This is one of the earliest Memorial Mob merchants that you can encounter. Memorial mobs are merchants that have larger inventories, featuring important items such as Dragon’s Blood Droplets, upgrade materials, shinobi tools, Gourd Seeds, Prayer Beads, etc. You can also sell unwanted items to them.
For this particular memorial mob, you can find him a short distance past the Ashina Outskirts - Outskirts Wall - Path to the Gate sculptor’s idol), after defeating the first boss. To reach him, you need to do the following:
From the sculptor’s idol, grapple to the roof of the nearby gate and head to the cliff to the left.
Peek down the edge of the cliff to find a ledge below (with two lit lanterns) that you can jump to. (That ledge leads to a small cave with a Bundled Jizo Statue item inside) From that ledge, look for the branch that you can grapple to then jump off and pull yourself to that branch.
Jump to the next ledge and continue jumping up. Upon reaching the grassy ledge, look to the right and jump to the next grassy ledge.
Look for grappling points on the nearby cliff ahead to reach the top of the cliff. The merchant’s black tent will be there.