High Tide Reports First Quarter 2024 Financial Results

High Tide Inc., the high-impact, retail-forward enterprise built to deliver real-world value across every component of cannabis, today released its financial results for the first fiscal quarter of 2024 ended January 31, 2024, the highlights of which are included in this news release. The full set of consolidated financial statements for the three months ended January 31, 2024, 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.sedarplus.ca, and EDGAR at www.sec.gov.

First Fiscal Quarter 2024 – Financial Highlights:

• Revenue increased to $128.1 million in the first fiscal quarter of 2024 compared to $118.1 million during the same period in 2023, representing an increase of 8% year-over-year and 1% sequentially
• Gross profit increased to $36.0 million in the first fiscal quarter of 2024 compared to $32.2 million during the same period in 2023, representing an increase of 12% year-over-year and 9% sequentially
• Gross profit margin in the three months ended January 31, 2024, was 28%, representing an increase from 26% in the fourth fiscal quarter of 2023 and 27% during the entirety of 2023
• Adjusted EBITDA increased to $10.4 million in the first fiscal quarter of 2024 compared to $5.5 million during the same period last year, representing an increase of 90% compared to the same period in 2023 and 25% sequentially. Adjusted EBITDA margin increased to 8.1%, representing a significant increase from 4.7% year-over-year and 6.6% sequentially
• Salaries, wages, and benefits represented 12% of revenue in the first fiscal quarter of 2024, which was consistent year-over-year and sequentially
• Given the strong cost controls the Company has been implementing, general and administrative expenses represented 4.4% of revenue in the first fiscal quarter of 2024, which improved from 6.3% year-over-year and 5.3% sequentially
• Revenue from the Cabanalytics Business Data and Insights platform, including ad revenue, was a record $7.3 million for the first fiscal quarter of 2024, compared to $6.6 million year-over-year, and $6.8 million sequentially, representing increases of 11% and 8% respectively
• For locations operational throughout the first fiscal quarter of 2024 and 2023, same-store sales increased by 7% year-over-year. Sequentially, same-store sales remained consistent across Canna Cabana while total cannabis retail sales across Canada, excluding Quebec, were down 6%, including the impact of new store growth⁶
• The Company continued the rollout of ELITE, the first-of-its-kind cannabis paid loyalty program in Canada, with membership reaching approximately 32,000, representing an increase of 237% year-over-year and 14% since January 29, 2024, which is the fastest pace of onboarding since ELITE was launched in late 2022
• Cash on hand as of January 31, 2024, totalled $28.7 million compared to $23.7 million as of January 31, 2023, and $30.1 as of October 31, 2023. This includes the impact of a $2.8 million one-time cash payment to pay down a convertible debenture in the first fiscal quarter of 2024

“Our ELITE program continues to be the biggest differentiator in our innovative discount club model and is yielding results ahead of our expectations. We welcomed new ELITE members at the fastest pace since inception, and our Cabana Club now includes approximately 32,000 paid members as part of the overall membership base, which now exceeds 1.32 million members and growing. Accordingly, we see a tremendous opportunity to continue upgrading many more base members to ELITE. We have reached over 10% market share across the five provinces where we operate. Our long-term goal is to reach 15% market share while operating approximately 300 retail stores across Canada. I look forward to announcing a number of new exciting Ontario Canna Cabana locations in the coming weeks. We are also very excited about our announcement this morning related to our agreement to acquire Queen of Bud, an innovative and well-established Canadian cannabis brand with a particularly strong appeal amongst female cannabis connoisseurs. This acquisition will help bolster our roster of in-house brands, which will also deliver premium, higher-margin white-label product offerings to our ELITE and Cabana Club members. Finally, alongside the enormous growth opportunities in front of us in Canada, we continue to closely monitor developments in Germany, where legislative changes could enable Canna Cabana to participate in cannabis bricks-and-mortar retail by mid-2025. I would like to thank our hard-working team and our loyal customers for another fantastic quarter, and I remain very enthusiastic for what lies ahead,” added Mr. Grover.

First Quarter 2024 – Operational Highlights (Nov 1- Jan 31):

• The Company opened 7 new stores: 1 in British Columbia, 2 in Alberta, 1 in Saskatchewan, 1 in Manitoba and 2 in Ontario
• The Company entered Ontario’s third-largest city, Mississauga, after spearheading efforts to convince the city council to opt into cannabis retail sales
• The Company successfully completed a restructuring of approximately $8.9 million of the Company’s outstanding debt held by a key industry lender under a senior secured convertible debenture issued on July 23, 2020, as amended, maturing on January 1, 2025. With this move and a subsequent cash payment made during the quarter, the current balance remaining on this debenture is $1.0 million
• The Company reported that certain officers, directors, and consultants led by the Company’s Founder and Chief Executive Officer, in the aggregate, acquired 125,917 common shares in the capital of High Tide on the open market between November 20 and November 21 at an average price of $1.88 per Common Share. These purchases come in addition to similar insider buying of shares, which occurred in March 2023

Subsequent Events (Feb 1 – present):

• As of March 15, 2024, memberships in the Cabana Club loyalty program increased to over 1.32 million, up from 975,000 members as of March 18, 2023, and 1.28 million as of January 29, 2024, representing increases of 35% and 3%, respectively
• As of March 15, 2024, ELITE memberships have grown to approximately 32,000 members, up from 28,000 as of January 29, 2024, representing an increase of 14% sequentially
• The Company announced the opening of 2 new stores in Ontario
• The Company strengthened its Canadian supply chain through a limited distribution agreement with Manitoba Liquor and Lotteries
• For the second time in three years, High Tide was recognized as a top 10 ranked company in the diversified industries sector by the TSX Venture 50
• The Company announced that it has entered into a definitive agreement pursuant to which High Tide will acquire all IP, including trademarks and other assets of the Queen of Bud cannabis and lifestyle brand
• The Company grew its World Vision sponsorship support to 330 children internationally after committing to sponsoring two additional children for every new store that opens in Canada