EXCLUSIVE: High Tide CEO Highlights Major Drivers Behind Record Earnings, Market Share Growth

While many cannabis retailers in Canada face a tightening market, High Tide Inc. HITI stands out with a robust increase in revenue and market share in its 2024 third-quarter financial results.

On Monday, the Calgary-based company reported record revenue of CA$131.7 million ($97 million), marking a 6% increase both year-over-year and sequentially.

CEO Raj Grover Discusses Growth Drivers

In an exclusive interview with Benzinga, High Tide's founder and CEO Raj Grover highlighted the success of its discount club model. “Since the beginning of this calendar year alone, we have added 21 new stores, including 11 in the third quarter. At the same time, same-store sales have risen 118% since the launch of our discount club model through June 2024, including 5% sequentially,” he said.

"Among those still standing, we are vastly outperforming the industry averages, as our average store was on a CA$2.6 million annual revenue run-rate in June 2024, vs. our peers averaging CA$1 million," Grover added.

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Store Growth And Loyalty Fuel Market Share Expansion

The quarter also saw a 12% market share across the provinces where High Tide operates, up from 10% a year ago. Grover attributes this growth to an increase in store count and enhancements to the company’s loyalty programs.

Notably, the Cabana Club and its ELITE membership tier have been significant contributors. “ELITE members tend to shop more frequently and have larger basket sizes than base-tier members. Thanks to our innovative and disruptive membership-based retail model, we are clearly industry leaders in customer engagement and retention,” Grover said.

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With over 1.55 million Cabana Club members, including 57,000 ELITE members, High Tide continues to set itself apart in the cannabis retail landscape. Moreover, the company remains committed to leveraging its strong market position for future expansion, aiming for 300 Canna Cabana locations nationwide and further advancements in its white-label product offerings.

Operational Efficiency Boosts High Tide's Financial Performance

Financially, High Tide continues to show strength with its fifth consecutive quarter of positive net income, posting CA$0.8 million in net earnings. This is a marked improvement from a CA$3.6 million loss in the year-ago period. The company's adherence to stringent cost controls has allowed it to convert its operational efficiency into robust free cash flow, amounting to CA$21.8 million over the trailing four quarters.

Q3 2024 Financial Highlights

• Revenue was CA$131.7 million ($97 million), up from CA$124.4 million in the same period last year, marking a 6% increase both year-over-year and sequentially.
• Net income was CA$0.8 million, showing an improvement from a net loss of CA$3.6 million in the same period last year and a rise from CA$0.2 million sequentially.
• Adjusted EBITDA was CA$9.6 million, marking the 18th consecutive quarter of positive Adjusted EBITDA, compared to CA$10.2 million during Q3 2023.
• Gross profit was CA$35.5 million, up from CA$34.6 million in the same period last year, reflecting a 3% increase year-over-year and maintaining stability sequentially.

As High Tide continues to drive innovation and growth, it remains the highest revenue-generating cannabis company reporting in Canadian dollars, positioning itself for continued market leadership amid challenging industry conditions.

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Photo: Courtesy of High Tide.