquired is primarily related to the opportunities to grow the business, expanded access to capital and greater financial flexibility. Goodwill is not deductible for tax purposes. For the year ended October 31, 2021, FABCBD accounted for $4,746 in revenues and $640 in net income. If the acquisition had been completed on November 1, 2020, the Company estimates it would have recorded an increase of $7,790 in revenues and a decrease of $306 in net loss for the year ended October 31, 2021. The Company also incurred $872 in transaction costs, which have been expensed to finance and other costs during the period. ā ā ā E. DHC Supply LLC. Acquisition ā ā ā ā Total consideration $ Cash 4,045 Common Shares ā 7,767 ā 11,812 Purchase price allocation Cash and cash equivalents 1,054 Trade and other receivables ā 66 Inventory 1,270 Prepaid expenses ā 18 Property and equipment 10 Intangible assets - brand 2,671 Goodwill ā 8,201 Right of use asset 592 Lease liability (592) Accounts payable and accrued liabilities (1,478) ā 11,812 ā On July 6, 2021, the Company closed the acquisition of 100% of the outstanding common shares of DHC Supply LLC. (āDHCā). Pursuant to the terms of the Arrangement, the consideration was comprised of: (i) 839,820 post-consolidation commons shares of High Tide (12,597,300 pre-consolidation), having an aggregate value of $7,767; (ii) $4,045 in cash. In accordance with IFRS 3, Business Combinations (āIFRS 3ā), the substance of this transaction constituted a business combination. Management is in the process of gathering the relevant information that existed at the acquisition date to determine the fair value of the net identifiable assets acquired. As such, the initial purchase price was provisionally allocated based on the Companyās estimated fair value of the identifiable assets acquired on the acquisition date. The values assigned are, therefore, preliminary, and subject to change. Management continues to refine and finalize its purchase price allocation for the fair value of identifiable intangible assets and the allocation of goodwill. Goodwill is not deductible for tax purposes. For the year ended October 31, 2021, DHC accounted for $3,399 in revenues and $14 in net income. If the acquisition had been completed on November 1, 2020, the Company estimates it would have recorded an increase of $7,513 in revenues and an increase of $301 in net loss for the year ended October 31, 2021. ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā F. 102105699 Saskatchewan Ltd. Acquisition ā ā ā ā Total consideration $ Cash 698 Common Shares ā 2,018 ā 2,716 Purchase price allocation Cash and cash equivalents 7 Trade and other receivables 7 Inventory 46 Prepaid expenses 55 Property and equipment 136 Intangible assets - license 879 Goodwill 1,966 Right of use asset 691 Lease liability ā (691) Accounts payable and accrued liabilities ā (143) Deferred tax liability (237) ā 2,716 ā On August 6, 2021 the Company closed the acquisition of 100% of the issued and outstanding common shares of 10210569 Saskatchewan Ltd. (āOneLeafā). Pursuant to the terms of the Arrangement, the consideration was comprised of: (i) 254,518 post-consolidation common shares of High Tide, having an aggregate value of $2,018; and (ii) $698 in cash. In accordance with IFRS 3, Business Combinations (āIFRS 3ā), the substance of this transaction constituted a business combination. Management is in the process of gathering the relevant information that existed at the acquisition date to determine the fair value of the net identifiable assets acquired. As such, the initial purchase price was provisionally allocated based on the Companyās estimated fair value of the identifiable assets acquired on the acquisition date. The values assigned are, therefore, preliminary, and subject to change. Management continues to refine and finalize its purchase price allocation for the fair value of identifiable intangible assets, income taxes and the allocation of goodwill. Goodwill is not deductible for tax purposes. For the year ended October 31, 2021, OneLeaf accounted for $90 in revenues and $83 in net loss. If the acquisition had been completed on November 1, 2020, the Company estimates it would have recorded an increase of $254 in revenues and an increase of $72 in net loss for the year ended October 31, 2021. ā G. DS Distribution Acquisition ā ā ā ā Total consideration $ Common Shares ā 5,013 ā 5,013 Purchase price allocation Cash and cash equivalents 115 Inventory 160 Prepaid expenses 158 Property and equipment 69 Intangible assets - brand 1,375 Goodwill 4,384 Right of use asset 299 Lease liability (299) Accounts payable and accrued liabilities ā (863) Deferred tax liability (385) ā 5,013 ā On August 12, 2021 the Company closed the acquisition of 100% of all the issued and outstanding common shares of DS Distribution Inc. (āDankStopā). Pursuant to the terms of the Arrangement, the consideration was comprised of 612,087 post-consolidation shares of High Tide, having an aggregate value of $5,013. In accordance with IFRS 3, Business Combinations (āIFRS 3ā), the substance of this transaction constituted a business combination. Management is in the process of gathering the relevant information that existed at the acquisition date to determine the fair value of the net identifiable assets acquired. As such, the initial purchase price is provisionally allocated based on the Companyās estimated fair value of the identifiable assets acquired on the acquisition date. The values assigned are, therefore, preliminary, and subject to change. Management continues to refine and finalize its purchase price allocation for the fair value of identifiable intangible assets, income taxes and the allocation of goodwill. Goodwill is not deductible for tax purposes. For the year ended October 31, 2021, DankStop accounted for $380 in revenues and $117 in net loss. If the acquisition had been completed on November 1, 2020, the Company estimates it would have recorded an increase of $6,473 in revenues and an decrease of $311 in net loss for the year ended October 31, 2021. ā H. Blessed CBD Acquisition ā ā ā ā Total consideration $ Cash 7,165 Common Shares ā 4,432 Working capital adjustment ā 1,086 ā 12,683 Purchase price allocation Cash and cash equivalents 2,155 Trade and other receivables 472 Inventory 293 Property and equipment 19 Intangible asset - brand 3,884 Goodwill 9,225 Accounts payable and accrued liabilities (1,530) Deferred tax liability (971) Non-controlling interest ā (864) ā 12,683 ā On October 19, 2021, the Company closed the acquisition of 80% of the issued and outstanding common shares of Enigmaa Ltd. (āBlessed CBDā). Pursuant to the terms of the Arrangement, the consideration was comprised of: (i) 607,064 post-consolidation shares of High Tide, having an aggregate value of $4,432; (ii) $7,165 in cash, and (iii) and working capital adjustment of $1,086. In connection with the acquisition agreement, 529,487 post-consolidation common shares of the Company were placed in escrow for a period of 24 months. Every 12 months 50% of escrow shares are released to the minority shareholder of Blessed CBD. This share issuance was initially recorded through equity. Over the 24 month period, as the shares are earned by passage of time, the Company recognizes share-based compensation expense through profit and loss. The acquisition agreement also includes a call and put option that could result in the Company acquiring the remaining 20% of common shares in Blessed CBD not acquired upon initial acquisition. The Company analyzed the value in the call option and considers it to be at fair value, and therefore has no value related to the acquisition. As the put option is a contractual obligation, it gives rise to a financial liability calculated with reference to the agreement and is discounted to its present value at each reporting date using the discounted cash flow model. The initial obligation under the put option was recorded as a current liability with the offset recorded as equity on the Consolidated Statements of Financial Position, at its fair value at acquisition of $4,323 assuming a risk-free rate of 7.5% and an exercise date of October 19, 2022. For the year ended October 31, 2021, the Company recognized $9 as a gain on revaluation of derivative liability in the statement of net loss and comprehensive loss. In accordance with IFRS 3, Business Combinations (āIFRS 3ā), the substance of this transaction constituted a business combination. Management is in the process of gathering the relevant information that existed at the acquisition date to determine the fair value of the net identifiable assets acquired. As such, the initial purchase price is provisionally allocated based on the Companyās estimated fair value of the identifiable assets acquired on the acquisition date. The values assigned are, therefore, preliminary, and subject to change. Management continues to refine and finalize its purchase price allocation for the fair value of identifiable intangible assets, income taxes, the allocation of goodwill and the non-controlling interest. The goodwill is primarily related to the opportunities to grow the business, expanded access to capital and greater financial flexibility. Goodwill is not deductible for tax purposes. For the year ended October 31, 2021, Blessed CBD accounted for $296 in revenues and $130 in net income. If the acquisition had been completed on November 1, 2020, the Company estimates it would have recorded an increase of $10,083 in revenues and a decrease of $2,382 in net loss for the year ended October 31, 2021. The Company also incurred $360 in transaction costs, which have been expensed to finance and other costs during the period. ā ā ā I. Saturninus Partners Acquisition (Prior year) ā ā ā ā Total consideration $ Common shares 1,064 Warrants ā 100 Contingent consideration ā 108 ā 1,272 Purchase price allocation Cash and cash equivalents 414 Inventory 584 Property and equipment 538 Intangible asset - license 2,865 Right of use asset 410 Goodwill 342 Accounts payable and accrued liabilities (1,091) Lease liability (410) Notes payable (690) Non-controlling interest ā (930) Deferred tax liability ā (760) ā 1,272 ā On January 27, 2020, the Company acquired a 50% interest in the Saturninus Partners (āSaturninusā) which operates a licensed retail cannabis store in Sudbury, Ontario. As consideration for the transaction, the Company issued to nominees of the partners of the partnership an aggregate of 5,319,149 common shares of the Company, as well as common share purchase warrants to purchase up to an aggregate of 3,750,000 shares of the Company. Each warrant entitles the holder to acquire one share at an exercise price of $0.40 per share for a period of two years from the date of issuance. In addition, for a period of 2 years following the closing date, one of the outgoing partners will be entitled to receive, from the Company, a royalty of 1% of the gross revenues of the Sudbury store. Contingent consideration was calculated using the present value of expected payment, discounting using 22% discount rate. The expected payment of $176 is determined by considering the 1% share of forecasted revenue. Non-controlling interests (āNCIā) are recognized at the NCIās proportionate share of the acquireeās net assets, determined on an acquisition-by-acquisition basis. ā |
