This news release constitutes a "designated news release"
for the purposes of the Company's prospectus supplement dated
December 3, 2021, to its short form
base shelf prospectus dated April 22,
2021.
- Same-store Sales Increased by 46% Compared to the Same
Quarter Last Year and 18% Sequentially
- Reports 77% Sequential Increase in Adjusted EBITDA to
$4.2 Million
- Current Annual Revenue Run Rate of Over $400 Million and Is Now Within Striking Distance
of Having the Highest Revenue of Any Cannabis Company Reporting in
Canadian Dollars
- The Cabana Club Loyalty Program, which is the largest in
Canadian cannabis retail, has Surpassed 750,000 Members, with over
90% of daily transactions conducted by club members
- Anticipates Launching Enhanced Fee-Based Cabana Elite
Membership Program by the end of calendar 2022
CALGARY,
AB, Sept. 14, 2022 /CNW/ - High Tide Inc.
("High Tide" or the "Company") (NASDAQ: HITI) (TSXV:
HITI) (FSE: 2LYA), a leading retail-focused cannabis company with
bricks-and-mortar as well as global e-commerce assets, filed its
financial results for the third fiscal quarter of 2022 ended
July 31, 2022, the highlights of
which are included in this news release. The full set of condensed
interim consolidated financial statements for the three and nine
months ended July 31, 2022 (the
"Financial Statements") and accompanying management's
discussion and analysis can be accessed by visiting High Tide's
website at www.hightideinc.com, its profile pages on SEDAR
at www.sedar.com, and EDGAR at www.sec.gov.
Third Quarter 2022 – Financial Highlights:
- Revenue increased to $95.4
million in the third quarter of 2022 compared to
$48.1 million in the same quarter
last year, representing an increase of 98%. Sequentially, revenue
increased by 18% compared to the second quarter of 2022
- Gross profit increased by 54% to $25.8
million in the third quarter of 2022 compared to
$16.7 million in the same quarter
last year
- Gross profit margin in the three months ended July 31, 2022, was 27% compared to 35% in the
same quarter last year. The shift in the gross margin was due to a
change in retail pricing strategy to a discount club model.
Sequentially, the gross profit margin was relatively on par with
the previous quarter, which closed at 28%
- Adjusted EBITDA1 for the three
months ended July 31, 2022, was
$4.2 million compared to $1.5 million for the same quarter last year,
representing an increase of 176%. Sequentially, Adjusted EBITDA
increased by 77% compared to $2.4
million during the previous quarter
- Cabanalytics data sales were $5.5
million in the third quarter of 2022 compared to
$3.8 million for the same quarter
last year. Sequentially, Cabanalytics data sales increased by 7%
compared to $5.1 million the previous
quarter
- For locations operational throughout the third fiscal quarter
of 2022 and 2021, same-store sales increased by 46%. Sequentially,
same-store sales increased by 18% compared to the previous
quarter
- Geographically, in the third quarter of 2022, $80.7 million of revenue was earned in
Canada, $12.7 million in the
United States and $1.9 million
internationally. Compared to the third quarter of 2021, revenue
increased by 110% in Canada, 33%
in the United States, and 1,486%
internationally
- Cash on hand as of July 31, 2022,
totalled $18.3 million compared to
$14.0 million as of October 31, 2021
"Our team continues to deliver strong execution, and this shows
in our third quarter results, which feature quarterly revenue of
$95 million, representing 98% annual
growth, as well as a 176% annual increase in Adjusted EBITDA,
making this the tenth consecutive quarter of positive Adjusted
EBITDA for High Tide. These impressive numbers come despite
hyper-competitive cannabis retail markets across Canada and a global softening of e-commerce
sales as pandemic-related restrictions are continuing to be lifted.
High Tide now sits within striking distance of having the highest
revenue of any cannabis company reporting in Canadian dollars. Our
same-store sales have continued their upward trajectory, increasing
by 46% year over year and 18% sequentially. This growth continues
to be propelled by our innovative discount club model, which is
specifically tailored to our Company's unique position in the
market through our diversified ecosystem. I am also very
happy to report that our Cabana Club loyalty program, which is the
largest of its kind in Canada, now
sits at over 750,000 members, which represents more than 12% of the
cannabis users across the country, excluding Quebec per Statistics Canada data. This
membership number was our initial goal when we launched our
discount club model last October, and we have now met our target in
under a year. We look forward to rolling out our Cabana Elite
program in the near term. This program will let members access
additional benefits for a small recurring fee, while the existing
Cabana Club program will remain free of charge," said Raj Grover,
President and Chief Executive Officer of High Tide.
_____________________
|
1 Adjusted EBITDA is a non-IFRS
financial measure.
|
|
"Our rapidly increasing sales and focus on cost control led us
to generating $2.3 million in cash
flow from operations before non-cash working capital for the
quarter ended July 31, 2022, which
was up meaningfully versus the prior quarter and the third fiscal
quarter of 2021. Our selling, general and administrative expenses
("SG&A") relative to our peer group has always been
conservative; however, we remain focused on further controlling our
costs to drive even more cash flows for our shareholders. On
the mergers and acquisitions ("M&A") front, subsequent
to the end of the quarter, we added nine stores from Choom Holdings
Inc. ("Choom"), and currently have many other prospects
which are both accretive and strategic, that we are in the process
of analyzing.
"I have always strived to underpromise and over-deliver. This is
a value that I consistently instill in our team. We set targets and
are held accountable as a team if we do not meet them. I am happy
to report that based on our latest financial results, we are
consistently outperforming our targets as communicated to the
market. One example of this is the fact that we were able to
improve our balance sheet with a commitment letter from Connect
First Credit Union Ltd. ("connectFirst"), despite the
process taking longer than we had initially anticipated. This
facility, which is expected to close imminently, will inject
additional fuel to power our growth. As of August 2022, our annualized revenue run rate sits
at over $400 million, and our
Adjusted EBITDA is clearly on the right trajectory. Although, in
our view, these strong fundamentals are not currently reflected in
our market capitalization, myself and our team maintain a
laser-like focus on the continued improvement of our fundamentals,
as that is what we can control. We believe that sooner or later,
the market sentiment will catch up to our business fundamentals. I
would like to give a huge thanks to our customers, team, investors,
and Board of Directors for their continued support." added Mr.
Grover.
Third Quarter 2022 – Operational Highlights:
- Organic retail store expansion continued with 5 new Canna
Cabana locations: 2 in Alberta, 1
in Ontario, 1 in Saskatchewan, and the Company's first store in
British Columbia
- The Company completed the acquisition of the final store
operating under the name Crossroads Cannabis in Woodstock, Ontario
- The Company completed the acquisition of an 100% equity
interest of Livonit Foods Inc. operating as Bud Heaven, adding two established cannabis
retail stores in Bracebridge,
Ontario
- The Company continued the rollout of its Fastendr™ retail kiosk
and smart locker technology, with 22 Canna Cabana locations having
been equipped with the technology by the end of the quarter
- On June 13, 2022, the Company
launched its Cabana Cannabis Co. line of house-branded products in
Saskatchewan, with anticipated
launches in Ontario and
Manitoba by the end of 2022,
pending listing approval
- On June 22, 2022, the Company
secured $5 million subordinated debt
to power continued growth
- On July 7, 2022, the Company
announced the acquisition of a nine-store portfolio from Choom
through Companies' Creditors Arrangement Act ("CCAA")
proceedings, the acquisition of the portfolio was subsequently
closed in tranches on August 9, 2022
and September 1, 2022,
respectively
- On July 11, 2022, the Company's
subsidiary, Enigmaa Ltd., operating as Blessed CBD, launched sales
of hemp-derived CBD products on Amazon United Kingdom platform
- On July 22, 2022, the Company
closed a bought deal equity financing for aggregate gross proceeds
of $11.5 million, inclusive of the
exercise in full of the over-allotment option
- On July 29, 2022, the Company
announced that it had seized the shares of Halo Kushbar Retail Inc.
("Kushbar"), taking control of three operating cannabis retail
stores in Alberta
Subsequent Events:
- The Company's Cabana Club loyalty program continued its rapid
growth, sitting at over 750,000 members as of today, representing
over 90% of daily transactions
- Rollout of Fastendr™ continued, with 28 Canna Cabana locations
equipped with the technology as of today
- On August 18, 2022, the Company
executed a binding commitment letter with connectFirst for
$19 million in non-dilutive credit
facilities
- The Company acquired nine operating retail cannabis stores from
Choom. As of today, the Company operates a total of 140 retail
cannabis stores across Canada
Selected financial information for the three and nine months
ended July 31, 2022:
(Expressed in thousands of Canadian Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
July 31
|
|
Nine months ended
July 31
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
|
$
|
|
$
|
|
|
|
$
|
|
$
|
|
|
Revenue
|
|
95,354
|
|
48,069
|
|
98 %
|
|
248,604
|
|
127,256
|
|
95 %
|
Gross Profit
|
|
25,755
|
|
16,679
|
|
54 %
|
|
71,434
|
|
46,445
|
|
54 %
|
Gross Profit
Margin
|
|
27 %
|
|
35 %
|
|
(8 %)
|
|
29 %
|
|
36 %
|
|
(7 %)
|
Total Operating
Expenses
|
|
(30,425)
|
|
(23,946)
|
|
27 %
|
|
(89,739)
|
|
(60,268)
|
|
49 %
|
Adjusted
EBITDA
|
|
4,246
|
|
1,540
|
|
176 %
|
|
9,602
|
|
10,862
|
|
(12 %)
|
Loss from
Operations
|
|
(4,670)
|
|
(7,267)
|
|
(36 %)
|
|
(18,305)
|
|
(13,823)
|
|
32 %
|
Net loss
|
|
(2,717)
|
|
(1,750)
|
|
55 %
|
|
(18,345)
|
|
(30,861)
|
|
(41 %)
|
Loss per share
(Basic)
|
|
(0.04)
|
|
(0.03)
|
|
33 %
|
|
(0.31)
|
|
(0.79)
|
|
(61 %)
|
The following is a reconciliation of Adjusted EBITDA to Net
Loss:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
July 31,
|
|
Nine Months Ended
July 31,
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Net (loss)
income
|
|
(2,717)
|
|
(1,750)
|
|
(18,346)
|
|
(30,861)
|
|
Income taxes
(recovery)
|
|
731
|
|
224
|
|
(1,133)
|
|
688
|
|
Accretion and
interest
|
|
1,048
|
|
1,095
|
|
4,140
|
|
6,635
|
|
Depreciation and
amortization
|
|
7,182
|
|
8,299
|
|
21,920
|
|
22,107
|
|
EBITDA
(1)
|
|
6,244
|
|
7,868
|
|
6,581
|
|
(1,431)
|
|
Foreign exchange loss
(gain)
|
|
120
|
|
(28)
|
|
324
|
|
66
|
|
Transaction and
acquisition costs
|
|
1,436
|
|
1,939
|
|
3,014
|
|
4,409
|
|
Debt restructuring
gain
|
|
—
|
|
—
|
|
—
|
|
(1,145)
|
|
(Gain) loss revaluation
of derivative liability
|
|
(6,078)
|
|
(5,919)
|
|
(7,331)
|
|
8,553
|
|
Loss (gain) on
extinguishment of debenture
|
|
(140)
|
|
—
|
|
(255)
|
|
516
|
|
Impairment
loss
|
|
—
|
|
57
|
|
89
|
|
57
|
|
Share-based
compensation
|
|
1,734
|
|
508
|
|
5,988
|
|
2,578
|
|
Loss (gain) on
revaluation of marketable securities
|
|
146
|
|
112
|
|
408
|
|
256
|
|
Gain on extinguishment
of financial liability
|
|
784
|
|
—
|
|
784
|
|
—
|
|
Gain on disposal of
property and equipment
|
|
—
|
|
(2,997)
|
|
—
|
|
(2,997)
|
|
Adjusted EBITDA
(1)
|
|
4,246
|
|
1,540
|
|
9,602
|
|
10,862
|
|
(1)
|
Earnings before
interest, taxes, depreciation, and amortization ("EBITDA") and
Adjusted EBITDA. These measures do not have a standardized meaning
prescribed by IFRS and are therefore unlikely to be comparable to
similar measures presented by other issuers. Non-IFRS measures
provide investors with a supplemental measure of the Company's
operating performance and therefore highlight trends in Company's
core business that may not otherwise be apparent when relying
solely on IFRS measures. Management uses non-IFRS measures in
measuring the financial performance of the Company.
|
Outlook
High Tide continues to be the largest non-franchised cannabis
bricks-and-mortar retail chain in Canada, with 140 locations across the country
and expects to reach its target of 150 by the end of the calendar
year. The Company's launch of its innovative discount club model
near the end of the fourth fiscal quarter of 2021 has driven
remarkable same-store sales increases. These gains have been
magnified by organic store openings and M&A activity leading to
a sustained upward trend in its market share across the country.
The Company currently has three stores in the province of
British Columbia, and a clear path
to reach eight, the maximum allowable today by any one entity, in
the near term, via both organic openings as well as accretive
M&A.
As previously stated, the Company is currently on an annual
revenue run rate exceeding $400
million which puts it within striking distance of being the
top revenue-generating cannabis company which reports in Canadian
dollars. Canna Cabana possesses the largest loyalty program in
Canadian cannabis with over 750,000 members, which represents over
90% of daily transactions. The Company anticipates launching a paid
version of the Cabana Club, Cabana Elite membership program, by the
end of the calendar year, which should monetize this base even
further.
The Company first launched its white label offerings in
June 2022 in the province of
Saskatchewan, under the name
Cabana Cannabis Co., and expects to launch in Ontario beginning next week. Over the
long-term, the Company expects these offerings to reach 25% of
total sales, which should provide a meaningful boost to
profitability. The Company has many benefits from its
diversified ecosystem, one of which is the ability to bring its
existing international CBD brands (NuLeaf Naturals, FABCBD and
Blessed CBD) to Canada and sell
them in its nationally-leading store network. The Company
anticipates entering into new markets and distribution platforms
for its ancillary cannabis business lines in fiscal 2023.
High Tide Earnings Event Webcast
The Company will host a webcast and conference call to discuss
the Financial Statements at 5:30 PM (Eastern
Time) today, Wednesday, September 14,
2022.
Webcast Link for High Tide Earnings Event:
https://events.q4inc.com/attendee/992967987
Participants may pre-register for the webcast by clicking on the
link above prior to the beginning of the live webcast. Three hours
after the live webcast, a replay of the webcast will be available
at the same link above.
Participants who wish to ask questions during the event may do
so through the call-in line, the access information for which is as
follows:
Canada Dial-In Number (Toll-Free): +1 833 950 0062
Canada Dial-In Number (Local): +1 226 828 7575
United States Dial-In Number (Toll-Free): +1 844 200 6205
United States Dial-In Number (Local): +1 646 904 5544
Dial-In Number for All Other Locations: +1 929 526 1599
Participant Access Code: 619859
*Participants will need to enter the participant access code
before being met by a live operator*
ATM PROGRAM QUARTERLY UPDATE
Pursuant to the Company's at-the-market equity offering program
(the "ATM Program") that allows the Company to issue up to
$40 million (or the equivalent in
U.S. dollars) of common shares ("Common Shares") from
treasury to the public from time to time, at the Company's
discretion and subject to regulatory requirements, as required
pursuant to National Instrument 44-102 – Shelf Distributions
and the policies of the TSX Venture Exchange (the "TSXV"),
the Company announces that, during its third quarter ended
July 31, 2022, the Company has issued
an aggregate of 34,900 Common Shares over the TSXV and Nasdaq
Capital Market ("Nasdaq"), for aggregate gross proceeds to
the Company of $0.1 million (compared
to the three and six months ended April 30,
2022: 1,336,313 Common Shares; $7.4
million; and three months ended January 31, 2022: 130,197 Common Shares;
$0.8 million).
Pursuant to an equity distribution agreement dated December 3, 2021, entered into among the Company,
ATB Capital Markets Inc. and ATB Capital Markets USA Inc. (the "Agents"), associated
with the ATM Program (the "Equity Distribution Agreement"),
a cash commission of less than $0.01
million on the aggregate gross proceeds raised was paid to
the Agents in connection with their services under the Equity
Distribution Agreement during the third quarter ended July 31, 2022 (compared to the three and six
months ended April 30, 2022:
$0.1 million; and three months ended
January 31, 2022: $0.01 million).
The Company intends to use the net proceeds of the ATM Program,
if any, and at the discretion of the Company, to fund strategic
initiatives it is currently developing, to support the growth and
development of the Company's existing operations, funding future
acquisitions as well as working capital and general corporate
purposes.
Common Shares issued pursuant to the ATM Program will be issued
pursuant to a prospectus supplement dated December 3, 2021 (the "Canadian Prospectus
Supplement") to the Company's final base shelf prospectus dated
April 22, 2021, filed with the
securities commissions or similar regulatory authorities in each of
the provinces and territories of Canada (the "Canadian Shelf
Prospectus") and pursuant to a prospectus supplement dated
December 3, 2021 (the "U.S.
Prospectus Supplement") to the Company's U.S. base prospectus
dated September 17, 2021 (the
"U.S. Base Prospectus") included in its registration
statement on Form F-10 (the "Registration Statement") and
filed with the U.S. Securities and Exchange Commission (the
"SEC"). The Canadian Prospectus Supplement and Canadian
Shelf Prospectus are available for download from SEDAR
at www.sedar.com, and the U.S. Prospectus Supplement, the U.S.
Base Prospectus and Registration Statement are accessible via EDGAR
on the SEC's website at www.sec.gov.
The ATM Program is effective until the earlier of (i) the date
that all Common Shares available for issue under the ATM Program
have been sold, (ii) the date the Canadian Prospectus Supplement in
respect of the ATM Program or Canadian Shelf Prospectus is
withdrawn and (iii) the date that the ATM Program is terminated by
the Company or Agents.
OMNIBUS PLAN IMPLEMENTATION
On April 19, 2022, the board of
directors of the Company (the "Board") approved the 2022
equity incentive plan of the Company (the "Omnibus Plan"),
which was effective June 2, 2022,
upon the Company receiving disinterested shareholder approval at
the annual general meeting and special meeting of shareholders of
the Company (the "Effective Date"), pursuant to which it is
able to issue share-based and cash-based long-term incentives to
eligible participants. A copy of the Omnibus Plan is available
under the Company's SEDAR profile at www.sedar.com.
The Omnibus Plan replaced the former stock option plan (the
"Stock Option Plan") and restricted share unit plan (the
"RSU Plan") of the Company (together, the "Predecessor
Plans").
All directors, officers, employees, management company employees
and consultants of the Company and/or its affiliates
("Participants") are eligible to receive Awards (as defined
below) under the Omnibus Plan, subject to the terms of the Omnibus
Plan. Awards include stock options ("Options"), stock
appreciation rights ("Stock Appreciation Rights"),
restricted share awards ("Restricted Share Awards"),
restricted share units ("RSUs"), performance shares
("Performance Shares"), performance units ("Performance
Units"), cash-based awards ("Cash-Based Awards") and
other share-based awards (collectively, the "Awards"), under
the Omnibus Plan.
Purpose of the Omnibus Plan
The Omnibus Plan serves several purposes for the Company. One
purpose is to advance the interests of the Company by developing
the interests of Participants in the growth and development of the
Company by providing such persons with the opportunity to acquire a
proprietary interest in the Company. All Participants are
considered eligible to be selected to receive an Award under the
Omnibus Plan. Another purpose is to attract and retain key talent
and valuable personnel, who are necessary to the Company's success
and reputation, with a competitive compensation mechanism. Finally,
the Omnibus Plan will align the interests of Participants with
those of shareholders by devising a compensation mechanism which
encourages the prudent maximization of distributions to
shareholders and long-term growth.
The Omnibus Plan is administered by the Board, and/or if
applicable, a committee of the Board.
Omnibus Plan Maximum, Limits and Vesting Restrictions
The maximum number of Common Shares available and reserved for
issuance, at any time, under the Omnibus Plan, together with any
other security-based compensation arrangements adopted by the
Company, including the Predecessor Plans, has been fixed at 20% of
the issued and outstanding Common Shares on the Effective Date,
namely 12,617,734 Common Shares.
Common Shares underlying outstanding Awards that for any reason
expire or are terminated, forfeited or cancelled shall again be
available for issuance under the Omnibus Plan. Also, any Common
Shares forfeited, cancelled or otherwise not issued for any reason
under the predecessor Options and/or predecessor RSUs pursuant to
the Stock Option Plan and RSU Plan, respectively, shall be
available for grants under the Omnibus Plan. Any predecessor
Options and/or predecessor RSUs outstanding under the Predecessor
Plans shall remain subject to the terms of those awards and the
Stock Option Plan and RSU Plan, respectively.
Awards that by their terms are to be settled solely in cash
shall not be counted against the maximum number of Common Shares
available for the issuance of Awards under the Omnibus Plan.
No Awards, other than Options, may vest before the date that is
one year following the date it is granted or issued, although the
vesting required of any such Awards may be accelerated for a
Participant who dies or who ceases to be an eligible Participant
under the Omnibus Plan in connection with a Change in Control (as
such term is defined in the Omnibus Plan), take-over bid, reverse
takeover or other similar transaction.
The aggregate number of Awards which may be granted to any one
Participant that is a consultant of the Company in any 12-month
period must not exceed 2% of the issued Common Shares calculated at
the first such grant date. In addition, the aggregate number of
Options granted to all persons retained to provide investor
relations activities must not exceed 2% of the issued Common Shares
in any 12-month period calculated at the first such grant date (and
including any Participant that performs investor relations
activities and/or whose role or duties primarily consist of
investor relations activities) and any such Options granted to any
person retained to provide investor relations activities must vest
in a period of not less than 12 months from the date of grant of
the Award and with no more than 25% of the Options vesting in any
three month period notwithstanding any other provision of the
Omnibus Plan. The maximum aggregate number of Common Shares that
are issuable pursuant to all Awards granted or issued to Insiders
(as such term is defined in the Omnibus Plan), as a group, must not
exceed 10% of the issued and outstanding Common Shares at any point
in time, unless the Company has obtained the requisite
disinterested shareholder approval. The maximum aggregate number of
Common Shares that are issuable pursuant to all Awards granted or
issued in any 12-month period to Insiders, as a group, must not
exceed 10% of the issued and outstanding Common Shares, calculated
as at the date any Award is granted or issued to any Insider,
unless the Company has obtained the requisite disinterested
shareholder approval. The maximum aggregate number of Common Shares
issuable pursuant to Awards granted to any one Participant in any
12-month period must not exceed 5% of the issued and outstanding
Common Shares, calculated on the date the Award is granted or
issued to the Participant, unless the Company has obtained the
requisite disinterested shareholder approval. Participants who
provide investor relations activities may not receive any Awards
other than Options.
ABOUT HIGH TIDE
High Tide is a leading retail-focused cannabis company with
bricks-and-mortar as well as global e-commerce assets. The Company
is the largest Canadian retailer of recreational cannabis as
measured by revenue, with 140 current locations spanning
Ontario, Alberta, British
Columbia, Manitoba, and
Saskatchewan. The Company is also
North America's first cannabis
discount club retailer, under the Canna Cabana banner, which is the
single-largest cannabis retail brand in Canada with additional locations under
development across the country. High Tide's portfolio also includes
retail kiosks and smart locker technology – Fastendr™. High Tide
has been serving consumers for over a decade through its
established e-commerce platforms including Grasscity.com,
Smokecartel.com, Dailyhighclub.com, and Dankstop.com and more
recently in the hemp-derived CBD space through Nuleafnaturals.com,
FABCBD.com, BlessedCBD.co.uk, BlessedCBD.de, and Amazon United
Kingdom, as well as its wholesale distribution division under
Valiant Distribution, including the licensed entertainment product
manufacturer Famous Brandz. High Tide was featured in the third
annual Report on Business Magazine's ranking of Canada's Top Growing Companies in 2021 and was
named as one of the top 10 performing diversified industries stocks
in the 2022 TSX Venture 50™. High Tide's strategy as a parent
company is to extend and strengthen its integrated value chain,
while providing a complete customer experience and maximizing
shareholder value.
For more information about High Tide Inc., please visit
www.hightideinc.com, its profile page on SEDAR at www.sedar.com,
and its profile page on EDGAR at www.sec.gov.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking information"
within the meaning of applicable Canadian securities legislation.
These statements relate to future events or future performance. The
use of any of the words "could", "intend", "expect", "believe",
"will", "projected", "estimated" and similar expressions and
statements relating to matters that are not historical facts are
intended to identify forward-looking information and are based on
the Company's current belief or assumptions as to the outcome and
timing of such future events.
The forward-looking information and forward-looking
statements contained herein include, but are not limited to,
statements regarding: the Company's business objectives and
milestones and the anticipated timing of, and costs in connection
with, the execution or achievement of such objectives and
milestones (including, without limitation, proposed acquisitions);
the Company's future growth prospects and intentions to pursue one
or more viable business opportunities; the development of the
Company's business and future activities following the date hereof;
expectations relating to market size and anticipated growth in the
jurisdictions within which the Company may from time to time
operate or contemplate future operations; expectations with respect
to economic, business, regulatory and/or competitive factors
related to the Company or the cannabis industry generally; the
impact of the COVID-19 pandemic on the Company's current and future
operations; the market for the Company's current and proposed
product offerings, as well as the Company's ability to capture
market share; the Company's strategic investments and capital
expenditures, and related benefits; the distribution methods
expected to be used by the Company to deliver its product
offerings; the competitive landscape within which the Company
operates and the Company's market share or reach; the performance
of the Company's business and the operations and activities of the
Company; the Company adding the number of additional cannabis
retail store locations the Company proposes to add to the Company's
business upon the timelines indicated herein, and the Company
remaining on a positive growth trajectory; same-store sales
continuing to increase in the fourth quarter of 2022 and beyond;
the Company making meaningful increases to its revenue profile; the
Company expanding in the German market and in British Columbia; the Company deploying
Fastendr™ technology across the Company's retail stores upon the
timelines disclosed herein; the Company continuing to increase its
revenue through the fourth fiscal quarter of 2022, and the
remainder of the year; the Company building upon its existing
momentum in the international hemp-derived CBD and consumption
accessories e-commerce sectors; the Company continuing to integrate
and expand its CBD brands; the Company completing the development
of its cannabis retail stores; the Company's ability to generate
cash flow from operations and from financing activities; the
Company's ability to obtain, maintain, and renew or extend,
applicable authorizations, including the timing and impact of the
receipt thereof; the realization of cost savings, synergies or
benefits from the Company's recent and proposed acquisitions, and
the Company's ability to successfully integrate the operations of
any business acquired within the Company's business; the
anticipated sales from continuing operations for the financial year
of the Company ending October 31,
2022; Cabana Club loyalty program membership continuing to
increase; the Company hitting its forecasted revenue and sales
projections for the fourth quarter of 2022; the Company's
expectations from its Cabana Cannabis Co. white label products; the
Company launching Cabana Cannabis Co. white label products in the
jurisdictions and on the timelines outlined herein; the Company
securing the proposed credit facilities on the terms and within the
timelines set out herein; the use of proceeds from the proposed
credit facilities being utilized as outlined herein; the
anticipated effects of the proposed credit facilities on the
business and operations of the Company; the Company becoming the
largest revenue-generating cannabis company reporting in
Canada dollars; the Company
launching the Cabana elite program on the terms and timelines
outlined herein; the anticipated effects of the Cabana elite
program on the business and operations of the Company; the
intention of the Company to complete the ATM Program and any
additional offering of securities of the Company; the aggregate
amount of the total proceeds that the Company will receive pursuant
to the ATM Program and/or any future offering; the Company's
expected use of the net proceeds from the ATM Program and/or any
future offering; the listing of Common Shares offered in the ATM
Program and/or any future offering; and the Company continuing to
grow its online retail portfolio through further strategic and
accretive acquisitions.
Forward-looking information in this press release are based
on certain assumptions and expected future events, namely: current
and future members of management will abide by the Company's
business objectives and strategies from time to time established by
the Company; the Company will retain and supplement its board of
directors and management, or otherwise engage consultants and
advisors having knowledge of the industries (or segments thereof)
within which the Company may from time to time participate; the
Company will have sufficient working capital and the ability to
obtain the financing required in order to develop and continue its
business and operations; the Company will continue to attract,
develop, motivate and retain highly qualified and skilled
consultants and/or employees, as the case may be; no adverse
changes will be made to the regulatory framework governing
cannabis, taxes and all other applicable matters in the
jurisdictions in which the Company conducts business and any other
jurisdiction in which the Company may conduct business in the
future; the Company will be able to generate cash flow from
operations, including, where applicable, the distribution and sale
of cannabis and cannabis products; the Company will be able to
execute on its business strategy as anticipated; the Company will
be able to meet the requirements necessary to obtain and/or
maintain authorizations required to conduct the business; general
economic, financial, market, regulatory, and political conditions,
including the impact of the COVID-19 pandemic, will not negatively
affect the Company or its business; the Company will be able to
successfully compete in the cannabis industry; cannabis prices will
not decline materially; the Company will be able to effectively
manage anticipated and unanticipated costs; the Company will be
able to maintain internal controls over financial reporting and
disclosure, and procedures in order to ensure compliance with
applicable laws; the Company will be able to conduct its operations
in a safe, efficient and effective manner; general market
conditions will be favourable with respect to the Company's future
plans and goals; the Company will reach the anticipated sales from
continuing operations for the financial year of the Company ending
October 31, 2022; the Company will
complete its proposed acquisitions; the Company will hit its
forecasted revenue and sales projections for the fourth quarter of
2022; Cabana Club loyalty program membership will continue to
increase; the Company will deploy Fastendr™ technology across the
Company's retail stores upon the timelines disclosed herein; the
Company will launch Cabana Cannabis Co. white label products in the
jurisdictions and on the timelines outlined herein and such
products will achieved the results disclosed herein; same-store
sales will continue to increase in the fourth quarter of 2022 and
beyond; the Company will make meaningful increases to its revenue
profile; the Company will expand in the German market and in
British Columbia; the Company will
continue to increase its revenue through the fourth fiscal quarter
of 2022, and the remainder of the year; the Company will build upon
its existing momentum in the international hemp-derived CBD and
consumption accessories e-commerce sectors; the Company will
continue to integrate and expand its CBD brands; the Company will
add the additional cannabis retail store locations to the Company's
business and remain on a positive growth trajectory; the Company
will complete the development of its cannabis retail stores; the
Company will secure the proposed credit facilities (and will have
the ability to obtain all requisite approvals) on the terms and
within the timelines anticipated; the use of proceeds from the
proposed credit facilities will be utilized as outlined herein; the
proposed credit facilities will have the anticipated effect on the
business and operations of the Company; the Company will become the
largest revenue-generating cannabis company reporting in
Canada dollars; the Company will
launch the Cabana elite program on the terms and timelines outlined
herein; the Cabana elite program will have the anticipated effect
on the business and operations of the Company; the Company will
complete the ATM Program; the Company's will use of the net
proceeds from the ATM Program and/or any future offering as
outlined herein; the Company will list the Common Shares offered in
the ATM Program and/or any future offering; and the Company will
continue to grow its online retail portfolio through further
strategic and accretive acquisitions.
These statements involve known and unknown risks,
uncertainties and other factors, which may cause actual results,
performance or achievements to differ materially from those
expressed or implied by such statements, including but not limited
to: the Company's inability to attract and retain qualified members
of management to grow the Company's business and its operations;
unanticipated changes in economic and market conditions (including
changes resulting from the COVID-19 pandemic) or in applicable
laws; the impact of the publications of inaccurate or unfavourable
research by securities analysts or other third parties; the
Company's failure to complete future acquisitions or enter into
strategic business relationships; interruptions or shortages in the
supply of cannabis from time to time available to support the
Company's operations from time to time; unanticipated changes in
the cannabis industry in the jurisdictions within which the Company
may from time to time conduct its business and operations,
including the Company's inability to respond or adapt to such
changes; the Company's inability to secure or maintain favourable
lease arrangements or the required authorizations necessary to
conduct the business and operations and meet its targets; the
Company's inability to secure desirable retail cannabis store
locations on favourable terms; risks relating to projections of the
Company's operations; the Company's inability to effectively manage
unanticipated costs and expenses, including costs and expenses
associated with product recalls and judicial or administrative
proceedings against the Company; risk that the Company will not
reach the anticipated sales from continuing operations for the
financial year of the Company ending October
31, 2022; risk that the Company will not hit its forecasted
revenue and sales projections for the fourth quarter of 2022; risk
that Cabana Club loyalty program membership will decrease and/or
plateau; risk that the Company will be unable to deploy Fastendr™
technology across the Company's retail stores or on the timelines
disclosed herein; risk that the Company will be unable to launch
Cabana Cannabis Co. white label products in the jurisdictions and
on the timelines outlined herein and/or that such products will be
unable to achieve the results disclosed herein; risk that
same-store sales will not increase, but decease and/or plateau;
risk that the Company will be unable to increase its revenue
profile; risk that the Company will be unable to increase its
revenue through the fourth fiscal quarter of 2022, and the
remainder of the year, but that it will decease and/or plateau;
risk that the Company will be unable to expand in the German market
and/or in British Columbia; risk
that the Company will be unable to build upon its existing momentum
in the international hemp-derived CBD and consumption accessories
e-commerce sectors; risk that the Company will be unable to
continue to integrate and expand its CBD brands; risk that the
Company will be unable to grow its online retail portfolio through
further strategic and accretive acquisitions; risk that the Company
will be unable to add additional cannabis retail store locations to
the Company's business and remain on a positive growth trajectory;
risks that the Company will be unable to complete the development
of any or all of its cannabis retail stores; risk that the Company
will be unable to secure the proposed credit facilities, unable to
utilize the proposed credit facilities on the terms and within the
timelines anticipated and/or the proposed credit facilities will
not have the anticipated effect on the business and operations of
the Company; risk that the Company will not become the largest
revenue-generating cannabis company reporting in Canada dollars; risk that the Company will be
unable to launch the Cabana elite program on the terms and
timelines outlined herein or at all; risk that the Cabana elite
program will not have the anticipated effect on the business and
operations of the Company; risk the Company will not complete the
ATM Program; the Company's inability to list the Common Shares
offered in the ATM Program and/or any future offering; the
Company's failure to utilize the use of proceeds from the ATM
Program and/or any future offering as expected; risks surrounding
the legality of delta-8 tetrahydrocannabinol ("Delta-8")
derived from hemp; risks surrounding the uncertainty and legality
of Delta-8 and delta-9 tetrahydrocannabinol ("Delta-9")
state to state; risk that the United States Drug Enforcement
Administration could consider the Company's Delta-8 products an
illegal controlled substance under the Controlled Substances Act
(the "CSA") or Federal Analogue Act in the United States; risk that that state or
federal regulators or law enforcement could take the position that
the Delta-8 and Delta-9 products and/or in-process hemp extract
are/is a Schedule I controlled substance in violation of the CSA
and similar state laws; risk that the Company's Delta-9 products
could be considered by state law enforcement and state regulators
to be marijuana illegal under state laws criminalizing the
possession, distribution, trafficking and sale of marijuana; risk
that should the Company become subject to enforcement action by
federal or state agencies, the Company could: (i) be forced to stop
offering some or all of it Delta-8 and Delta-9 products or stop all
business operations, (ii) be subject to other civil or criminal
sanctions, (iii) be required to defend against such enforcement and
if unsuccessful could cause the Company to cease its operations;
and risk that enforcement or regulatory action at the United States federal and/or state level
could adversely impact the listings of the Common Shares on the
TSXV and Nasdaq.
Readers are cautioned that the foregoing list is not
exhaustive. Readers are further cautioned not to place undue
reliance on forward-looking statements, as there can be no
assurance that the plans, intentions or expectations upon which
they are placed will occur. Such information, although considered
reasonable by management at the time of preparation, may prove to
be incorrect and actual results may differ materially from those
anticipated.
Forward-looking statements contained in this press release
are expressly qualified by this cautionary statement and reflect
the Company's expectations as of the date hereof and are subject to
change thereafter. The Company undertakes no obligation to update
or revise any forward-looking statements, whether as a result of
new information, estimates or opinions, future events or results or
otherwise or to explain any material difference between subsequent
actual events and such forward-looking information, except as
required by applicable law.
CAUTIONARY NOTE REGARDING FUTURE ORIENTED FINANCIAL
INFORMATION
This press release may contain future-oriented financial
information ("FOFI") within the meaning of Canadian
securities legislation, about prospective results of operations,
financial position or cash flows, based on assumptions about future
economic conditions and courses of action, which FOFI is not
presented in the format of a historical balance sheet, income
statement or cash flow statement. The FOFI has been prepared by
management to provide an outlook of the Company's activities and
results and has been prepared based on a number of assumptions
including the assumptions discussed under the heading above
entitled "Cautionary Note Regarding Forward-Looking Statements" and
assumptions with respect to the costs and expenditures to be
incurred by the Company, capital expenditures and operating costs,
taxation rates for the Company and general and administrative
expenses. Management does not have, or may not have had at the
relevant date, firm commitments for all of the costs, expenditures,
prices or other financial assumptions which may have been used to
prepare the FOFI or assurance that such operating results will be
achieved and, accordingly, the complete financial effects of all of
those costs, expenditures, prices and operating results are not, or
may not have been at the relevant date of the FOFI, objectively
determinable.
Importantly, the FOFI contained in this press release are, or
may be, based upon certain additional assumptions that management
believes to be reasonable based on the information currently
available to management, including, but not limited to, assumptions
about: (i) the future pricing for the Company's products, (ii) the
future market demand and trends within the jurisdictions in which
the Company may from time to time conduct the Company's business,
(iii) the Company's ongoing inventory levels, and operating cost
estimates, (iv) the Company obtaining the proposed credit
facilities, (v) the Company completing the ATM Program, and (vi)
the Company's unaudited financial results for the three and nine
months ended July 31, 2022. The FOFI
or financial outlook contained in this press release do not purport
to present the Company's financial condition in accordance with
IFRS as issued by the International Accounting Standards Board, and
there can be no assurance that the assumptions made in preparing
the FOFI will prove accurate. The actual results of operations of
the Company and the resulting financial results will likely vary
from the amounts set forth in the analysis presented in any such
document, and such variation may be material (including due to the
occurrence of unforeseen events occurring subsequent to the
preparation of the FOFI). The Company and management believe that
the FOFI has been prepared on a reasonable basis, reflecting
management's best estimates and judgments as at the applicable
date. However, because this information is highly subjective and
subject to numerous risks including the risks discussed under the
heading above entitled "Cautionary Note Regarding Forward-Looking
Statements" and under the heading "Risk Factors" in the Company's
public disclosures, FOFI or financial outlook within this press
release should not be relied on as necessarily indicative of future
results.
Readers are cautioned not to place undue reliance on the
FOFI, or financial outlook contained in this press release. Except
as required by Canadian securities laws, the Company does not
intend, and does not assume any obligation, to update such
FOFI.
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SOURCE High Tide Inc.