While many cannabis retailers in Canada are facing a tightening market, High Tide Inc. (HITI) is defying the trend with strong growth. The Calgary-based company reported record revenue of CA$131.7 million ($97 million) in its third-quarter 2024 financial results, representing a 6% increase both year-over-year and sequentially. This impressive performance highlights High Tide’s ability to navigate the challenging cannabis landscape and emerge as a market leader.
CEO Raj Grover attributes the company’s success to its innovative discount club model, which has been a key driver of growth. Since the beginning of 2024, High Tide has added 21 new stores, including 11 in the third quarter, and same-store sales have surged by 118% since the launch of the discount club. This model has also attracted a loyal customer base, with the average High Tide store generating CA$2.6 million in annual revenue as of June 2024, significantly exceeding industry averages.
High Tide’s growth strategy extends beyond its discount club model. The company has also focused on expanding its store count and enhancing its loyalty programs. These initiatives, particularly the Cabana Club and its ELITE membership tier, have been instrumental in driving customer engagement and retention. ELITE members tend to shop more frequently and have larger basket sizes, contributing significantly to High Tide’s revenue growth.
This focus on customer loyalty has translated into a remarkable market share expansion for High Tide. The company now boasts a 12% market share across the provinces it operates in, up from 10% a year ago. High Tide’s strong market position is further solidified by its over 1.55 million Cabana Club members, including 57,000 ELITE members, underscoring its ability to connect with cannabis consumers.
Financially, High Tide continues to demonstrate strength. The company has recorded positive net income for five consecutive quarters, posting CA$0.8 million in net earnings in the third quarter of 2024. This marks a significant improvement from a CA$3.6 million loss in the same period last year. High Tide’s commitment to operational efficiency has resulted in robust free cash flow, totaling CA$21.8 million over the trailing four quarters.
The company’s impressive financial performance is a testament to its ability to manage costs effectively while driving revenue growth. High Tide’s dedication to innovation and its successful expansion strategy have positioned it for continued market leadership amidst challenging industry conditions. The company remains committed to expanding its presence with a target of 300 Canna Cabana locations nationwide and further advancements in its white-label product offerings. As High Tide continues to evolve and adapt to the dynamic cannabis landscape, its unwavering commitment to customer satisfaction and its innovative approach will undoubtedly propel it to even greater heights in the years to come.
