High Tide (HITI) has entered into a definitive agreement under which wholly-owned subsidiary High Tide USA Inc. will acquire all of the issued and outstanding shares of DS Distribution Inc., operating as DankStop.com, for $3.85 million. High Tide is a retail-focused cannabis company bolstered by the manufacture and distribution of consumer accessories.
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By acquiring this leading online consumption accessories retailer, High Tide continues its fast expansion into the United States and gets closer to its goal of dominating the consumer accessories and merchandise e-commerce marketplace.
High Tide will gain access to DankStop’s over 200,000 email followers and further strengthen its online presence by accessing DankStop’s nearly 335,000 Instagram followers.
High Tide’s President and CEO Raj Grover said, “Along with this transaction, our last two acquisitions have increased High Tide’s social media reach by leaps and bounds, giving us access to an invaluable potential customer base. Being vertically integrated in the consumption accessories space and having access to the end consumer will continue to result in our ability to make meaningful high margin sales across all of our channels. Having already commenced online cannabis sales in three Canadian provinces, and already possessing an established customer network in place in the U.S. positions us well to commence online cannabis sales and cannabis subscription boxes in the United States if and when federally permissible. It is for these and many other reasons that I am delighted to welcome the DankStop team to the High Tide family of companies.”
The transaction is expected to be immediately accretive as DankStop generated revenues of over $3 million in the 12 months ended April 30, 2021.
High Tide’s U.S. revenue run rate is approximately C$55 million pro forma for the acquisition. (See High Tide stock charts on TipRanks)
Two months ago, Echelon Wealth Partners analyst Andrew Semple maintained a Buy rating on High Tide with a C$20.00 price target. This implies 154% upside potential.
Andrew Semple is the only analyst to have offered a rating for High Tide in the past three months. Shares have more than doubled in value year-to-date.
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