High Tide's Diversified Businesses Continue to Gain Momentum in Third Quarter 2020 Results

High Tide is on the Cusp of the Strongest Results since the Company's Inception.

High Tide Inc. (CSE: HITI), a retail-focused cannabis corporation enhanced by the manufacturing and distribution of cannabis lifestyle accessories, is pleased to report its financial and operating results for the third quarter of fiscal 2020 ending July 31, 2020.

Third Quarter 2020 – Financial Highlights:
  • Revenue for the three months ended July 31, 2020 increased by 180%, to $23.20 million from $8.29 million for the same quarter last year.
  • Segment-wise for the three months ended July 31, 2020, revenue was earned 89% ($20.54 million) by Retail, 11% ($2.63 million) by Wholesale and an immaterial percentage ($0.04 million) by Corporate, which compares to 80% ($6.64 million), 17% ($1.42 million) and 3% ($0.23 million), respectively, for the same period of 2019.
  • Geographically for the three months ended July 31, 2020, revenue was earned 75% ($17.41 million) in Canada, 23% ($5.32 million) in the United States and 2% ($0.48 million) internationally, which compares to 79% ($6.51 million), 20% ($1.63 million) and 1% ($0.15 million), respectively, for the same quarter last year.
  • Gross profit for the three months ended July 31, 2020 increased by 202%, to $9.23 million from $3.06 million for the same period of 2019.
  • Gross profit margin for the three months ended July 31, 2020 increased to 40% from 37% for the same quarter last year.
  • Income from operations for the three months ended July 31, 2020 was $2.11 million compared to a loss from operations of $4.04 million for the same period of 2019.
  • Adjusted EBITDA(1) for the three months ended July 31, 2020 was $3.96 million compared to an Adjusted EBITDA loss of $3.37 million for the same quarter last year.
  • Cash and cash equivalents as at July 31, 2020 increased to $7.11 million from $0.81 million as at October 31, 2019

Our dedicated and passionate employees worked together to achieve these outstanding results and they should feel extremely proud of their hard work in this collective accomplishment.Grover, President and Chief Executive Officer at High Tide

"This exceptional combination of quarterly financial metrics, specifically the record levels and continued growth trends in revenue, gross profit margin, operating income, positive adjusted EBITDA and net income, reinforces our conviction that High Tide is one of the top performing cannabis companies in Canada today. High Tide's diversified and integrated businesses, including its best-in-class e-commerce platform, were strategically positioned to generate the Company's strongest results since inception," said Raj Grover, President and Chief Executive Officer… I am very thankful to our shareholders and stakeholders for their ongoing support of our strategy and we remain committed to achieving the highest standard in Canadian Cannabis retail." added Mr. Grover.

Third Quarter 2020 – Operational Highlights:
  • The Company's diversified businesses continue to gain momentum in this challenging economic environment, with the best-in-class Grasscity e-commerce platform driving continued growth in market share and daily transaction volume across North America.
  • Through the COVID-19 pandemic, existing Canna Cabana and KushBar locations have remained operational, despite the complex conditions facing the retail industry across Canada.
  • The Company opened four new Canna Cabana retail locations in Ontario: Niagara Falls, Toronto – Parliament, Burlington, and Toronto – Bayview, bringing the current total to 7 branded stores in the province.
  • The Company restructured $10.8 million of debt into an interest free debenture due in 2025.
  • The Company opened a KushBar store in Medicine Hat, Alberta.
  • Currently, there are approximately 57,000 members of Cabana Club, which has resulted in over 50% of the Company's average daily retail cannabis transactions being conducted by Club members.
  • As of the date of this news release, the Company's portfolio includes a total of 37 branded retail cannabis locations in Ontario, Alberta, and Saskatchewan.
Subsequent Events:
  • The Company opened a Canna Cabana store in the year-around tourist destination of Banff, Alberta.
  • The Company entered into a definitive arrangement agreement to acquire all the issued and outstanding shares of Meta Growth Corp., subsequent to which it will become the largest cannabis retailer in Canada with annualized pro-forma revenue of approximately $148 Million. The investor presentation that provides an overview of the transaction will be updated to include High Tide's and Meta Growth's recent financial results and will be available on their respective websites.
  • The Company amended the asset purchase agreement with Halo Labs to focus on three KushBar operating stores for a revised sale price of $5.7 million, which is subject to the requisite regulatory approvals.
  • The Company extended maturity of a $2.0 million loan to September 30, 2021 in consideration for warrants.

High Tide remains focused on the fundamentals of profitable retail, while continuing to leverage cannabis and its related accessories through the Company's manufacturing and e-commerce business portfolio. High Tide's diverse mix of consumer channels provides access to layered insights and context unavailable to competitors, providing the Company with an advantage in understanding the development of North American and global cannabis user preferences in real time.

The Company believes that achieving positive cash flow from operations, the restructuring of $10.8 million of debt into an interest-free debenture due in 2025 and the pending acquisition of META Growth has strongly positioned High Tide to execute on its strategic growth objectives for the remainder of fiscal 2020 and beyond. The Company is well funded and operationally prepared to further its expansion in Ontario, as Canada's largest and most underserved market.

To learn more about High Tide, visit their company HQ here.

Disclaimer: Past performance is not an indicator of future performance.

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Mikayla Chadwick
Mikayla Chadwick

Mikayla Chadwick is a Melbourne-based writer, focused on human and legal rights, global affairs and popular culture. Mikayla holds a Bachelor of Arts Degree and is currently completing a research degree in sex work policy reform.

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