Kiaro made the news this week with two acquisitions, propelling its standing higher among the ranks of publicly-traded cannabis companies. The “national omnichannel cannabis retailer and wholesale distributor” announced an agreement with Aegis Brands to acquire its subsidiary Hemisphere Cannabis Co., as well as an agreement to purchase Cozy Cannabis. Through these deals, Kiaro managed to acquire ten new retail locations, three e-commerce platforms, and two new executives.
Hemisphere Cannabis Co.
Previously a subsidiary of Aegis Brands, Hemisphere Cannabis Co. operates seven retail locations in Ontario. With the two additional stores in development, this transaction will more than double Kiaro’s retail footprint, particularly in the coveted Ontario market. According to a press release, with this expansion, Kiaro expects to see its annual run-rate revenue increase to $42.7 million with a gross margin of $13.7 million once the transaction closes.
“The acquisition of Hemisphere is simply transformational,” said Daniel Petrov, CEO of Kiaro. “It brings up to 18 stores into operation by the end of the fiscal year and cements a strategic partnership with retail industry titans at Aegis Brands. Their team has assembled a superior Ontario portfolio of well-positioned brick and mortar locations, supporting our objective of exponential revenue and EBITDA growth.”
As a part of the transaction, Jenn Juby, previously Vice President of Retail at Hemisphere, will join Kiaro in the same role.
The acquisition was purchased with 61.3 million common shares of Kiaro, with an additional 13.4 million on the way in the form of warrants and bonuses.
While Cozy Cannabis only operates one store, it operates in a highly desirable location in Toronto, a city with a quickly growing store count, in the heart of the Trinity Bellwoods neighbourhood and represents Kiaro’s first brick-and-mortar store in Ontario.
On top of that, Sculthorp SEO Inc., Cozy Cannabis’ parent company, also operates three e-commerce business platforms that sell cannabis accessories to Canadian, American, and Australian markets—Vaped.ca, Vaped.com, and VaporizersDirect.com.au.
The transaction went through for $1.35 million in shares and cash, and Cozy Cannabis founder and CEO Christian Sculthorp will join Kiaro as Director of eCommerce to oversee the integration of the e-commerce sites.
In one fell swoop, Kiaro more than doubled its brick-and-mortar footprint and greatly expanded its e-commerce offerings, making it one of Canada’s fastest-growing retailers.