High Tide To Acquire Fastendr Retail Kiosk And Smart Locker Technology Through Acquisition Of Bud Room Inc.
Fastendr™ is a unique and fully automated technology that integrates retail kiosks and smart lockers to facilitate a better buying experience through browsing, ordering and pickup.
The Fastendr™ technology offers faster transaction times, increased average basket size, lower overhead and labor costs, and provides a seamless end to end customer experience.
High Tide through this acquisition gains ownership of the Fastendr™ technology which will improve the Company’s competitive advantage in bricks-and mortar cannabis retail.
A pilot conducted at Bud Room’s Ottawa location found that over 60% of customers preferred to use the Fastendr™ kiosks and spent over 20% more when doing so.
All existing and future Canna Cabana locations will be equipped with this customized and innovative kiosk and smart locker technology as it delivers a faster customer experience in busier retail locations while also enabling the efficient operation of smaller footprint stores.
High Tide intends to license this technology to third party retailers starting with the cannabis industry, and expanding to other retail sectors across North America and beyond.
This technology provides High Tide with potential new revenue generation, data collection and monetization opportunities from third party retail locations, and will further enhance the value of its Cabannalytics data insights offering.
This technology also provides High Tide with an opportunity to digitally advertise and upsell in store to consumers at relatively low costs.
The Bud Room retail location is currently generating annual run rates in excess of $2.4 Million in revenue and $500,000 in Adjusted EBITDA1
In line with High Tide’s ongoing strategy of securing top tier entrepreneurial talent through acquisitions, Bud Room CEO Michael Di Duca will continue to develop and deploy the Fastendr™ technology with continued innovations under contract with High Tide.
High Tide Inc. a leading retail-focused cannabis company with bricks-and-mortar as well as global e-commerce assets, is pleased to announce that it is taking yet another step to introduce innovative technology into both its bricks-and-mortar retail cannabis operations, as well as third party retailers, by entering into a definitive agreement (the “Acquisition Agreement”) pursuant to which High Tide will acquire 100% of the equity interest of Bud Room Inc. (“Bud Room”), as well as assignments of the vendors’ shareholder loans, for CAD$3.6 Million (the “Transaction”) and acquire all rights to the customized Fastendr™ retail kiosk and smart locker technology and Bud Room’s retail cannabis store located at 1910 St. Laurent Blvd in Ottawa, Ontario.
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Fastendr™ is a unique and fully automated technology that integrates retail kiosks and smart lockers to facilitate a better buying experience through browsing, ordering and pickup. The technology is a catalyst to faster transaction times, increased average basket size, lower overhead and labor costs, and provides a seamless end-to end customer experience.
“This deal is one of the most exciting acquisitions for High Tide to date, as it greatly enhances the customer experience in our stores while materially reducing overhead and labor costs in our ever-expanding retail portfolio. This technology will also allow us to generate third-party revenue, provide data collection and monetization opportunities, while supporting an unparalleled retail shopping experience for our customers, said Raj Grover, President and Chief Executive Office of High Tide. “Fastendr is a perfect solution for smaller footprint stores as well as busier retail locations, as it allows for more transactions in less time and with less square footage. All Canna Cabana locations will be equipped with this technology, with the first installations planned for later this month in the province of Ontario. The customized Fastendr technology is a game changer for our bricks-and-mortar retail business and has tremendous potential to be rolled out in our ancillary business divisions as well. This acquisition comes on the heels of several disruptive retail innovations by High Tide, such as our “one stop shop” and “discount club” concepts. I look forward to working with Mike on further market leading retail initiatives as we continue our momentum into the future,” added Mr Grover.
“When High Tide initially approached us we already had several interested parties at the table. However, it became clear that choosing a partnership with Raj and his team was a no-brainer for us because we felt that our innovation deserved to be in the hands of the best Cannabis company in Canada,” said Michael Di Duca, CEO of Bud Room. “This customer-centric technology was designed with the user experience in mind and it is my firm belief that with High Tide’s experience, history of operational execution, and financial resources, this technology can be effectively implemented across retail sectors on a world class level,” added Mr. Di Duca.
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Grows High Tide’s competitive advantage – As the Canadian cannabis industry continues to become more competitive, it is essential for successful companies to innovate, using technology to differentiate themselves and improve the efficiency of their operations, in order to thrive. High Tide’s ownership of the Fastendr™ technology will improve its operational efficiency materially while also reducing operating expenses in the Company’s retail cannabis stores.
Strong opportunity to grow and diversify revenue through licensing – Pending regulatory and exchange approvals, as applicable, High Tide intends to grow and diversify its revenue by licensing the self-order kiosk and smart locker technology for use by third party cannabis retailers across North America. The transaction also gives High Tide tremendous data collection and monetization opportunities from its retail portfolio and third party licensees.
Provides opportunity to further enhance ancillary business lines – The principles of the Fastendr™ technology will be leveraged to add further consumer focused retail innovations to High Tide’s ancillary business portfolio in the coming months.
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, is expected to close in the coming weeks. The consideration (the “Consideration”) for the 100% of equity interest acquired will be CAD$3.24 Million paid in common shares of High Tide (“High Tide Shares”) and CAD$360,000 cash for the assignment of CAD$360,000 of the vendors’ shareholder loans, all on the closing of the Transaction (the “Closing”) on the basis of a deemed price per High Tide Share equal to the volume weighted average price per High Tide Share on TSXV for the 10 consecutive trading days preceding Closing.
From the Consideration, an amount equal to $300,000 will be held in escrow for a period of twelve (12) months by High Tide’s lawyers to satisfy Bud Room’s indemnity with respect to possible claims based on breaches of representation and warranties.
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