Acquisition
High Tide Continues to Expand U.S. E-Commerce Presence Through Acquisition of Daily High Club
- High Tide adds another top e-commerce platform to its portfolio which will now include 3 out of the top 5 most popular e-commerce platforms for consumption accessories globally totaling 91 million site visits in 2020, including 23 million associated with Daily High Club alone.1
- High Tide gains access to Daily High Club’s over 15,000 subscription box members who are ideal customers for High Tide to potentially launch cannabis subscription boxes in the event of U.S. federal legalization.
- High Tide bolsters its online presence, by gaining access to Daily High Club’s almost 800,000 followers on Instagram and over 75,000 followers on TikTok.
- With over one million accessories sold under the Daily High Club name, High Tide adds a company to its portfolio with proven brand equity.
- Transaction is immediately accretive as Daily High Club generated US$9.4 million in net revenue and US$1.2 million in EBITDA during the 12 months ended April 2021.
- Pro forma for the acquisition, High Tide’s revenue run rate in the U.S. exceeds CAD$50 million.
High Tide Inc. (“High Tide” or the “Company“) (TSXV: HITI) (Nasdaq: HITI) (FRA: 2LYA), a retail-focused cannabis corporation enhanced by the manufacturing and distribution of consumption accessories, is pleased to announce that it is taking another step towards solidifying itself as the leader within the U.S. e-commerce marketplace for consumption accessories by entering into a definitive agreement (the “Acquisition Agreement“) pursuant to which High Tide USA Inc., a wholly-owned U.S. subsidiary of the Company, will acquire 100% of the issued and outstanding shares of DHC Supply LLC (the “Transaction“) operating as Daily High Club (“Daily High Club“).
“In alignment with our intention to become a dominant player in the U.S. e-commerce marketplace through a combination of organic growth and accretive acquisitions, specifically targeting businesses with strong brand loyalty, I am thrilled to announce the acquisition of Daily High Club,” said Raj Grover, President and Chief Executive Officer of High Tide. “Daily High Club stood out to us because it is an increasingly popular consumption accessories online retailer, with a rapidly growing subscription box model which can easily be tailored to include cannabis products in the event of U.S. federal legalization. This subscription box model is complementary to our existing accessories e-commerce portfolio, and as such creates numerous opportunities for potential synergies. It’s my pleasure to welcome Harrison and the DHC team into our High Tide family,” added Mr. Grover.
“I am extremely excited to be joining the High Tide team and see a huge opportunity to boost High Tide’s brands the same way we built our loyal following for Daily High Club,” said Harrison Baum, Founder and Chief Executive Officer of Daily High Club. “Daily High Club’s social media dominance, coupled with High Tide’s vast manufacturing capabilities and mature e-commerce platforms should yield meaningful synergies. I could not be more thrilled to be part of the High Tide family,” added Mr. Baum.
Strategic Highlights
With over 10 years of experience in the cannabis accessory sector, including through our subsidiaries Grasscity and Smoke Cartel, High Tide is constantly exploring opportunities to further increase its share in the growing consumption accessories market. Daily High Club’s consumption accessories subscription box model, with over 15,000 and growing active monthly subscribers, allows the Company to ensure this Transaction will be immediately accretive through cross-selling opportunities, and offering subscription box memberships across its other e-commerce platforms, including Grasscity.com and Smokecartel.com. Although currently operating in the hemp-derived CBD and consumption accessory space, High Tide intends to expand its cannabis retail network into the U.S. in the event of federal legalization, through cannabis subscription boxes, mature e-commerce sites and bricks and mortar locations.
