Canna Cabana Archives - Green Market Report

Kaitlin DomangueMarch 2, 2021
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7min9580

Canadian cannabis retailer, High Tide Inc., (TSXV: HITI) (OTCQB: HITIF), announced their Q4 earnings yesterday for 2020. Despite the curveballs 2020 threw, High Tide landed on top, and reported a 118% increase in revenue bringing the total to $24.9 million for the fourth quarter. The revenue increase accounted for a 166% year-over-year growth, and brought the year’s total earnings to $83.3 million. 

High Tide’s revenue by geographic location

  • $20.6 million of total company revenue was earned in Canada in Q4
  • $4.1 million of total revenue was earned in the United States in Q4
  • $0.2 million of total revenue was internationally in Q4

 

  • $68.4 million of total revenue was earned in Canada in fiscal year 2020
  • $14.3 million of total revenue was earned in the United States in fiscal year 2020
  • $0.6 million of total revenue was earned internationally in fiscal year 2020

High Tide’s gross profit increased by 112%

The company’s gross profit increased by 112% to reach $8.7 million in the fourth quarter of 2020, and 172% to $30.8 million for the year. The company’s CEO and President, Raj Grover, said 2020 was their best year yet. “Despite the global slump in retail sales associated with the pandemic, and thanks to the tireless efforts of our team, we closed the year with approximately $8 million in Adjusted EBITDA making 2020 the best year in High Tide’s history,” said Raj Grover, President and Chief Executive Officer. High Tide’s Adjusted EBITDA for the fourth quarter was $3.6 million, and the $8 million represents the fiscal year ended October 31st, 2020. 

High Tide’s cash on hand

The company reported $7.5 million cash on hand as of October 31st, 2020, and a significant cash balance increase to approximately $38 million as of today. 

Revenue segments

  • $22.6 million in total revenue was generated by retail in Q4
  • $2.2 million in total revenue was generated by wholesale in Q4 
  • An immaterial amount by corporate was generated in Q4

 

  • $75 million in total revenue was generated by retail in fiscal year 2020
  • $7.9 million in total revenue was generated by wholesale in fiscal year 2020
  • $0.4 million in total revenue was generated by corporate in fiscal year 2020 

These figures compare to $24 million, $6.69 million, and $0.6 million, respectively, for the previous year.

More thoughts from High Tide’s CEO 

“We continued to run our operations tightly, ending the year off with the record levels of revenue and Adjusted EBITDA.,” said Grover. “We are excited about our trajectory in the United States and continue to prioritize and look for opportunities in that market. Our integrated value chain which includes Cannabis Bricks & Mortar stores, e-commerce platforms for consumption accessories and hemp derived CBD products, along with manufacturing and distribution of licensed and proprietary consumption accessories, experienced sizable growth on all fronts. We plan to continue to further strengthen our chain through organic growth and strategic acquisitions creating even more value for our shareholders.  Since the end of the fiscal year, we have already nearly doubled our size in Canada with the closing of the META Growth acquisition. For the fiscal first quarter of 2021 we expect to report revenue in the range of $37 million to $38 million.”

Operational highlights

In addition to monetary achievements, High Tide made some operational moves last year to set the company up for success in 2021 and beyond. 

  • Canna Cabana (High Tides retailer) opens location in tourist destination Banff, Alberta in August
  • META shareholders overwhelmingly approve High Tide’s acquisition of META Growth Corp. (META. V) in October 2020
  • Over 50% of the company’s brick-and-mortar revenue came from Cabana Club members, emphasizing the brand’s value 

Additional Events

  • High Tides entered a loan agreement for $6.75 million ending on December 31st, 2024 of an undrawn balance on a $20 million credit facility, which was obtained through the acquisition of META
  • Approximately $29 million worth of company debt was converted into common shares after October 31st, 2020
  • Company common shares moved up to the TSX Venture Exchange
  • The company submitted an initial application to be listed on the NASDAQ 
  • High Tides closed on an unsubscribed bought deal equity financing, gross proceeds $23 million 
  • All branded locations have remained operational throughout the COVID-19 crisis, despite difficult issues facing Canada. 

Debra BorchardtMarch 31, 2020
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4min12460

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.

Financial Status

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.

KushBar

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.

Canna Cabana

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.


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