Core Insights - High Tide Inc. reported CAD $6.8 million in total retail gross revenues during the 4/20 long weekend, marking a 10% increase compared to the previous week [1] - The company launched its largest 4/20 customer appreciation giveaway, awarding a grand prize of CAD $100,000 [2] - The 4/20 giveaway was modified to feature a cash prize instead of a Tesla Model Y, with the winner being an ELITE member from Winnipeg [3] Financial Performance - Total sales during the 4/20 weekend reached CAD $6.8 million, reflecting strong sales momentum across all retail channels [1][4] - The increase in sales indicates a successful customer-first strategy that positions Canna Cabana as a leading retail brand in the cannabis sector [4] Customer Engagement - High Tide has over 1.8 million Cabana Club members, with ELITE memberships growing at an accelerated rate [5] - The annual 4/20 giveaway was open to all legal-age Canadians, reinforcing the company's commitment to customer engagement and loyalty [5] Employee Incentives - High Tide granted 136,000 incentive stock options to employees, consultants, and management, which are exercisable at the closing price of the company's common shares [6] Company Overview - High Tide is the second-largest cannabis retailer globally by store count, with 196 locations across Canada [7] - The company operates various retail and e-commerce platforms, including Canna Cabana and several accessory e-commerce sites [8][9] - High Tide has been recognized as one of Canada's Top Growing Companies and ranked number one in the retail category on the Financial Times list of Americas' Fastest Growing Companies for 2023 [11]

The most recent trading session ended with High Tide Inc. (HITI) standing at $2.29, reflecting a -0.87% shift from the previouse trading day's closing. The stock trailed the S&P 500, which registered a daily gain of 2.51%. Elsewhere, the Dow gained 2.66%, while the tech-heavy Nasdaq added 2.71%. Market participants will be closely following the financial results of High Tide Inc. in its upcoming release. Our most recent consensus estimate is calling for quarterly revenue of $96.73 million, up 5.6% from the ...

Industry Overview - The marijuana stock market is currently facing uncertainty due to the political climate in the USA, making it difficult for investors to have strong convictions about positive market outcomes [1] - There is speculation that improved industry regulations could lead to increased investor confidence and higher share prices for marijuana stocks [2] Trading Dynamics - Trading levels for marijuana stocks are often low and short-lived, with some investors hoping for small bounces in stock prices [2] - Ancillary cannabis stocks have shown stronger trading performance as they do not solely rely on cannabis, making them perceived as safer investments [3] Company Highlights - **Leafly Holdings, Inc.**: Operates as an online cannabis discovery marketplace. Recently received a notice of delisting from Nasdaq due to failure to meet the minimum net income requirement of $500,000 [4][6] - **WM Technology, Inc.**: Provides e-commerce and compliance software solutions for the cannabis market. Reported its Q4 and full-year financial results for 2024 [7][8] - **High Tide Inc.**: Engages in cannabis retail, with plans to open a new retail store, bringing its total to 195 locations. Reported revenue of $47.7 million for Q4 2024, an increase from the previous quarter [10][11] Financial Performance - High Tide's revenue for fiscal year 2024 was $184.5 million, a decrease from $188.0 million in the prior year. However, net income increased to $12.2 million from a net loss of $15.7 million in the prior year [11]

Core Insights - High Tide Inc. has opened a new Canna Cabana retail cannabis store in Cochrane, Alberta, increasing its total store count to 196 across Canada, with 85 located in Alberta [1][4] - The new store is strategically positioned to serve over 8,000 residents in an area with no current cannabis retail competition, enhancing High Tide's market presence [2][4] - The company is actively pursuing entry into the German medical cannabis market, aiming to become a major importer and distributor of Canadian medical cannabis products [3][5] Company Expansion - The new Cochrane store reflects High Tide's commitment to expanding in markets with strong long-term potential, aiming to become the preferred cannabis retailer for local residents [4] - High Tide's Cabana Club loyalty program is gaining traction, with ELITE signups accelerating, indicating strong brand loyalty and customer engagement [4] - The company has generated $1.7 billion in Canadian cannabis sales since 2018, which has attracted interest from potential partners in Germany [3][5] Market Opportunities - The German medical cannabis market is experiencing rapid growth, with imported dried flower volumes exceeding 70 tons in 2024, more than doubling from the previous year [5] - High Tide is exploring alternative acquisition targets after pausing the Purecan acquisition, aiming to leverage its Canadian sales success to establish a foothold in the German market [5] - The company is focused on delivering an unmatched retail experience and providing value to customers as it expands its operations [4]

Core Viewpoint - High Tide Inc. is expanding its retail presence with the opening of a new Canna Cabana store in Kitchener, Ontario, which will enhance its market position in the cannabis industry and reflects the company's commitment to disciplined growth amidst a changing macroeconomic environment [1][3][4]. Group 1: Store Expansion and Market Position - The new Canna Cabana store in Kitchener will begin selling recreational cannabis products on April 16, 2025, bringing the total number of Canna Cabana locations to 195 across Canada, with 80 in Ontario [1]. - The store is strategically located in a high-visibility area with a young and growing population, which is expected to drive strong sales and establish Canna Cabana as a leading cannabis retailer in the neighborhood [2]. - Existing locations in Kitchener have outperformed competitors, indicating a positive market reception and potential for continued success with the new store opening [2]. Group 2: Financial Strategy and Shareholder Rights Plan - The company emphasizes the importance of maximizing free cash flow and is prepared to adjust the pace of new store openings to protect its balance sheet and capitalize on strategic opportunities [4]. - High Tide's board has adopted a Shareholder Rights Plan to ensure compliance with cannabis laws and fair treatment of shareholders in the event of a takeover bid, which will be in effect for three years if ratified [5][6]. - The Shareholder Rights Plan has been accepted for filing by the TSX Venture Exchange, pending ratification by shareholders within six months [7]. Group 3: Company Overview and Achievements - High Tide is recognized as the second-largest cannabis retailer globally by store count and operates a fully integrated business model across various components of the cannabis industry [9]. - The company has been acknowledged as one of Canada's Top Growing Companies for four consecutive years and ranked number one in the retail category on the Financial Times list of Americas' Fastest Growing Companies for 2023 [13].

Core Insights - The article serves as an introduction to "The Cannabis Report," which focuses on the cannabis industry and includes insights from an experienced analyst and consultant in the field [1]. Industry Overview - The cannabis industry is highlighted as a growing sector with increasing interest from investors and analysts [1]. - The report aims to provide technical stock analysis, option strategies, small cap strategies, and insights into emerging markets within the cannabis sector [1]. Analyst Background - The analyst has a decade of experience in the cannabis industry and has contributed to notable publications such as High Times Magazine [1]. - A book titled "Cannabis in the Ancient Greek and Roman World" has been published by the analyst, indicating a depth of knowledge in the historical context of cannabis [1].

Financial Data and Key Metrics Changes - High Tide reported record revenue for Q1 at $142.5 million, an increase of 11% year-over-year and 3% sequentially, reaching an annual run rate of approximately $570 million [38] - Adjusted EBITDA was $7.1 million, down 32% year-over-year and 14% sequentially due to initiatives aimed at future growth [45] - Consolidated gross margins were 25% in Q1, down from 28% year-over-year and 26% sequentially, impacted by the illicit market and the launch of the Cabana Club loyalty program [42][43] Business Line Data and Key Metrics Changes - The brick-and-mortar segment led revenue growth, up 17% year-over-year, representing the fastest growth in five quarters [16][38] - Same-store sales increased by 5% year-over-year, with a remarkable 142% increase from October 2021 to December 2024 [12][39] - The Cabanalytics Business Data and Insights Platform generated record revenue of $11.3 million, up 49% year-over-year [42] Market Data and Key Metrics Changes - High Tide maintained an 11% market share in total sales across the five provinces where it operates, consistent with previous performance [17] - The average Canna Cabana store achieved an annual revenue run rate of $2.7 million, significantly higher than the average peer revenue of $1.3 million [40] Company Strategy and Development Direction - High Tide aims to expand its store count to 300 locations in Canada and enter the German medical cannabis market [14][30] - The company is focusing on organic growth while remaining open to strategic M&A opportunities [25] - The Cabana Club loyalty program is a key component of the growth strategy, with a target of reaching 2.5 million members [14][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the cannabis industry being recession-resistant, despite economic volatility [18][66] - The company is optimistic about future growth, particularly in the German market, and is exploring various partnership opportunities [32][56] - Management noted that working capital investments turned free cash flow negative this quarter but expects to be free cash flow positive for the fiscal year [26][46] Other Important Information - High Tide's White Label strategy is showing promise, with over $0.5 million in sales from the Queen of Bud brand [27] - The company has successfully launched the Cabana Club globally, now boasting 5.66 million members [16] Q&A Session Summary Question: Changes in Germany's market conditions - Management confirmed commitment to enter the German medical cannabis market and is exploring alternative partnerships beyond Purecan due to recent political developments [52][56] Question: Consumer behavior and market share dynamics in Canada - Management indicated long-term ambitions to reach at least a 15% market share in Canada, with strong same-store sales growth and resilience against inflation [62][66] Question: Timeline for entering the German market - Management stated that they are in discussions with multiple partners and expect to enter the market in a couple of months, emphasizing the importance of selecting the right partner [75][76] Question: Impact of tariffs on business - Management reassured that 99% of their business does not cross the US-Canada border, minimizing tariff impacts, and that most accessories are sourced domestically [78][80] Question: E-commerce segment performance - Management acknowledged short-term headwinds in the e-commerce segment but remains optimistic about long-term growth potential, especially with the global Cabana Club initiative [92][95]

Company Performance - High Tide Inc. reported a quarterly loss of $0.02 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.01, marking an earnings surprise of -100% [1] - The company posted revenues of $100.25 million for the quarter ended January 2025, exceeding the Zacks Consensus Estimate by 4.46% and showing an increase from $94.76 million year-over-year [2] - Over the last four quarters, High Tide has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Outlook - High Tide shares have declined approximately 23.6% since the beginning of the year, compared to a decline of -4.1% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is -$0.01 on revenues of $100.85 million, and for the current fiscal year, it is -$0.04 on revenues of $413.24 million [7] Industry Context - The Medical - Products industry, to which High Tide belongs, is currently ranked in the bottom 44% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact High Tide's stock performance [5]

[Financial Statements](index=4&type=section&id=Financial%20Statements) [Consolidated Statements of Financial Position](index=4&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Financial%20Position) As of January 31, 2025, High Tide's total assets were $235.7 million, a decrease from $246.2 million on October 31, 2024, primarily due to a reduction in cash and cash equivalents. Total liabilities also decreased to $90.6 million from $100.7 million, largely driven by the repayment of notes payable. Consequently, total shareholders' equity remained relatively stable at $145.1 million Statement of Financial Position Highlights (in thousands of CAD) | Financial Position | Jan 31, 2025 ($) | Oct 31, 2024 ($) | | :--- | :--- | :--- | | **Total Current Assets** | 73,732 | 85,789 | | Cash and cash equivalents | 33,341 | 47,267 | | **Total Non-Current Assets** | 161,931 | 160,419 | | Intangible assets and goodwill | 92,467 | 92,816 | | **Total Assets** | **235,663** | **246,208** | | **Total Current Liabilities** | 45,828 | 61,480 | | Current portion of notes payable | 724 | 13,974 | | **Total Non-Current Liabilities** | 44,735 | 39,216 | | **Total Liabilities** | **90,563** | **100,696** | | **Total Shareholders' Equity** | **145,100** | **145,512** | [Consolidated Statements of Loss and Comprehensive Loss](index=6&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Loss%20and%20Comprehensive%20Loss) For the three months ended January 31, 2025, the company's revenue increased by 11.2% year-over-year to $142.5 million. However, gross profit slightly decreased to $35.4 million from $36.0 million. A rise in operating expenses led to a significant drop in income from operations to $67 thousand from $2.8 million in the prior year. The company reported a net loss of $2.7 million, a substantial increase from the $5 thousand net loss in the same period last year Income Statement Summary (in thousands of CAD) | Metric | Q1 2025 ($) | Q1 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 142,461 | 128,068 | +11.2% | | Gross Profit | 35,440 | 35,994 | -1.5% | | Income from Operations | 67 | 2,792 | -97.6% | | Net Loss | (2,689) | (5) | N/A | | Basic and Diluted EPS | (0.03) | — | N/A | [Consolidated Statements of Changes in Equity](index=8&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Total shareholders' equity experienced a slight decrease from $145.5 million at October 31, 2024, to $145.1 million at January 31, 2025. The decrease was primarily driven by the net loss for the period of $2.8 million (attributable to owners), which was largely offset by share-based compensation of $1.2 million and positive cumulative translation adjustments Changes in Equity (in thousands of CAD) | Description | Amount ($) | | :--- | :--- | | **Balance, October 31, 2024** | **145,512** | | Net loss for the period | (2,689) | | Share-based compensation | 1,175 | | Issuance of shares through ATM (net) | 5 | | Options and Warrants exercised | 216 | | Cumulative translation adjustment | 881 | | **Balance, January 31, 2025** | **145,100** | [Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, the company experienced a net cash decrease of $13.9 million. While operations generated $0.7 million in cash, this was significantly lower than the $6.9 million generated in Q1 2024. Cash used in investing activities was $2.7 million for asset purchases. Financing activities resulted in a net cash outflow of $12.0 million, primarily due to the repayment of $13.4 million in notes payable, partially offset by proceeds from new secured debentures Cash Flow Summary (in thousands of CAD) | Activity | Q1 2025 ($) | Q1 2024 ($) | | :--- | :--- | :--- | | Net cash provided by operating activities | 682 | 6,873 | | Net cash used in investing activities | (2,741) | (2,076) | | Net cash used in financing activities | (11,992) | (6,196) | | **Net (decrease) in cash** | **(13,926)** | **(1,436)** | | **Cash, beginning of period** | 47,267 | 30,121 | | **Cash, end of period** | **33,341** | **28,685** | - A significant financing outflow was the repayment of notes payable amounting to **$13.4 million**, while the company raised **$4.4 million** from secured debentures[10](index=10&type=chunk) [Notes to the Financial Statements](index=12&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Consolidated%20Financial%20Statements) [General Information and Accounting Policies](index=12&type=section&id=Note%201-4%20General%20Information%20and%20Accounting%20Policies) High Tide Inc. is a retail-focused cannabis company with operations in Canada, the US, and Europe. These unaudited condensed interim consolidated financial statements were prepared in accordance with IAS 34 and are consistent with the accounting policies of the most recent annual statements. The company adopted amendments to IFRS 16 and IAS 1, which did not have a material impact - The company is a retail-focused cannabis entity with brick-and-mortar stores and global e-commerce assets, listed on Nasdaq, TSXV, and FSE[11](index=11&type=chunk) - The financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting[13](index=13&type=chunk) - The company's subsidiaries operate with functional currencies including the Canadian dollar, U.S. dollar, Euro, and British Pound Sterling[16](index=16&type=chunk)[19](index=19&type=chunk) [Revenue and Segment Performance](index=16&type=section&id=Note%206%20%26%2022%20Revenue%20and%20Segment%20Performance) Total revenue for Q1 2025 reached $142.5 million, an 11.2% increase from $128.1 million in Q1 2024. The growth was driven by the Bricks and Mortar segment, which saw revenue climb to $135.7 million. Conversely, the E-commerce segment's revenue fell to $6.7 million from $12.4 million. Geographically, Canadian revenue grew substantially, while US revenue declined. The Bricks and Mortar segment generated $2.3 million in operating income, whereas the E-commerce segment posted a $2.2 million operating loss Revenue by Segment and Geography (Q1 2025 vs Q1 2024, in thousands of CAD) | Category | Q1 2025 ($) | Q1 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | **Segment** | | | | | Bricks and Mortar | 135,714 | 115,701 | +17.3% | | E-commerce | 6,747 | 12,367 | -45.4% | | **Geography** | | | | | Canada | 135,714 | 115,701 | +17.3% | | USA | 6,458 | 11,815 | -45.3% | | International | 289 | 552 | -47.6% | | **Total Revenue** | **142,461** | **128,068** | **+11.2%** | Income from Operations by Segment (Q1 2025, in thousands of CAD) | Segment | Income (Loss) from Operations ($) | | :--- | :--- | | Bricks and Mortar | 2,290 | | E-commerce | (2,223) | | **Total** | **67** | [Asset Analysis](index=17&type=section&id=Note%207%2C%208%2C%2010%20Asset%20Analysis) The company's asset base is dominated by non-current assets, particularly intangible assets and goodwill ($92.5 million). Property and equipment increased slightly to $28.2 million due to additions. Inventory levels rose to $30.4 million from $29.3 million at the end of the previous fiscal year. No impairment indicators were identified for intangible assets during the quarter - The net book value of Property and Equipment increased to **$28.2 million** as of Jan 31, 2025, from **$27.5 million** at Oct 31, 2024, with additions of **$2.6 million** during the quarter[29](index=29&type=chunk) - Intangible assets and goodwill stood at **$92.5 million**. The company evaluated for impairment indicators during the quarter and determined none were present[31](index=31&type=chunk) - Total inventory increased to **$30.4 million** as of Jan 31, 2025, up from **$29.3 million** at Oct 31, 2024[33](index=33&type=chunk) [Liabilities and Equity Analysis](index=19&type=section&id=Note%2013%2C%2014%2C%2015%2C%2017%20Liabilities%20and%20Equity%20Analysis) Total liabilities decreased, primarily due to a significant reduction in notes payable from $14.0 million to $0.8 million after a $13.0 million loan was paid in full. The company increased its long-term debt by issuing an additional $5.0 million in secured debentures. Share capital saw a minor increase from equity financing through the ATM program and exercises of options and warrants - Notes payable decreased dramatically to **$0.8 million** from **$14.0 million**, as a **$13.0 million** loan to OCN was paid in full on December 31, 2024[36](index=36&type=chunk) - The company issued an additional **$5.0 million** of secured debentures at a **10%** discount on November 30, 2024, increasing the total face value to **$15.0 million**[40](index=40&type=chunk) - The company raised **$52 thousand** through its at-the-market (ATM) equity program during the quarter[44](index=44&type=chunk) [Financial Instruments and Risk Management](index=26&type=section&id=Note%2021%20Financial%20Instruments%20and%20Risk%20Management) The company manages financial risks including credit, liquidity, interest rate, and foreign currency risk. Liquidity risk is managed through operational cash flow and financing. A maturity analysis shows contractual cash outflows of $37.1 million due in 2025. The company is exposed to interest rate risk on its variable-rate borrowings and foreign currency risk on its net monetary assets denominated in USD, EUR, and GBP Maturity of Financial Liabilities (Undiscounted, in thousands of CAD) | Period | Amount ($) | | :--- | :--- | | 2025 | 37,084 | | 2026-2027 | 24,786 | | 2028-2029 | 27,969 | | 2030 and beyond | 17,771 | | **Total** | **107,610** | - Approximately **56%** of the company's borrowings are at a fixed interest rate. A **+/- 1.0%** change in variable rates would impact annual interest payments by approximately **+/- $120 thousand**[67](index=67&type=chunk) - The company has net monetary assets exposed to foreign currency fluctuations, primarily in GBP and EUR, and net monetary liabilities in USD[68](index=68&type=chunk) [Other Key Disclosures](index=30&type=section&id=Note%2023%2C%2025%2C%2028%20Other%20Key%20Disclosures) The company engages in related party transactions, including a lease for office and warehouse space from a company controlled by the President & CEO. Capital management objectives focus on profitable growth, shareholder returns, and financial flexibility. Subsequent to the quarter's end, the company announced it has paused the acquisition of Purecan GmbH, which was intended to facilitate its entry into the German market - The company leases office and warehouse space from Grover Properties Inc., a company related to the President & CEO, with annual lease payments of **$386 thousand**[72](index=72&type=chunk) - The company's capital management strategy aims to maintain a flexible capital structure to fund growth and meet obligations through cash flow and financing[77](index=77&type=chunk) - Subsequent to the quarter end, on February 25, 2025, the company paused its acquisition of Purecan GmbH to explore alternative arrangements for its German market expansion[82](index=82&type=chunk)

Financial Performance - Revenue for the first fiscal quarter of 2025 reached $142.5 million, marking an 11% increase year over year and a 3% increase sequentially, setting an all-time record [3][4] - Gross profit was $35.4 million, with a gross profit margin of 25%, down from 28% year over year [7][9] - The company reported a net loss of $2.7 million, compared to break-even in the prior year [7][9] Operational Highlights - Same store sales increased by 5% year over year, the fastest growth rate in the past four quarters [4][5] - The Cabana Club loyalty program surpassed 5.66 million global members, with Canadian membership exceeding 1.76 million, a 33% increase year over year [4][14] - The company held an 18% market share in Alberta and 10% in Ontario during November and December 2024 [4] Strategic Initiatives - The company is expanding its Cabana Club loyalty program globally, with a focus on international markets, including the German medical cannabis market [6][16] - Plans to open an additional 20-30 locations in Canada during calendar 2025, aiming for a total of 300 locations [13] - The company has launched 29 SKUs under the Queen of Bud brand since its acquisition in March 2024 [8] Market Position - High Tide remains the highest revenue-generating cannabis company reporting in Canadian dollars, with its bricks-and-mortar segment accounting for 95% of consolidated revenue [4][27] - The company has been recognized as a top 50 company by the TSX Venture Exchange for two consecutive years and ranked number one in the retail category on the Financial Times list of Americas' Fastest Growing Companies for 2023 [31]