First of all, this is not financial advise. You should do your own due diligence before taking investment decisions. Now, let me tell you why i think that High Tide might be the best stock of the decade. Enjoy!
In a world where innovation and adaptability rule the business landscape, High Tide Company (take your symbol HITI) is riding the wave toward an incredible future. Whether you’re an investor or just a curious observer, this company has everything it needs to not only stay afloat but to surge ahead in the cannabis industry worldwide. Here’s why High Tide is set to make some serious waves (no pin intended ;-)).
So, what is High Tide?
First let’s describe what this company does: High Tide Inc. (HITI) is a leading retail-focused cannabis company with a global presence. Headquartered in Calgary, Canada, High Tide operates a diverse portfolio of businesses, including their branded retail cannabis stores (Canna Cabana), accessories e-commerce platforms, and wholesale distribution networks. With over 190 retail locations across Canada, the company is the largest non-franchised cannabis retail chains in the country with 12% market share (data end of july 2024).
In addition to its physical stores, High Tide owns a suite of leading online platforms like Grasscity.com, Smoke Cartel, and Daily High Club, which cater to the cannabis accessory market and reach customers worldwide. By integrating cannabis retail with a robust e-commerce strategy, High Tide has positioned itself as an innovator in the industry.
But here is the most important aspect of High Tide (for me!): they introduced a couple years back an innovative membership-based program called the Cabana Club Membership. This program has become a cornerstone of its customer engagement strategy, driving loyalty and recurring revenues while offering unmatched value to its members (+1.5m members already and counting!). And there is also the Cabana Elite Membership (premium tier subscription program, 57’000 members already and counting too), offering exclusive perks and deeper savings to cannabis consumers. It is tailored for those who want the maximum value and priority access to High Tide’s products and services, all at a highly competitive subscription fee.
What about their financials?
Yes, I could not believe it in the beginning but a profitable cannabis company exists and we found it!
High Tide Inc. (HITI) has demonstrated robust financial performance in recent quarters, underscoring its position as a leading retail-focused cannabis company.
Here are a summarize of their Third Fiscal Quarter 2024 Highlights:
- Revenue: Achieved a record $131.7 million, marking a 6% increase year-over-year and sequentially
- Gross Profit: Reported at $35.5 million, a 3% rise from the same period last year, maintaining a gross margin of 27%
- Adjusted EBITDA: Recorded at $9.6 million, marking the 18th consecutive quarter of positive Adjusted EBITDA!
- Net Income: Achieved positive net income of $0.8 million, a significant improvement from a net loss of $3.6 million in the same quarter of the prior year.
- Free Cash Flow: Generated $3.1 million in positive free cash flow during the quarter, contributing to $21.8 million over the trailing four quarters.
- Market Share: Held a 21% share in Alberta and 11% in Ontario, with an overall 12% market share across five provinces, despite representing only 5% of the total cannabis retail store count in those regions.
The fact that they can be Free cash flow positive while growing very fast (they openened close to 30 new stores in 2024) and with such a low gross margin (27%) shows that they extremely efficient on the operational side!
For 2025, I believe the company will continue to be Free Cash flow positive and will continue to grow (600m+ revenues is possible!).
So why High tide might be the best stock of the decade?
1. A Vision Anchored in Excellence
High Tide isn’t just another business; it’s a movement (look a their membership program!). In an era when consumers are more values-driven than ever, High Tide’s commitment to doing good while doing business positions it perfectly for long-term success. Their competitors are slowly going into brankruptcy while High Tide “steals” their customers and keep growing. Long term, they should reach 15-20% of the total market share of Canada!
2. An Unstoppable Industry Tailwind
Some companies have to fight against market trends, but not High Tide. It operates in a thriving industry—Cannabis —that has shown consistent growth year over year. And High Tide isn’t just riding the tailwind; it’s propelling the ship forward with innovations that redefine what’s possible. The cannabis market in Canada (and in the world) will keep growing for the next decades.
3. The Power of Adaptability
In business, it’s not the strongest that survive but the most adaptable. High Tide has proven itself to be just that. During economic shifts, technological disruptions, and even global challenges like the pandemic, High Tide has shown remarkable agility, quickly pivoting strategies to meet changing demands. Even with Canada being in a recession right now, High Tide is still growing and taking market shares.
4. An All-Star Team Behind the Helm
No ship sails itself, and High Tide is fortunate to have a world-class team of industry veterans, creative thinkers, and passionate leaders guiding its journey. The leadership team brings a wealth of experience, blending visionary thinking with practical execution. What can I say about their CEO and founder Raj Grover? He has a vision, a dream and he will do everything he can to make it a reality. I truly believe that he is the man that will take High Tide to a multi billion company in the future!
5. A Loyal (and Growing) Customer Base
One of High Tide’s greatest assets is its loyal and rapidly expanding community of customers through their membership programs. Thanks to its focus on delivering exceptional value, High Tide has cultivated a tribe of brand advocates who are not just customers but ambassadors. This is the trick, once you have tried their membership in Canna Cabana, you will not want to go shopping anything else. The deals you will get are unseen before! I believe we will cross the 2m+ members for their program and the 100’000 members for the elite program in 2025!
6. High Tide’s Expansion in Germany and the USA: Key to Global Dominance
High Tide Inc. has set its sights on international markets, with Germany and the United States as primary targets for expansion. These two countries represent significant opportunities for growth in the global cannabis and accessories industries. By leveraging its proven business model, High Tide is strategically positioning itself as a key player in these lucrative markets. Nothing is sure yet but if they can develop their business in these countries, this would be a game changer for High Tide!
7. The Future Is High Tide
When you put it all together—a clear vision, thriving industry trends, adaptability, a strong team, loyal customers, innovation, financial health, and purpose—it’s easy to see why High Tide Company is poised for greatness.
So, grab your surfboard and join the ride—because this is one wave you don’t want to miss!
Oh yeah, I almost forget 2 things:
- my price target for 2030 is USD 50 (it’s now trading around USD 3.30)
- This is not a sponsored post and not financial advice!
Cheers!
This was Why High Tide might be the best stock of the decade? Any question? Contact me!
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