High Tide Inc. (Nasdaq: HITI) is buying DHC Supply LLC operating as Daily High Club in a deal valued at $10 million. It is expected to close around the end of June 2021. The transaction will consist of $6.75 million in common shares of High Tide and $3.25 million in cash.
Daily High Club is an online retailer of glass water pipes, vaporizers, and other in-demand consumption accessories. Daily High Club provides a marketplace with a wide variety of high-quality products and subscription boxes. Daily High Club has an active social media presence with numerous influencer and celebrity endorsements including deals with Tommy Chong, Chanel West Coast, and more. Daily High Club boasts over 800,000 followers on Instagram and 75,000 followers on TikTok.
“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.
High Tide also announced that Harrison Baum will be joining the High Tide team on closing as Director of Digital Marketing to oversee all social media initiatives for High Tide globally.
“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.
High Tide is the most profitable Canadian retailer of recreational cannabis as measured by Adjusted EBITDA, with 87 current locations spanning Ontario, Alberta, Manitoba, and Saskatchewan. High Tide’s retail segment features the Canna Cabana, KushBar, Meta Cannabis Co., Meta Cannabis Supply Co. and NewLeaf Cannabis banners, with additional locations under development across the country. 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).