- High Tide acquires another top e-commerce platform for its
portfolio which already includes 3 out of the top 5 most popular
e-commerce platforms for consumption accessories and totaled almost
100 million site visits across all platforms in 2020, including 2.5
million associated with DankStop1.
- High Tide gains access to DankStop's more than 200,000 email
subscribers and further bolsters its online presence by gaining
access to DankStop's almost 335,000 Instagram followers.
- Transaction is immediately accretive as DankStop generated
revenue over US$3 million
during the 12 months ended April 30
2021, with an EBITDA margin in the low double digits.
- Pro forma for the acquisition, High Tide's revenue run rate in
the U.S. is approximately CAD$55
- High Tide adds an asset light business that is already a
supplier for its dropshipping catalogue, resulting in enhanced
efficiencies and vertical integration.
CALGARY, AB, Aug. 12, 2021 /PRNewswire/ - High Tide Inc.
("High Tide" or the "Company") (TSXV: HITI) (Nasdaq:
HITI) (FSE: 2LYA), a retail-focused cannabis corporation enhanced
by the manufacturing and distribution of consumption accessories,
is pleased to announce that further to its press release dated
July 20, 2021, the Company has
completed the acquisition (the "Acquisition") of DS
Distribution Inc., operating as DankStop.com
The acquisition is just one of a series of recent steps the
Company has taken to expand its footprint in the United States market and dominate the
e-commerce marketplace for consumption accessories.
The acquisition was completed pursuant to the terms of the
definitive agreement dated July 20,
2021 (the "Acquisition Agreement"), pursuant to which
High Tide USA Inc., a wholly-owned
U.S. subsidiary of High Tide, purchased 100% of the issued and
outstanding shares of DankStop from its shareholders for
US$3,850,000, comprised of 612,087
common shares of High Tide ("High Tide Shares") on the basis
of a deemed price per High Tide Share of $7.88, being equal to the volume weighted average
price per High Tide Share on the TSX Venture Exchange (the
"TSXV") for the ten consecutive trading days preceding the
closing of the acquisition ("Closing").
Pursuant to the terms of the acquisition agreement, 153,021 High
Tide Shares, which represent 25% of the High Tide Shares issued to
the DankStop shareholders, has been placed in escrow for a period
of up to 12 months from closing.
The company is pleased to announce that DankStop co-founder
Feliks Khaykin has joined the High
Tide team, as Director of U.S. Operations.
Upon closing, DankStop has approximately US$100,000 of cash and non-cash working capital
and inventory of approximately US$220,000. DankStop will continue its corporate
existence under the state of Delaware as a 100% owned subsidiary of High
Tide USA Inc.
With over ten years of experience in the consumption accessories
sector, including through its subsidiaries Grasscity, Smoke Cartel
and Daily High Club, High Tide is constantly exploring
opportunities to further increase its share in the growing
consumption accessories market. The acquisition is immediately
revenue-accretive and DankStop's growing base of over 200,000 email
subscribers provides High Tide with another sales channel on which
to sell its products, thus leveraging retail margins on its own
The acquisition will result in enhanced efficiencies and
vertical integration as DankStop is already a supplier for High
Tide's drop-shipping catalogue. Although currently operating in the
hemp-derived CBD and consumption accessories space, High Tide
intends to expand its cannabis retail network into the United States in the event of federal
legalization, through cannabis subscription boxes, mature
e-commerce sites and bricks and mortar locations. The work of
launching consumption accessories and hemp-derived CBD subscription
boxes across all platforms has begun and High Tide will continue to
optimize and integrate these platforms throughout the year.
DankStop is a leading online consumption accessories retailer.
With an industry leading and innovative website, and dedicated
support team, DankStop has raised the bar for the online
consumption supply industry since 2014. Leveraging its in-house
technology, DankStop now offers a variety of B2B services for the
Cannabis industry in addition to its retail websites ranging from
drop shipping to third party logistics. Information on DankStop and
its many products can be accessed through: www.DankStop.com.
ABOUT HIGH TIDE
High Tide is a retail-focused cannabis company enhanced by the
manufacturing and distribution of consumption accessories. The
Company is the most profitable Canadian retailer of recreational
cannabis as measured by Adjusted EBITDA2, with 91
current locations spanning Ontario, Alberta, Manitoba and Saskatchewan. High Tide's retail segment
features the Canna Cabana, Meta Cannabis Co., Meta Cannabis Supply
Co. and NewLeaf Cannabis banners, with additional locations under
development across the country. High Tide has been serving
consumers for over a decade through its established ecommerce
platforms including Grasscity.com, Smokecartel.com,
Dailyhighclub.com and Dankstop.com, and more recently in the
hemp-derived CBD space through CBDcity.com and FABCBD.com as well
as its wholesale distribution division under Valiant Distribution,
including the licensed entertainment product manufacturer Famous
Brandz. High Tide's strategy as a parent company is to extend and
strengthen its integrated value chain, while providing a complete
customer experience and maximizing shareholder value. Key industry
investors in High Tide include Tilray Inc. (TSX: TLRY) (Nasdaq:
TLRY) and Aurora Cannabis Inc. (TSX: ACB) (Nasdaq: ACB).
Neither the TSXV nor its Regulation Services Provider (as such
term is defined in the policies of the TSXV) accepts responsibility
for the adequacy or accuracy of this release.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
Forward Looking Statements
This news release contains "forward-looking statements"
within the meaning of applicable securities laws. All statements
contained herein that are not clearly historical in nature may
constitute forward-looking statements.
Generally, such forward-looking information or
forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or may contain
statements that certain actions, events or results "may", "could",
"would", "might" or "will be taken", "will continue", "will occur"
or "will be achieved". The forward-looking information and forward-
looking statements contained herein include, but are not limited
to, statements regarding: the Company bolstering its online
presence as a result of the acquisition; the Company enhancing
efficiencies in vertical integration as a result of the
acquisition; the acquisition being immediately revenue-accretive;
the strengthening of the Company's e-commerce infrastructure; the
Company's ability to continue to make meaningful sales across its
various e-commerce channels; the Company's continued exploration of
various opportunities in the consumption accessories market; the
Company's ability to leverage retail margins on its own brands; the
ability of the Company to expand its cannabis retail network into
the United States; and the
continued optimization and integration of the Company's various
e-commerce platforms throughout the coming year.
Forward-looking information in this news release are based on
certain assumptions and expected future events, namely: the
Company's ability to continue as a going concern; the continued
commercial viability and growth in popularity of cannabis and
cannabis consumption accessories; continued approval of the
Company's activities by the relevant governmental and/or regulatory
authorities; the continued growth of the Company; the continued
growth in popularity of the online retail/distribution of cannabis
consumption accessories; the continued ability of DankStop to
generate revenue; the ability of the Company to integrate DankStop
into its current suite of e-commerce channels; and the ability of
the Company's to effectively integrate and capitalize on DankStop's
social media presence.
These statements involve known and unknown risks,
uncertainties and other factors, which may cause actual results,
performance or achievements to differ materially from those
expressed or implied by such statements, including but not limited
to: the potential inability of the Company to continue as a going
concern; the risks associated with the cannabis and cannabis
consumption accessory industry in general; increased competition in
the cannabis retail and cannabis consumption accessory market; the
potential future unviability of the cannabis retail and cannabis
consumption accessory market; incorrect assessment of the value and
potential benefits of the acquisition; risks associated with
potential governmental and/or regulatory action with respect to the
cannabis retail and cannabis consumption accessory market; risks
associated with a potential collapse in the value of cannabis and
cannabis consumption accessories; risks associated with the
Company's ability to continue generating a profit; the Company's
potential inability to achieve efficiencies in vertical integration
as a result of the acquisition; the acquisition not being
revenue-accretive; the potential inability of the Company to
strengthen its e-commerce infrastructure; the Company's inability
to continue to make meaningful sales across its various e-commerce
channels; the Company's inability to continue its exploration of
various opportunities in the consumption accessories market; the
Company's inability to leverage retail margins on its own brands;
the inability of the Company to expand its cannabis retail network
into the United States; and the
inability of the Company to optimize and integrate the Company's
various e-commerce platforms throughout the coming year.
Readers are cautioned that the foregoing list is not
exhaustive. Readers are further cautioned not to place undue
reliance on forward-looking statements, as there can be no
assurance that the plans, intentions or expectations upon which
they are placed will occur. Such information, although considered
reasonable by management at the time of preparation, may prove to
be incorrect and actual results may differ materially from those
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement and reflect the
Company's expectations as of the date hereof and are subject to
change thereafter. The Company undertakes no obligation to update
or revise any forward-looking statements, whether as a result of
new information, estimates or opinions, future events or results or
otherwise or to explain any material difference between subsequent
actual events and such forward-looking information, except as
required by applicable law.
of June 21st, 2021, based on analytics data provided by Alexa
Internet, Inc. related to Grasscity, SmokeCartel and Daily High
Club. Traffic data provided by Google Analytics.
2 Adjusted EBITDA is a non-IFRS
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SOURCE High Tide Inc.