Fire & Flower Holdings Corp. (TSX: FAF) (OTCQX: FFLWF) is eyeing the purchase of PotGuide, a high-traffic weed website, as the company expands its digital network.
On Thursday, the firm said the proposed acquisition of all issued and outstanding shares of Colorado-based PGED Corp., known as PotGuide, amounted to around US$8.5 million, payable by way of US$4.0 million cash consideration, as well as 5,978,050 common shares of Fire & Flower.
The deal is expected to close during the company’s fiscal third-quarter if all conditions in the share purchase agreement are met.
According to the company’s statement, PotGuide is one of the most visited weed websites in North America.
Upon closing, the deal is expected to be immediately accretive to revenues and profits, Fire & Flower says, while also setting up Hifyre Inc., the company’s wholly-owned subsidiary, with a U.S. base for technology and operations.
Bolstering online presence to steer traffic toward purchases
“Following closing of the acquisition, Hifyre intends to leverage this significant user traffic and its proprietary white-label dispensary e-commerce software to convert traffic into cannabis and accessory purchases,” the company explains.
Its retail network across Canada and in California will fulfill the purchases, and Hifyre is looking to strike additional deals in Canada and the U.S. to deliver in “as many geographic locations as possible.”
Fire & Flower anticipates the Hifyre digital network to “become one of the world’s most visited networks of cannabis websites and content platforms.”
Earlier this month, the firm said it was buying certain assets of Wikileaf Technologies Inc. (CSE: WIKI).
The firm estimates PotGuide and Wikileaf will bring about 225,000 potential consumers into Fire & Flower’s Spark Perks membership loyalty program, which boasts more than 300,000 subscribers.
“As Fire & Flower has grown over the past few years, we have successfully proven the value of our Hifyre data analytics retail platform and it is a great accomplishment to see the rapid success of our expanding digital strategy with the acquisition of PotGuide,” CEO Trevor Fencott said in a statement.
“Now that we are strategically acquiring two of the most visited cannabis online websites, PotGuide and Wikileaf, we have established Fire & Flower and Hifyre as leading global players in digital cannabis traffic and believe we can offer even greater value to these high-demand properties.”
Company stock rose 1.11 per cent Thursday to $0.91 on the Toronto Stock Exchange.
To date, the company has 85 corporate-owned stores.