High Tide Inc. (TSXV:HITI) entered into a definitive agreement to acquire Smoke Cartel, Inc. (OTCPK:SMKC) for $4.8 million on January 25, 2021. The consideration will be comprised of issue of 9.54 million common shares of High Tide and $2 million in cash. Pursuant to the agreement, 25% of the consideration to be paid in shares will be placed in escrow for a period of 12 months from closing. In case of termination, each High Tide and Smoke would be required to pay a termination fee of $0.5 million. Certain Smoke Cartel directors, officers and other significant shareholders have entered into voting and support agreements to vote in favor of the transaction and have entered into leak-out agreements which will limit their ability to sell High Tide shares they receive based on various time and volume restrictions. Sean Geng, Founder and Chief Technical Officer of Smoke Cartel will be joining the High Tide team upon closing as Chief Technology Officer to oversee all IT and e-commerce initiatives for High Tide globally. The transaction is subject to the approval of Smoke Cartel shareholders and High Tide Shareholders, receipt of required regulatory approvals, The shares of Parent Common Stock issuable as Merger Consideration pursuant to this Agreement shall have been approved for listing on the TSVX, The Escrow Agreement shall have been duly executed by each of Seller Parent, Representative, and Buyer's Counsel, Parties shall have entered into a lock up agreement, Smoke Cartel shall have entered in the Shareholder Support Agreement with each of the Converting Shareholders, High Tide shall have entered into (i) an employment agreement with Sean Geng for a term of one (1) year from the Effective Time, Between the Execution Date and the Closing Date, High Tide shall have consummated a fundraise of at least CAD $15,000,000 of additional capital (excluding conversion of any outstanding convertible debt or other instrument) and other customary conditions of closing. The approval of High Tide shareholders is not required. The transaction has been unanimously approved by the Board of Directors of each High Tide and Smoke Cartel. The transaction is expected to be completed in March 2021. As of February 23, 2021, the transaction is expected to close in first half of March 2021. The acquisition will be immediately accretive to shareholders.

Matthew R. Kittay, Maureen R. Monaghan and Zev M. Bomrind of Fox Rothschild acted as legal advisors to Smoke Cartel. Arthur Marcus and Zachary Weiss of Sichenzia Ross Ference LLP acted as legal advisors to High Tide Inc. Shimmy Posen of Garfinkle, Biderman LLP acted as legal advisor for High Tide.

High Tide Inc. (TSXV:HITI) completed the acquisition of Smoke Cartel, Inc. (OTCPK:SMKC) on March 24, 2021.