Marcy Nicholson, Calgary
High Tide Inc., which operates Canna Cabana cannabis retail stores and accessory franchise Smoker’s Corner, and owns two other brands, has ambitious goals for expansion as it prepares to trade on the Canadian Securities Exchange (CSE) this month with the ticker symbol HITI. The Calgary-based company, which was founded in 2009, aims to open the maximum number of stores allowed in British Columbia, Alberta, and Ontario, as well as to become a wholesaler in Saskatchewan.
Below is a Q&A with High Tide president and chief executive Raj Grover:
Cannabis Professional: When will High Tide go public on the CSE?
Raj Grover: We don’t have a firm date. We’ll be trading by mid-December. We’re raising money right now.
Cannabis Professional: How much financing have you raised ahead of your initial public offering (IPO)?
Raj Grover: We’re raising another $20-million on our convertible debenture round. Our current valuation is close to $100 million.
Cannabis Professional: Have you fulfilled the CSE’s listing requirements?
Raj Grover: Yes, we have conditional approval on the CSE. It’s imminent that we’re going to get listed on the CSE. We’re just waiting for our first day of trading notification. We have been granted approval by the Alberta Securities Commission.
Cannabis Professional: High Tide was founded in Calgary in 2009. What are your expansion plans?
Raj Grover: Our first store was a 480-square-foot space in Calgary and it’s been quite a ride since. Now we have 19 Smoker’s Corner locations. We have Canna Cabana locations coming up. We’re going to achieve our maximum 37 stores in Alberta. The total number of development permits we’ve achieved are 30. We have about 21 stores under construction. We have five stores awaiting licenses from AGLC (Alberta Gaming, Liquor and Cannabis), that are ready for them to inspect. We have four (Canna Cabana) stores up and running.
Cannabis Professional: Last month the AGLC announced it temporarily stopped issuing licenses for cannabis retail stores in Alberta due to the national supply shortage. How has this impacted High Tide’s expansion plans?
Raj Grover: High Tide has been operating with a long-term strategy in mind so we continue to work toward those 37 stores (in Alberta). Our plans are right in line with our expectations. Licensing is just one step and we have many stores to build. Even with the AGLC hiccup, we’re on target for what we want to do. Our long-term strategy is not changing.
Cannabis Professional: What are your retail plans in Ontario?
Raj Grover: We’ve secured conditional leases for approximately 20 new stores. We’re looking to do 75 locations in Ontario and we’re looking for more rules on franchising. Our goal is to have 75 corporate locations in Ontario. It may take us a year to a year-and-a-half to get them all. These will be owned by High Tide. We are looking to expand Smoker’s Corner in Ontario through our franchise model. Smoker’s Corner only does accessories.
Cannabis Professional: When will you expand to sell wholesale in Saskatchewan and why?
Raj Grover: We have applied to become a licensed wholesaler in Saskatchewan and we are pretty much in the final stage of approvals. Being retailers, it helps us understand what the whole value chain looks like. Because we’re in distribution anyway with smoking accessories, we thought it was a perfect fit for High Tide. We have a 10,000-square-foot facility in Regina that’s also conditionally tied up.
Cannabis Professional: How is the cannabis supply shortage impacting you?
Raj Grover: We are fully stocked in the four stores we do have open. There are only 65-70 stores open in Alberta and we’re all getting equal access to cannabis. Supply is still a problem to get more retailers on board. Every month it will get a bit better than what it has been. I see supply improving through 2019 and going into 2020. The onus is on Health Canada. We need more licensed producers and they need to deliver on what they promised. Health Canada and licensed producers have to get their act together and speed up the processes they have in place; from Health Canada to get the producers licensed and for LPs to be completely focused on Canadian cannabis demand. Once both parties take action, we should see considerable supplies, and I think that’s already in the works.
Cannabis Professional: What are High Tide’s long-term goals?
Raj Grover: We want to be a strong, downstream, retail-focused, vertically integrated player. We intend to open as many retail locations as possible in each respective province. We will focus in North America first and then worldwide. We plan to acquire a few stores in Saskatchewan in the near future. We made the application in B.C. B.C.’s a bit behind in processing the applications but eventually we will be in B.C. with the maximum allowed eight stores.
Cannabis Professional: Many companies aim to gain significant market share in cannabis retail space. How does High Tide differentiate itself?
Raj Grover: We’re one of the most experienced players in the cannabis retail industry. We know our customers well. We’re well capitalized. We’ve proven ourselves in Alberta.