High Tide, a Calgary-based cannabis retailer, has completed the final draw of a CA$15 million debt facility, securing an additional CA$5 million to bolster its operations. This move comes after the company initially accessed CA$10 million of the debt in July 2024. The final tranche will be used for debt repayment, further business development, and working capital.
Key Details of the Debt Facility
The debt consists of subordinate secured debentures priced at CA$900 per debenture, with a principal value of CA$1,000. This final draw saw the issuance of 5,000 debentures, which will mature on July 31, 2029, carrying an interest rate of 12% annually. Interest payments are due quarterly, offering a clear financial structure for High Tide as it continues to grow in the competitive cannabis market.
Use of Funds
According to a release issued by the company, the additional funds will serve several purposes:
- Debt Repayment: A portion of the funds will go toward repaying existing debt maturing on December 31, 2024.
- Business Development: The company will continue refining and expanding its business model to strengthen its position in the Canadian cannabis retail market.
- Working Capital: The remainder of the funds will be used for general operational expenses, helping High Tide to maintain liquidity and support its ongoing activities.
Equity Issuance and Stakeholder Involvement
Along with the debt, High Tide issued 230,760 common shares at a price of CA$3.47 per share to the lenders in connection with the initial tranche drawn in August. The Calgary-based Olympia Trust Co. is acting as the trustee and collateral agent for the deal, while Ventum Capital Markets, located in Vancouver, served as the company’s financial adviser.
Strategic Move for Future Growth
This final debt draw comes as part of High Tide’s broader strategy to solidify its operations and pursue new growth avenues in the evolving cannabis industry. With a competitive market environment, the company’s efforts to streamline operations and expand its business model will be crucial in ensuring long-term success.
