HITI - Earnings call transcript Q4 2021

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Operator

Good evening. My name is Hannah and I will be your conference operator today. At this time, I would like to welcome everyone to the High Tide Inc. Fourth Quarter Fiscal Year 2021 Financial and Operational Results Conference Call. All lines have been placed on mute to prevent any background noise. now with call High will host, to I Dafoe Krystal Tide. Instructions] turn over the your [Operator Please proceed.

Krystal Dafoe

Thank you, Inc.’s quarterly Hannah. High earnings to Good call. evening, everyone and welcome Tide

President today Joining year the company ended quarter results released its XXXX. CFO. are for and from the CEO highlights October and Mr. Earlier me XX, today, and call and Raj financial on the the Kanji, Rahim fourth Grover, operational fiscal

may forward-looking statements begin, forward-looking I’d or the remind events, made the current projections, performance to may or estimates, materially about like future actual and the assumptions, on on beliefs of information contain objectives not numerous certain are statements that and or or which represent meanings and Such facts call we want within representative risks that Before We information. statements are laws. plans everyone today’s company’s goals, to securities cause results of are inherently forecasts, to expectations based from that are uncertain historical be uncertainties include subject applicable may such statements. differ and such to clear

in provided publicly or or the results contained call projections Additional available risks update call. not forward-looking profile. results about or which statements supplement any basis forward-looking of cause in does both readily announce in this and SEDAR a High were applied upon the today’s both available under that is to forward-looking forming assumptions to conclusions, any to factors and differ any the or of any our statements assumptions regulatory certain information available document and actual materially to forecasts or the company’s factors performance the could duty and information and statements revisions material material undertake on call our make in to this on request and EDGAR in filings Tide

only have in do investors management adjusted as any believe is me, measures, non-IFRS as In These assist be should or these Raj statements to to refer pardon supplemental accounting the our and in SEDAR. for understanding conjunction IFRS. IFRS. superior to non-GAAP and It calculation and trends not Thank measures financial considered as non-IFRS considered my We to which should be should in High CEO Grover. addition, directly presented Tide. our and on on the EBITDA, to you, calculated measures performance. accordance superior with and and prescribed release now this be introduce not measures pleasure alternative of by non-IFRS should Mr. IFRS on call, press not reconciliations with refer – including these standardized these to listed financial analyzing comparable a measures Mr. presented measures measures we business will considered Grover, financial substitute be meaning a the and President Please of to for most an earnings

now You may begin.

Raj Grover

providing an Tide the by Thank Crystal results XX, will and to Welcome for financial everyone. ended conference call XXXX. good Rahim questions any the start results developments you key discuss depth. pleased of quarter. will financials our overview the to may and that, fourth after other this I October Inc.’s High fourth you, have. in answer And unaudited quarter evening in be call we will

a year-over-year $XX.X sequentially and to headline was new look the record. was up quarter XX% the up million. for Let’s was This at Revenue numbers. XXX%

run-rate quarterly represent cannabis level third a I our ever company proud fiscal would number, to a us million our in QX, highest go $XX didn’t we million QX. QX am the over days in are would share over Canadian the there, put with over sequentially very and that we growth $XX million. to $XXX to excited reported on X XX% with expect up QX, revenue While in of sales stop sales by generate still of revenue in

For year or up we XX% XXX% compared of which to reported of XX, revenue margin Gross the margin in ticked launch revenue versus in due of largely million, XXXX. This below was $XXX.X fiscal XX% year sales, our $XX.X fiscal million XX% ended for and October QX for the retail to million in $XX club the discount QX. generated stores. was in fiscal the the XXXX. of was XX% model Gross

million as in sequentially. in It well $X.X had leader UK the months in a preparation million and club $X.X the been in Naturals, and X Colorado. distribution The products companies, acquired QX our the margin discount NuLeaf it quarterly Adjusted in one where brands had it Denver, only premium to for since slightly impact during of However, of we results QX. as EBITDA two record last XX market being gross higher live call. the has the than conference incredibly We CBD dollar X% in CBD million. of EBITDA cannabinoid the a XXXX generated resulted been the model terms, top increased in of QX, have production wellness in busy. quarter was the $XX.X up And based launch Blessed, gone the days

doing which experience. cannabis retail for technology, locker We pilots in MJBizCon the discount Room kiosks customer club customized week its Ottawa, in on when next But our shoppers an look the technology of with Bud launch lower announced of enhanced anticipated labor as technology and innovative Las our includes differentiated overhead to use at since Inc., We which the key including most forward rolling after call closing acquisition store also transaction Bud Room XX successful four came efficiency, of and intro, allows Fastendr impactful and provides quarterly a to number and smart costs along operational initiative announced the Vegas, and we while model, Fastendr components. nationwide. out a a the October last

as over own our still that data are consumers XX% sensitive. market cannabis of from that the unbeatable cannabis how is multiple we as represented the showed highlighted of country’s and Canadian over sector First, price prices, well sources XX% extremely illicit data

versus price prices. are everyday matching club in prices discount we low area. advertised Our this model and Therefore, offers unbeatable

accessories. Unlike are High price of of consumption cannabis, designs, and accessories SKUs assortment, sell. Tide over paying Second, the retailers manufacturers X,XXX we generally for XX% consumption the same the retails same where

bottom than vertical and Our earn accessories unique integration given which us and a The to and come working. buy come cannabis. in accessories the Customers consumption regularly higher North totally we for accessories advantage, among cannabis. offer of at We category quadrupled sell has our The stores back shop strategic accessories can cannabis concept key gross meaningfully one-stop still unique April. is retailers. has margins number since selling our is rock weekly prices proprietary American to

desire wide cater exclusive Cabana. to at essentially to Given supply our selection find phased we wholesale accessories Canada in can have lingering and customers, Canna chain retail of both customers our a so out best issues that

Third, loyalty incorporating our plan.

over signups members in day. a our the what to introducing this the our need lower. For a Since market these to – XXX,XXX is that’s Cabana typically get of and X membership well and cannabis price goods to loyalty today, at a every But for growth, from program. SKU the goods XXX,XXX price which ago, XX% concept go program months stores of market the typically X,XXX in accessories, show in a member – you has is new significantly order which price, that these member exploded Club member be over

model and Our quickly members is transactions now in achievement our They quite over to our tremendous is realized our our over daily in of This represent best on. daily XX% how used XX% catching a stores. opinion demonstrates club our discount of represent innovative transactions.

created loyal is clearly a large customers, have We you of block as a very want exactly retailer. which what

see bat members increase continue across to eventually plan membership We we our expect Canada. a XXX,XXX getting and that loyalty will to to

also we of for opportunity is a that our is We when block own the Fourth have pathways time identified a size have significant members monetization brands. you believe already and right. is that there when monetization

disclosed, with gummies shatter Cannabis previously Cabana Cannabis Co. our and As produce Loosh Holdings to are we branded Heritage and respectively. working

and are hit provincial days. products expect working store within with shelves various them get boards to We to our approved now these XX

label own to with will bring and how producers own are prices preferential We help available white also stores. will tier they products and made discount our our will brands. are our CBD major house own have NuLeaf also licensed it we own now at and brands that in to CBD their offering with model to with retailers help brands only our Not so margins, stores top club these Blessed be sale similarly in many successful available as these brands in Canada only for FAB, X working our

more about well. our and differentiation. tremendously holistic much that price is As our major am while leverage to took club, a to We that I broader, say you just see points discount very than working that. it’s it’s more factor can pleased approach of And strengths in a

announced recall of model. concept, that will take discount launch year, of months several until on this trials You underwent we that that would feel the three we we cautioned full when we it the the likely based success of last the impact the club

discount an We that Given but already has seeing very in we really versus up were uptick are XXXX, started things excited in club sales about the accelerating things are how started X% the same-store time they so as QX since had tracking. launched passed model. far, QX we

same-store down on In basis, the the first full posted national the where total, same-store month cannabis month further generated did posted went service in while November important, market down up new growth We including October, December of same-store versus is the month Nationally and the which last data tremendous club as sales than XX% province X% available things while across of entire market land a Stats in of the our In the X% at and even was for grab a sales. XX%. including in is were Then it Ontario, versus adding December, X%. Stats country a look while and largest the by the X% outperforming of country, openings. in increase October Let’s to store expected Can versus same-store Across model our the even up Ontario gain according the November, our data sales X% November to the our were compare only same-store November, market sales sales in significantly was November, Can, a most higher better. contrast, stores stores. discount we accelerated new in XX% published.

our customers out in stores. versus are the one proof as the increasingly gain single of expected, XXX every accomplishment incredible discount XXX word of stores, posted model stores is getting our December club our more fact, and to over same-store and that in An sales a coming In November.

new seen ramp our the discount up model. faster introduced much also we have before We stores than club

in maturity it over to Specifically, get almost X X months, take just months while seeing we previously. are now new stores would

strength no our it which of is is that shareholders. our we the model. club doubt unique, It the significant differentiated help difficult dominate discount off a are leverages for there otherwise points and of So, value to on to market, great it to start us an lead should creation is

ways benefits business are also model, quite While there to continues feel so perform are are still things encouraged rest how tracking to to of very the well. the full far. we The on go the of

FAB acquisitions the With ago such acquisition also business business NuLeaf, as months this of X on us. we a of only to are exist very creating CBD the co-packing working multi-cannabinoid and on already Blessed run-rate immediate our recent softgels. and a synergies, closed year Blessed is perform continues and and well. did whole some $XX not It’s been since for for term of line oils million global NuLeaf

industry the to think as realize EBITDA acquire up and as $X.X THC sales of bottom $X.X sales an Data so is I underappreciated million, multiple our now. to CBD internationally In are are is again to going in contributing differentiated beyond. diversified in expect business. data might and allow our part This margin on be customers. contribution business in to trying it are on, QX on we and cannabis while million our times were to from much we sales to the businesses potential high QX of ecosystem. well line. markets, line interested makes execute XXXX. it also Data our remain With seeing, due us our for people to are QX accessories revenue continue continuing don’t e-commerce in obtaining very stakeholders Based our in and strategy demand business. positively data Today, Our we future once climb our the capital conclusion, exceptionally an us these right businesses

tangibly is model club discount Our delivering.

to how tireless more QX. progressing. With to add to for our Rahim to and up businesses EBITDA over CBD perform million consolidated are revenue of call turn fiscal results. CFO will Our work at and thanks our over end forecasting High more Everyday run-rate our of Things to get are continue are I Tide, about at the the and accessory being looking and we I things confident the discuss financial team. now that, our Kanji, $XXX

Rahim Kanji

Raj and evening you, Thank good everyone.

September $XX.X earned closed as ended unaudited Note quarter for biggest In is results. representing $XX.X ended presented sequentially. that, year-over-year basis. after NuLeaf $XX.X previously XXXX, XXXX. XX% was in XXX% dig consolidated fiscal NuLeaf XX end versus outlined, company recorded the generated fourth Revenue the results on QX U.S. Let’s of million, these the are fiscal of an XXXX. months Note and October into of in the million, the XX, XX% history the our up revenue million the acquisition an increase our year.

fiscal the $XX.X generated which from million up the XXXX, was October in revenue of year $XX.X XXX% ended U.S. For Tide High XX, fiscal million, XXXX. in

while make $XX in to fourth Blessed. Our Retail revenue acquisitions and of level fiscal million in to revenue the Regina million time, revenue and our representing our from in XXXX, from segment chain to benefit million is was from XX% XXXX, segment retail Revenue store quarter we suffer the is of that to [indiscernible] wholesale customers organically was rebuilt the approximately run-rate three and partial logistical from million. X and same well due quarter current up in lowest sure as challenges, focus run-rate fourth as $X.X at of quarters. total stores proprietary This our of supply approximately shifted $XX outside the continued in contributions our Canada $XX.X its fiscal accessories. U.S.

in down quarter the of profit margins. at Our launch consolidated revenue last or the club XX% which of the third for expense from quarter discount XXXX The generated by were design third particular lower $XX.X the XX% million by the impacted was quarter XXXX. fiscal fourth of in fiscal of gross volumes of our of calls in higher model,

has held expenses, it revenue, and same Looking XX% proportion the of been at salary several our wages at for benefits quarters.

expenses administration which XX% associated decreased listing. of X% QX, However, revenue general and to with expenses some included from one-time in the NASDAQ

adjusted QX, the EBITDA the line, generated just generated $X.X Going in down million to company million the bottom in above in $X.X QX.

On QX model gross gross immediate margin. We and dollar EBITDA does of Day club be EBITDA. discount of of be prices. we launch the on was several the As the builds, October advised the the is to mentioned, terms expect felt. last short-term put to model we to in where XX ahead and that we in an in the we $XXX,XXX have given prior the XXXX pressure that margin impact again, trials to X, months based in October of for of the the there revenue take XX, club done of calculated volume on discount we the hit Similarly, impact it reduction well to immediate and between were lower financials as fully and is But that days into in look inherent selling margins margins XX as quarter was the $XXX,XXX. would impact

our of with ancillary the However, seeing we as are portfolio. are sales trajectory brand the very diversified nature we by due our and happy to Raj, outlined ecosystem

are not competing just So to be clear, we price. on

of percentages. was stores the quarter million time in onset the of strength impacted sit losses increased. as and as on by were we their Note saw the related Given stores the X in operating gross Mayor volumes X respective and feel dollar The in the that in fourth Magrath competition open to a the Yonge will to Lethbridge, to we which sales coming over are months sheer impairment Street Toronto where be of of in $X.X among cut non-operating of gross margin XXXX in naturally stores. currently, X first margin offsets legalization operating declines things basis we continue ahead where at cities

only of our million, million Our $XX.X balance due XX remained months. with value is debt the in upcoming principal Total strong. sheet $X.X

very capital can strength debt cannabis of the facility we on our and most markets positioned believe if long-term the fact our low across basis opportunistically well allow remain us of that challenged desired. which cost the given sector, our operations. While are at-the-market is The to capital raise we a so

We this have only on facility raised approximately to-date. $XXX,XXX

to calendar first facility, are conditions at total the facility debt As non-dilutive of required this the in to a relating least the year. quarter we million part of $X through of raise at-the-market our

already and implementing it to we May we required EBITDA club near-term this currently, the not in more sooner. at is due obtained draw already in back or to largely stands facility fiscal months. we model our repayment pay million included This XXXX of are changes it on the be able to million will will by all than our potentially be debt line discount covenants resume to due on point, with line and related anticipate related that in end as have the we we drawing Additionally, next $X.X XX the the to $X QX the X. At

results tougher many in acquire on only the are which our business. had EBITDA where these the positive pandemic Canadian impacts Additionally, to weakness bricks in global market and of strategy, The market. competitive companies, I the and contributing now we the helping value our highlight overall mortar offset our believe times has

impacted. wholesale logistical chain supply business greatly and non-core to challenges, our due First, has been

longer COVID mortar has new led to timeframes stores. frequently to permits building On opening and thus obtain the bricks and side,

restrictions home. government employees of by been and our stay well, have to combination As existing stores affected a having

earning hours closures dramatically currently and/or X that COVID. to can in stores As operating I capacity and Ontario a of reduced today, due are snapshot our top report with

top in store to due Our closure COVID. at relating mall hours operating extremely Manitoba earning to reduced is

high requires store stalled stores Ontario are due month had these NASDAQ, ongoing. challenges or over due reduced growth X and November as COVID has and Another X since hours to report by country our closures Staffing hours in to results demonstrating the Alberta head pandemic our across XX year been to COVID. well the our closures a in which impacted to store have we uplifting early the reduced have as miscellaneous sooner. and by And office been full also us

obstacles. of to our result, our finalize As loss. Despite this loss management, financials work discussion organization comprehensive changes, the and we move quality associated to which these anticipate to be still of We solution full to hardworking relating or exception a the that, taxes, turn Monday. to release a do financial get team, seems the is audited operator I completed. and the find and outlined any over to Q&A. We for the that material being to forward call will shareholders. analysis will tax deliver will to deadline and is by balances an the net income all signoff today for income and filed lines results audit always finalized be and changes to and discussed press not now It in open growth our high our With testament next with anticipate as continue our such

Operator

[Operator is line ROTH The Fortune Certainly. the Capital first Partners. Instructions] Scott from question with

may proceed. You

Scott Fortune

a for the little retail side forward? retail in unpack you Tide look here Can Yes, e-com from quarter. and the CBD little retail bit kind you going of current the your industry margin overall as in a margin of model as Congratulations color more the versus of your from margins quarter get this impact the to different a you provide – businesses? sense will with can Good afternoon. at segments Canada it of and on I the and unpack High on discount

Raj Grover

Sure.

I think Rahim can take this question.

Rahim Kanji

Scott. Thanks, Sure.

is look this on we X next landscape and years. our remain the for at when at definitely to is way So sort mortar bricks and of the first, business competitive expected moment the

had adjust X%. However, to thanks average downwards model, to margin bricks gross club we of our and mortar innovative have discount our by although

increases. sales We seeing are same-store already

increasing, ramping stores a we coming margin up New to months. these pace. at in And drop faster volumes expect the offset are with the

implement, we now. gross of are gross as that CBD healthy products In side with continued seeing terms on have our of maintain then platforms, on as platforms our those e-commerce they we we we margins proprietary continuing have our there on the synergies margins, are to various right and gross plan on margins and to

Scott Fortune

Okay. you of and And follow-up wanted to kind the question, kind thank – here. growth store of a for through then step

You Ontario, your store the XXX plan stores add the can – of by color discounted ramp there are a here. more provide on on throughout how mom-and-pop continue we openings continued the to XXX to landscape organically out Columbia are seeing valuations we kind stores the timing you kind little end versus XXXX year the of of and what focus of that competitive and from can look now M&A or to at on you about seeing up currently continue there? And with British to valuations, side, XXX to – just small with on the from

Raj Grovers

is Scott. your for question, This Raj. Scott. Hi, Thanks

goal year. to but stores, definitely stores hit we think yes, end I what that the calendar So is by will the exceed hit this of our to minimum at we want XXXX, XXX is by XXX

inbound know, remain us ton the open Ontario, will XX, around you we get as market, to in smaller we have focus Ontario because have some from regional and XX. still we on of even Our have, And operators Scott, but smaller opportunities to chains. XX room the come seeing to we locations a still are

We I in building remain Columbia anticipate because bit grow are of blend X March, that been year, organically little the this a British end BC, for of a to we hit XXX X around entering as the let’s again, waiting M&A, organic XXXX calendar say by include of permits growth BC and for can it’s locations we year. difficult approvals. by the end in us well. BC, us very locations of end also locations by This is confident our we going with in see to So hitting

have only So the in our meanwhile and portfolio we Scott, but really best in BC, at to I to can of the allows the best ability. exist started cherry and moment. the grade that have what we locations smaller locations is all And BC definitely X know, you want X chains the done we our independent pick high at looking as

locations XXX end year, then of through we it be first will Ontario, to So, the as organic the end both least. our March BC on at the growing BC, will to of blend expect And on of well portfolio be enter M&A. with growth location towards focus focus second will be as a our

Scott Fortune

Thanks, and the on Raj. Appreciate quarter. the again color congratulations

Raj Grover

Thank you.

Operator

Thank you, Mr.

Fortune. The Capital next is Markets. with line from question the Andrew Semple of Echelon

proceed. may You

Andrew Semple

outlook Congrats Hi, strong there. Good quarter. for current the quarter on the the afternoon. and

Just as stores, segment. strategy see accelerating outlook traction the there. as is brick-and-mortar for it’s revenue the sales for the great question that that I to EBITDA given retail guess, quarter, would first clear the the on the be growth anticipated, my

be to experience got be EBITDA? have some couple months an the discount club revenue would to as to when estimated able with to net positive you of growth the will begin you the Now that provide strategy, with a brick-and-mortar retail timeline

Rahim Kanji

Hey, because at the ton very that for question. answer, rather closures. a I’d the give you we you not Andrew. of Thank are Andrew, facing COVID moment, much

is As you every that. business experiencing know,

we we is a very idea projecting are $XX the can and headed. XX%. on in we by good of else on which showcase same-store you giving the increase same-store over Ontario, sales see everybody up already that to for everything in we of December sales going And can our said, QX like is know volumes XXXX, now, we that quite where sales is almost still watching were sales trajectory because of are sales COVID, And rapidly. regardless market million like Although

confident want So, to surely next am at because drop. if have very quickly to offsetting than are I our already over get we loss we reduced happened give that has margins. And I to I days comfortably trajectory, we balanced would of more margin But of the say offset experience months EBITDA by volumes are few ourselves there. but looking this now on continue going that then by the that XX will last that, actually again, quarter, what a we

does X we the X the Now next in just that in experiencing of stores, our We we get happening This in are will stores in are is because reduced only be dozens our closures lived. at outstanding That – it lot store of drop COVID will what’s months and will dozens short hours. and know there. A that’s months? surely hours. the happen happens the that only fact, deliverable, unknown operating our the this or recent be of temporary. next It’s and of but

So, as as EBITDA. back within out, balance be three be will we months these five next on much think track the things we to very soon months on

Andrew Semple

Make sure helpful. that best is there, Raj. That’s quite

be the what are timeline as across to done some the Moving what work on to technology store much level on that implement at there? to How targeted just provide additional want well for the the as you maybe to speak to that’s budget the needs kind have you Fastendr integration is rollouts. details the that Could year? your of Canada, to portfolio? And across budgeting

Raj Grover

Yes, absolutely.

the look, stores. our have preparations already began rollout So, in Fastendr

to completed We of end five anticipating stores March. stores are seven having the by

already closed even Bud haven’t the for we Room yet. acquisition We our started But have that. preparing stores

this new we location for So, XX pandemic. pre-wiring, due going very it. in challenges install facing the technology technology we But after month. to is at is by after that happening. think don’t time competitive XX grow least the know want it’s March, we we all again, are And We still Fastendr are I with to all to locations. reasons, grow. at March, then can cost it already at every I to market to of least forward per the And that that first to because we this want going want share what and locations

High So, with strategic I am that Tide. advantage going to keep

We also third-party technology going are license retailers. sell or this this to technology to

of So, have can market to me it next to disclose multiple one won’t that this inbound to about quarters reaching But coming end converted roll to going calls of our be what already single me couple us to we cost every this or provide very retailers out. hope about also Fastendr then is to By we it’s of talking technology. into in technology from what out definitely asking I this And the stores will this these have that this we year, the going up. prudent and of cost the for technology them. about equipment, have asking

retailers. of is tremendous monetization So, in are own to short third-party data that retail us our provide opportunities, stores. the this prioritizing supply generation lockers from kiosks But smart going and the technology opportunities at are revenue time, we we this

stores are on for we to So, going year. entire this focus

are High be confident of converted all Tide by stores into end technology this this We that year. the of will

going February itself. in We are start to

In have stores. similar ancillary now type started our we plan out roll in right of businesses. fact, also eventually in And already to we pre-wiring a technology our

And to in the terms course. of going share this are due our be will leverage of this Fastendr in existing principles others strategy with businesses. and technology I We to ancillary you into able more

Andrew Semple

despite the watch per macro store count continues Raj. could other would average, are Canada, And decline maybe most question we here, that appear Great. on maybe more the That’s fact store retailers. sneak to I in if for helpful, one extend it continuing across to sales

on macro others the just perspective you potentially even your begin store appreciate market? pressures given putting out would and in or the are grow Just count we to that competitive slowdown whether and times XXXX, on see

Raj Grover

for most provinces years. still going of Yes, still are in rapidly. to next slowdown. of landscape we the a owned BC But year, what to are ourselves slowdown growing Manitoba, Alberta, It’s the which in X.X such drastically chains. rapidly about Currently to market. the quite to grow absolutely. as increases only it the are to But big of other the still count smaller was And we see in Saskatchewan, larger pace change XX% store continue is XX% store to are mix. of There ourselves in is of expanding bigger hitting by are quite terms XX% and still growing. stores XX% still like the Look, rapidly starting there is like provinces and maturity, it’s operate, difference is many a counts, chains but to quite independent starting Ontario previously. comparison still

to mix a it some of Andrew, because because competitors other of fallout, the the that going get mix. It the right see independents smaller years, there of to to some independent. trying there bit lines upside change. take over don’t we of But are that few this that going and margin will and be the store that’s the is that I years make and not a are So, have bit distance of chains especially that will from are to coming of as of the stores now. chains requirements, and like – there It provinces going there, be it next the a same will us a is some down is unfortunate the hold just think very stores quite our and some Ontario, to on couple pressure well, at smaller of on

to I differentiated. very grow. So, continue path which discount unique, for very model, still clear our ahead is club a will see we

our products our there. constantly is and – demand for prices Our demand

doing good. are We

So, we expand. to are going continue to

end end We XXX I And the will the stores stores XXXX. XXX by hit over hitting by this of anticipate of year.

Andrew Semple

you, Appreciate the Thank color. Raj.

Operator

ATB is Gomes Mr. Semple. from The you, next line of Markets. Thank the question Frederico Capital with

may You proceed.

Frederico Gomes

on and Thank the you. Good Rahim. Congrats quarter. evening, Raj

$XX cash on quarter the you quick $XX so, Just position, a and your last finished question cash million. in this quarter million with with

of And balance be in Just this amount know use I color any yet, line. that that you. helpful? Thank guys from does credit didn’t but quarter curious, cash financials you any terms understanding cash would include there your new your file

Rahim Kanji

store from million in right cash was we our at Blessed at – Regina. we position positive working year primarily position end we cash Thanks. $XX acquisitions that so open And year quarter, the capital stores flow one healthy as flow the to compared was And cash were a for did Yes. million now used [indiscernible] And used in to cash new $X the cash we also that and and were primarily in operations. our that are before.

So, stores organic focus. and our focused it of expansion was mostly acquisition new

Frederico Gomes

Thank on Europe? And that Okay. there? do about What’s plan talk German the other Rahim. see to you any And your Thank you, potential you bringing then entering Blessed can the CBD you. you brands of market. That’s more helpful.

Raj Grover

Hi, Frederico. Thanks question. for the

to in is market start German sales start commencing commencing getting to are approval food to ready German that So, which on should the expecting end and European for compliance. enter of soon, CBD able we Blessed Union the filed CBD market, Blessed Germany. We the Blessed. in by that pretty And anticipate Blessed already allows sales February, to has novel be the and operate we

both THC We opportunities German are other on some also of and in side the market. at looking the CBD

supplementary in Blessed do CBD in Germany. the three leverage with So, And facility successful, in brands tier UK. the Blessed of that facility to an Blessed top formulations the is Blessed extremely that pass. one the fact the making to the then cannabinoid planning States. U.S. we entry very also top the market well also feel Blessed and And certified newly we manufacturing of And is SKUs cGMP add now of brands. the that in United have be newly multi that some softgel enter then to Blessed in SKUs may CBD the to will can and States other start We United

sometime be of introduce will February. Blessed enhanced U.S. that happen full are March products, line in an we market, XXXX. that in the in believe entry for German to we going which sometime a of Blessed line prior to But So, products will of fact

Frederico Gomes

on queue. Thank you, will you. hop Raj. quarter in Congrats I Thank back again. the

Raj Grover

Thanks.

Operator

is next you, Chu line of from with Capital Thank Mr. Markets? may question You the The Desjardins proceed. Gomes. John

John Chu

guys. Hi

outlook. the this just stores running still just the I they point to have longer. early is retail question pilot been had, it’s discount can you pretty with that three first model. sales my if But obviously know maybe So, you on

months. month-after-month sense that pilots. three those type extra now So, data have What same-store you us same-store of a additional strong longevity maybe those insights give your of the last more growth for sales the can of months that other during all across three we been had have hoping well? as from seeing more stores three give for months us maybe or And four sales growth are you

Raj Grover

for Thanks John. question. Hi, the

we I discount far our seen club have progress on am so happy the John, So, with model. very

loyalty exploding. We absolute our like are is absolutely

XX%. sequentially up in of up at were expected weeks. Quarter-over-quarter, December store same are alone, sales than like up we on month opening new up also should I we XX These out. They XX approximately looking ramp locations are for weeks, we are the we up. better were We that are our results X%. pointed In team. And

which them to in proved seeing basically entire is up customers are retail company’s now weeks are loving club We weeks, has our XX ecosystem. XX discount that which ramp model our leveraging

encouraging Club monetize on do day, signups We Cabana new no are is now can am how started And which in almost averaging extremely But we I so. for strategizing have again, then already a the over hurry me. X,XXX customer membership. to we

out the launch XX% had going have enhance on have also coming the different a had numbers. the help three I forgetting that this, provinces planned our I And gross XXX% the our XXX% stores. the the the We to that out, increase we stores. to us or the THC pilot white believe of seen wrong we where back in did are further we calling accessories numbers in on not It’s brands going up. to margins label pilots, to increase front, of if in seen But am we side things, pilots put

launched we side, increase quadruple we Now, John, in have a this accessories April. on seen the since

selling in April, we So, prior a X,XXX our were stores accessories approximately week. to

that close week, to you we look XX,XXX, selling at we is And now a times extremely make now these accessories now numbers. encouraging. are four are accessories right which original XX,XXX We and

are like in is what our is are business, our not to And which core what members, And we success consumption We of was. And accessories a future. in can it signups in doing providing are are of which everything we members expect for club now. never I branded extremely looking the be membership our we sometime also we hotel phasing signups over more and – club reach day, So, promising. Canada, fast. said promising. because more we And the expect signups our the Cabana extremely now exclusively program grow are look I looking part our see very honestly pace members. out And a did proprietary our of XXX,XXX X,XXX to this sales. members daily mean over to not that launching, is Club

providing ecosystem, such model consumption our products to nature our we carved of have showcasing and out market. I think number that model is we versus unique in it’s discount So, a don’t portfolio of working. question discounts differentiated Because differentiated the anymore mark our a the are accessories that of

already to it’s starting I off. think take

and So, with the quarters, better and hopeful into continue that better quarter. the will coming get am it every very I sales should trajectory single

everywhere. positive retail am we on raging is the level about our sure stores. facing same of every I COVID industries growth going still that, Now, you single their am are sales that to see one hearing I in despite disruption the stores. multiple But hopeful are in

same-store be the to you continue. sales give saw expect that quarters. And we increase. would able to over an you the So, John, all in we XXX share promising stores So, more coming to our I of with that? example, mean is how

John Chu

near-term? goal the more Okay, bit six on then you the you in great. And end in things But had in had permit holidays of building got and any to going more Christmas have some in So, the you about loaded And a right? quarter. issues your XXXX, just down fourth whatnot. Ontario in end XXX maybe calculation, something QX. Price you new stores might color the get I think for terms or, to that’s having we back fiscal model are stores, XXX thus and the XX a by calendar store Obviously, are impact. my that of far should lot slow that how

Raj Grover

just and but and on are Ontario are in are is very hands. that look, British every the Ontario we our So, brought really, the leashes they Columbia, XX issues real building not like we permit John, province, practically one

them, We on waiting them a permits building under of are few literally construction. for of few already

announcing number We to and M&A XXX in in and even And of will that organic will growth. be March. then more to blend get a February more we

with which not sites, I by XXX having And is other landlord permits hard that conservative. is cherry hard number organic really the am And groups best stores getting cherry we out are of a and larger having putting to are in the of opinion time we still getting securing pick time some end are am the We year, locations. locations. are picking us. working building the my I

We have store been with aggressive growth. our

can organic year added locations last XXXX. fiscal You XX that see we throughout

do can – and same I are XXX that the So, already today. at we are we locations feel we

be because going come I difficult get more M&A. it’s I half all half through to to to at or almost can stores, don’t think So, feel than XXX for us

they weekly the by definitely diversified, be We we And chains out only as is advantages. that is ecosystem so have chains, approached independent our regional the daily, smaller to chains, way some consolidation are getting realizing competitive taken go. are to larger because

incoming flow incoming So, and deals. we for of lot mortar a have bricks

I come stores XX XX through So, M&A, XX stores stores, versa. could could growth feel come through or vice another organic

John Chu

you. Thank great. Okay,

Operator

queue with over Grover would the Chu. Raj to final I at time. the no comments. waiting And Mr. additional are you, There like Tide Thank CEO, High that, for questions in back to this session turn

Raj Grover

High for and evening. support ask will a for With line. operator close the Have and to interest your I that, continued Thank Tide. you, thank everyone great operator you to

Operator

concludes conference participation. That you call. for today’s Thank your

You may now disconnect your line.

High Tide (HITI) 28 Jan 222021 Q4 Earnings call transcript