Article by Street Insider
Spyder Cannabis Inc. (TSXV: SPDR) (“Spyder” or the “Company”), an established Canadian cannabis and vape retailer, is pleased to announce the closing of its previously announced acquisition on February 23, 2021 of all of the issued and outstanding shares of the entities that collectively comprise the business of 180 Smoke (“180 Smoke”), a dominant vape retailer in Canada. On March 30, 2021, the Company purchased all of the shares of 180 Smoke (the “Acquisition”) from CRHC Holdings Corp. (the “Seller”), on a cash-free basis (after post-closing adjustments), for nominal consideration. Additionally, the Company secured a strategic institutional investor to lead the acquisition of all the existing debt of 180 Smoke owing to an affiliate of the Seller.
Dan Pelchovitz, President & CEO of Spyder, commented, “We are extremely excited to welcome 180 Smoke to the Spyder team, which undoubtedly strengthens our management and operating teams bringing strong retail processes and expertise to Spyder. The acquisition of 180 Smoke significantly accelerates the development of Spyder’s cannabis and vape retail growth strategy, providing access to an iconic brand name, an established platform, and a loyal customer base. We are excited by the prospects ahead of us and executing on our immediate cannabis retail expansion plans in Ontario.”
- 180 Smoke is a leading Canadian vape product retailer that has been widely regarded as the gold standard for vape store operations and customer service. 180 Smoke sells high-quality e-cigarettes, vaporizers and other nicotine-related products.
- The Acquisition is expected to immediately increase Spyder’s consolidated revenue with the addition of 180 Smoke’s nicotine vape sales, franchise revenue and other wholesale and distribution revenue which generated approximately $12.9 million in unaudited net revenue with gross margins of 50% during the year ended December 31, 2020.
- 180 Smoke has a team of 91 employees who will continue to operate 180 Smoke’s 18 brick and mortar vape retail locations, 8 franchises, and its corporate head office and distribution warehouse, following the closing of the Acquisition.
- 180 Smoke’s current customer base includes 92,481 in-store accounts, 98,052 online accounts, as well as 235 specialty wholesale vape B2B accounts.
- Immediately after closing, Spyder expects to integrate its 2 brick and mortar vape retail stores with those of 180 Smoke’s to leverage the acquired know-how and intellectual property, including retail store design and layout, standard operating procedures, administrative systems and customer support, human resources and staff training, and accounting.
- Synergies are also expected between 180 Smoke’s existing customer base with Spyder’s cannabis business.
- Spyder will have the ability to utilize its wholly-owned subsidiary’s Retail Operator License issued by the Alcohol and Gaming Commission of Ontario (AGCO) to convert some of 180 Smoke’s existing vape retail locations to licensed cannabis dispensaries by obtaining a Retail Store Authorization from the AGCO for such store.
About Spyder Cannabis Inc.
Spyder is a cannabis and vape retailer that operates in jurisdictions where the products are federally legal in Canada. The Company, through its subsidiaries, is a retailer involved in the development of two retail business units. The first is the sale of cannabis products and the second is the sale of smoking cessation products.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.