High Tide Buys Crossroads Cannabis for C$2.5M

High Tide (TSE: HITI)(NASDAQ: HITI) has signed a deal to acquire four Ontario-operated cannabis retail stores under the name Crossroads Cannabis for C$2.5 million. The stores are located in Stratford, Woodstock, Hanover, and Markdale.

Don't Miss our Black Friday Offers:

Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter

With this acquisition, Canada’s largest retailer of recreational cannabis expands its brick-and-mortar retail cannabis operations.

For quarter ended December 31, 2021, Crossroads earned annualized revenues of C$7.6 million and annualized adjusted EBITDA of C$0.7 million.

CEO Commentary

High Tide president and CEO Raj Grover said, “Since its inception, Crossroads has been a very popular cannabis retail brand in the communities that it serves. The Stratford Crossroads location was the first to open in the city and has meaningful levels of goodwill from early customers in the community. As consolidation in the Canadian retail cannabis space has picked up steam, we have become the acquirer of choice. This has allowed us to be strategic in determining where to expand within Ontario, bringing our innovative discount club model to communities which we have not yet been able to serve directly”

Grover added that High Tide is likely to announce more retail store acquisitions in the near term as the company move towards its goal of reaching 150 stores by the end of calendar 2022.

Wall Street’s Take

Last month, Cantor Fitzgerald analyst Pablo Zuanic kept a Hold rating on HITI and lowered its price target to C$7.25 (from C$7.75). This implies 36% upside potential.

Consensus among Wall Street analysts is that HITI is a Moderate Buy, based on two Buys and one Hold. The average High Tide price target of C$11.59 implies 117.4% upside potential to current levels.

Download the TipRanks mobile app now

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.