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Sept. 14, 2021, 4:00 p.m. EDT

High Tide Reports Third Quarter 2021 Financial Results Featuring a 99% Increase in Revenue and Sixth Consecutive Quarter of Positive Adjusted EBITDA

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CALGARY, AB, Sep. 14, 2021 (Canada NewsWire via COMTEX) -- High Tide Inc. ("High Tide" or the "Company") /zigman2/quotes/201958100/composite HITI -1.71% /zigman2/quotes/222662325/delayed CA:HITI -2.02% /zigman2/quotes/206848902/delayed DE:2LYA -1.56% , a retail-focused cannabis corporation enhanced by the manufacturing and distribution of consumption accessories, filed its financial results for the third fiscal quarter of 2021 ending July 31, 2021, the highlights of which are included in this news release. The full set of Condensed Interim Consolidated Financial Statements and Management's Discussion and Analysis can be viewed by visiting High Tide's website at www.hightideinc.com , its profile page on SEDAR at www.sedar.com , and its profile page on EDGAR at www.sec.com .

The Company will host a conference call to discuss the results at 6:00pm Eastern Time on September 14, 2021.

Third Quarter 2021 - Financial Highlights:







        
            --  Revenue increased by 99% to $48.1 million in the three months
                ended July 31, 2021, compared to $24.1 million in the same
                quarter last year. The third quarter of 2021 financial results
                incorporate the acquisition of META Growth Corp. ("Meta") on
                November 18, 2020, Smoke Cartel, Inc. ("Smoke Cartel") on March
                24, 2021, Fab Nutrition, LLC. ("FABCBD") on May 10, 2021, and
                DHC Supply LLC. ("DHC") on July 6, 2021.
            --  As of today, Cabana Club membership has grown by 45% to
                approximately 221,127 (June 28, 2021 - 151,240) due in large
                part to the success of our 'One Stop Shop' accessories
                promotion.
            --  Gross profit increased by 75% to $16.7 million in the three
                months ended July 31, 2021, compared to $9.5 million in the
                same quarter last year.
            --  Gross profit margin in the three months ended July 31, 2021,
                was 35% compared to 40% in the same quarter last year.
            --  Adjusted EBITDA((1)) for the three months ended July 31, 2021,
                was $1.5 million compared to $3.4 million for the same quarter
                last year. The decrease in adjusted EBITDA was primarily due to
                expenses related to the up listing of the Company's stock to
                Nasdaq including directors' and officers' liability insurance
                premiums, Nasdaq listing fees, one-time professional fees, and
                additional human resources to support the integration of newly
                acquired companies. As a result of the up listing to Nasdaq,
                the Company became a non-venture issuer resulting in higher
                compliance requirements.
            --  Geographically in the three months ended July 31, 2021, $38.4
                million of revenue was earned in Canada, $9.6 million in the
                United States and an immaterial amount internationally.
            --  Revenue from the United States increased to $9.6 million,
                compared to $5.7 million for the second quarter of 2021,
                representing a 69% increase sequentially.
            --  Segment-wise in the three months ended July 31, 2021, $46.3
                million of revenue was generated by Retail, $1.8 million by
                Wholesale, and an immaterial amount by Corporate.
            --  Cash on hand as of July 31, 2021, totaled $26.6 million
                compared to $7.5 million as of October 31, 2020.
        
        
        








        
                                (1) Adjusted EBITDA is a
                                 non-IFRS financial
                                 measure.
        
        
        


"Since our inception over a decade ago there has never been a more opportunistic time for our company's growth. Over the past year, we have been making strategic moves to successfully advance our rising portfolio of companies. We believe we can continue to build upon this momentum and capture a sizeable share of the cannabis market globally. I'm proud of our team's efforts this quarter which resulted in revenue increasing once again by 99 percent over last year and 18 percent sequentially, despite market disruptions due to pandemic related lockdowns and a very aggressive pricing strategy adopted by some value players. In Ontario, the largest cannabis market in Canada, due to pandemic related restrictions, our stores were closed for in-person shopping for about half of the second quarter with only click-and-collect and delivery permitted. Despite these challenges we have been able to remain EBITDA positive by increasing our revenue at a pace consistent with previous quarters," said Raj Grover, President and Chief Executive Officer of High Tide. "This last quarter saw us continue our organic growth momentum by opening seven new retail locations across Canada with a total of 93 locations today. While the Canadian retail market remains competitive, our one stop cannabis shop concept is very well received. This is evidenced by the fact that our Cabana Club membership grew by over 69,000 during the last quarter. We are very excited to have announced earlier today our new value focussed cannabis concept that is ready to be deployed in value sensitive markets. Beyond our bricks and mortar organic growth, we doubled down on more accretive e-commerce acquisitions last quarter, in the consumption accessories and hemp-derived CBD space, with a particular focus on the U.S. market. With these acquisitions our portfolio now includes three of the top five most popular online platforms for consumption accessories in the world. I remain excited about our e-commerce pipeline and look forward to sharing more good news on the M&A front in the very near future," added Mr. Grover.

Third Quarter 2021 - Operational Highlights:







        
            --  The Company completed the acquisition of FABCBD on May 10,
                2021, and Daily High Club ("DHC") on July 6, 2021, enhancing
                the Company's e-commerce business.
            --  The Company announced the filing of Form 40-F with the U.S.
                Securities and Exchange Commission fulfilling a significant
                milestone for the NASDAQ listing.
            --  The Company completed a 15:1 share consolidation on May 14,
                2021, and began trading on the Nasdaq on June 2, 2021, under
                the symbol "HITI".
            --  The Company was added to three prominent ETFs: Cannabis ETF
                ("THCX"), AdvisorShares Pure Cannabis ETF ("YOLO"), and
                Horizons Marijuana Life Sciences Index ETF ("HMMJ").
            --  The Company closed an oversubscribed bought deal equity
                financing on May 26, 2021, for gross proceeds of $23.2 million.
            --  The Company announced the elimination of its senior secured
                debt.
            --  The Company completed the sale of KushBar retail cannabis
                assets to Halo for $5.7 million.
            --  The Company announced its plan to acquire leading online
                retailer DS Distribution Inc., ("DankStop") to continue rapid
                expansion into the Unites States.
            --  The Company announced plans to increase its presence in
                Saskatchewan through acquisition of a Regina retail store
                portfolio.
            --  The Company opened seven cannabis retail locations under the
                Canna Cabana banner: two in Ontario, four in Alberta, and one
                in Saskatchewan.
        
        
        


Subsequent Events:







        
            --  The Company completed the acquisition of all the common shares
                of 102105699 Saskatchewan Ltd., (operating as 102 Saskatchewan)
                for $2.7 million.
            --  The Company opened four new Canna Cabana stores, three in
                Ontario, and one in Alberta.
            --  The Company completed the acquisition of 100% of DankStop for
                US$3.85 million.
            --  The Company was added to the prominent ETF: ETFMG Alternative
                Harvest ETF ("MJ").
            --  The Company announced the elimination of all its META
                convertible debentures.
            --  The Company entered into two white label partnerships with
                Heritage Cannabis Holdings and Loosh Inc.
            --  The Company finalized and revealed the store design for its new
                cannabis retail value outlets, "Cannabis Chop Club".
        
        
        


Selected financial information for the three and nine months ended July 31, 2021:

(Expressed in thousands of Canadian Dollars)







        
        
        
                                                              Three months ended July 31 Nine months ended July 31
        
        
                                                                                    2021                       2020
             Change                2021          2020
             Change
        
        
        
        
        
                        $
                      $
        
                    $
                    $
        
        
        
               Revenue                                                           48,069                     24,103           99%        127,256        58,389          118%
        
        
        
               Gross Profit                                                      16,679                      9,539           75%         46,445        22,087          110%
        
        
        
               Gross Profit Margin                                                  35%                       40%         (5)%            36%          38%         (2)%
        
        
        
               Total Operating Expenses                                        (23,946)                   (7,915)         203%       (60,268)     (22,424)         169%
        
        
        
               Adjusted EBITDA                                                    1,540                      3,397         (55)%         10,862         4,348          150%
        
        
        
               Net (loss) income from Operations                                (7,267)                     1,624        (547)%       (13,823)        (337)        4001%
        
        
        
               Net (loss) income                                                (1,750)                     3,826        (146)%       (30,861)      (5,031)         513%
        
            ---
        
        
               (Loss) earnings per share (Basic and Diluted)                     (0.03)                      0.25        (112)%         (0.79)       (0.33)         139%
        
        
        


The following is a reconciliation of Adjusted EBITDA to Net Income/(Loss):







        
        
        
                                                           Three Months Ended July 31, Nine Months Ended July 31,
        
        
                                                                                  2021                        2020      2021      2020
        
        
        
        
               Net (loss) income                                              (1,750)                      3,827  (30,861)  (5,031)
        
        
        
               Income taxes (recovery)                                            224                         316       688       393
        
        
        
               Accretion and interest                                           1,095                       2,456     6,635     6,719
        
        
        
               Depreciation and amortization                                    8,299                       1,771    22,107     4,585
        
            ---
        
        
        
                        EBITDA (1)                                          7,868                       8,370   (1,431)    6,666
        
            ===
        
        
               Foreign exchange                                                  (28)                          4        66      (17)
        
        
        
               Transaction and acquisition costs                                1,939                         193     4,409       988
        
        
        
               Debt restructuring gain                                                                            (1,145)
        
        
        
               Revaluation of derivative liability (2)                        (5,919)                         67     8,553     (247)
        
        
        
               (Gain) Loss on extinguishment of debenture                                                (3,576)      516   (3,390)
        
        
        
               Impairment loss                                                     57                                   57       247
        
        
        
               Share-based compensation                                           508                           2     2,578       101
        
        
        
               Revaluation of marketable securities                               112                     (1,663)      256
        
        
        
               Gain on disposal of property and equipment                     (2,997)                             (2,997)
        
            ---
        
        
        
                        Adjusted EBITDA (1)                                 1,540                       3,397    10,862     4,348
        
            ===
        
        








        
        
        
             (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.
        
        
        
        
        
        
             (2) The Company recorded a gain from
                      the revaluation of derivative
                      liability of $5,919 during the
                      third quarter of 2021 (2020:
                      loss of $67).  This non-cash
                      accounting charge primarily
                      relates to warrants issued to
                      Windsor Private Capital in
                      connection with the loan
                      agreement entered into on
                      January 6, 2020.  The cashless
                      exercise feature in the warrants
                      creates a derivative liability
                      which is required to be revalued
                      each reporting period.
        
        
        


Outlook

High Tide continues to have a leading position in the Canadian bricks and mortar cannabis market with 93 locations across the country. Given the number of locations currently being built out, most notably in Ontario and Saskatchewan, the Company expects to be at approximately 110 stores by the end of calendar 2021, despite some delays experienced in securing building permits. The Company has made good progress on its application to enter the British Columbia market, and now expects that to occur by end of our 2021 fiscal year.

While competition has increased given material growth in store counts in Ontario and Alberta and the concurrent rise of value players, the Company is focused on maintaining and growing its market share. We have begun leveraging our unique positioning within accessories to attract and retain more customers, and this approach has already yielded meaningful increases to our top line over the past few months. Just this week we announced two initiatives to expand our revenue streams.

/zigman2/quotes/201958100/composite
US : U.S.: Nasdaq
$ 5.76
-0.10 -1.71%
Volume: 164,373
Dec. 8, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$321.95 million
Rev. per Employee
N/A
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/zigman2/quotes/222662325/delayed
CA : Canada: TSX Venture
$ 7.27
-0.15 -2.02%
Volume: 33,671
Dec. 8, 2021 5:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$407.19 million
Rev. per Employee
N/A
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/zigman2/quotes/206848902/delayed
DE : Germany: Frankfurt
5.06
-0.08 -1.56%
Volume: 1,168
Dec. 8, 2021 11:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
N/A
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