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]

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].

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]