High Tide (HITI) Small-Cap Virtual Conference summary

Key business highlights

• Achieved record Q3 results with $149.7M revenue and $10.6M adjusted EBITDA, driven by strong same-store sales and expanding market share in Canada.

• Operates 207 retail stores under the Canna Cabana brand, with a 12% market share in five provinces and industry-leading revenue per store and per square foot.

• Launched a successful discount club and ELITE paid membership, now at 115,000 members, driving over 90% of transactions and increasing customer loyalty and basket size.

• Maintains a strong balance sheet with low leverage, positive free cash flow, and no near-term debt maturities.

• Targeting 20–30 new store openings in 2024, aiming to exceed 300 stores in Canada for further growth.

Strategic expansion and acquisitions

• Completed the largest acquisition to date: 51% of Ramexian Pharma, a leading German medical cannabis importer and distributor, for €26.4M.

• German market entry leverages Canadian producer relationships; aims to increase Canadian-sourced product share from 33% to 40–60%.

• German medical cannabis market is rapidly expanding, with patient counts rising from 250,000 to 900,000 after regulatory changes in April 2024.

• Ramexian generated €70M annualized revenue and €15M adjusted EBITDA for the six months ended March, with options to acquire the remaining stake.

• Exploring further European expansion in markets like the UK, Poland, Czech Republic, and Switzerland as opportunities arise.

Business model and operational strengths

• Discount club model prioritizes volume over margin, resulting in 137% same-store sales growth since October 2021, far outpacing peers.

• Stores are efficiently sized (1,200–1,500 sq ft) and strategically located in strip malls and power centers, avoiding oversaturated urban clusters.

• Accessories business, with 5,000 proprietary SKUs, offers high-margin products and incentivizes membership.

• White label cannabis brands (e.g., Cabana Cannabis Co., Queen O’Bud) provide higher margins and strong customer adoption.

• Inventory management is highly efficient, with a shrink rate of 0.2% and inventory turnaround of 18–20 days.