High Tide Inc. (NASDAQ: HITI) reported its financial results for the third fiscal quarter of 2021 ending July 31, 2021, as revenue increased by 99% to $48.1 million versus $24.1 million in the same quarter last year. High Tide noted that the financial results included the acquisition of META Growth Corp., Smoke Cartel, Fab Nutrition, and DHC Supply LLC. The net loss for the quarter was $1.7 million versus last year’s net income of $3.8 million for the same time period.
Geographically, $38.4 million of revenue was earned in Canada and $9.6 million in the United States. Revenue from the U. S. increased to $9.6 million, versus $5.7 million for the second quarter of 2021, representing a 69% increase sequentially.
” Over the past year, we have been making strategic moves to successfully advance our rising portfolio of companies. We believe we can continue to build upon this momentum and capture a sizeable share of the cannabis market globally. I’m proud of our team’s efforts this quarter which resulted in revenue increasing once again by 99 percent over last year and 18 percent sequentially, despite market disruptions due to pandemic-related lockdowns and a very aggressive pricing strategy adopted by some value players. In Ontario, the largest cannabis market in Canada, due to pandemic-related restrictions, our stores were closed for in-person shopping for about half of the second quarter with only click-and-collect and delivery permitted. Despite these challenges we have been able to remain EBITDA positive by increasing our revenue at a pace consistent with previous quarters,” said Raj Grover, President and Chief Executive Officer of High Tide.
High Tide’s adjusted EBITDA in the quarter fell to $1.5 million versus $3.4 million for the same quarter last year. The company attributed the decrease in adjusted EBITDA to expenses related to the uplisting of the company’s stock to Nasdaq including directors’ and officers’ liability insurance premiums, Nasdaq listing fees, one-time professional fees, and additional human resources to support the integration of newly acquired companies. As a result of the uplisting to Nasdaq, the company became a non-venture issuer resulting in higher compliance requirements.
Grover went on to say, “This last quarter saw us continue our organic growth momentum by opening seven new retail locations across Canada with a total of 93 locations today. While the Canadian retail market remains competitive, our one-stop cannabis shop concept is very well received. This is evidenced by the fact that our Cabana Club membership grew by over 69,000 during the last quarter. Beyond our bricks and mortar organic growth, we doubled down on more accretive e-commerce acquisitions last quarter, in the consumption accessories and hemp-derived CBD space, with a particular focus on the U.S. market. With these acquisitions, our portfolio now includes three of the top five most popular online platforms for consumption accessories in the world. I remain excited about our e-commerce pipeline and look forward to sharing more good news on the M&A front in the very near future.”
High Tide said it expects to be at approximately 110 stores by the end of calendar 2021, despite some delays experienced in securing building permits. The company said it has made good progress on its application to enter the British Columbia market, and now expects that to occur by end of its 2021 fiscal year.
The increase in dispensaries in Canada was also mentioned. High Tide wrote, “While competition has increased given material growth in store counts in Ontario and Alberta and the concurrent rise of value players, the Company is focused on maintaining and growing its market share. We have begun leveraging our unique positioning within accessories to attract and retain more customers, and this approach has already yielded meaningful increases to our top line over the past few months. Just this week we announced two initiatives to expand our revenue streams.” The company also noted its plans to increase its business in the U.S.
Finally, High Tide said, “We are currently in discussions with multiple parties across a variety of end markets, with a particular focus on e-commerce within the growing ancillary and hemp-derived CBD markets. With a current annual run rate of revenues in the U.S. exceeding $50 million, we believe we are excellently positioned to lever our U.S. customer base to also sell cannabis once permissible by federal regulations and/or exchange policies – and the Company intends to continue growing its U.S. presence in the meantime.”