High Tide Q1 Revenue Increases 9% Sequentially

High Tide Reports Second Consecutive Quarter of Record Revenue and Adjusted EBITDA; $118 Million and $5.5 Million, Respectively

The Company Also Reports Year-Over-Year Increase in Free Cash Flow¹ From ($6.3 Million) to ($2.3 Million) Representing a 64% Improvement

This news release constitutes a “designated news release” for the purposes of the Company’s prospectus supplement dated December 3, 2021, to its short form base shelf prospectus dated April 22, 2021.

  • 12th Straight Quarter of Positive Adjusted EBITDA, Representing an 86% Increase Year-Over-Year and 10% Sequentially
  • High Tide Reaches 9% of Canadian Cannabis Retail Market Share2, Following 1% Sequential Growth in Each of the Past Five Quarters
  • Same-Store Sales Increased by 52% Year-Over-Year and 4% Sequentially, Representing the Sixth Consecutive Quarter of Sequential Gains
  • High Tide Remains the Highest Revenue Generating Cannabis Company Reporting in Canadian Dollars3 and Sets Objective of Becoming Free Cash Flow Positive Within This Calendar Year
  • The Company Remains the Largest Non-Franchised Cannabis Retailer in Canada With 151 locations as Well as Over 975,000 Cabana Club Members, and a Global Customer Database Surpassing 4.5 Million

CALGARY, Alberta, March 17, 2023–(BUSINESS WIRE)–High Tide Inc. (“High Tide” or the “Company”) (Nasdaq: HITI) (TSXV: HITI) (FSE: 2LYA), the high-impact, retail-forward enterprise built to deliver real-world value across every component of cannabis, released today its financial results for the first fiscal quarter of 2023 ended January 31, 2023, the highlights of which are included in this news release. The full set of consolidated financial statements for the three months ended January 31, 2023, and the accompanying management’s discussion and analysis can be accessed by visiting the Company’s website at www.hightideinc.com, its profile pages on SEDAR at www.sedar.com, and EDGAR at www.sec.gov.

First Fiscal Quarter 2023 – Financial Highlights:

  • Revenue increased to $118.1 million in the first fiscal quarter of 2023 compared to $72.2 million during the same period in 2022, representing an increase of 64% year-over-year and 9% sequentially
  • Gross profit increased to $32.2 million in the first fiscal quarter of 2023 compared to $23.0 million during the same period in 2022, representing an increase of 40% year-over-year and 9% sequentially
  • Gross profit margin in the three months ended January 31, 2023, was 27%, consistent with the previous three quarters. The Company notes that gross margins earned in its bricks-and-mortar stores ticked higher sequentially
  • Adjusted EBITDA increased to $5.5 million in the first fiscal quarter of 2023 compared to $3.0 million during the same period in 2022, representing an increase of 86% year-over-year and 10% sequentially
  • Salaries, wages and benefits represented 12% of revenue in the first fiscal quarter of 2023, which improved from 14% in the first fiscal quarter of 2022 and was consistent with the prior three quarters
  • Given the strong cost controls the Company has been implementing, general and administrative expenses represented 6% of revenue in the first fiscal quarter of 2023, which improved from 8% in the first fiscal quarter of 2022 and improved from 7% in the previous quarter
  • Cabanalytics data sales were $6.6 million in the first fiscal quarter of 2023 compared to $4.7 million for the same quarter last year. Sequentially, Cabanalytics data sales increased by 3%
  • For locations operational throughout the first fiscal quarter of 2023 and 2022, same-store sales increased by 52% year-over-year. Sequentially, same-store sales increased by 4%, representing the sixth consecutive quarter of same-store sales growth
  • The Company continued the rollout of ELITE, the first-of-its-kind cannabis paid loyalty program in Canada, with membership reaching approximately 9,500, representing a 58% increase since January 30, 2023
  • Cash on hand as of January 31, 2023, totalled $23.7 million

I am humbled and delighted to share our results from yet another record-setting quarter, where we have continued to execute with excellence, resulting in our second consecutive quarter of record revenue and adjusted EBITDA which includes an improvement of over 64% in our free cash flow year-over-year. These results further solidify our position as the largest revenue-generating cannabis company in Canada, reporting in Canadian dollars while continuously improving profitability.

Raj Grover, President and Chief Executive Officer of High Tide

This is our twelfth consecutive quarter of positive adjusted EBITDA and fourth consecutive quarter of sequential same-store sales growth. Overall, our financials tell a truly inspiring and exciting story. While some of our peers have flatlined in revenue or struggled with maintaining margins, our results indicate that our company has succeeded in managing our exponential growth and driving consistent margins.

“These financial metrics point to something very important and unique to High Tide, our strength in generating cash while experiencing organic growth, illustrating the apparent success of our business model. While a further deterioration of the broader cannabis capital markets has occurred, we’ve remained focused on operating a fundamentally strong organization with strategic and attainable goals for growth. While we have executed and delivered on our hypergrowth strategy in recent years, establishing our brands and becoming a household name in Canadian cannabis retail, considering the market realities today, I am announcing a shift in that strategy. While we would never overlook a compelling M&A opportunity, we are now adding to our strategic mission the goal of becoming one of the first cannabis companies in Canada to generate free cash flow from operations by the end of this calendar year. We believe this is not only something that current market conditions demand but that doing so will mitigate risks as we navigate through uncertainty and give our shareholders an advantage. Although we can leverage various financial tools at our disposal to continue to gobble up market share through acquisitions, we believe that at this time, a more measured and nuanced approach is appropriate for our company and its shareholders and will ultimately lead to maximizing shareholder value, something that we so adamantly strive for,” said Raj Grover, President and Chief Executive Officer of High Tide.

“We have proven that we know how to grow the organization consistently, increasing our top line while maintaining margins, and we plan to leverage that success to achieve this new goal. As with any strategy adjustment, some of our objectives must shift as well. Previously, we had communicated plans to add 40 to 50 new stores in 2023. Today, we are turning our attention away from meeting that goal with this newly minted strategic objective of being amongst the first Canadian cannabis companies to become free cash flow positive – while also continuing to grow in a stable and consistent way. Beyond slowing our expenditures in acquisitions, and rapid build-out of organic locations, we have taken steps to add internal systems that strengthen our operations from a financial standpoint, which includes recently launching a company-wide project, supported by outside consultants, aimed at maximizing the integration of our various business units and systems in order to optimize productivity and output. Our position as the largest non-franchised retailer in Canada allows us the unique opportunity to slow our growth without risking market share decline while focusing on fundamentals such as free cash flow generation and profitability. We can return to our model of hyper-growth at any point, whether through M&A at highly attractive valuations or new organic store openings in high-quality locations; however, we will only do so in a way that aligns with our focus on a strong financial foundation. As noted in our filings and release, we have continued to capture market share at a rate of 1% per quarter, leading us to reach 9% of the total Canadian cannabis retail market outside of Quebec. This is such an important milestone and one that I do not take lightly. It is due to the steadfast determination of our team in executing the vision of our company and industry.

“I will close by saying a massive thank you to our valued customers and shareholders, the entire team at High Tide, and all those who make High Tide what it is. While the cannabis industry continues to experience growing pains on its path to its inevitable, legitimized, and rightful place in the global economic landscape, it is our strongly held belief, particularly given that our quarterly revenue now exceeds our market capitalization, that our share price is currently significantly undervalued. I believe that High Tide is and will continue to be a very attractive player in this challenging yet burgeoning industry, and for that, I remain extremely optimistic,” added Mr. Grover.

First Quarter 2023 – Operational Highlights (Nov 1- Jan 31):

  • Organic retail store expansion continued with 8 new Canna Cabana locations: 1 in British Columbia, 1 in Manitoba and 6 in Ontario
  • High Tide closed the acquisition of Jimmy’s, adding 2 additional retail cannabis stores in British Columbia
  • The Company maintained its status as the highest revenue-generating cannabis company in Canada³
  • The Company launched cannabis seed sales through its subsidiaries GrassCity, Smoke Cartel, Daily High Club and Dankstop e-commerce platforms
  • The Company continued the rollout of its Fastendr™ technology, with 120 Canna Cabana locations having been equipped with the technology by the end of the quarter
  • The Company launched “ELITE”, the first-of-its-kind cannabis paid membership loyalty program in Canada
  • The Company signed an LOI with Berlin-based health and life science company Sanity Group to better position itself to take advantage of potential German adult-use cannabis legalization opportunity
  • The Company continued the roll out of its higher margin Cabana Cannabis Co products in Saskatchewan, Manitoba and Ontario

Subsequent Events (Feb 1 – present):

  • ELITE upgrades totalled approximately 9,500 members, representing a 58% increase since January 30, 2023
  • The Company announced the departure of Rahim Kanji, Chief Financial Officer and the appointment of Sergio Patino as its interim Chief Financial Officer

Selected financial information for the first quarter ended January 31, 2023:

(Expressed in thousands of Canadian Dollars)

The following is a reconciliation of Adjusted EBITDA to Net Loss:


High Tide is the market leader in Canadian bricks-and-mortar cannabis retail, with 151 locations operating across the country and a loyalty base of over 975,000 Cabana Club members. The Company had previously announced its target to add 40-50 new retail locations in calendar 2023; however, given the current macro conditions and the state of cannabis capital markets, the Company is revising its earlier guidance. The new goal for calendar 2023 is to achieve free cash flow generation by the end of this calendar year. At the end of November, the Company launched Cabana ELITE, its premium paid membership offering and has already onboarded approximately 9,500 members. The Company expects this number to increase steadily over the coming quarters.

The Company notes that its second fiscal quarter totals three fewer calendar days than the first fiscal quarter, which also enjoys the seasonal benefits of the holiday period. Further, consistent with our new strategy, new store growth has meaningfully slowed, and the Company has added no new stores since the conclusion of the first fiscal quarter.

Throughout 2022, High Tide deployed its customized Fastendr™ technology in 120 locations across Canada. This rollout will continue through the remainder of the calendar year and includes an opportunity to start licensing the technology in the US in late 2023.

Since mid-2022, High Tide has been launching white-label products through its Cabana Cannabis Co and NuLeaf Naturals brands in Ontario, Manitoba and Saskatchewan. The Company is actively rolling out more SKUs through the course of the year and in conjunction with other higher-margin revenue streams, such as ELITE membership fees, which should result in consolidated gross margins remaining steady and ticking higher in the quarters ahead.

High Tide Earnings Event Webcast

The Company will host a webcast and conference call to discuss the Financial Statements at 11:30 AM (Eastern Time) Monday, March 20, 2023.

Webcast Link for High Tide Earnings Event: https://events.q4inc.com/attendee/193203965

Participants may pre-register for the webcast by clicking on the link above prior to the beginning of the live webcast. Three hours after the live webcast, a webcast replay will be available at the same link above.

Participants who wish to ask questions during the event may do so through the call-in line, the access information for which is as follows:

Participant Details:

Joining by Telephone:

Canada dial-in number (Toll-Free): 1 833 950 0062

Canada dial-in number (Local): 1 226 828 7575

United States (Toll-Free): 1 833 470 1428

United States (Local): 1 404 975 4839

All other locations: 1 929 526 1599

Access code: 291706

*Participants will need to enter the participant access code before being met by a live operator*

Employee Stock Options Grant

In addition, High Tide announces the grant of 32,500 incentive stock options (the “Options”) to various employees, consultants and management of the Company. Each Option is exercisable at the closing price of the Company’s common shares listed on the TSX Venture Exchange (the “TSXV”) based on the last trading day immediately prior to this press release, expires three years from the date of grant, and vests over a two-year period. Each Option is exercisable to purchase one common share of the Company and is being issued pursuant to the terms of the Company’s Omnibus Plan, which became effective on June 2, 2022.


Pursuant to the Company’s at-the-market equity offering program (the “ATM Program”) that allows the Company to issue up to $40 million (or the equivalent in U.S. dollars) of common shares (“Common Shares”) from treasury to the public from time to time, at the Company’s discretion and subject to regulatory requirements, as required pursuant to National Instrument 44-102 – Shelf Distributions and the policies of the TSX Venture Exchange (the “TSXV”), the Company announces that, during its first fiscal quarter ended January 31, 2023, the Company has issued an aggregate of 821,537 Common Shares over the TSXV and Nasdaq Capital Market (“Nasdaq”), for aggregate gross proceeds to the Company of $1.8 million.

Pursuant to an equity distribution agreement dated December 3, 2021, entered into among the Company, ATB Capital Markets Inc. and ATB Capital Markets USA Inc. (the “Agents”), associated with the ATM Program (the “Equity Distribution Agreement”), a cash commission of less than $0.1 million on the aggregate gross proceeds raised was paid to the Agents in connection with their services under the Equity Distribution Agreement during the first quarter ended January 31, 2023.

The Company intends to use the net proceeds of the ATM Program if any, and at the discretion of the Company, to fund strategic initiatives, it is currently developing, to support the growth and development of the Company’s existing operations, funding future acquisitions as well as working capital and general corporate purposes.

Common Shares issued pursuant to the ATM Program will be issued pursuant to a prospectus supplement dated December 3, 2021 (the “Canadian Prospectus Supplement”) to the Company’s final base shelf prospectus dated April 22, 2021, filed with the securities commissions or similar regulatory authorities in each of the provinces and territories of Canada (the “Canadian Shelf Prospectus”) and pursuant to a prospectus supplement dated December 3, 2021 (the “U.S. Prospectus Supplement”) to the Company’s U.S. base prospectus dated September 17, 2021 (the “U.S. Base Prospectus”) included in its registration statement on Form F-10 (the “Registration Statement”) and filed with the U.S. Securities and Exchange Commission (the “SEC”). The Canadian Prospectus Supplement and Canadian Shelf Prospectus are available for download from SEDAR at www.sedar.com, and the U.S. Prospectus Supplement, the U.S. Base Prospectus and Registration Statement are accessible via EDGAR on the SEC’s website at www.sec.gov.

The ATM Program is effective until the earlier of (i) the date that all Common Shares available for issue under the ATM Program have been sold, (ii) the date the Canadian Prospectus Supplement in respect of the ATM Program or Canadian Shelf Prospectus is withdrawn and (iii) the date that the ATM Program is terminated by the Company or Agents.


High Tide, Inc. is the leading community-grown, retail-forward cannabis enterprise engineered to unleash the full value of the world’s most powerful plant. High Tide (HITI) is uniquely-built around the cannabis consumer, with wholly-diversified and fully-integrated operations across all components of cannabis, including:

Bricks & Mortar Retail: Canna Cabana™ is the largest non-franchised cannabis retail chain in Canada, with 151 current locations spanning British Columbia, Alberta, Saskatchewan, Manitoba and Ontario and growing. In 2021, Canna Cabana became the first cannabis discount club retailer in North America.

Retail Innovation: 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.

E-commerce Platforms: High Tide operates a suite of leading accessory sites across the world, including Grasscity.com, Smokecartel.com, Dailyhighclub.com, and Dankstop.com.

CBD: High Tide continues to cultivate the possibilities of consumer CBD through Nuleafnaturals.com, FABCBD.com and BlessedCBD.co.uk.

Wholesale Distribution: High Tide keeps that cannabis category stocked with wholesale solutions via Valiant™.

Licensing: High Tide continues to push cannabis culture forward through fresh partnerships and license agreements under the Famous Brand™ name.

High Tide consistently moves ahead of the currents, having been named one of Canada’s Top Growing Companies in both 2021 and 2022 by Report on Business Magazine. To discover the full impact of High Tide, visit www.hightideinc.com. For investment performance, don’t miss High Tide profile pages on SEDAR and EDGAR.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

1 Free cash flow defined as cash flow from operations. minus capex and lease payments

2 Based on Statistics Canada and Hifyre data, for the months of November, 2022 December, 2022 and January 2023, not including the province of Quebec.
3 Based on reporting by New Cannabis Ventures as of March 16, 2023. For the New Cannabis Ventures’ senior listing, segmented cannabis-only sales must generate more than US$25 million per quarter (CAD$31 million) – for full details, see: https://www.newcannabisventures.com/cannabis-company-revenue-ranking/

Original press release

Published by NCV Newswire
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