High Tide Inc., 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 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 brands.
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.