The Company Also Reports Year-Over-Year
Increase in Free Cash Flow1 From
($6.3 Million) to ($2.3 Million) Representing a 64%
Improvement
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.
- 12th Straight Quarter of Positive Adjusted EBITDA,
Representing an 86% Increase Year-Over-Year and 10%
Sequentially
- High Tide Reaches 9% of Canadian Cannabis Retail Market
Share[2], Following 1% Sequential
Growth in Each of the Past Five Quarters
- Same-Store Sales Increased by 52% Year-Over-Year and 4%
Sequentially, Representing the Sixth Consecutive Quarter of
Sequential Gains
- High Tide Remains the Highest Revenue Generating Cannabis
Company Reporting in Canadian
Dollars[3] and Sets Objective of
Becoming Free Cash Flow Positive Within This Calendar
Year
- The Company Remains the Largest Non-Franchised Cannabis
Retailer in Canada With 151
locations as Well as Over 975,000 Cabana Club Members, and a Global
Customer Database Surpassing 4.5 Million
CALGARY,
AB, March 17, 2023 /CNW/ - High Tide Inc.
("High Tide" or the "Company") (NASDAQ: HITI) (TSXV:
HITI) (FSE: 2LYA), the high-impact, retail-forward enterprise built
to deliver real-world value across every component of cannabis,
released today its financial results for the first fiscal quarter
of 2023 ended January 31, 2023, the
highlights of which are included in this news release. The full set
of consolidated financial statements for the three months ended
January 31, 2023, and the
accompanying management's discussion and analysis can be accessed
by visiting the Company's website at www.hightideinc.com, its
profile pages on SEDAR at www.sedar.com, and EDGAR at
www.sec.gov.
_____________________________
|
1 Free cash
flow defined as cash flow from operations. minus capex and lease
payments
|
2 Based on
Statistics Canada and Hifyre data, for the months of November, 2022
December, 2022 and January 2023, not including the province of
Quebec.
|
3 Based on
reporting by New Cannabis Ventures as of March 16, 2023. For the
New Cannabis Ventures' senior listing, segmented cannabis-only
sales must generate more than US$25 million per quarter (CAD$31
million) – for full details, see:
https://www.newcannabisventures.com/cannabis-company-revenue-ranking/
|
First Fiscal Quarter 2023 – Financial Highlights:
- Revenue increased to $118.1
million in the first fiscal quarter of 2023 compared to
$72.2 million during the same period
in 2022, representing an increase of 64% year-over-year and 9%
sequentially
- Gross profit increased to $32.2
million in the first fiscal quarter of 2023 compared to
$23.0 million during the same period
in 2022, representing an increase of 40% year-over-year and 9%
sequentially
- Gross profit margin in the three months ended January 31, 2023, was 27%, consistent with the
previous three quarters. The Company notes that gross margins
earned in its bricks-and-mortar stores ticked higher
sequentially
- Adjusted EBITDA increased to $5.5
million in the first fiscal quarter of 2023 compared to
$3.0 million during the same period
in 2022, representing an increase of 86% year-over-year and 10%
sequentially
- Salaries, wages and benefits represented 12% of revenue in the
first fiscal quarter of 2023, which improved from 14% in the first
fiscal quarter of 2022 and was consistent with the prior three
quarters
- Given the strong cost controls the Company has been
implementing, general and administrative expenses represented 6% of
revenue in the first fiscal quarter of 2023, which improved from 8%
in the first fiscal quarter of 2022 and improved from 7% in the
previous quarter
- Cabanalytics data sales were $6.6
million in the first fiscal quarter of 2023 compared to
$4.7 million for the same quarter
last year. Sequentially, Cabanalytics data sales increased by
3%
- For locations operational throughout the first fiscal quarter
of 2023 and 2022, same-store sales increased by 52% year-over-year.
Sequentially, same-store sales increased by 4%, representing the
sixth consecutive quarter of same-store sales growth
- The Company continued the rollout of ELITE, the
first-of-its-kind cannabis paid loyalty program in Canada, with membership reaching approximately
9,500, representing a 58% increase since January 30, 2023
- Cash on hand as of January 31,
2023, totalled $23.7
million
"I am humbled and delighted to share our results from yet
another record-setting quarter, where we have continued to execute
with excellence, resulting in our second consecutive quarter of
record revenue and adjusted EBITDA which includes an improvement of
over 64% in our free cash flow year-over-year. These results
further solidify our position as the largest revenue-generating
cannabis company in Canada,
reporting in Canadian dollars while continuously improving
profitability. This is our twelfth consecutive quarter of positive
adjusted EBITDA and fourth consecutive quarter of sequential
same-store sales growth. Overall, our financials tell a truly
inspiring and exciting story. While some of our peers have
flatlined in revenue or struggled with maintaining margins, our
results indicate that our company has succeeded in managing our
exponential growth and driving consistent margins.
"These financial metrics point to something very important and
unique to High Tide, our strength in generating cash while
experiencing organic growth, illustrating the apparent success of
our business model. While a further deterioration of the broader
cannabis capital markets has occurred, we've remained focused on
operating a fundamentally strong organization with strategic and
attainable goals for growth. While we have executed and delivered
on our hypergrowth strategy in recent years, establishing our
brands and becoming a household name in Canadian cannabis retail,
considering the market realities today, I am announcing a shift in
that strategy. While we would never overlook a compelling M&A
opportunity, we are now adding to our strategic mission the goal of
becoming one of the first cannabis companies in Canada to generate free cash flow from
operations by the end of this calendar year. We believe this is not
only something that current market conditions demand but that doing
so will mitigate risks as we navigate through uncertainty and give
our shareholders an advantage. Although we can leverage various
financial tools at our disposal to continue to gobble up market
share through acquisitions, we believe that at this time, a more
measured and nuanced approach is appropriate for our company and
its shareholders and will ultimately lead to maximizing shareholder
value, something that we so adamantly strive for," said Raj Grover,
President and Chief Executive Officer of High Tide.
"We have proven that we know how to grow the organization
consistently, increasing our top line while maintaining margins,
and we plan to leverage that success to achieve this new goal. As
with any strategy adjustment, some of our objectives must shift as
well. Previously, we had communicated plans to add 40 to 50 new
stores in 2023. Today, we are turning our attention away from
meeting that goal with this newly minted strategic objective of
being amongst the first Canadian cannabis companies to become free
cash flow positive – while also continuing to grow in a stable and
consistent way. Beyond slowing our expenditures in acquisitions,
and rapid build-out of organic locations, we have taken steps to
add internal systems that strengthen our operations from a
financial standpoint, which includes recently launching a
company-wide project, supported by outside consultants, aimed at
maximizing the integration of our various business units and
systems in order to optimize productivity and output. Our position
as the largest non-franchised retailer in Canada allows us the unique opportunity to
slow our growth without risking market share decline while focusing
on fundamentals such as free cash flow generation and
profitability. We can return to our model of hyper-growth at any
point, whether through M&A at highly attractive valuations or
new organic store openings in high-quality locations; however, we
will only do so in a way that aligns with our focus on a strong
financial foundation. As noted in our filings and release, we have
continued to capture market share at a rate of 1% per quarter,
leading us to reach 9% of the total Canadian cannabis retail market
outside of Quebec. This is such an
important milestone and one that I do not take lightly. It is due
to the steadfast determination of our team in executing the vision
of our company and industry.
"I will close by saying a massive thank you to our valued
customers and shareholders, the entire team at High Tide, and all
those who make High Tide what it is. While the cannabis industry
continues to experience growing pains on its path to its
inevitable, legitimized, and rightful place in the global economic
landscape, it is our strongly held belief, particularly given that
our quarterly revenue now exceeds our market capitalization, that
our share price is currently significantly undervalued. I believe
that High Tide is and will continue to be a very attractive player
in this challenging yet burgeoning industry, and for that, I remain
extremely optimistic," added Mr. Grover.
First Quarter 2023 – Operational Highlights (Nov 1- Jan 31):
- Organic retail store expansion continued with 8 new Canna
Cabana locations: 1 in British
Columbia, 1 in Manitoba and
6 in Ontario
- High Tide closed the acquisition of Jimmy's, adding 2
additional retail cannabis stores in British Columbia
- The Company maintained its status as the highest
revenue-generating cannabis company in Canada³
- The Company launched cannabis seed sales through its
subsidiaries GrassCity, Smoke Cartel, Daily High Club and Dankstop
e-commerce platforms
- The Company continued the rollout of its Fastendr™ technology,
with 120 Canna Cabana locations having been equipped with the
technology by the end of the quarter
- The Company launched "ELITE", the first-of-its-kind cannabis
paid membership loyalty program in Canada
- The Company signed an LOI with Berlin-based health and life science company
Sanity Group to better position itself to take advantage of
potential German adult-use cannabis legalization opportunity
- The Company continued the roll out of its higher margin Cabana
Cannabis Co products in Saskatchewan, Manitoba and Ontario
Subsequent Events (Feb 1 -
present):
- ELITE upgrades totalled approximately 9,500 members,
representing a 58% increase since January
30, 2023
- The Company announced the departure of Rahim Kanji, Chief Financial Officer and the
appointment of Sergio Patino as its
interim Chief Financial Officer
Selected financial information for the first quarter ended
January 31, 2023:
(Expressed in thousands of Canadian Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
January 31
|
|
|
|
|
|
|
2023
|
|
|
|
2022
|
|
|
|
Change
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
Revenue
|
|
|
|
118,076
|
|
|
|
72,218
|
|
|
|
64 %
|
Gross Profit
|
|
|
|
32,181
|
|
|
|
22,982
|
|
|
|
40 %
|
Gross Profit
Margin
|
|
|
|
27 %
|
|
|
|
32 %
|
|
|
|
(5 %)
|
Total Operating
Expenses
|
|
|
|
(36,103)
|
|
|
|
(29,129)
|
|
|
|
(24 %)
|
Adjusted
EBITDA
|
|
|
|
5,500
|
|
|
|
2,955
|
|
|
|
86 %
|
Loss from
Operations
|
|
|
|
(3,922)
|
|
|
|
(6,147)
|
|
|
|
36 %
|
Net loss
|
|
|
|
(3,862)
|
|
|
|
(7,352)
|
|
|
|
47 %
|
Loss per share
(Basic)
|
|
|
|
(0.05)
|
|
|
|
(0.14)
|
|
|
|
60 %
|
The following is a reconciliation of Adjusted EBITDA to Net
Loss:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
January 31
|
|
|
|
|
|
2023
|
|
|
|
|
|
2022
|
|
Net (loss)
income
|
|
(3,862)
|
|
|
|
|
|
(7,352)
|
|
Income taxes
(recovery)
|
|
(1,236)
|
|
|
|
|
|
(1,064)
|
|
Accretion and
interest
|
|
1,813
|
|
|
|
|
|
1,551
|
|
Depreciation and
amortization
|
|
7,986
|
|
|
|
|
|
7,111
|
|
EBITDA
(1)
|
|
4,701
|
|
|
|
|
|
246
|
|
Foreign exchange loss
(gain)
|
|
(15)
|
|
|
|
|
|
97
|
|
Transaction and
acquisition costs
|
|
665
|
|
|
|
|
|
909
|
|
(Gain) loss revaluation
of derivative liability
|
|
(1,261)
|
|
|
|
|
|
(525)
|
|
Loss (gain) on
extinguishment of debenture
|
|
-
|
|
|
|
|
|
18
|
|
Impairment
loss
|
|
-
|
|
|
|
|
|
89
|
|
Share-based
compensation
|
|
1,436
|
|
|
|
|
|
1,902
|
|
Loss (gain) on
revaluation of marketable securities
|
|
(8)
|
|
|
|
|
|
219
|
|
Gain on extinguishment
of financial liability
|
|
(18)
|
|
|
|
|
|
-
|
|
Adjusted EBITDA
(1)
|
|
5,500
|
|
|
|
|
|
2,955
|
|
(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 is the market leader in Canadian bricks-and-mortar
cannabis retail, with 151 locations operating across the country
and a loyalty base of over 975,000 Cabana Club members. The Company
had previously announced its target to add 40-50 new retail
locations in calendar 2023; however, given the current macro
conditions and the state of cannabis capital markets, the Company
is revising its earlier guidance. The new goal for calendar 2023 is
to achieve free cash flow generation by the end of this calendar
year. At the end of November, the Company launched Cabana
ELITE, its premium paid membership offering and has already
onboarded approximately 9,500 members. The Company expects this
number to increase steadily over the coming quarters.
The Company notes that its second fiscal quarter totals three
fewer calendar days than the first fiscal quarter, which also
enjoys the seasonal benefits of the holiday period. Further,
consistent with our new strategy, new store growth has meaningfully
slowed, and the Company has added no new stores since the
conclusion of the first fiscal quarter.
Throughout 2022, High Tide deployed its customized Fastendr™
technology in 120 locations across Canada. This rollout will continue through the
remainder of the calendar year and includes an opportunity to start
licensing the technology in the US in late 2023.
Since mid-2022, High Tide has been launching white-label
products through its Cabana Cannabis Co and NuLeaf Naturals brands
in Ontario, Manitoba and Saskatchewan. The Company is actively rolling
out more SKUs through the course of the year and in conjunction
with other higher-margin revenue streams, such as ELITE membership
fees, which should result in consolidated gross margins remaining
steady and ticking higher in the quarters ahead.
High Tide Earnings Event Webcast
The Company will host a webcast and conference call to discuss
the Financial Statements at 11:30 AM
(Eastern Time) Monday, March 20, 2023.
Webcast Link for High Tide Earnings
Event: https://events.q4inc.com/attendee/193203965
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 webcast replay 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:
Participant Details:
Joining by Telephone:
Canada dial-in number
(Toll-Free):
1 833 950 0062
Canada dial-in number
(Local):
1 226 828 7575
United States
(Toll-Free):
1 833
470 1428
United States
(Local):
1 404 975 4839
All other
locations:
1 929 526 1599
Access code:
291706
*Participants will need to enter the participant access code
before being met by a live operator*
Employee Stock Options Grant
In addition, High Tide announces the grant of 32,500 incentive
stock options (the "Options") to various employees, consultants and
management of the Company. Each Option is exercisable at the
closing price of the Company's common shares listed on the TSX
Venture Exchange (the "TSXV") based on the last trading day
immediately prior to this press release, expires three years from
the date of grant, and vests over a two-year period. Each Option is
exercisable to purchase one common share of the Company and is
being issued pursuant to the terms of the Company's Omnibus Plan,
which became effective on June 2,
2022.
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 first fiscal quarter ended
January 31, 2023, the Company has
issued an aggregate of 821,537 Common Shares over the TSXV and
Nasdaq Capital Market ("Nasdaq"), for aggregate gross
proceeds to the Company of $1.8
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 $0.1
million on the aggregate gross proceeds raised was paid to
the Agents in connection with their services under the Equity
Distribution Agreement during the first quarter ended January 31, 2023.
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.
ABOUT HIGH TIDE
High Tide, Inc. is the leading community-grown, retail-forward
cannabis enterprise engineered to unleash the full value of the
world's most powerful plant. High Tide (HITI) is uniquely-built
around the cannabis consumer, with wholly-diversified and
fully-integrated operations across all components of cannabis,
including:
Bricks & Mortar Retail: Canna Cabana™ is the largest
non-franchised cannabis retail chain in Canada, with 151 current locations
spanning British Columbia,
Alberta, Saskatchewan, Manitoba and Ontario and growing. In 2021, Canna Cabana
became the first cannabis discount club retailer in North America.
Retail Innovation: Fastendr™ is a unique and fully
automated technology that integrates retail kiosks and smart
lockers to facilitate a better buying experience through browsing,
ordering and pickup.
E-commerce Platforms: High Tide operates a suite of
leading accessory sites across the world, including Grasscity.com,
Smokecartel.com, Dailyhighclub.com, and Dankstop.com.
CBD: High Tide continues to cultivate the possibilities
of consumer CBD through Nuleafnaturals.com, FABCBD.com and
BlessedCBD.co.uk.
Wholesale Distribution: High Tide keeps that cannabis
category stocked with wholesale solutions via Valiant™.
Licensing: High Tide continues to push cannabis culture
forward through fresh partnerships and license agreements under the
Famous Brand™ name.
High Tide consistently moves ahead of the currents, having been
named one of Canada's Top Growing
Companies in both 2021 and 2022 by Report on Business Magazine. To
discover the full impact of High Tide, visit www.hightideinc.com.
For investment performance, don't miss High Tide profile pages on
SEDAR and EDGAR.
Neither the TSX Venture Exchange 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 or competitive factors related to
the Company or the cannabis industry generally; 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; changes
in general and administrative expenses; future Business operations
and activities and the timing thereof; the future tax
liability of the Company; the estimated future
contractual obligations of the Company; the future
liquidity and financial capacity of the Company and its ability to
fund its working capital requirements and forecasted capital
expenditures; 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; the Company making
meaningful increases to its revenue profile; the Company deploying
Fastendr™ technology across the Company's retail stores upon the
timelines disclosed herein, including licensing this technology
towards the end of 2023; the Company continuing to increase its
revenue; 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
consistent free cash flow from operations and from financing
activities, including by amending its loan agreement, on the
timelines indicated herein; the Company's ability to maximize
shareholder value; 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; Cabana
Club and Cabana ELITE loyalty programs membership continuing to
increase; the Company launching additional Cabana Cannabis Co. and
NuLeaf Naturals branded SKUs on the timelines outlined herein; the
Company hitting its forecasted revenue and sales projections; 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 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, which may cause
the actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements, and those assumptions and expected future events
include, but are not limited to: 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 its anticipated sales from continuing operations; the Company
will complete its proposed acquisitions; the Company will hit its
forecasted revenue and sales projections; Cabana Club and Cabana
ELITE loyalty programs membership will continue to increase; the
Company will deploy Fastendr™ technology across the Company's
retail stores, including licensing this technology, upon the
timelines disclosed herein; same-store sales will continue to
increase; the Company will make meaningful increases to its revenue
profile; the Company will continue to increase its revenue; 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 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 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 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; risk that the Company will not hit its forecasted
revenue and sales projections; risk that Cabana Club or Cabana
ELITE loyalty program membership will decrease or plateau; risk
that the Company will be unable to deploy Fastendr™ technology
across the Company's retail stores or license it on the timelines
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, but that it will decease or plateau;
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
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.
Additional risk factors that can cause results to differ
materially from those expressed in forward-looking statements in
this press release are discussed in greater detail in the
"Non-Exhaustive List of Risk Factors" section in Schedule A to our
current annual information form, and elsewhere in this press
release, as such factors may be further updated from time to time
in our periodic filings, available at www.sedar.com and
www.sec.gov, which risk factors are incorporated herein by
reference.
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 period ended
January 31, 2023. 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 "Non-Exhaustive List of 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.