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Below is the latest in-depth and summary DD from High Tide (a leading retail-focused cannabis company with bricks-and-mortar as well as global e-commerce assets. The Company is the largest non-franchised cannabis retail chain in Canada, with 152 current locations spanning British Columbia, Alberta, Saskatchewan, Manitoba and Ontario) which I hope will be appreciated and shared.
What I find important to note is the following:
High Tide is valued at approximately 130 million CAD market cap with double-digit annual growth and quarterly reduced expenses, in an ultra-competitive market, a constant increase in gross margins and a turnover of over 450 million annually. The company trades at 0.5 times the sales… These few lines, in addition to the in-depth and exhaustive dd, should make us reflect on the true value of the company and not on what the market values ​​it now.
Earnings are expected after markets close tomorrow, enjoy reading
HIGH TIDE
ticker -- NASDAQ:HITI / TSXV:HITI
GLOBAL CANNABIS (brick&mortar & e-commerce) EMPIRE
🥦THC
⚕️ CBD
🍶 Accessories
📊 Data
🏧 Kiosks
🌱 Seeds
🇨🇦 🇺🇸 🇬🇧 🇩🇪
INVESTOR PRESENTATION: [https://hightideinc.com/wp-content/uploads/2023/03/High-Tide-Investor-Presentation-Mar-21-2023.pdf](https://hightideinc.com/wp-content/uploads/2023/03/High-Tide-Investor-Presentation-Mar-21-2023.pdf) \[Updated march 2023\]
Latest Earnings -> [https://hightideinc.com/high-tide-reports-second-consecutive-quarter-of-record-revenue-and-adjusted-ebitda-118-million-and-5-5-million-respectively/](https://hightideinc.com/high-tide-reports-second-consecutive-quarter-of-record-revenue-and-adjusted-ebitda-118-million-and-5-5-million-respectively/)
SOURCE STORY Snapshot: CEO and Raj Grover started the company that became High Tide with $50,000 and a vision. With never more than $30 million in the bank, Raj strategically transformed one store into today's 152-store, multi-vertical, growth rate of over $400 million in '23.
When they were only 8mln 4 years ago!
Wisely borrowing pages directly from dominant retail companies' playbooks of: COST COST: Club Membership = Low Prices = Loyalty = Market Share
STARBUCKS SBUX: dollar is selling the coffee, not growing the beans
High Tide's strategy is unique and farsighted, given the number of companies currently competing with themselves and the market saturation which increasingly reduces margins, but this does not affect High Tide.
\#1 IN 🇨🇦 REVENUE FROM CANNABIS
High Tide Named Canada's Top Revenue Generating Cannabis Company \[11/30/22\]. [***https://www.forbes.com/sites/benjaminadams/2022/11/30/high-tide-named-canadas-top-revenue-generating-cannabis-company/?sh=384eced66033***](https://www.forbes.com/sites/benjaminadams/2022/11/30/high-tide-named-canadas-top-revenue-generating-cannabis-company/?sh=384eced66033)
CAPITAL MARKETS Highlights: the current share price is $1.30 USD, it is at a P/S multiple of 0.5 because the market capitalization is $160 million (USDcad) and the execution rate is $CAd 450 million (2023) . LOW FLOAT: Only \~55 million float = rapid upward movement in share price. Institutions, ETFs (MJ, THCX, YOLO, MJXL)
GLOBAL 🥦 THC + ⚕️ CBD + 🍶 ACCESSORIES STRATEGY
High Tide owns & operates a portfolio of cannabis-related businesses in several verticals:
**🥦 THC**
· [www.CannaCabana.com](http://www.cannacabana.com/) \-- **152 stores** are #1 in 🇨🇦Canada selling THC, CBD, & Accessories.
{Same Store Sales up 46% Y/Y. Gaining 1% national Market Share per quarter since launching the discount club biz model late 2021. See "Q3 RE RECAP" below for more info.}
**⚕️ CBD**
· [www.NuLeafNaturals.com](http://www.nuleafnaturals.com/) & [www.FabCBD.com](http://www.fabcbd.com/) \-- Top CBD brands in the 🇺🇸USA with 70%+ margins
· [www.BlessedCBD.co.uk](http://www.blessedcbd.co.uk/) \-- the #1 CBD brand in the 🇬🇧 UK -- is now delivering to 🇩🇪 Germany & 🇺🇸 USA, and soon to France & Italy.
**🍶 ACCESSORIES** High Tide owns 3 of the top 5 global 🌐 US CA GB DE FR IT🌐
Accessory eCommerce businesses, and a 4th in the top 10:
· [www.GrassCity.com](http://www.grasscity.com/)
· [www.SmokeCartel.com](http://www.smokecartel.com/)
· [www.DailyHighClub.com](http://www.dailyhighclub.com/)
· [www.DankStop.com](http://www.dankstop.com/)'23-'24 EXPANSION PLANS
CANADIAN -- B&M "Canna Cabana" STORES -- THC, CBD and accessories:
2021: 105 (goals achieved!)
2022: 150 (goals achieved!)
USA -- Accessories e-commerce: At over $30 million, it's always possible that High Tide will pick up one more accessories e-commerce business to add to the other four.
GERMANY -- THC, CBD and accessories: already planning to establish a presence in Germany pending US decision/reschedule. Leading Canadian Cannabis Retailer To Open German 'High Street' Shops For Adult Use \[12/10/22\] -- [https://businesscann.com/leading-canadian-cannabis-retailer-to-establish-german-adult-use](https://businesscann.com/leading-canadian-cannabis-retailer-to-establish-german-adult-use) \- high-street-shops/
USA -- THC: Globally, High Tide has 3,000,000 High Lifetime Value (LTV) customers in its database (2.4 million in the USA) who have purchased accessories (pipes, bongs, vaporizers, dab rigs, etc.) -- segmented by country and US state.
Raj said, "We've had conversations with multiple US groups about a potential acquisition." Considering all factors (inflation, rising interest rates, falling stock market prices, cannabis sector, access to capital, etc.) it is likely that High Tide will have a 2nd mover advantage for US M&As at attractively low multiples, reaffirmed that they intend to become a top 5 US MSO.
INFORMATIVE VIDEOS & ARTICLES
**High Tide Recaps Key Milestones of 2022 \[12/30/22\]** \-- [https://hightideinc.com/high-tide-recaps-key-milestones-of-2022/](https://hightideinc.com/high-tide-recaps-key-milestones-of-2022/)
**High Tide CEO On M&A, New Products And 3 Factors Holding The Cannabis Stock Back \[12/22/22\]** \-- [https://www.benzinga.com/markets/cannabis/22/12/29959300/high-tide-ceo-on-m-a-new-products-and-3-factors-holding-the-cannabis-stock-back](https://www.benzinga.com/markets/cannabis/22/12/29959300/high-tide-ceo-on-m-a-new-products-and-3-factors-holding-the-cannabis-stock-back)
**How High Tide Became the ‘Costco of Cannabis’ \[11/23/22\]** \-- [https://www.cannabisbusinesstimes.com/news/how-high-tide-became-the-costco-of-cannabis-canna-cabana/](https://www.cannabisbusinesstimes.com/news/how-high-tide-became-the-costco-of-cannabis-canna-cabana/)
Q3 2022 ER RECAP \[reported 9/14\]
[https://hightideinc.com/high-tide-reports-third-quarter-2022-financial-results-featuring-a-98-increase-in-revenue-and-tenth-straight-quarter-of-positive-adjusted-ebitda/](https://hightideinc.com/high-tide-reports-third-quarter-2022-financial-results-featuring-a-98-increase-in-revenue-and-tenth-straight-quarter-of-positive-adjusted-ebitda/)
**A) Q3 ER** showed continued growth in same store sales and 1% in market share every quarter! The discount club concept launched in late 2021 continues to drive sales & loyalty.
· Revenue $95.4MM - up 98% Y/Y -- 18% seq
· SSS (aka Same store sales) **up 46% Y/Y** \-- 18% seq
· Adj EBITDA $4.2MM - up 176% Y/Y -- 77% seq
· Revenue now on $450+MM run rate.
📊 **Graph of High Tide's National Market Share growth by quarter (since launching the discount club biz model)** \-- [https://pbs.twimg.com/media/FlO4PLiXgAQbY4e?format=jpg&name=small](https://pbs.twimg.com/media/FlO4PLiXgAQbY4e?format=jpg&name=small)
📊 **Graph of High Tide's revenue growth** \-- [https://pbs.twimg.com/media/FkhCCy-X0AMy8pg?format=png&name=small](https://pbs.twimg.com/media/FkhCCy-X0AMy8pg?format=png&name=small)
**B) NDF:** $19M in Non-Dilutive Financing alleviates any cash concerns at industry leading <9% interest rates. [https://hightideinc.com/high-tide-closes-19-million-non-dilutive-credit-facility-with-connectfirst-credit-union/](https://hightideinc.com/high-tide-closes-19-million-non-dilutive-credit-facility-with-connectfirst-credit-union/)
**C) Cabana Elite monetization :** Raj going to start to monetize the membership by EOY. Profits go straight to the bottom line. 900k members now. Example: if 20% of 1M members (200k) subscribe at $5/month ($60/year), that's an extra $12M in profit!
**High Tide Launches Exclusive Paid Membership Program: “Cabana Elite” \[11/29/22\]** \-- [https://hightideinc.com/high-tide-launches-exclusive-paid-membership-program-cabana-elite/](https://hightideinc.com/high-tide-launches-exclusive-paid-membership-program-cabana-elite/)
DISCOUNT CLUB BIZ MODEL \[launched 12/20/21. paid Cabana Elite membership launched 11/29/22\]
Launched 10/20/21 with 245K members. Currently 900K+ members as of EOY '22! [https://hightideinc.com/high-tide-becomes-north-americas-first-cannabis-discount-club-retailer-with-over-245000-members/](https://hightideinc.com/high-tide-becomes-north-americas-first-cannabis-discount-club-retailer-with-over-245000-members/).
This was a DATA DRIVEN decision based on successful pilot programs
Membership in this loyalty program is FREE. Every person who walks into a Canna Cabana sees a high cost for non-members, and a discounted cost for members. When they realize signing up for FREE with their email address and phone # (SMS) makes them a MEMBER of the CABANA CLUB, they will do so in order to save money on that purchase and future purchases.
Stores are stocked w/ HIGH MARGIN products like consumption accessories, CBD, and house brands of shatter & gummies & prerolls -- with other form factors later.
Market Share and Same Store Sales growth are WAY up (see Q3 ER recap above) Q over Q while the other retailers (& USA MSOs btw) are seeing declines.
MEANING OF THE ACQUISITION OF NULEAF NATURALS \[acquired on 11/22/21\]
[https://hightideinc.com/high-tide-continues-expansion-into-global-cbd-market-with-acquisition-of-colorado-based-nuleaf-naturals/](https://hightideinc.com/high-tide-continues-expansion-into-global-cbd-market-with-acquisition-of-colorado-based-nuleaf-naturals/)
Headquartered in Denver CO, NuLeaf Naturals is one of the leading CBD brands in the United States in terms of CBD blend research and intellectual property, rapid growth, and industry-leading margins. $16 million of the \~$20 million in revenue is directed to the consumer, but the expanding deal with Sprouts will allow for B&M's wider retail distribution. It is notable that their facility is cGMP certified. It can generate up to 60,000 vegan soft-gels per hour, or 25% of their activity. FabCBD production, co-packing and shipping were moved to the facility to save costs through operational efficiency. NULEAF comes with a cGMP certified manufacturing facility in Denver CO, USA, state of the art in CBD and other cannabinoids
🏧 KIOSK (FASTENDR) \[launched 5/1/22\]
[*https://hightideinc.com/high-tide-to-acquire-fastendr-retail-kiosk-and-smart-locker-technology-through-acquisition-of-bud-room-inc/*](https://hightideinc.com/high-tide-to-acquire-fastendr-retail-kiosk-and-smart-locker-technology-through-acquisition-of-bud-room-inc/). {Launched 5/1/22. Currently 175 Fastendr kiosks are operational in 120 Canna Cabana stores as of EOY '22}
The Discount Club model is causing long lines out the door. Taking a page from major retailers in other industries, this allows customers to order online or at a kiosk and collect from a "smart" locker. For those customers who know what they want and don't need budtender guidance, this is a handy convenience. Very few dispensaries in the world have this experience. Also mentioned in the PR is a desire to license this technology to other dispensaries and industries which could turn into another revenue stream. Delivery will be made available to all locations permitted by law but this offers a fast, convenient and quick way to order/collect. It also cuts the dollars spent on budtenders by keeping the lines moving.
\+ 🌿 SEEDS \[Launched 12/13/22\]
[https://hightideinc.com/high-tide-enters-new-vertical-in-the-united-states-with-launch-of-cannabis-seeds/](https://hightideinc.com/high-tide-enters-new-vertical-in-the-united-states-with-launch-of-cannabis-seeds/)
Selling seeds is another high-margin revenue stream growing HITI's $3 million global customer database of High Lifetime Value users!
COMMANDING ECOMM RETAILER MULTIPLES
High Margin Private Label THC and FabCBD.com / BlessedCBD / NuLeaf, one of the main reasons High Tide is expected to be profitable later in 2023. When high tide...
A) Sells most accessories and CBD worldwide.
B) Owns multiple businesses in the US.
C) Sells data, kiosks and cannabis seeds
D) Selling their private label (think Kirkland) edible THC, vape and flower brands. E) Supplies supplies to dispensaries in multiple states.
F) PARTNER WITH STATE OPERATORS TO GIVE THEM ACCESS TO SELL THC TO THEIR HIGH VALUE CANNABIS CONSUMERS OVER 3 MILLION LIVES ...still only considered a Canadian cannabis retailer?