High Tide (HITI) has signed an agreement to buy 100% of the issued and outstanding shares of DHC Supply LLC, operating as Daily High Club. This acquisition brings the Canadian retail cannabis chain closer to becoming a leader in the U.S. e-commerce market.
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High Tide’s President and CEO Raj Grover said, “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. 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.”
The total consideration to Daily High Club shareholders will be $10 million. The transaction is immediately accretive as Daily High Club generated $9.4 million in net sales and $1.2 million in EBITDA during the 12 months ended April 2021.
On closing of the transaction, which is expected to be around the end of June, Harrison Baum will join the High Tide team as Director of Digital Marketing. He will be in charge of global social media initiatives for High Tide. (See High Tide stock chart on TipRanks)
Last month, Echelon Wealth Partners analyst Andrew Semple maintained a Buy rating on High Tide with a C$20.00 price target. This implies 102% upside potential.
Andrew Semple is the only analyst to have offered a rating for High Tide in the past three months. Shares have gained more than 150% year-to-date.
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