Calgary-based High Tide, a retailer of recreational cannabis products in Canada, announced it will acquire Milwaukee-based Fab Nutrition, which sells CBD products online at www.fabcbd.com.
Under terms of the deal, High Tide will buy 80% of FABCBD for a little more than $20.6 million (U.S.) and have a three-year option to purchase the remaining 20% of the company at any time. The acquisition will significantly expand High Tide's presence in the U.S., where High Tide made its entry in May 2020 with the launch of e-commerce site CBDCity, according to a news release.
High Tide's near-term plans include selling FABCBD products—which include CBD oils, creams, gummies and dog treats—on CBDCity as well as High Tide's other U.S. e-commerce sites, GrassCity and Smoke Cartel. Longer term, according to the release, High Tide is eyeing opportunity for the company's 85 Canadian retail outlets to carry FABCBD items.
Currently, FABCBD products are available exclusively direct-to-consumer at fabcbd.com. In 2020, the company posted revenue of $10.8 million, fulfilling approximately 124,000 online orders at an average order value of $91.90.
"FABCBD has been exceptionally run, having more than doubled revenue and EBITDA in each of 2019 and 2020, including generating terrific gross margins of 74% and EBITDA margins of 40% in 2020, by far the highest of all CBD companies we evaluated," High Tide President and CEO Raj Grover said in a news release. FABCBD founder and sole shareholder Josh Delaney will join High Tide as general manager of FABCBD following the acquisition.
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