High Tide to Enter German Medical Cannabis Market Through Acquisition of Purecan GmbH

Core Insights - High Tide Inc. is acquiring a 51% stake in Purecan GmbH for approximately €4.8 million, marking its entry into the German medical cannabis market [2][10] - The acquisition provides High Tide with a majority stake in Purecan's profitable operations, including a German import license, warehousing, logistics infrastructure, and a telemedicine portal [1][3] Company Overview - High Tide is a leading retail-forward cannabis enterprise, recognized as the second-largest cannabis retailer globally by store count [15] - The company has a diversified business model encompassing brick-and-mortar retail, e-commerce platforms, and various cannabis-related brands [18][20] Industry Context - Germany is one of the largest importers of medical cannabis, with nearly half of its imports coming from Canada [4] - Medical cannabis sales in Germany are projected to exceed €420 million in 2025, potentially reaching €1 billion by 2028, with a 30% increase in sales noted in Q3 2023 [4][8] Financial Metrics - Purecan has a revenue run rate of approximately €15 million, with gross margins around 40% and EBITDA margins of 29% [8] - The acquisition implies an enterprise valuation of €9.5 million, representing 3.0 times the annualized adjusted EBITDA for the six months ending December 31, 2024 [10] Strategic Implications - The acquisition is expected to enhance High Tide's procurement capabilities and strengthen its position as a leading supplier of medical cannabis in Germany [5][9] - High Tide aims to leverage its extensive relationships with Canadian licensed producers to capitalize on the growing demand for medical cannabis in Germany [6][9]