Delta 9 buys Garden Variety for $3M

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This article was published 18/08/2022 (1284 days ago), so information in it may no longer be current.

Delta 9 Cannabis is adding three new locations to its operations after buying fellow weed retailer Garden Variety for $3.25 million, the company announced Monday.

Delta 9 chief executive officer John Arbuthnot said his company now runs 38 brick-and-mortar stores, including two in Brandon.

While the finalized transaction remains subject to approval by the Toronto Stock Exchange, the deal is expected to close on or around Aug. 29.

Arbuthnot told the Sun this purchase was an easy decision to make, since Garden Variety has demonstrated significant revenue and earnings growth throughout 2020 and 2021.

“We obviously see value [in Garden Variety], or we wouldn’t be going through with this type of transaction,” Arbuthnot said. “But we’re very much looking forward to bringing on those stores and much of the staffing contingents, and make them part of the Delta 9 family.”

However, Arbuthnot said the three Garden Variety stores — two in Winnipeg and one in Brandon — won’t be subject to much change at the consumer level for at least the next little while.

While locations will continue to operate under the Garden Variety banner for the time being, each store will be supplied with some brand-new inventory.

“Obviously, we’re not only a retailer but a wholesaler, so you’ll start to see some of those Delta 9 products sitting in the lineup and hitting store shelves,” he said. “That’ll be the only real change out of the gate.”

Garden Variety regional manager Sheilagh Dohie said she’s optimistic about the deal because of this “business-as-usual” approach, and she’s looking forward to maintaining the retailer’s unique customer service, product lineup and store design that their consumers have come to expect.

“My takeaway, for sure, is that it’s business as usual, and we want to continue to create the same experiences that we’ve created these last three and a half years for our customers,” Dohie told the Sun on Wednesday.

Garden Variety first opened its doors in Brandon on Dec. 23, 2019, with Delta 9 establishing itself at Shoppers Mall in April of that same year.

The two businesses emerged following the federal government’s decision to legalize cannabis in the fall of 2018, a move that resulted in a glut of weed retailers quickly setting up shop across the country.

Brandon was not immune to this trend as companies like Tweed, Tokyo Smoke, Meta Cannabis and Flamingo + Cannabis quickly made a home out of the city.

“We’re starting to reach market saturation in terms of the overall number of retail stores,” Arbuthnot said. “What inevitably plays out in that type of environment is consolidation starts to happen as well as an overall market cycle.”

If the market continues to head in this direction, Arbuthnot said he is expecting his company’s purchase of Garden Variety will be “the first of many deals” involving consolidation, which has the potential to expand Delta 9’s reach beyond its current 38 locations.

“And I see no reason why we can’t see that number [go up to] 50, 75, 100 stores over the next year to two years.”

Delta 9 Cannabis also released details about its second-quarter financials Monday, stating in a press release that the company had generated $30 million in net revenue during the first six months 2022, ending June 30.

However, Delta 9 still saw a net loss of around $6.4 million throughout this same period.

The retailer also opened a mobile cannabis store this summer, which allowed the company to peddle its products at major entertainment events like Dauphin’s Countryfest and Rockin’ the Fields of Minnedosa.

According to its website, Garden Variety is a partnership of the Fisher River Cree Nation, Chippewas of the Thames First Nation, Avana Canada Inc., MediPharm Labs, and Native Roots Dispensary.

» kdarbyson@brandonsun.com

» Twitter: @KyleDarbyson