Cannabis retailer High Tide Inc. HITI HITI (FSE:2LYA) reported financials for the period ending July 31 on Tuesday after the market close, revealing that its quarterly revenue nearly doubled as its acquisition spree continues.
Q3 2021 Financial Highlights
- Revenue increased by 99% year-over-year, reaching CA$48.1 million ($38 million), encompassing acquisitions of META Growth Corp. META, Smoke Cartel, Inc. SMKC, Fab Nutrition, LLC., and DHC Supply LLC., operating as Daily High Club. In addition, CA$38.4 million in revenue was earned in Canada, CA$9.6 million in the United States and an immaterial amount internationally.
- Segment-wise, CA$46.3 million of revenue was generated by retail, CA$1.8 million by wholesale
- and an immaterial amount by corporate.
- Gross profit increased by 75% to CA$16.7 million, compared to CA$9.5 million in the same quarter last year.
- The gross profit margin was 35% compared to 40% in the corresponding period of 2020.
- Adjusted EBITDA came in positive at CA$1.5 million compared to CA$3.4 million for the same quarter last year, with a decrease attributable to the uplisting of the company's stock to Nasdaq Capital Market in May.
- Net loss from operations totaled CA$7.3 million.
- Quarterly net loss was CA$0.03 per share, missing the analyst consensus estimate of CA$0.04 by 175%.
- The company ended the quarter with CA$26.6 million cash on hand.
After announcing a $3.85 million purchase of an online retailer DS Distribution Inc., which operates as DankStop.com, in July, the Calgary-based company teamed up with cannabis retail tech company Jane Technologies to bring its full suite of e-commerce solutions, including the headless e-commerce software, Jane Roots, to cannabis operators in Canada and the U.S.
The opening of Canna Cabana stores in Calgary, Brampton and Ajax, came amid High Tide reducing its total debt balance to $28.4 million after closing the $71 million worth acquisition of META, including $21.15 million of META convertible debentures.
Moreover, on Wednesday, the company announced the opening of its META Cannabis retail store located at 366 Main Street in Selkirk, Manitoba.
The company has begun selling recreational cannabis products for adult use. The opening represents High Tide's 94th branded retail location across Canada and 9th in Manitoba.
Over the third quarter of fiscal 2021, the company kicked off cannabis sales at seven retail locations, including two in Ontario, four in Alberta and one in Saskatchewan.
"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," Raj Grover, president and CEO of High Tide, disclosed Tuesday.
"While the Canadian retail market remains competitive, our one-stop cannabis shop concept is very well received," Grover continued, adding that Cabana Club membership grew by over 69,000 during the period.
The company plans to operate approximately 110 stores by the year-end and enter into the British Columbia market as well as Missouri.
With the newly revealed store design for its new cannabis retail value outlets, "Cannabis Chop Club," created in collaboration with Holland Design, High Tide is targeting value-focused customers in order to increase market share and lure customers away from the illicit market, Grover further explained.
High Tide's shares traded 5.19% lower at $7.30 per share after the market close on Tuesday.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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