High Tide Inc. (Nasdaq: HITI) (TSXV: HITI) (FSE: 2LYA) has started selling its cannabis seeds to customers in the United States via its e-commerce subsidiaries GrassCity and Smoke Cartel.
The Canadian cannabis retailer headquartered in Calgary, Alberta announced Tuesday that the company plans to expand seed sales to additional online retail platforms within its portfolio next year.
The launch comes after the U.S. government’s Drug Enforcement Administration (DEA) determined that cannabis seeds will fall under the legal definition of hemp and can be sold openly in the country.
Its GrassCity and Smoke Cartel platforms have high SEO rankings that have been built over the last 22 and eight years respectively which the company will use to leverage its seed sales.
Over the last 12 months, GrassCity.com saw close to 24 million page views with 3.8 million users and its forums have seen 6.2 million users with nearly 12 million views.
SmokeCartel.com generated 42.6 million page views with 6.5 million users.
High Tide also owns other e-commerce platforms such as Dailyhighclub.com, and Dankstop.com and more recently in the hemp-derived CBD space through Nuleafnaturals.com and FABCBD.com.
The company also owns BlessedCBD.co.uk, BlessedCBD.de, as well as its wholesale distribution division under Valiant Distribution.
“With our entry into this new and exciting complementary vertical, we continue to extend and strengthen our integrated value chain, providing our customers with a complete cannabis experience, in addition to the opportunity to further enhance our consolidated gross margin profile,” CEO Raj Grover said.
“This new business venture will greatly expand our U.S. customer base, which already sits at 2.4 million through our ancillary cannabis business lines, and sets us up well to take advantage of federal legalization in the United States when it comes,” he added.
Grover explained that this further diversification into the U.S. seeds market also strengthens High Tide’s Canadian discount club model as it is expected to generate significantly higher gross margins than its retail shops.
According to the analytics firm Allied Market Research, the global cannabis seeds market was valued at USD$1.3 billion in 2021 and is set to reach USD $6.5 million by 2031.
The company also announced on Tuesday that its board of directors has approved a grant of 106,635 restricted share units to directors of the company.
High Tide stock went down Wednesday by 2.38 per cent to $2.05 on the Canadian Ventures Exchange.