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High Tide Profitable for 11 Quarters

High Tide Inc.—one of Canada’s largest cannabis retailers—recently released its audited 2022 financial results, announcing record fourth quarter revenue of $108.2 million. The impressive numbers are reflective of the incredible trajectory it’s been enjoying of late.

Strength of Quarters

The strong fourth quarter results created a tremendously successful year for High Tide, with revenue of $356.9 million for the year ending October 31, 2022. That represents a 97% revenue increase over the prior 12-month period. The fourth quarter is the eleventh consecutive positive quarter dating back to early 2020, fueling the company’s current annual revenue run rate of $450 million.

The company’s financial performance is being driven by a determined strategy and diverse portfolio of offering. Raj Grover, the company’s President and Chief Executive Officer, says, “I am thrilled to share these results, which, once again, deliver record-breaking revenue and adjusted EBITDA which further solidifies High Tide’s position as the largest revenue-generating cannabis company in Canada with a current annual run rate of over $450 million. While these numbers demonstrate exponential revenue growth, it’s also important to note that we have maintained adjusted EBITDA level profitability for 11 consecutive quarters and that we were cash flow positive from operations during the last fiscal year. In our opinion, this is because we have the strongest retail concept in Canadian cannabis, something that is backed up by the fact that our Cabana Club loyalty program now has approximately 950,000 members across 151 Canadian stores. I am also excited to report that we have already upgraded over 6,000 members into ELITE. As we continue to introduce more ELITE offerings, we anticipate upgrades to continue throughout 2023, providing us with an additional high-margin recurring revenue stream to further boost our bottom line.”

Cabana Club loyalty program now has approximately 950,000 members across 151 Canadian stores.

Growing Global Customer-Base

With an estimated 4.5 million customers accessing its product on multiple platforms across the world, Canada’s largest non-franchised retailer was able to generate 50% year-over-year same store sales growth at its brick-and-mortar locations throughout the country, something that Grover refers to as “an anomaly amongst North American cannabis companies.”

“Our bricks-and-mortar margins have slowly but steadily ticked higher over the last two quarters, and we expect this to continue, which will help amplify the impact of our anticipated same-store sales increases,” he adds. “Our growing customer loyalty and value-focused strategy have resulted in the rapid conversion of illicit market consumers and have helped to increase our market share by approximately 1% per quarter for the last four quarters. With these increases, Canna Cabana now serves roughly 13% of Canadian cannabis consumers outside of Quebec. We also continue to be a global player in the retail sale of consumption accessories through our world-leading e-commerce platforms and our Canadian bricks and mortar stores.”

Diverse Geographical Revenue

In addition, High Tide’s gross profit increased by 58% to $101.0 million for the year ended October 31, 2022, increasing sequentially by 15% to $29.5 million in the fourth quarter of 2022. The vast majority of revenue accumulated by the company was generated in Canada ($290.4 million – increase of 93%), with $59.3 million earned in the United States (an increase of 100%), and $7.1 million internationally (an increase of 671%). In the fourth quarter of fiscal 2022, revenue was $93.9 million in Canada (an increase of 16% sequentially), $13.2 million in the United States (an increase of 4% sequentially), and $1.2 million internationally (a decrease of 37% sequentially, which is explained by a global slowdown in sales of CBD products).

Continued Growth Expected

High Tide also added 13 new stores to its portfolio in Canada in 2022, opening three in British Columbia, nine in Alberta  and one in Ontario. And, although Grover asserts that High Tide has “meaningfully slowed down [its] M&A activity”, the company plans to add 40-50 new retail locations in calendar 2023, with the majority of new locations targeted to open in Ontario.

Tags: Canadian cannabis store (3), Canna Cabana (22), Cannabis Industry (180), Cannabis Retail (387), Cannabis Sales (64), High Tide (31), Raj Grover (30)