As the newly legalized cannabis industry works to get up and running, larger companies such as Aurora Cannabis (NYSE: ACB; TSX: ACB) have frequently invested in downstream entities to kickstart revenue from additional sources.
Late last year, Aurora completed a $10 million investment in Alberta-based lifestyle and accessory company High Tide (CSE: HITI).
Full payments on investments and acquisitions since the Cannabis Act went into effect have frequently hinged on specific corporate milestones being met, such as acquiring licensing from Health Canada or meeting certain sales goals.
Today Aurora revealed that High Tide has consistently hit those expected milestones, starting with listing on the Canadian Securities Exchange in December, opening new Canna Cabana retail stores last month, and issuing letters of intent to purchase Saskatchewan retail sites.
Aurora’s Chief Executive Officer Terry Booth praised High Tide and CEO Raj Grover as an example of success in the downstream portion of the industry, issuing this statement:
By far, the most notable milestone from High Tide has been in striking deals with winners of the coveted Alcohol and Gaming Commission of Ontario lottery.
With sales in Ontario currently only available online through the provincial government, retail stores will open in a staggered configuration over time, starting with 25 random winners of the application lottery.
All 25 of the storefront lottery winners in Ontario were unknown entities in the cannabis landscape, and High Tide was known to be courting winners for potential acquisition or franchise opportunities.
Today, High Tide announced the company will assist two separate winners of that lottery in constructing and operating their storefronts.
Although neither company was named, the letters of intent issued by High Tide stated the company would acquire a minority stake in the winners, with an option available to increase that stake at a later time.
One of those winners is currently in the process of setting up a shop in Hamilton, Ontario.
Aside from the two stores from those unnamed winners and the seven existing Canna Cabana outlets, High Tide currently has 26 branded stores in different stages of licensing or construction.
Aurora Cannabis also just released quarterly earnings info, with a full breakdown available here.