High Tide Reports Third Consecutive Quarter of Record Revenue and Adjusted EBITDA of $118.1 Million and $6.6 Million, Respectively

High Tide Inc., the high-impact, retail-forward enterprise built to deliver real-world value across every component of cannabis, released today its financial results for the second fiscal quarter of 2023 ended April 30, 2023, the highlights of which are included in this news release. The full set of consolidated financial statements for the three and six months ended April 30, 2023, 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.sedar.com, and EDGAR at www.sec.gov.

Second Fiscal Quarter 2023 – Financial Highlights:

• Revenue increased to $118.1 million in the second fiscal quarter of 2023 compared to $81.0 million during the same period in 2022, representing an increase of 46% year-over-year and was consistent with the previous quarter. Note that the second fiscal quarter of 2023 had three fewer days and is a seasonally slower quarter when compared to the first fiscal quarter of 2023
• Gross profit increased to $31.6 million in the second fiscal quarter of 2023 compared to $22.7 million during the same period in 2022, representing an increase of 39% year-over-year and was down 2% sequentially as there were 3% fewer days
• Gross profit margin in the three months ended April 30, 2023, was 27%, consistent with the previous three quarters. The Company notes that gross margins earned in its bricks-and-mortar stores ticked higher sequentially
• Adjusted EBITDA increased to $6.6 million in the second fiscal quarter of 2023 compared to $2.4 million during the same period in 2022, representing increases of 174% year-over-year and 20% sequentially3

• Continued cost-saving measures implemented by the Company resulted in a decrease in general and administrative expenses as a percentage of revenue to 5% in the second fiscal quarter of 2023, an improvement from 7% in the second fiscal quarter of 2022 and 6% sequentially
• Salaries, wages and benefits represented 12% of revenue in the second fiscal quarter of 2023, consistent with the prior four quarters
• Cabanalytics data sales were $6.4 million in the second fiscal quarter of 2023 compared to $5.1 million for the same quarter last year. Sequentially, Cabanalytics data sales decreased by 3%
• For locations operational throughout the second fiscal quarter of 2023 and 2022, same-store sales significantly increased by 30% year-over-year. Sequentially, same-store sales increased by 1%. Calculated daily, same-store sales increased by 5%, as there were 3 fewer days in the quarter, representing the seventh consecutive quarter of same-store sales growth
• The Company continued the rollout of ELITE, the first-of-its-kind cannabis paid loyalty program in Canada, with membership reaching over 13,500 as of June 14, 2023 representing a 42% increase since March 17, 2023

• Loss from operations improved to ($2.6) million in the second fiscal quarter of 2023, compared to ($7.6) million during the same period in 2022, and ($3.9) million sequentially, representing a reduction in losses of 65% and 33% respectively
• Net loss improved to ($1.6) million in the second fiscal quarter of 2023, compared to ($8.3) million during the same period in 2022 and ($3.9) million sequentially, representing reductions in net losses of 81% and 59%, respectively
• The Company generated fully diluted earnings per share of ($0.02) in the second fiscal quarter of 2023, compared to ($0.14) during the same period in 2022 and ($0.05) sequentially, representing improvements of 86% and 60%, respectively
• Free cash flow was ($2.0) million in the second fiscal quarter of 2023 compared to ($0.8) million in the first fiscal quarter of 2023. Importantly, this includes a meaningful reduction of $6.8 million dollars in accounts payable and accrued liabilities during the second fiscal quarter. Free cash flow also represented a 66% improvement versus ($5.8) million in the second fiscal quarter of 20224

• Cash on hand as of April 30, 2023, totalled $22.5 million

“I’m delighted to report continued positive momentum in all aspects of our business, including the third consecutive quarter of record revenue generation and Adjusted EBITDA, despite this being a seasonally slower quarter and having three fewer days when compared to the previous quarter. Importantly, this growth was achieved organically, with gross margins remaining consistent. We accomplished this by continuing to focus on our business fundamentals through our superior retail concept, including expanding our higher margin white label offerings in Ontario, Manitoba and Saskatchewan, increasing customer adoption of our Fastendr kiosks across our Canadian bricks-and-mortar stores, driving meaningful cost savings in areas such as G&A expenses, and by temporarily scaling back on our aggressive growth strategy. We remain on track towards achieving our communicated goal of generating positive free cash flow by the end of calendar 2023″ said Raj Grover, President and Chief Executive Officer of High Tide.

“Our unique membership-based innovative discount club model has proven yet again to be superior strategically in both attracting and retaining new customers, having surpassed one million members in our Cabana Club loyalty program, which remains the largest cannabis bricks-and-mortar loyalty plan in Canada. ELITE, which is the next evolution of our discount club model, has experienced 42% growth since we last reported, strengthening our bottom line and solidifying our loyalty loop with our club members. Our bricks-and-mortar margins have increased by approximately 1% every quarter for the last 5 quarters, and we feel there is further opportunity to increase margins in most markets where we operate.

Our same-store sales growth shows no sign of slowing down, as we saw a 5% sequential increase when calculated daily. While we are very proud to have achieved nearly 10% of the Canadian retail market share outside of Quebec, we believe there remains a significant opportunity to continue moving towards our goal of capturing 15% of this market. I consider these results a huge accomplishment given the extremely competitive market conditions in Canada, and full credit must go to our team, which I firmly believe is the best in the cannabis space,” added Mr. Grover.

Second Fiscal Quarter 2023 – Operational Highlights (February 1- April 30):

• The Company ranked 31st out of 500 on the Financial Times Americas’ Fastest Growing Companies 2023 List and took the top spot in the retail category
• The Company announced that certain officers, directors, and consultants led by the Company’s President and Chief Executive Officer, in the aggregate, acquired 258,921 common shares in the capital of High Tide on the open market between March 24 and March 29 at an average price of $1.59 per Common Share
• The Company presented virtually at the Sequire Cannabis & Psychedelics Conference
• Organic retail store expansion continued with 1 new Canna Cabana location opening in Edmonton, Alberta

• The Company continued the rollout of its higher-margin Cabana Cannabis Co products in Saskatchewan, Manitoba and Ontario, with 13 white label SKUs currently being sold in these markets
• The Company also announced that on April 20, 2023 ‘4/20’, it generated over $2 million in total retail gross revenues across all retail platforms, representing a 64% increase from the previous Thursday. The Company’s Canadian bricks-and-mortar stores reported a 46% increase, while sales across its e-commerce platforms (Grasscity.com, Smokecartel.com, Dailyhighclub.com, Dankstop.com, Nuleafnaturals.com, FABCBD.com, BlessedCBD.co.uk, and BlessedCBD.de) reported an increase of 216% over the previous Thursday
• The Company celebrated Earth Day 2023 by announcing it has contributed to the diversion of over 20,000 pounds of plastic waste from landfills through its partnership with [Re] Waste
• The Company maintained its status as the highest revenue-generating cannabis company in Canada²

Subsequent Events (May 1 – present):

• Memberships in the Cabana Club loyalty program have increased to over 1,040,000 from 550,000 an increase of 89% year-over-year and 7% sequentially
• ELITE memberships for the second fiscal quarter totalled over 13,500 members, representing an increase of 42% from 9,500 on March 17, 2023

• Organic retail store expansion continued with 1 new Canna Cabana location opening in Grande Prairie, Alberta

• The Company now sponsors 306 children internationally through World Vision as per its previously stated commitment to sponsor two children for every new store opened
• The Company announced that the founder of FABCBD exercised his put option for the remaining 20% of FABCBD not owned by High Tide. Accordingly, the Company acquired the remaining 20% ownership in FABCBD by issuing 386,035 common shares of High Tide valued at $747,827 on the basis of a deemed price per High Tide Share of $1.9372

• The Company welcomed the passage of Bill 10 by the Manitoba legislature resulting in the repeal of Manitoba’s 6% Social Responsibility Fee on legal cannabis sales retroactive to January 1st, 2022