Same-store Sales Increased 23% Sequentially
Compared to the Previous Quarter
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.
CALGARY,
AB, June 14, 2022 /CNW/ - 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 second fiscal quarter of 2022 ended
April 30, 2022, the highlights of
which are included in this news release. The condensed interim
consolidated financial statements for the three and six months
ended April 30, 2022 and the
accompanying management's discussion and analysis can be accessed
by visiting the Company's website at www.hightideinc.com, and its
profile pages on SEDAR at www.sedar.com, and EDGAR at
www.sec.gov.
Second Quarter 2022 – Financial Highlights:
- Revenue increased to $81.0
million in the second quarter of 2022 compared to
$40.9 million in the same quarter
last year. Sequentially, revenue increased by 12% compared to the
previous quarter. This represents the second-highest quarterly
revenue figure generated by a Canadian cannabis company reporting
in Canadian dollars.
- Gross profit increased by 51% to $22.7
million in the second quarter of 2022 compared to
$15.0 million in the same quarter
last year.
- Gross profit margin in the three months ended April 30, 2022, was 28% compared to 32% in the
previous quarter ended January 31,
2022. The drop in gross profit margin is attributed to an
increased share of total revenue coming from the bricks-and-mortar
retail side of the Company's business, as a result of continued
easing of pandemic restrictions across North America, and the rapid organic and
inorganic bricks-and-mortar expansion in Canada.
- Adjusted EBITDA1 for the three
months ended April 30, 2022, was
$2.4 million compared to $3.0 million in the previous quarter ended
January 31, 2022. This can be
attributed to retail seasonality, as the previous quarter included
the holiday season.
- Cabanalytics data sales were $5.1
million in the second quarter of 2022 compared to
$2.9 million for the same quarter
last year. Sequentially, Cabanalytics data sales increased by 10%
compared to the previous quarter.
- For locations operational throughout the second quarter of 2022
and 2021, same-store sales increased by 23%. Since the launch of
the discount club model in October of 2021, daily same-store sales
have increased by 48%. The Company has continued to experience
same-store sales growth since the end of the quarter.
- Geographically in the second quarter of 2022, revenue of
$63.5 million was earned in
Canada, $15.9 million was earned in the United States and $1.6 million was earned internationally. Compared
to the second quarter of 2021, revenue increased by 81% in
Canada, 181% in the United States, and 864%
internationally.
- Segment-wise in the three months ended April 30, 2022, $80.0
million of revenue was generated by Retail, $1.0 million by Wholesale, and an immaterial
amount by Corporate.
- Cash on hand as of April 30,
2022, totaled $15.0
million.
_______________________________
|
1 Adjusted EBITDA is a non-IFRS
financial measure.
|
"Once again, I can proudly report that High Tide continues to
see consistent and significant growth year-over-year and
sequentially with every passing quarter, despite a persistently
challenging macro environment and the state of the capital markets.
Since its launch, the ongoing growth of our innovative discount
club model has resulted in a 48% increase in daily same-store
sales, contributing to our 98% revenue growth over the same quarter
last year. While we aggressively gain retail market share in
Canada ahead of our peer group, we
have remained adjusted EBITDA positive for the ninth straight
quarter. Although we are pleased with our EBITDA of $2.4 million this quarter, we highlight that, as
the only pure-play cannabis retailer trading on Nasdaq, direct
ongoing costs incurred associated with our Nasdaq listing amounted
to approximately $750,000 this
quarter. Our continued EBITDA positivity is a critical point for
us, as we are steadily growing at the same time when many of our
publicly-traded and private peers are facing fierce challenges and
slowing down," said Raj Grover, President and Chief Executive
Officer of High Tide.
"We also continue to be the acquirer of choice, as many
independents see compelling value in joining the High Tide family
in this highly competitive retail landscape. Our recently-launched
Cabana Cannabis Co. products will further contribute to healthy
margin increases, since we expect our house-branded products to
represent a 20-30% share of our total bricks-and-mortar sales over
the long term. We are currently sitting at 126 stores across
Canada, and remain confident that
we will reach our goal of 150 stores by the end of the 2022
calendar year. Last quarter, we became the second-largest
revenue-generating Canadian cannabis company that reports in
Canadian dollars, and we are now on an annualized revenue run rate
trajectory of approximately $325
million. I am lazer-focused on ensuring that High Tide's
growth trajectory will bring us to that coveted number one position
in Canada. I want to give a huge
shout out and thanks to the entire High Tide team for consistently
producing industry-leading results," added Mr. Grover.
Second Fiscal Quarter 2022 – Operational Highlights:
- Organic retail store expansion continued with 5 new Canna
Cabana locations: 3 in Alberta and
2 in Ontario.
- Cabana Club membership increased to over 550,000 members as of
today, from 245,000 at the launch of the Company's discount club
model, representing a 124% increase over the past 8 months.
- Following the success of its discount club model, the Company
celebrated the milestone of 420,000 Cabana Club members by
launching an exclusive car giveaway contest, which was the first of
its kind in North America and will
be an annual event going forward.
- The Company was recognized as one of the top 10 performing
diversified industries stocks in the 2022 TSX Venture 50™, which
comprises the top 50 companies from over 1,600 listed on the TSX
Venture Exchange.
- The Company closed the acquisition of Bud Room Inc. on
February 10, 2022, securing ownership
of Fastendr™ retail kiosk and smart locker technology. Fourteen
Canna Cabana locations have been equipped with Fastendr™
technology, which is helping to further differentiate the Company's
already-unique retail concept.
- The Company launched cannabis delivery on demand through select
Canna Cabana locations in Ontario,
Manitoba, and Saskatchewan on February 22, 2022, and in Alberta on March 8,
2022.
- On March 3, 2022, the Company
announced that it had entered into an agreement to acquire four
established retail cannabis stores, operating as Crossroads
Cannabis, in Stratford,
Woodstock, Hanover, and Markdale, Ontario. On April 27, the Company closed the acquisition of
the three Crossroads Cannabis stores in Stratford, Hanover, and Markdale.
- The Company's subsidiary, Fab Nutrition, LLC., operating as
'FAB CBD,' launched a Subscribe-and-Save discount program in
the United States on March 7, 2022.
- The Company's subsidiary, Enigmaa Ltd., operating as 'Blessed
CBD,' launched online sales of its premium hemp-derived CBD
products in Germany on
March 9, 2022.
- On March 30, 2022, the Company
announced that it had entered into an agreement to acquire two
established retail cannabis stores, operating as Bud Heaven, in Bracebridge, Ontario.
- On April 1, 2022, the Company
announced that it had entered into an agreement to acquire two
established retail cannabis stores, operating as Boreal Cannabis,
in Slave Lake and St. Paul, Alberta. On April 22, 2022, the Company announced that it had
closed the acquisition of Boreal Cannabis, adding the two stores to
the Canna Cabana network.
- On April 18, 2022, the Company
entered into a letter of intent with ConnectFirst Credit Union for
CAD$30 million in non-dilutive credit
facilities. These facilities consist of CAD$15 million of term debt and CAD$15 million in a mergers and acquisitions
revolving master line. The Company expects to close the credit
facilities in the month of July.
Subsequent Events:
- The Company organically opened one new store in Alberta, one in Saskatchewan, and one in Ontario. The Company's total store count as of
today is 126 across Canada.
- The Company completed the acquisition of the final Crossroads
Cannabis store in Woodstock,
Ontario.
- The Company completed the acquisition of Bud Heaven, adding two established cannabis
retail stores in Bracebridge,
Ontario.
- The Company's President and Chief Executive Officer, Raj
Grover, received the Cannabis Person of the Year Award at the
O'Cannabiz Industry Awards Gala on June 1,
2022.
- On June 13, 2022, the Company
announced the launch of its Cabana Cannabis Co. line of
house-branded products in Saskatchewan, with anticipated launches in
Ontario and Manitoba within the coming weeks, pending
listing approval.
Selected financial information for the three and six months
ended April 30, 2022:
(Expressed in thousands of Canadian Dollars)
|
|
Three months ended
April 30
|
|
Six months ended
April 30
|
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
|
$
|
|
$
|
|
|
|
$
|
|
$
|
|
|
Revenue
|
|
81,031
|
|
40,868
|
|
98 %
|
|
153,249
|
|
79,187
|
|
94 %
|
Gross Profit
|
|
22,694
|
|
14,998
|
|
51 %
|
|
45,676
|
|
29,766
|
|
53 %
|
Gross Profit
Margin
|
|
28 %
|
|
37 %
|
|
(9 %)
|
|
30 %
|
|
38 %
|
|
(8 %)
|
Total Operating
Expenses
|
|
(30,272)
|
|
(19,509)
|
|
55 %
|
|
(59,401)
|
|
(36,322)
|
|
64 %
|
Adjusted EBITDA
(1)
|
|
2,402
|
|
4,720
|
|
(49 %)
|
|
5,357
|
|
9,322
|
|
(43 %)
|
Loss from
Operations
|
|
(7,578)
|
|
(4,511)
|
|
68 %
|
|
(13,725)
|
|
(6,556)
|
|
109 %
|
Net loss
|
|
(8,277)
|
|
(12,266)
|
|
(33 %)
|
|
(15,629)
|
|
(29,111)
|
|
(46 %)
|
Loss per share
(Basic)
|
|
(0.14)
|
|
(0.30)
|
|
(53 %)
|
|
(0.28)
|
|
(0.86)
|
|
(67 %)
|
Note:
|
|
(1)
|
Adjusted EBITDA is a
non-IFRS financial measure.
|
The following is a reconciliation of Adjusted EBITDA to Net
loss:
|
|
Three Months Ended
April 30,
|
|
Six Months Ended
April 30,
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Net loss
|
|
(8,277)
|
|
(12,266)
|
|
(15,629)
|
|
(29,111)
|
|
Income taxes
(recovery)
|
|
(800)
|
|
(124)
|
|
(1,864)
|
|
464
|
|
Accretion and
interest
|
|
1,541
|
|
2,838
|
|
3,107
|
|
5,540
|
|
Depreciation and
amortization
|
|
7,627
|
|
7,714
|
|
14,738
|
|
13,808
|
|
EBITDA
(1)
|
|
91
|
|
(1,838)
|
|
352
|
|
(9,299)
|
|
Foreign exchange
loss
|
|
107
|
|
5
|
|
204
|
|
94
|
|
Transaction and
acquisition costs
|
|
669
|
|
889
|
|
1,563
|
|
2,470
|
|
(Gain) loss revaluation
of derivative liability
|
|
(728)
|
|
3,988
|
|
(1,253)
|
|
14,472
|
|
Debt restructuring
gain
|
|
—
|
|
—
|
|
—
|
|
(1,145)
|
|
Loss on revaluation of
marketable securities
|
|
43
|
|
159
|
|
262
|
|
144
|
|
Loss (gain) on
extinguishment of debenture
|
|
(133)
|
|
—
|
|
(115)
|
|
516
|
|
Impairment
loss
|
|
—
|
|
—
|
|
89
|
|
—
|
|
Share-based
compensation
|
|
2,353
|
|
1,517
|
|
4,255
|
|
2,070
|
|
Adjusted EBITDA
(1)
|
|
2,402
|
|
4,720
|
|
5,357
|
|
9,322
|
|
Note:
|
|
|
(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. Adjusted EBITDA is a non-IFRS financial
measure.
|
Outlook:
High Tide continues to be the largest non-franchised retailer in
the Canadian bricks-and-mortar cannabis market with 126 locations
across the country. The Company's launch of its innovative discount
club model near the end of the fourth fiscal quarter of 2021 has
delivered tremendous results to date, with same-store sales having
continued to accelerate throughout the second fiscal quarter of
2022. As stated in this financial release, the Company reported
revenue of $81.0 million in the
second fiscal quarter of 2022, which is the second-highest
quarterly revenue figure amongst all Canadian cannabis companies
that report in Canadian dollars. Through organic growth and
accretive M&A, the Company expects to continue to increase its
revenue through the third fiscal quarter of 2022, and for the
remainder of the year. With 126 stores, the Company is well on its
way to achieving its goal of increasing its Canadian retail store
portfolio to at least 150 locations by the end of 2022. The Company
anticipates entering the British
Columbia market within the third fiscal quarter of 2022, and
will continue growing strategically in other provinces where it
currently operates. The Company has been integrating its
recently-acquired customized Fastendr™ technology across its retail
store network, which it expects will drive greater efficiency and
improve the customer experience. Fourteen of the Company's stores
are now equipped with the Fastendr™ technology. Subject to hardware
availability and logistics, the Company anticipates having all of
its Canna Cabana locations outfitted with this technology by the
end of the 2022 calendar year. The Company expects continued
launches of more Cabana Cannabis Co. branded SKUs throughout 2022
and 2023. The Company also has firm plans to build upon its
existing momentum in the international hemp-derived CBD and
consumption accessories e-commerce sectors. Throughout 2022, High
Tide will continue to integrate and expand CBD brands that it
acquired in 2021, including NuLeaf Naturals, FAB CBD, and Blessed
CBD. As part of the identified synergies within the Company's
diversified ecosystem, and as previously communicated, the Company
recently launched subscribe-and-save programs on the platforms of
all three of its CBD subsidiaries. Through its United Kingdom-based subsidiary, Blessed CBD,
the Company entered the German market with the organic sale of
premium hemp-derived CBD products on its e-commerce platform. The
Company continues to monitor the German legislative process
closely, given that the new German government has recently
indicated its intent to introduce a cannabis legalization bill by
the end of 2022. In addition to growing its in-house brands, High
Tide intends to continue growing its online retail portfolio
through further strategic and accretive acquisitions.
In addition, the Company, through its subsidiaries
("Subsidiaries"), intends to restart sales in certain states
in the United States of products
containing hemp-derived cannabinoids, including delta-8
tetrahydrocannabinol ("Delta-8") and delta-9
tetrahydrocannabinol ("Delta-9"), extracted from cannabis
plants that meet the definition of "hemp" under the Agriculture
Improvement Act of 2018. The legality of Delta-8 derived from hemp
is uncertain and varies from state to state, with some states
banning the sale of products containing Delta-8. The Company will
not sell into any states where the sale of Delta-8 is prohibited at
the state level. At the federal level in the United States, the legality of Delta-8
remains unclear. The United States Drug Enforcement Agency
("DEA") has issued a statement that some have interpreted as
making hemp-derived Delta-8 illegal, while it has issued other
statements that some interpret to the contrary. As a result, there
is a risk that the DEA could consider Subsidiaries' Delta-8
products an illegal controlled substance under the U.S. Controlled
Substances Act (the "CSA") or the Federal Analogue Act in
the United States. Please refer to
the Company's management discussion and analysis dated June 14, 2022, available on www.sedar.com, for
more information about the risks associated with Delta-8 and
Delta-9.
High Tide Earnings Event Webcast:
The Company will host a webcast and conference call to discuss
their unaudited results and outlook at 5:30
PM (Eastern Time) today, Tuesday,
June 14, 2022.
Webcast Link for High Tide Earnings Event:
https://events.q4inc.com/attendee/198957094
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: 076140
*Participants will need to enter the participant access code
before being met by a live operator*
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 126 current locations spanning
Ontario, Alberta, Manitoba, and Saskatchewan. 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™. The Company is also North America's first and only cannabis
discount club retailer, featuring Canna Cabana, Meta Cannabis Co.,
and Meta Cannabis Supply Co. banners, with additional locations
under development across the country. High Tide's portfolio also
includes retail kiosk 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, and BlessedCBD.de, as well as its
wholesale distribution division under Valiant Distribution,
including the licensed entertainment product manufacturer Famous
Brandz. 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.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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.
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, with the Company
anticipating entering into British
Columbia within the third fiscal quarter of 2022 and
remaining on a positive growth trajectory; same-store sales
continuing to increase in the third quarter of 2022 and beyond; the
Company making meaningful increases to its revenue profile; the
Company growing in the German market; the Company continuing to
offer the car giveaway contest in future years; the Company
deploying Fastendr™ technology across the Company's retail stores
upon the timelines disclosed herein, resulting in greater
efficiencies and improving the customer experience; the
Company continuing to increase its revenue through the third 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, and the Company's ability to successfully integrate the
operations of any business acquired within the Company's business;
the Company's intention to devote resources to the protection of
its intellectual property rights, including by seeking and
obtaining registered protections and developing and implementing
standard operating procedures; 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 reaching its
goal of leading global cannabis across all business segments in
which they operate; the anticipated sales from continuing
operations for the financial year of the Company ending
October 31, 2022; the Company hitting
its forecasted revenue and sales projections for the third quarter
of 2022; the Company's expectations from its Cabana Cannabis Co.
white label products; the Company launching additional Cabana
Cannabis Co. branded SKUs upon the timelines outlined herein; the
Company securing the proposed credit facilities on the terms and
within the timelines set out in this news release; 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 utilizing the proposed credit facilities to complete future
acquisitions; the Company becoming the largest revenue-generating
cannabis company in Canada; the
Company, through its Subsidiaries, relaunching sales of Delta-8 and
Delta-9 products in the United
States; house-branded products will represent a 20-30% share
of the Company's total bricks-and-mortar sales in the long term;
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, 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 third quarter of
2022; Cabana Club loyalty program membership will continue to
increase; the Company will reach its goal of leading global
cannabis across all business segments in which they operate; the
Company will deploy Fastendr™ technology across the Company's
retail stores, upon the timelines disclosed herein, resulting in
greater efficiencies and improving the customer experience; the
Company will continue to launch SKUs under its exclusive lineup of
Cabana Cannabis Co. white label products on the timelines disclosed
herein and these products will contribute to healthy margin
increases; house-branded products will represent a 20-30% share of
the Company's total bricks-and-mortar sales in the long term;
same-store sales will continue to increase in the third quarter of
2022 and beyond; the Company will make meaningful increases to its
revenue profile; the Company will grow in the German market; the
Company continue the car giveaway contest in future years; the
Company will continue to increase its revenue through the third
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 continue to grow its online retail portfolio
through further strategic and accretive acquisitions; 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 Company will utilize the proposed
credit facilities to repay its debt, replace its current credit
facility and complete future acquisitions; the Company will enter
British Columbia upon the
timelines indicated herein; the Company will become the largest
revenue-generating cannabis company in Canada; and the Company, through its
Subsidiaries, will restart sales of Delta-8 and Delta-9 products in
the United States.
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 third quarter of 2022; risk
that Cabana Club loyalty program membership will decrease and/or
plateau; risk that the Company will not reach its goal of leading
global cannabis across all business segments in which they operate;
risk that the Company will be unable to deploy Fastendr™ technology
across the Company's retail stores or upon the timelines disclosed
herein; risk that the Company will be unable to launch additional
SKUs under its exclusive Cabana Cannabis Co. brand on the timelines
disclosed herein or at all; risk that the Cabana Cannabis Co.
products will be unable to contribute to margin increases; risk
that house-branded products will not represent a 20-30% share of
the Company's total bricks-and-mortal sales in the long term; 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 third 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 grow in the German market;
risk that the Company will be unable to continue the car giveaway
contest in the future; risk that the Company will be unable to
expand into 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 and/or will
be unable to utilize the facilities on the terms and within the
timelines anticipated; risk that the Company will be unable to
become the largest revenue-generating cannabis company in
Canada; risk that the Company,
through its Subsidiaries, will be unable to restart sales of
Delta-8 and Delta-9 products in the
United States; risks surrounding the legality of Delta-8
derived from hemp; risks surrounding the uncertainty and legality
of Delta-8 and Delta-9 state to state; risk that the DEA could
consider the Company's Delta-8 products an illegal controlled
substance under 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 this 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, and/or (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 Company's
common shares on the TSX Venture Exchange and Nasdaq
Exchange.
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, and (v) the Company's unaudited financial results for
the three and six months ended April 30,
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.
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SOURCE High Tide Inc.