Leading retail-focused cannabis company High Tide Inc. announced this week it has entered into a definitive agreement to acquire 80% of Denver-based NuLeaf Naturals. High Tide will pay $31.24 million for the 80% stake in NuLeaf and will have a three-year option to acquire the remaining 20% at any time.
Based in Calgary, Alberta, High Tide operates brick-and-mortar as well as global e-commerce outlets. The deal is another step towards solidifying High Tide as a major player within the global marketplace for hemp-derived CBD products. NuLeaf’s production capability and established distribution network will help High Tide’s marketing efforts across all of its brands.
Founded in 2014, NuLeaf is a market leader in the production and distribution of premium cannabidiol (CBD) wellness products. It has received over 25,000 verified five-star customer reviews through its e-commerce platform.
NuLeaf can produce 60,000 plant-based softgels per hour and is one of only a few manufacturers in the United States that can produce a vegan softgel. With a heightened consumer interest in health focused and sustainable products, plant-based offerings are primed for growth.
Key Distribution Partner
NuLeaf has a strong distribution reach in the natural products channel and recently secured an expansion with Sprouts Farmers Market from 33 retail locations to an additional 235 stores. It has quickly grown to become one of the most popular brands for hemp-derived CBD products across the U.S., with a product portfolio including cannabinoid tinctures, softgels and topicals.
Over the 12 months ended Sept. 30, 2021, NuLeaf had more than 5.1 million site visits and an average order value of $120. Since its inception, NuLeaf has served approximately 330,000 unique customers through its e-commerce platform, and hundreds of thousands more through their other distribution channels.
“With this announcement, we have doubled down on our efforts to become a global market leader with respect to hemp-derived CBD production and e-commerce sales,” said Raj Grover, president and CEO of High Tide. “Our strategy is backed by numerous studies which predict that the global CBD market is set to grow exponentially over the coming years, with Fortune Business Insights projecting that it will reach $56 billion by 2028, equating to a compound annual growth rate of 47%.”
Grover noted that High Tide is growing across all three categories within the cannabis ecosystem, including THC, CBD and accessories. The purchase of NuLeaf will make the company further vertically integrated in its CBD business, as it has been with regard to consumption accessories.
“Their portfolio also includes other innovative products including their multicannabinoid oils and softgels,” added Grover. “This transaction will provide us with meaningful cross-selling synergies and margin enhancement opportunities for FAB and Blessed CBD.”
Multiple Acquisitions in 2021
High Tide purchased Blessed CBD in October of this year and Milwaukee-based FABCBD in May. Founded in 2019 with its headquarters in Scotland, Blessed has quickly grown to become one of the most popular brands for hemp-derived CBD products across the U.K., including CBD oils, creams, gummies and capsules. FABCBD has quickly grown to become one of the most popular brands for hemp-derived CBD products across the U.S., including CBD oils, creams, gummies and dog treats.
High Tide’s made five acquisition deals in the global e-commerce space in 2021, which brings the company’s online portfolio to a total of eight e-commerce platforms across cannabis, hemp-derived CBD, and consumption accessories, servicing customers across the U.K., E.U., and North America. These transactions have collectively contributed to increasing the company’s annual run-rate e-commerce revenue from approximately $10.6 million at the end of October 31, 2020, to just under $60 million today.