Tidal Royalty Corp. (RLTY.U) and Harborside Announce Strategic Royalty Financing Partnership

Tidal Royalty Corp. (CSE: RLTY.U) (“Tidal Royalty“), a leading provider of royalty financing to licensed U.S. cannabis operators, is pleased to announce it has signed a non-binding memorandum of understanding for a strategic royalty financing partnership. The Company is also participating in the series B equity financing of FLRish, Inc. (“Harborside“), the parent company of the iconic Harborside dispensaries in California, which closed today.

The parties have entered into a non-binding memorandum of understanding whereby Tidal Royalty commits to provide US$10 million in royalty financing to prospective dispensary operators licensing the “Harborside” brand. Each potential dispensary financing transaction will be assessed on a case-by-case basis and specific financing terms will be negotiated among the parties.

“Harborside is one of the preeminent cannabis companies in the U.S.,” stated Paul Rosen, Tidal Royalty’s CEO and Chairman. “They are a leading operator in California already, and we expect that their business strategy and strong executive team will enable them to enhance their leadership position. Through our strategic financing partnership, Tidal Royalty would provide select operators with the capital required to launch a dispensary licensing the “Harborside” brand in exchange for a royalty on sales.”

Harborside, a vertically-integrated California licensed operator, was founded in 2006 by cannabis industry activist and entrepreneur Steve DeAngelo. He remains the company’s Chairman Emeritus and stated: “This is yet another step on our path to fulfill the goal we set for Harborside at the outset. From the caliber of our dispensaries, to the product knowledge of our team members, to the quality of products that we sell, we have aimed to change the perception of cannabis in our communities and demonstrate that it can be an agent for positive change.”

Harborside operates two dispensaries and one of California’s largest cultivation facilities and owns the Harborside brand. Its flagship location in Oakland, California is the largest medical cannabis dispensary in the U.S. It was the first medical cannabis dispensary in the U.S. to introduce lab testing, the first to offer CBD-rich medicine, and the first to treat children with Dravet syndrome. Harborside was also reported to be the first dispensary to legally sell non-medicinal cannabis in California following the state’s legalization of adult use sales on January 1, 2018.

“Our business model has been California-centric, and we will continue to pursue a growth strategy in the nation’s largest cannabis market,” stated Harborside CEO Andrew Berman. “We have numerous options available to us to do so, and Tidal Royalty’s financial support allows us to accelerate growth opportunities with partners that are looking to operate under the Harborside umbrella.”

This transaction continues to grow Tidal Royalty’s portfolio of licensed cannabis operators and follows Tidal Royalty’s announcement of its strategic subscription and financing arrangement with Lighthouse Strategies, LLC, which is subject to, among other things, the satisfactory completion of due diligence, which is currently underway, the receipt of all corporate and regulatory approvals, and the closing of a financing transaction by Lighthouse. Tidal Royalty has also previously announced an agreement to finance Diem’s expansion into Massachusetts, and a binding letter of intent to purchase equity in, and assume a royalty agreement with, AltMed (a vertically-integrated license holder with operations in Arizona and Florida). Tidal Royalty is currently in the process of evaluating multiple additional opportunities across the U.S., including in California, New York, Illinois, Ohio, Pennsylvania, Texas and Michigan. Tidal Royalty intends to provide further information on those opportunities when the respective parties reach an agreement and execute letters of intent.

Tidal Royalty has also purchased C$3,000,000 of senior unsecured convertible debenture units, which pay 12% interest and are convertible into Harborside common shares. The units also include warrants to purchase 87 additional common shares per unit, for 24 months after the closing date of the financing. Harborside announced in August 2018 that it has signed a binding letter of intent with Lineage Grow Company (CSE: BUDD) to effect a reverse take-over (“RTO“) transaction and to file an application to trade on the Canadian Securities Exchange. Following completion of the RTO, the debentures and share purchase warrants are convertible into common shares of the resulting issuer pursuant to their terms.