NEWS BRIEF

Canadian marijuana retailer High Tide buys US online head shop for $8 million

Calgary, Alberta-based marijuana retailer High Tide is spending $8 million to acquire Smoke Cartel, a U.S. e-commerce website that sells cannabis accessories and CBD products.

Under terms of the deal, High Tide will pay $2 million in cash and $6 million in High Tide shares for all shares of Georgia-based Smoke Cartel.

When the deal is closed, High Tide said it “will operate both the largest and second largest e-commerce platforms for consumption accessories in the world and (believes) it will be well positioned to begin online cannabis sales should the United States move towards federal legalization.”

High Tide already owns Grasscity.com, a U.S. online cannabis accessory retailer, as well as U.S. online cannabidiol store CBDcity.com. The company also owns accessory wholesaler Valiant Distribution.

“The acquisition of Smoke Cartel is a great way to further vertically integrate our accessories business and expand our footprint in the United States, especially in parallel with our current application to list on the Nasdaq,” High Tide CEO Raj Grover said in a news release issued Monday.

“We expect Smoke Cartel’s proprietary and licensable drop-shipping technology to enhance our e-commerce business right away, along with the cross-listing of inventories between its website and our Grasscity and CBDcity platforms.”

High Tide said Smoke Cartel anticipates revenues of roughly $7.4 million and has approximately $1 million in cash on hand.

Smoke Cartel was launched in 2013 by Darby Cox and Sean Geng.

High Tide completed acquiring Canadian retail competitor Meta Growth in November.

The company’s shares trade on the TSX Venture Exchange as HITI.

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