Alberta-based, retail-focused cannabis company High Tide Inc. (CSE:HITI) (OTCQB:HITIF) delivered its financial results for the first fiscal quarter of 2020 ending January 31, 2020. Revenue for the quarter increased by 173%, to $13.6 million from $5 million in the previous year. The company said that the increase in revenue was primarily driven by the retail segment of the Company with operations of Canna Cabana and KushBar.
The company managed to trim its operating losses to $1.9 million from last year’s $4.8 million at the same time period. The net losses remained flat at $3.8 million for the 2020 fiscal first quarter.
“High Tide’s first-quarter results for the 2020 fiscal year confirm the company’s positive trajectory towards profitability, with our best quarterly numbers since going public in December 2018. The Company’s significant year-over-year increases in revenue and gross profit, coupled with cost-cutting measures across the organization, have helped narrow our loss from operations for the quarter by 60% over the same period of the previous year,” said Raj Grover, President & Chief Executive Officer. “For the remainder of this year, we will be focused on furthering our expansion in Ontario, Canada’s largest and most underserved market, with an expectation of seven additional stores by September 2020. With more Canna Cabana locations either under development or nearing completion in Alberta, we continue to grow our retail portfolio at a sustainable pace. I am also pleased to report that High Tide has continued to generate additional subscription-based revenue through our proprietary Cabanalytics data analytics service,” added Mr. Grover.
As of January 31, 2020, High Tide had a working capital deficit of $11 million, compared to a surplus of $1.9 million on October 31, 2019. The change is mainly due to convertible debt of $11 million and related derivative liability of $3 million maturing in less than 12 months as at January 31, 2020. During the first quarter of 2020, the company secured a credit facility of up to $10,000 from Windsor Capital. This transaction, among others, is expected to provide the Company sufficient liquidity to execute on its near-term expansion plan and for its working capital needs.
In December 2019, the Company acquired the remaining 49.9% of KushBar Inc. This transaction resulted in KushBar becoming a wholly-owned subsidiary of High Tide. Subsequent to the end of the first fiscal quarter of the 2020 fiscal year, High Tide entered into an agreement to sell the assets of KushBar in consideration for a deemed value of $12 million in common shares of Halo Labs.
In January 2020, the company acquired 2680495 Ontario Inc., a company that operates a Canna Cabana branded retail cannabis store in Hamilton, Ontario. The company also acquired a 50% interest in a partnership that holds a Canna Cabana-branded retail cannabis store in Sudbury, Ontario.