Cannabis retailer High Tide is transitioning its 100-plus stores across Canada to a “discount club” model, eyeing price-sensitive consumers yet to transition to the regulated market.
“A driving focus of this rollout will be to convert consumers who currently buy products from the illicit market, a potential customer base worth at least CA$3 billion in annual sales,” the Calgary, Alberta-headquartered company said in a news release.
The concept is modeled after membership-based grocery discount club retailers, the company said, and will offer exclusive benefits targeted to Cabana Club members.
High Tide might explore introducing a fee for the Cabana Club, which could include annual cashback to members, depending on the regulatory requirements.
Cabana Club has about 245,000 members, according to the release.
“While other retailers have made moves to service the value segment, our strategy sets us apart as the only retailer in Canada which will have a discount club loyalty plan,” CEO Raj Grover said in the release.
Earlier this week, High Tide said it completed the acquisition of an 80% interest in Blessed CBD for 9.06 million pounds ($12.5 million).
The Scotland-based online retailer of hemp-derived CBD products generated revenue of 5.1 million pounds for the fiscal year ended Aug. 31, 2021, and earnings before interest, taxes, depreciation (EBITDA) of 2.8 million pounds.
The deal includes a three-year option to acquire the remainder of Blessed CBD.
High Tide’s shares trade as HITI on the Nasdaq and the TSX Venture Exchange.