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Decibel Cannabis Company to Divest Retail Stores to FIKA

Mar 23, 2024


Key Takeaways

  • Decibel Cannabis Company Inc. has agreed to sell the assets of its retail operations, Prairie Records, to FIKA for approximately $3.0 million.
  • The sale includes six Prairie Records stores located in Alberta and Saskatchewan.
  • This move allows Decibel to focus on expanding and diversifying its product brand portfolio in Canada and globally.
  • The transaction is expected to close by the end of Q1 2024, subject to customary closing conditions.

A Strategic Shift in Focus

Decibel Cannabis Company Inc. announced in a news release its decision to divest its Prairie Records brick-and-mortar retail operations to Fire and Flower Inc., a subsidiary of FIKA.

This move involves the transfer of three stores in Alberta and another three in Saskatchewan, signifying a notable shift in the company's strategic direction.

Adam Coates, Decibel's Chief Revenue Officer, highlighted the sale as pivotal in the company's growth journey.

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According to Coates, this decision enables Decibel to reallocate resources towards innovation within its core branded product business, aspiring to elevate and broaden its premium product offerings globally.

Coates also expressed pride in the unique identity and success of the Prairie Records brand under Decibel's stewardship and voiced confidence in FIKA as the ideal successor to continue the brand's legacy.

Why We Care

Decibel's decision to sell its Prairie Records retail locations to focus on its core mission of delivering exceptional cannabis brands and products highlights a strategic shift toward innovation and global expansion. This move allows Decibel to channel resources into enhancing its product portfolio and solidifying its market position.

On the other hand, FIKA's acquisition reflects its ambition to redefine cannabis retail by offering a sophisticated, lifestyle-oriented shopping experience. FIKA aims to create welcoming environments catering to seasoned consumers and newcomers. Their stores, characterized by intuitive design, knowledgeable staff (Ambassadors), and a unique product display approach, emphasize customer engagement and education.

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Besides, Decibel Cannabis Company Inc. has shown a robust financial performance leading up to its decision to divest its retail operations to FIKA. For the year ending December 31, 2022, Decibel reported a record fourth-quarter net revenue of $25.8 million and an adjusted EBITDA of $7.1 million. This financial upswing continued into the third quarter of 2023, with the company posting $30.2 million in net revenue, a $6.7 million adjusted EBITDA, and positive free cash flow.