Calgary-based High Tide announced today it has secured commitment for $19 million in financing with Connect First Credit Union of Canada. High Tide is a top Canadian retail-focused cannabis company with bricks-and-mortar as well as global e-commerce assets.
While Canadian companies have been floundering in the face of over-production and slipping retail prices, the loan represents the lender’s faith in Canadian cannabis’ market. Connect First Credit Union is one of the largest and most successful credit unions in Canada — a full-service financial institution with over $6 billion in assets.
Raj Grover, President & CEO of High Tide Inc. PHOTO COURTESY CNW GROUP/HIGH TIDE INC.
Just like U.S. companies hamstrung by a lack of banking resources due to the controlled-substance act, Canadian cannabis businesses still have difficulty securing help at traditional institutions. Nearly four years after legalization in Canada, cannabis ventures are still considered “high risk” by traditional lenders, according to Leafly. Many cannabis companies have turned to partnering with credit unions. In consideration of High Tide’s strong presence in Canada, the company entered into a binding commitment letter with Connect First Credit at the credit union’s floor interest rate.
“We have watched locally based High Tide execute over the last several years. Accordingly, we are very excited about this new partnership between High Tide and connectFirst helping to create a more prosperous Alberta – and beyond,” says Sourav Neogi, relationship manager, corporate & commercial banking, Connect First Credit Union.
Upon closing, High Tide expects to use the proceeds to fund continued organic growth, general working capital requirements and potential future merger and acquisitions.
“This will enable us to capitalize on attractive M&A and organic opportunities in North America and Europe,” said Raj Grover, president and chief executive officer of High Tide. “I remain as confident as ever in High Tide’s growth trajectory in Canada, the United States, and newly-emerging international markets.”