CEA Industries Inc. (Nasdaq: CEAD, CEADW) has announced a $12.6 million acquisition of Fat Panda Ltd., a leading Canadian retailer and manufacturer of nicotine vape products.

The acquisition will be financed through cash, CEA Industries common shares, and a combination of seller and bank debt, aiming to minimize dilution for shareholders, according to a company press release.

Fat Panda holds a dominant market share of over 50% in central Canada’s vape industry. The company operates 33 retail locations, including 29 Fat Panda stores and four Electric Fog vape outlets, across Manitoba, Ontario, and Saskatchewan.

Fat Panda also operates a robust e-commerce platform and produces its own line of in-house manufactured e-liquids, alongside a portfolio of trademarks and intellectual property.

Tony McDonald, chairman and CEO of CEA Industries, emphasized the strategic importance of the acquisition.

“CEA Industries has been deeply engaged in the Canadian market, and this acquisition marks our official entry into the high-growth Canadian vape industry,” McDonald said in a prepared statement. “Fat Panda’s dominance in central Canada, backed by its 33-store network and vertically integrated operations, represents a well-established business with strong fundamentals, consistent profitability, and a history of double-digit revenue growth.”

CEA Industries aims to drive Fat Panda’s growth by expanding both its retail footprint and wholesale operations, including acquiring new store locations and opening brand-new outlets.

“By leveraging our expertise and resources alongside Fat Panda’s strong market position, we plan to accelerate its expansion and strengthen its presence in Canada, creating long-term value for our shareholders,” said Tony McDonald, chairman and CEO of CEA Industries.

The company confirmed it will retain Fat Panda’s current management team, along with its production and retail staff. The acquisition is set to close in the first half of 2025.