High Tide Inc. (CSE:HITI) (OTC:HITIF) Has 10 Enviable Years of Experience & 6 Vertically-Integrated Businesses Under Its Belt…And They’re Growing Faster Than Ever
“The pace of achievements by High Tide in such a short period of time reinforces the value of our strategic investment.”
– Terry Booth, CEO, Aurora Cannabis Inc., Feb. 13, 2019
That quote from Terry Booth is how the CEO of one of the world’s largest and leading cannabis companies sums up all the excitement around High Tide Inc. (CSE:HITI) (OTC:HITIF). It also explains why Aurora Cannabis invested an additional $1 million into High Tide in mid-2019 on the heels of their initial $10-million investment back in late 2018.
High Tide Inc. (CSE:HITI) (OTC:HITIF) is making some serious waves and is attracting well-deserved attention as it continues to carve out ever-greater market dominance in the smoking accessories manufacturing, wholesale and retail pot sectors.
With legal cannabis spending in Canada projected to hit nearly $5.2 billion by 2024, High Tide’s (CSE:HITI) (OTC:HITIF) potential for big investment gains would be exciting enough if it only involved the Canadian pot market.
But Canada is just one part of High Tide’s investment appeal. They’re also expanding their international and online footprint through the manufacturing and wholesale distribution of smoking accessories and cannabis lifestyle products.
After serving cannabis consumers for the past decade through its smoke shops, High Tide (CSE:HITI) (OTC:HITIF) isn’t only the largest counterculture chain in Canada and a dominant distributor and manufacturer, they also know the hottest items, which offerings have the highest margins, and how to build and operate companies that can keep them leading the pack.
Their portfolio of six companies is what drove High Tide’s (CSE:HITI) (OTC:HITIF) Q2 2019 revenue growth of 325% year-over-year to hit $6.6 million for that quarter alone.
Here’s how High Tide Inc. (CSE:HITI) (OTC:HITIF) explained their rapid growth in their June 27, 2019 news release:
“The increases are primarily due to the acquisition of Grasscity, the retail cannabis operations of Canna Cabana which began generating revenue on October 27, 2018 and sales made to new customers in the Company’s Wholesale Segment.”
In other words, High Tide (CSE: HITI) (OTC: HITIF) is fulfilling their vision of growing organically and through acquisitions to become, in their words, “the largest vertically integrated cannabis enterprise in the world”.
Revenue Growth Is On Par Or Far Better Than Companies With Much Higher Market Caps
When comparing Q1 2019 revenue growth year-over-year, High Tide’s (CSE:HITI) (OTC:HITIF) 83% growth beats all the major players below except Tilray.
And don’t forget High Tide’s Q2 2019 revenue growth year-over-year was nearly 4x greater by growing 325%.
High Tide’s (CSE:HITI) (OTC:HITIF) revenue growth underscores how a smaller company has so much more potential for rapid expansion and upside potential for its stock price. With High Tide continuing to make its mark in the pot market, it could be assumed that the stock should be due for a significant swing in the near term.
It’s also interesting to note some of the ways that under-the-radar High Tide (CSE:HITI) (OTC:HITIF) is comparable with these very large market players.
For example, Tilray is aiming to develop and sell co-branded cannabis products globally through a long-term revenue sharing agreement with Authentic Brands Group, the American company behind brands like Juicy Couture, Aeropostale and Nine West. .
The table above showing the revenue and market cap of High Tide and several of its contemporaries highlights just how undervalued High Tide (CSE:HITI) (OTC:HITIF) is. The company’s market cap is 3 times lower than Aphria and 6 times lower than Tilray!
And yet it’s showing the same revenue growth as those companies, indicating that a big upswing is in High Tide’s near future.
- high tide opens canna cabana stores in calgary and vegreville bringing its total to 19 locations across alberta
- high tide acquires smoker’s corner franchise for conversion into canna cabana in edmonton
- high tide opens canna cabana stores in calgary, edmonton and red deer bringing its total to 17 locations across alberta
Backed by Aurora, Aphria and Other Major Industry Players
Even High Tide’s (CSE:HITI) (OTC:HITIF) competitors are investing in the company AND becoming customers. Just take Aurora Cannabis. On December 13, 2018, they made their first investment in High Tide: $10 million.
And with High Tide’s (CSE:HITI) (OTC:HITIF) penchant for rapid expansion, it’s no wonder that in mid-2019, Aurora invested another $1 million. As Aurora’s CEO, Terry Booth, put it:
“High Tide continues to execute on its goals and is leading by example in the downstream segment of the cannabis industry. The pace of achievements by High Tide in such a short period of time reinforces the value of our strategic investment.”
And now High Tide (CSE:HITI) (OTC:HITIF) is manufacturing Aurora-branded accessories and distributing them worldwide. Aurora gave High Tide its largest accessories purchase order to date .
Other cannabis-focused strategic investors that see the value High Tide (CSE:HITI) (OTC:HITIF) offers include Aphria Inc., who anchored High Tide’s non-brokered private placement in April 2019 with a $4.5 million order , and FSD Pharma, who was among High Tide’s earliest supporters  with a current investment of over $3.0 million.
Well On Its Way To Becoming Canada’s Largest Cannabis Retailer Network
High Tide’s (CSE:HITI)(OTC:HITIF) subsidiary Canna Cabana has already established itself as Canada’s one-stop cannabis shop on the strength of several important factors:
- connected to 25,000+ Canadians on social media
- industry-leading smoking accessories and employee training ensures consumers consistently enjoy premier products and customer service
- centralized logistics maximize efficiency while minimizing operational costs
And with 23 operating locations and plans for roughly 120 stores across Canada, Canna Cabana has a major head start on competitors looking to penetrate the emerging Canadian market.
High Tide’s (CSE:HITI)(OTC:HITIF) largest Canadian presence is in Alberta. That province’s 2018 sales represented 28% of national sales despite only having only 11% of Canada’s population. In other words, Alberta is a hot pot market…and High Tide is only adding to its strength there.
6 Impressive Subsidiaries Built Or Acquired
High Tide’s (CSE:HITI) (OTC:HITIF) portfolio of companies span from manufacturers of cannabis accessories and wholesale distributors, to bricks-and-mortar retailers, to a global e-commerce smoking accessories leader.
Company #1 – Smoker’s Corner: Founded back in 2009, this original smoking accessory chain has grown to 13 significant locations (7 franchises; 6 corporate stores). That makes it one of the largest chains of cannabis accessory stores in all of Canada, and gives High Tide (CSE:HITI) (OTC:HITIF) a major competitive advantage and platform as the legalized market continues to roll out.
Company #2 – Canna Cabana: Launched in 2018, this retail network is currently in the process of becoming one of Canada’s largest through establishing new locations and retrofitting existing stores. They already have over 20 branded locations across Alberta, Ontario and Saskatchewan, and they’re developing stores in BC and Manitoba too, all of which is contributing to High Tide’s (CSE:HITI)(OTC:HITIF) rapid expansion.
Company #3 – KushBar: With the first store launching in September 2019, this retail businesses is all about offering cannabis consumers an elevated experience marked by proprietary products, excellent customer service and attractive environments. They have 3 other permitted retail stores under various stages of development and construction in Alberta, with many more planned for Ontario in the near term.
Company #4 – Grasscity: This Amsterdam-based company is the world’s top pot accessory e-retailer with a 20+ year history, 5.8 million site visits per year, a customer database of 600,000, and 65,000 orders per year with about 90% of those coming from customers in the US. That’s what you call a very significant and strategic acquisition for High Tide (CSE:HITI)(OTC:HITIF).
Company #5 – RGR Canada: Founded in 2011, this wholesaler has grown into Canada’s premier distributor and manufacturer of premium cannabis accessories that distributes to independent retailers nationwide. RGR is vertically-integrated from factory to retail, with a 27,000-square-foot facility in Alberta, 4,300 SKUs, and over 70% of its catalog designed and manufactured in-house to maximize High Tide’s (CSE:HITI)(OTC:HITIF) margins.
Company #6: Famous Brandz: Backed by celebrity brands such as Snoop Dogg, Cheech and Chong, Guns N’ Roses and more, in 2 short years this manufacturer and global distributor of licensed exclusive and proprietary smoking accessories has become a dominant brand carried by the largest distributors and retail chains across the globe. It also serves as an ideal platform for the endless release of new brands, products and a retail cannabis lounge concept.
With those 6 subsidiaries in their portfolio, High Tide (CSE:HITI) (OTC:HITIF) has strategically established themselves in ALL downstream pot markets:
- Wholesale = RGR Canada + Famous Brandz
- Retail Bricks & Mortar = Smoker’s Corner + Canna Cabana + KushBar
- Retail Online = Grasscity
Which means that, as the legal pot market continues to emerge and expand, High Tide (CSE:HITI) (OTC:HITIF) just might be the most likely stock to quickly ride that wave to all-new highs.
Growing Its Already Strong Brands Across Canada and Around The World
You couldn’t blame High Tide Inc. (CSE:HITI)(OTC:HITIF) if they took a breather and basked in their success to date, especially with their accessories being sold in 3,000 stores worldwide across 20+ countries and their annual retail customer interactions exceeding 170,000.
But slowing down is apparently not their style.
Instead, High Tide (CSE:HITI) (OTC:HITIF) is turning up the heat. They’re expanding their existing retail presence with more than 15 Canna Cabana locations currently under various stages of construction across Canada.
KushBar has 4 locations currently permitted and under construction in Alberta alone. When it comes to Ontario, the plan is for many more locations in the near term.
Then there’s High Tide’s (CSE:HITI)(OTC:HITIF) wholesale segment. This vertical continues to grow thanks to the overall expansion of the cannabis industry. Sales are being made to new customers while new cannabis accessory products are being added to High Tide’s (CSE:HITI) (OTC:HITIF) already large catalogue.
Then there’s High Tide’s (CSE: HITI)(OTC: HITIF) future plan to launch a lounge concept that could serve or facilitate the consumption of edibles, concentrates and other products once they’re legalized in Canada in late 2019.
Slowing down is clearly not High Tide’s (CSE:HITI) (OTC:HITIF) style.
Backed By The Powerful Sway Of Celebrities
As touched on earlier, High Tide’s (CSE:HITI)(OTC:HITIF) subsidiary Famous Brandz (famousbrandz.com) is an exclusive global manufacturer and distributor of licensed smoking accessories.
Their partnerships with celebrities and major media partners that are more than relatable to cannabis consumers include:
- Snoop Dogg
- Cheech & Chong’s Up in Smoke
- Trailer Park Boys
- Guns N’ Roses
- Kevin Smith
- Kevin Smith
- Radio Days
- The Beach Bum
- and more…
In today’s culture where celebrity influencers have some of the largest followings and incredible ability to sway consumer behaviors, these cross-promotional relationships give High Tide (CSE:HITI)(OTC:HITIF) an advantage and “cool factor” that most of their competitors lack.
Meet The Exceptional Team That’s Made High Tide’s (CSE:HITI) (OTC:HITIF) Success & Growth Possible
You simply can’t achieve the kind of business value and upside potential that High Tide (CSE:HITI) (OTC:HITIF) has so amply demonstrated without a world-class leadership team.
Here are the key players that make up that leadership team.
Raj Grover – Founder, President and CEO
Mr. Grover has been operating as a pioneer in the cannabis accessories industry since 2009 and has a 17-year record of founding successful companies, including High Tide Inc. (CSE:HITI) (OTC:HITIF), its subsidiaries RGR Canada, Smoker’s Corner and Canna Cabana, and is the co-founder of the subsidiary Famous Brandz. Along the way, he has built the largest network of comparable retail stores in Canada.
Alex Mackay – Chief Operating Officer
Mr. Mackay knows what it takes to build a company made up of successful brands and offerings, thanks to his 21-year career at one of Canada’s largest telecommunications organizations. He has extensive operational experience and insight into growing sales while also ensuring customer satisfaction
Nick Kuzyk, MBA – Chief Strategist Officer and CVP of Capital Markets
Mr. Kuzyk represents an ideal mix of education (an HBA and MBA from the Richard Ivey School of Business at Western University) and hands-on experience from 15+ years of experience in 3 areas crucial to High Tide’s (CSE:HITI)(OTC:HITIF) ongoing expansion: investor relations, mergers and acquisitions and business development.
Andy Palalas, MBA, CPA, CA – Chief Revenue Officer
Mr. Palalas develops distribution channels, sources new market opportunities and oversees High Tide’s (CSE:HITI) (OTC:HITIF) revenue portfolio. To make that possible, he draws on his extensive experience in loyalty marketing, his track record of explosive growth in franchise sales and operations, and his mastery of ground-level business development through to overarching marketing strategy.
Rahim Kanji – Chief Financial Officer
Mr. Kanji has 18+ years of experience in everything from start-ups to enterprise-level companies. Of special significance to High Tide’s (CSE:HITI)(OTC:HITIF) ongoing growth is his experience with international expansion, mergers and acquisitions and strategy development.
High Tide Inc. (CSE:HITI) (OTC:HITIF) Is Expected To Continue Surging In The Pot Accessories Wholesale, Bricks-And-Mortar Retail and e-Retail Sectors
10 Years of Operations, 6 Vertically-Integrated Businesses, And Growing Faster Than Ever:
High Tide is the full package: they’re the largest counterculture chain in Canada, a dominant distributor and manufacturer, and they’re strategically established in all downstream pot markets through successful companies that can keep them leading the pack.
Well On Its Way To Being Canada’s Largest Cannabis Retailer:
Their subsidiary, Canna Cabana, already has over 20 operating locations and plans for roughly 120 stores across Canada, giving High Tide (CSE:HITI)(OTC:HITIF) a major head start on competitors looking to penetrate the emerging Canadian market.
Backed by Major Industry Players & Celebrities:
Aurora Cannabis invested $10 million in High Tide and then another $1 million. Aphria Inc. invested $4.5 million and FSD Pharma invested $3+ million. Meanwhile, High Tide’s (CSE:HITI) (OTC:HITIF) subsidiary, Famous Brandz, has locked up partnerships with celebrity influencers and major media partners.
Growing Its Already Strong Brands Across Canada & Around The World:
They’re expanding Canna Cabana with 20+ locations; they have 1 KushBar location opening imminently and 3 more under construction with many more planned; their wholesale vertical is growing; and future plans include tapping into edibles and concentrates once they’re legalized in Canada in late 2019.
Exceptional Leadership Team That’s Made Success & Growth Possible:
CEO Raj Grover is a proven pioneer who has been in the industry for 10 years and draws on a 17-year track record of building successful companies. The rest of the team only adds to High Tide’s (CSE:HITI)(OTC:HITIF) ability to fulfill their vision of growing organically and through acquisitions to become “the largest vertically integrated cannabis enterprise in the world””.