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
In the financial table Selected financial information for the
three and nine months ended July 31, 2022, Loss per share (Basic),
Three months ended July 31, 2022 should read: (0.04) instead of
(0.05); Loss per share (Basic), Three months ended July 31 Change
should read: 33% instead of 67%.
The updated release reads:
HIGH TIDE REPORTS THIRD QUARTER 2022
FINANCIAL RESULTS FEATURING A 98% INCREASE IN REVENUE AND TENTH
STRAIGHT QUARTER OF POSITIVE ADJUSTED EBITDA
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
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.
“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.
___________________________________
1Adjusted EBITDA is a non-IFRS financial measure.
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version on businesswire.com: https://www.businesswire.com/news/home/20220914005928/en/
Media Inquiries Omar Khan Senior Vice President – Corporate and
Public Affairs High Tide Inc. omar@hightideinc.com
Investor Inquiries Vahan Ajamian Capital Markets Advisor High
Tide Inc. vahan@hightideinc.com
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