Cannabis retailer High Tide reports record sales, eyes German opportunity

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Cannabis retailer and e-commerce platform operator High Tide reported record sales of 487.7 million Canadian dollars ($362 million) for its 2023 fiscal year ended October and reiterated expansion plans in Canada and overseas.

In a Monday news release announcing its financial results, the Alberta-based business reported a net loss of CA$41 million on the year, a 42% improvement over 2022’s net loss of CA$71 million.

High Tide said it remained the largest non-franchised marijuana retailer in Canada, with 163 store locations and 4.9 million total customers across Canada, the United States and Europe.

“While we remain focused on our core Canadian business, like any forward-thinking company, we are always looking at what opportunities may exist to expand our Canna Cabana brand internationally,” CEO Raj Grover said in a statement.

“We are seeing momentum regarding cannabis rescheduling in the United States, which could potentially pave a path for major U.S. exchanges to allow listed companies to engage in plant-touching business.”

Grover said he’s following developments in Germany, which has signaled its intention to legalize “cannabis clubs” this year and potentially launch regional adult-use pilot projects for retailers as early as 2025.

“These global opportunities, combined with an improved regulatory environment across many Canadian provinces, gives me confidence that 2024 will be yet another stellar year for High Tide as we work towards our ambition of building a top-tier global adult-use cannabis brand,” the CEO said.

Free cash flow generally improved throughout the year, starting at negative CA$847,000 in the first quarter and increasing to positive CA$5.7 million in the final quarter.

Free cash flow is defined as net cash used in operating activities, minus sustaining capex (capital expenditures), minus lease liability payments.

By market share, High Tide said its Canna Cabana stores represented 10% of the market, in dollars, in the five provinces where the company has a presence.

In Ontario and Alberta, the two largest retail markets in the country, Canna Cabana held more than 9% and 19%, respectively, of the cannabis retail market share.

High Tide welcomed Ontario’s plan to allow one company to operate up to 150 stores – a twofold increase from the previous 75-store limit.

The company said it anticipates opening an additional 20-30 stores in the province this calendar year.

High Tide’s updated long-term growth target calls for a total of 300 stores in Canada.

The company also said its paid membership program, called ELITE, grew to 28,000-plus members. The Cabana Club membership now has more than 1.28 million members, High Tide said.

High Tide said it had cash of CA$30.1 million as of Oct. 31, 2023, and gross debt of CA$28.8 million as of late January 2024.