Benjamin Adams Nov 30, 2022
Edging past the shortlist of Canadian juggernauts in cannabis, High Tide claimed the top spot in revenue among the country’s leading cannabis companies.
High Tide (NASDAQ: HITI) (TSXV: HITI) (FSE: 2LYA) announced that according to new data recently released by the cannabis business publication, New Cannabis Ventures, the company is now Canada’s top revenue-generating cannabis company.
High Tide is North America’s first cannabis discount club retailer, under the Canna Cabana banner, making it the single-largest cannabis retail brand in Canada, operating more than 100 Canna Cabana retail stores. With 142 current locations—spanning across British Columbia, Alberta, Saskatchewan, Manitoba, and Ontario—High Tide is the largest non-franchised cannabis retail chain in Canada.
New Cannabis Ventures manages the Public Cannabis Company Revenue & Income Tracker, which ranks the top revenue and incoming producing cannabis stocks. It’s a data-driven, fact-based tracker that is continually updated—strictly based on new filings. New Cannabis Ventures, a news and information platform provided by NCV Media, highlights promising companies and influential investors. This round, High Tide landed the top ranking.
“High Tide has been an evolving entity since Smoker’s Corner opened its doors in 2009,” says Raj Grover, President and Chief Executive Officer of High Tide. “The past 13 years have been carefully laid out and thoughtfully executed, bringing on the best minds. There isn’t simply one secret to High Tide’s growth and 10 straight quarters of positive EBITDA, rather, it is a result of leveraging several unique strengths.”
Since it was founded in 2009, High Tide has become a leader in Canadian bricks-and-mortar cannabis retail.
“The fact is we have been retailing to the cannabis consumer, legally, for over a decade,” Grover says. “Accordingly, we have a unique insight into what they are looking for and how to best cater to their needs. In particular, our shoppable layouts and unbeatable prices have gone a long way in helping accelerate adoption from the illicit market to our regulated ecosystem. Speaking of our ecosystem, ours is differentiated from our peers. Not only are we a leading Canadian cannabis retailer, but we also have CBD brands we own (in the U.S. and U.K.), thousands of our own consumption accessories SKUs, as well as wholly-owned e-commerce platforms. We are vertical in consumption accessories and semi-vertical in CBD.
“Finally, the biggest reason we have been able to grow so much is the strength of our team. We have hired and retained the best top-tier talent within our industry—which, given the breadth of our ecosystem, is no small feat,” Grover adds. “Our team is relentless, and because of their drive, skills and innovative spirit, we have become the largest cannabis company in Canada by revenue. I am extremely grateful for that.”
High Tide’s second Canna Cabana retail cannabis store in Windsor, Ontario, began selling adult-use cannabis products as the company’s 142nd location.
“We are currently at 142 Canna Cabana bricks-and-mortar stores across the country,” Grover says. “Securing prime real estate is a huge part of our strategy, and it’s how we have risen to the top after the initial euphoria of legalization subsided. Having great real estate is arguably the single biggest factor in determining long-term success. As we demonstrated an enviable track record over the past few years, we also established very strong relationships with key landlords across the country. They see who we are and what we have done—and as a result, we frequently receive the first crack at securing prime locations.
“Our targets are to reach 150 stores by the end of 2022, 200 stores by the end of 2023, and 250 stores by the end of 2024. Similar to our past expansion, we expect that future stores onboarded will be a healthy mix of organic openings as well as acquisitions,” he adds. “We are also working on international expansion—eyeing Germany and the U.S. in particular—as we have ambitions to be a major cannabis retailer globally.”
High Tide operates established e-commerce platforms such as Grasscity, Smoke Cartel, Daily High Club, and DankStop. Hemp-derived products are provided by platforms such as Nuleafnaturals.com, FABCBD.com, BlessedCBD.co.uk, BlessedCBD.de, and Amazon United Kingdom. Its wholesale distribution division under Valiant Distribution, includes the licensed entertainment product manufacturer Famous Brandz.
“I started this business in 2009 with less than $50,000 and two employees,” Grover explains. “While there were many ups and downs along the way, the real excitement came after we went public in December 2018 on the Canadian Securities Exchange. Today, our shares trade on the Toronto Venture Exchange as well as the Nasdaq.
Grover reflected on some of the changes he’s witnessed during the past decade or so. “The industry has evolved significantly over this time frame,” he said. “In December 2018, cannabis had just become legal and suffered from a lack of stores and supply, as well as questions about how well certain product formats would do. Today, we have a $4.7 billion industry which continues to grow.
“Governments initially took a harder line in an effort to be more cautious as the industry was legalized. Over time, they have relaxed certain restrictions, and we are optimistic that further changes including what types of products can be sold, taxation rates, government wholesaler markups, and what role the government plays in the supply chain will all continue to evolve and be more business friendly.”
“The biggest change for our business was the introduction of our innovative discount club model in October 2021. The model is built on four pillars—everyday unbeatable prices on cannabis, unparalleled verticalization on consumption accessories, our Cabana Cannabis Co. white label products (and our owned CBD brands), as well as our Cabana Club loyalty program. The uptake of this model has exceeded even our most optimistic projections and driven same-store sales which have allowed us to keep increasing our market share. Today we stand at over 860,000 Cabana Club members, representing 14% of the estimated number of cannabis users across Canada outside of Quebec. We just launched Cabana ELITE, the upgraded tier of our loyalty program, which offers members even more benefits for a small recurring fee. I’m very excited to see what the uptake will be from consumers and how the program will evolve over the years ahead.”
High Tide also adopts retail kiosk and smart locker technology called Fastendr™—and acquired the company last January. Fastendr™ provides fully automated technology integrating retail kiosks and smart lockers to provide a more efficient buying experience. This is done via faster transaction times, increased average basket size, lower overhead, and labor costs.