High Tide reported its third consecutive quarter of record revenue with the release of its financial results for the second fiscal quarter of 2023 ended April 30, 2023.
Revenue increased to $118.1 million in Q2 2023 compared to $81.0 million during the same period in 2022, representing an increase of 46% year-over-year and was consistent with the previous quarter. Note that the second fiscal quarter of 2023 had three fewer days and is a seasonally slower quarter when compared to their first fiscal quarter of 2023.
Same-store sales increased by 30% year-over-year and 1% sequentially, the seventh consecutive quarter of same-store sales growth.
Profitable for 13 Quarters
The company had its 13th straight quarter of positive adjusted EBITDA, representing a 174% increase year-over-year and 20% sequentially, driven by significant cost reductions in general and administrative expenses. The adjusted EBITDA was $6.6 million in Q2 2023 compared to $2.4 million during the same period in 2022.
Gross profit increased to $31.6 million in Q2 compared to $22.7 million during the same period in 2022, representing an increase of 39% year-over-year and was down 2% sequentially as there were 3% fewer days. Gross profit margin in Q2 was 27%, consistent with the previous three quarters.
High Tide is on track with its goal to achieve positive free cash flow by the end of this calendar year in part due to continued cost-saving measures.
$2.6 Million Loss
Loss from operations improved to $2.6 million in Q2, compared to $7.6 million during the same period in 2022, and $3.9 million sequentially, representing a reduction in losses of 65% and 33% respectively.
Net loss improved to $1.6 million in Q2, compared to $8.3 million during the same period in 2022 and $3.9 million sequentially, representing reductions in net losses of 81% and 59%, respectively.
Highest Revenue Generating Canadian Cannabis Company
High Tide remains the highest revenue generating cannabis company reporting in Canadian dollars. In Q2, it reached 9.5% of Canadian cannabis retail market share outside of Quebec, up from 9% in the previous quarter.
Canna Cabana continues to be the largest non-franchised cannabis retailer in Canada with 154 locations and over 1.04 million Cabana Club members, an increase of 89% year-over-year and 7% sequentially. High Tide’s global customer database exceeds 4.5 million.
From May 1, 2023, to present, organic retail store expansion continued with one new Canna Cabana location opening in Grande Prairie, Alberta.
ELITE Loyalty Program
In Q2, High Tide continued the rollout of ELITE, the first-of-its-kind cannabis paid loyalty program in Canada, with membership reaching over 13,500 as of June 14, 2023, representing a 42% increase since March 17, 2023.
Organic Growth
Raj Grover, President and Chief Executive Officer of High Tide, said this growth was achieved organically with gross margins remaining consistent.
“We accomplished this by continuing to focus on our business fundamentals through our superior retail concept, including expanding our higher margin white label offerings in Ontario, Manitoba and Saskatchewan, increasing customer adoption of our Fastendr kiosks across our Canadian bricks-and-mortar stores, driving meaningful cost savings in areas such as G&A expenses, and by temporarily scaling back on our aggressive growth strategy.”