High Tide Inc. Archives - Green Market Report

High Tide Inc. (NASDAQ: HITI) (TSXV: HITI) reported its financial results for the first fiscal quarter of 2022, ending January 31, 2022. Revenue increased to $72.2 million in the first quarter of 2022 compared to $38.3 million in the same quarter last year. Sequentially, revenue increased by 34% compared to the fourth quarter of 2021. The company also reported a net loss of $7.3 million. All figures are in Canadian dollars.

Geographically in the first quarter of 2022, $52.4 million of revenue was earned in Canada, $17.4 million in the United States and $2.3 million internationally. Compared to the first quarter of 2021, revenue increased by 53% in Canada, 346% in the United States, and 1,016% internationally. Sequentially, revenue earned increased by 22% in Canada, 65% in the United States, and 455% internationally, compared to the fourth quarter of 2021.

“This past quarter’s results, showcasing 34% sequential revenue growth and 80% sequential increase in Adjusted EBITDA, re-affirms our exponential, yet sustained growth trajectory. We continue to execute on our business plan quarter after quarter by strategically expanding our business in Canada and internationally through organic growth and accretive M&A across our diversified ecosystem. Our forward-thinking approach makes us a leader amongst our peer group in Canada, as we keep introducing innovative retail concepts such as our discount club model, while remaining agile and pivoting quickly when needed due to the constantly evolving dynamics in the global cannabis landscape,” said Raj Grover, President and Chief Executive Officer of High Tide.

He continued saying,  “With these results, we have now achieved the second-highest quarterly revenue figure ever reported by a Canadian cannabis company that reports in Canadian dollars, and with our growth plans for the remainder of this year, we remain confident in further meaningful increases to our revenue profile. As Canada’s largest cannabis retailer, we continue to consolidate the bricks-and-mortar market at attractive multiples while simultaneously growing our e-commerce business portfolio.

Outlook

Through organic growth and accretive M&A, High Tide said it expects to continue to increase its revenue through the second fiscal quarter of 2022, and the remainder of the year. By the end of the 2022 calendar year, the company intends to grow its Canadian retail store portfolio to at least 150 locations, with a primary focus on the Province of Ontario. The company said it also plans to enter the British Columbia market in the near-term and will continue growing strategically in other provinces where it currently operates. Although challenges still remain as a result of the ongoing COVID-19 pandemic, the Company is confident and has demonstrated that it will be able to remain on a positive growth trajectory.

“From same-store sales increases to the rapid growth in our Cabana Club loyalty program, including generating higher consolidated gross margins through our complimentary ecosystem, we continue to raise the bar on our operational execution. Our recent entry into Germany positions us well to take advantage of significant growth opportunities in Europe’s largest cannabis market. Our imminent entry into British Columbia and ongoing expansion in Ontario will further propel our growth over the next few quarters. We practically doubled our EBITDA this quarter and believe this growth will continue to accelerate as we remain hyper focussed in executing on our business plan,” added Mr. Grover.

High Tide Inc. (TSXV: HITI) (Nasdaq: HITI) is buying Bud Room Inc. in a deal valued at C$3.6 million or $2.8 million based on today’s currency exchange. The acquisition will also include all rights to the customized Fastendr retail kiosk and smart locker technology and Bud Room’s retail cannabis store located at 1910 St. Laurent Blvd in Ottawa, Ontario. The transaction will consist of C$3.24 Million paid in common shares of High Tide and C$360,000 cash for the assignment of C$360,000 of the vendors’ shareholder loans. The acquisition follows last month’s announcement by High Tide to offer C$40 million of common shares intended to fund two specific strategic initiatives it was developing including acquisitions.

Fastendr is a unique and fully automated technology that integrates retail kiosks and smart lockers to facilitate a better buying experience through browsing, ordering, and pickup. The technology is meant to create faster transaction times, increased average basket size, lower overhead and labor costs, and provides a seamless end-to-end customer experience.

“This deal is one of the most exciting acquisitions for High Tide to date, as it greatly enhances the customer experience in our stores while materially reducing overhead and labor costs in our ever-expanding retail portfolio. This technology will also allow us to generate third-party revenue, provide data collection and monetization opportunities, while supporting an unparalleled retail shopping experience for our customers, said Raj Grover, President and Chief Executive Officer of High Tide. “Fastendr is a perfect solution for smaller footprint stores as well as busier retail locations, as it allows for more transactions in less time and with less square footage. All Canna Cabana locations will be equipped with this technology, with the first installations planned for later this month in the province of Ontario. The customized Fastendr technology is a game-changer for our bricks-and-mortar retail business and has tremendous potential to be rolled out in our ancillary business divisions as well. This acquisition comes on the heels of several disruptive retail innovations by High Tide, such as our “one-stop shop” and “discount club” concepts,” added Mr. Grover.

High Tide noted in a statement that as the Canadian cannabis industry continues to become more competitive, it is essential for successful companies to innovate, using technology to differentiate themselves and improve the efficiency of their operations, in order to thrive. The company said it believes the Fastendr technology will improve its operational efficiency materially while also reducing operating expenses in its retail cannabis stores. High Tide also said it plans to grow and diversify its revenue by licensing the self-order kiosk and smart locker technology for use by third-party cannabis retailers across North America.

“When High Tide initially approached us we already had several interested parties at the table. However, it became clear that choosing a partnership with Raj and his team was a no-brainer for us because we felt that our innovation deserved to be in the hands of the best Cannabis company in Canada,” said Michael Di Duca, CEO of Bud Room. “This customer-centric technology was designed with the user experience in mind and it is my firm belief that with High Tide’s experience, history of operational execution, and financial resources, this technology can be effectively implemented across retail sectors on a world-class level,” added Mr. Di Duca.