High Tide Reports 2018 Financial Results
CALGARY, March 4, 2019 /CNW/ – High Tide Inc. (“High Tide” or the “Company”) (CSE:HITI) (Frankfurt:2LY), an Alberta-based, retail-focused cannabis corporation enhanced by the manufacturing and wholesale distribution of smoking accessories and cannabis lifestyle products, has filed its year-end 2018 financial results, the highlights of which are included in this news release. The full set of Consolidated Financial Statements and Management’s Discussion and Analysis can be viewed by visiting High Tide’s website at www.hightideinc.com, its profile page on SEDAR at www.sedar.com or the Company’s CSE profile page at www.thecse.com.
2018 Financial Highlights
- For the year ended October 31, 2018, the total assets of the Company increased to $25,922,494 from $11,113,004 in the prior fiscal year.
- High Tide had a working capital surplus of $14,919,817 (2017 – deficit of $10,297,428) for the year ended October 31, 2018, mainly from the acquisition of preference shares as part of the Corporate Reorganization and funds raised from share and special warrant financings.
- Revenue for the fiscal year ended October 31, 2018 was $8,748,766 (2017 – $9,993,246) primarily due to the loss of a wholesale customer in the Famous Brandz business.
- Gross margin in fiscal 2018 was $3,109,689 (2017 – $4,707,750), which declined primarily due to adjustments for the valuation of inventory made in preparation for the Company’s warehouse relocation that occurred in early 2019.
- The Company generated a loss of income for the 2018 fiscal year of $4,532,551 (2017 – income of $296,316) and had net operating cashflows of $8,779,133 (2017 – inflows of $1,041,438). The negative income and cash outflows were primarily driven by costs incurred to prepare the Company’s non-offering prospectus and become listed on the Canadian Securities Exchange, for additional staffing and third-party service providers, retail store setup costs as well as increased sales and marketing efforts that were implemented as the legalization of recreational cannabis across Canada approached on October 17, 2018.
2018 Corporate Highlights
- High Tide was incorporated on February 8, 2018 for the purpose of reorganizing a number of companies under a parent entity. Once the reorganization was complete, the Company became a vertically-integrated, downstream-oriented cannabis industry corporation with a portfolio of subsidiaries including Famous Brandz, RGR Canada, Smoker’s Corner, Canna Cabana, Kush West Distribution and a majority of KushBar. Subsequent to year end, the Company acquired the iconic online smoking accessories retailer Grasscity.com.
- On April 23, 2018, the Company reported its best ‘4/20’ weekend retail sales results to date, which was generated from the Smoker’s Corner stores across Canada.
On May 2, 2018, the Company closed a private brokered placement offering for 10,225,800 (pre-share split amount of 3,705,000) common shares at $0.3623 per share (pre-share split price of $1.00), for gross proceeds totalling $3,705,000.
- On August 22, 2018, the Company closed a private placement offering of special warrants for aggregate proceeds of $8,955,729. Pursuant to the Special Warrant offering, the Company issued 17,911,459 (pre-share split amount of 6,489,659) warrants at a price of $0.50 (pre-share split price of $1.38) per Special Warrant.
- On September 14, 2018, High Tide announced that Famous Brandz was selected as one of only a few companies to enter into a master accessories supply agreement with the Ontario Cannabis Store.
- On October 2, 2018, the Company closed a private placement offering of Special Warrants for aggregate proceeds of $9,408,508. Pursuant to the Special Warrant offering, the Company issued 18,817,015 (pre- share split amount of 6,817,759) Special Warrants at a price of $0.50 (pre-share split price of $1.38) per Special Warrant.
- Following the legalization of cannabis for adult use across Canada on October 17, 2018, the Company opened its first Canna Cabana retail cannabis store on October 27th on the Canyon Meadows Drive SW in Calgary, Alberta.
- Subsequent to its fiscal year-end and until the end of calendar 2018, High Tide announced several milestones including, but not limited to, receiving its largest ever wholesale purchase order for smoking accessories from Aurora Cannabis, the opening of three more Canna Cabana retail cannabis stores, receiving a $10,000,000 investment from Aurora Cannabis as part of an $11,330,000 convertible debenture offering, becoming a public issuer on December 17th, 2018 on the Canadian Securities Exchange under the stock symbol “HITI” and closing the acquisition of the iconic Grasscity.com.
High Tide has 10 operating Canna Cabana stores and is advancing its next 26 locations, which are under various stages of development and are expected to be completed during this fiscal year. In total, the Company has 36 development permits for its Canna Cabana and KushBar retail cannabis stores across Alberta and expects to receive the one remaining development permit required to achieve the AGLC’s effective maximum of 37 retail cannabis locations in the province in the short-term. High Tide has also been selected to assist two winners of the AGCO’s Expression of Interest Lottery with establishing their retail cannabis stores in Ontario in the second quarter of calendar 2019.
The Company is targeting having recreational cannabis stores in every province that permits privately-owned outlets, as further demonstrated by the recent signing of separate letters of intent to acquire two locations in Saskatchewan, which are also expected to be completed in the near term. Lastly, the Federal government has announced that the sale of edible products and concentrates will be deregulated no later than 12 months following October 17, 2018. In preparation for the latter, the Company expects to dedicate additional resources to explore the sale of edible products and concentrates as soon as lawfully permitted.
SUMMARY OF KEY ANNUAL FINANCIAL MEASURES
For the years ended October 31:
SUMMARY OF KEY QUARTERLY FINANCIAL MEASURES
About High Tide Inc.
High Tide is an Alberta-based, downstream cannabis corporation focused on the manufacturing and wholesale distribution of smoking accessories and cannabis lifestyle products. It is a vertically-integrated company in the Canadian cannabis market, with portfolio subsidiaries including RGR Canada Inc., Famous Brandz Inc., Kush West Distribution Inc., Smoker’s Corner Ltd., Grasscity.com, Canna Cabana Inc. and the majority of KushBar Inc. High Tide’s strategy as a parent company is to extend and strengthen its integrated value chain, while providing a complete customer experience and maximizing shareholder value. Key industry investors in High Tide include Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) (Frankfurt: 21P; WKN: A1C4WM) and FSD Pharma Inc. (CSE: HUGE) (OTC: FSDDF) (FRA: 0K9).
Representing the core of High Tide’s business, RGR Canada Inc. is a high-quality and innovative designer, manufacturer and distributor of cannabis accessories. Famous Brandz Inc. is a dominant manufacturer of licensed lifestyle accessories, through partnerships with celebrities and entertainment companies including Snoop Dogg and Paramount Pictures. Famous Brandz’ products are sold to wholesalers and retailers around the world. Founded in 2009 and approved by the Canadian Franchise Association, Smoker’s Corner Ltd. is among Canada’s largest counter-culture chains with 12 locations. Kush West Distribution is in the process of becoming a cannabis wholesaler in the province of Saskatchewan. Based in Amsterdam since 2000, Grasscity.com is the world’s preeminent and most searchable online retailer of smoking accessories and cannabis lifestyle products with approximately 5.8 million site visits annually. With the deregulation of recreational cannabis for adult use across Canada, Canna Cabana Inc., with ten current locations, is in the process of becoming a sizeable retail brand with a sophisticated yet playful customer experience, while KushBar Inc. is a retail concept that will also be focused on the valued Canadian cannabis consumer.
For more information about High Tide Inc., please visit www.hightideinc.com and its profile page on SEDAR at www.sedar.com.