High Tide's 'Cannabis Chop Shop': Retail Shop, Discount Warehouse Vibe & Club-Membership Feel...Sound Familiar?

Canadian cannabis retailer High Tide HITI HITI is adopting a new strategy that looks and feels rather familiar...lower prices with exclusive deals for loyalty club members.

In September, High Tide announced a new retail concept focused on “value-sensitive” cannabis shoppers and called it “Cannabis Chop Shop,” under the tagline “wholesale prices to the public."

You guessed it: Costco COST.

“Canadian cannabis retailer High Tide is stealing Costco’s strategy with a new focus on aggressively lower prices and exclusive deals for loyalty club members. Analysts at ATB Capital Markets expect the plan will boost the company’s stock, which has already climbed more than 75 percent year-to-date”, reported Jeff Lagerquist for Yahoo Finance.

High Tide’s retail rebrand comes as pricing pressure intensifies across Canada’s legal pot sector. Major licensed producers are growing more vocal about rising competition and their desire to move away from selling discount-priced cannabis. 

A New Concept in Cannabis Retail 

The new stores were created in collaboration with Holland Design, an award-winning, Calgary-based interior design firm. They will be differentiated from High Tide’s existing Canna Cabana network.

The new value concept will be more compact with an average retail footprint of 1,000 - 1,200 square feet. The estimated build costs for the new concept are expected to be between $125,000 to $150,000 instead of $265,000 to $350,000, the cost of a typical Canna Cabana store.

And, finally, Cannabis Chop Club will focus on a different assortment of cannabis and consumption accessories tailored to the consumers.

“Our strong data analytics capability has allowed us to pinpoint competitive and value-sensitive markets where the new Cannabis Chop Club model can thrive and compete with the aggressive pricing strategies that have been adopted by certain competitors, said Raj Grover, president and CEO of High Tide.

Price Action

High Tide was trading bullish 2.25%, at $5.46 per stock, at the time of this writing Wednesday afternoon prior to market close. 

Photo by budding on Unsplash