“Our vision is to build a loyal global membership base to whom we can sell all things cannabis, from flowers, edibles, and vapes to the various cannabinoids and consumption accessories.”
High Tide Inc. is a leading community-grown, retail-forward cannabis enterprise purposefully structured to unleash the full value of the world’s most powerful plant. The company excels across multiple dimensions, showcasing innovation in retail models, subscription services, and highly-regarded consumption accessories. Continuously establishing itself as a market leader, High Tide has made noteworthy contributions, yielding tangible results. Since its inception in 2009, the company has been instrumental in propelling the Canadian cannabis market forward, expanding its reach and operations into Europe, the United States, and various other global regions.
High Tide Inc. is headquartered in Calgary, Alberta.
The Silicon Review reached out to Raj Grover, the Founder, President, and CEO of High Tide Inc., and here’s his response.
Interview Highlights
Please tell us about the circumstances or events that led to the founding of High Tide Inc.
I came to Canada at the age of 20 by way of Mumbai, India. Initially, I lived in Toronto, Ontario, establishing several successful small businesses before selling them and relocating to Calgary, Alberta. Coming from a family that valued hard work, risk-taking, and an entrepreneurial spirit, I saw the opportunity to establish High Tide’s predecessor, Smokers Corner, in 2009, selling consumption accessories with an investment of just $50,000 and two employees. As promised by Prime Minister Trudeau, the Liberals ended up legalising recreational cannabis in 2018. I had strategically started plotting my moves as early as 2015, when the Liberals came into power, which included laying the groundwork to convert my smoke shops into legal cannabis retail stores, and following legalisation, I was able to do exactly that. I needed to raise external capital to realize my vision, so I took High Tide public in December of 2018 on the Canadian Securities Exchange. Today, High Tide trades on the Nasdaq, TSX Venture Exchange and the Frankfurt Stock Exchange and has since grown to become Canada’s largest non-franchised cannabis retailer, with nearly 160 stores operating across five Canadian provinces with many more in the pipeline.
Setbacks are a part of every growing business. Tell us about a few roadblocks and learning lessons that helped High Tide grow through the years.
Roadblocks and setbacks are inevitable, especially in an industry as new and hypercompetitive as Canadian cannabis. Regulators are also finding their way forward, and as a result, there have been instances where we incurred regulatory sanctions for marketing-related issues, which were industry norms at the time. Being the largest retailer in the country can have its perks and also its pitfalls, as we became a target for envious competitors making unreasonable complaints to regulators. However, through patience, perseverance, and putting forward rational arguments, we have been able to advocate for reasonable policy changes in this regard.
Another example of roadblocks we faced and eventually overcame with laser-focused execution was when we had to change our strategy from aggressive growth to free cash flow generation. As seen through our consistently exceeding quarterly results, thanks to our innovative discount club model, which, in our opinion, is the best retail concept in the country, we wanted to expand as quickly as possible. However, we needed additional capital to make this happen at a rapid pace. Due to the depressed cannabis capital markets, this was not possible unless we diluted our shareholders near 52-week lows, considering where our stock was trading at that time. Being mindful of the situation, we shifted our focus from expansion to free cash flow generation so we did not have to rely on the capital markets to take our business forward. In line with this new strategic direction, we aggressively cut back on new store growth while generating $4.1 million in positive free cash flow in the third fiscal quarter of 2023 and are now able to fund our expansion plans organically. Despite the turbulence we continue to experience in the capital markets, we are now among a handful of publicly traded North American cannabis companies to have achieved this coveted milestone.
As a leading community-grown, retail-forward cannabis enterprise, what are High Tide’s key focus areas?
We are acutely focused on expanding the reach of our membership-based innovative discount club model, which currently has around 9.5% of the cannabis retail market share in Canada. We have quickly accumulated over 1.2 million Cabana Club Members, which is the largest brick-and-mortar loyalty plan in the country, including over 20,000 ELITE members who pay us a monthly subscription fee to receive additional perks and premium benefits when shopping with us in-store and online. We are continuously looking to expand our ELITE product offerings to convert as many Cabana Club members into ELITE as possible, given that it’s a high-margin revenue stream for High Tide and helps instill further customer loyalty. Our other key focus area is the expansion of our US and international customer base into a global Cabana Club community, as we have served nearly three million customers in the US alone through our ancillary cannabis business lines. Once legally permitted to do so, our vision is to build a loyal global membership base to whom we can sell all things cannabis, from flowers, edibles, and vapes to the various cannabinoids and consumption accessories.
What strategies do you have in place to encourage innovation in your company?
Innovation is a key part of High Tide’s DNA. Being part of an exciting but hyper-competitive and challenging industry, as a team, we are always thinking about where the puck is going, and this enables us to continually be positioned ahead of our competition. We are always thinking of innovative ways to satisfy our customers, putting them first, and this has resulted in us launching our innovative discount club model, Canada’s largest cannabis bricks-and-mortar loyalty program in Cabana Club, the Elite paid membership tier, Fastendr Technology, and more recently, Cabanalytics Consumer Insights.
Tell us, what’s next for High Tide Inc.
Achieving positive free cash flow in 2023, five months ahead of our communicated timeline, was a major boon for us. Going forward, our intention is to remain free cash flow positive while accelerating organic store growth across Canada throughout 2024, with a focus on Ontario, Canada’s largest province.
Is there anything you would like to add before we wrap up?
We are carefully following legislation in both the US and Germany. With respect to the US, rescheduling seems to be moving forward, and we are hopeful that the regulatory guidance that accompanies it could convince exchanges like NASDAQ to allow the listing of companies involved in plant-touching business in the states where adult cannabis use has been legalised. Were this to happen, we are well-positioned to bring Canna Cabana to the U.S. and work towards our eventual goal of becoming a top 5 MSO. In Germany, we are hopeful that regional commercial pilot projects could be in place by 2025, opening the door for Canna Cabana in Europe.
Raj Grover | Founder, President & CEO
Raj Grover is one of Canada’s foremost business strategists and deal-makers. He founded High Tide and its subsidiaries, Valiant Distribution and Canna Cabana, and also co-founded Famous Brandz. Under his leadership, High Tide has grown from a small shop of two employees into Canada’s largest non-franchised cannabis retailer with over 150 locations and 1,500 team members globally. Raj has also expanded High Tide’s online reach in the ancillary cannabis space across North America and Europe. He is committed to giving back to the global community and has spearheaded High Tide’s support of World Vision, sponsoring over 300 children across 101 communities in 33 countries.
“Today, High Tide trades on the Nasdaq, TSX Venture Exchange and the Frankfurt Stock Exchange and has since grown to become Canada’s largest non-franchised cannabis retailer, with 156 stores operating across five Canadian provinces with many more in the pipeline.”