HITI: High Tide same-store sales turned positive in June 2026

By Tom Kerr, CFA

NASDAQ: HITI

READ THE FULL HITI RESEARCH REPORT

Ask Me Anything Reddit Session

On July 15, High Tide (NASDAQ:HITI) hosted an Ask Me Anything (AMA) open forum on Reddit. An AMA is an interactive, crowdsourced Q&A session where a host such as experts or business leaders invites the Reddit community to ask them questions in real-time. This was the 5^th AMA that the company has been involved in. 

The forum was very detailed and lengthy and covered substantially all aspects of the company’s business operations. An important comment by management was that June same-store sales turned positive after declining (1.2%) in the 2^nd quarter ending April 30, 2026. We believe this momentum will continue and it’s possible same-stores sales could remain positive in July.

Our key takeaways from the AMA include:

• High Tide's takeover protections are designed to maximize value and not to prevent acquisitions. The shareholder rights plan helps prevent coercive or undervalued bids while preserving regulatory compliance, but the board would still evaluate any realistic offer that maximizes shareholder value.

• Europe is the company's highest priority growth opportunity. Management continues to focus on Germany first, with the UK viewed as the next major expansion market, while the U.S. remains a longer-term opportunity.

• The U.S. expansion strategy is intentionally patient and capital disciplined. Rather than pursuing expensive acquisitions or issuing significant equity, High Tide intends to wait until regulations become more favorable before entering through the most attractive structure.

• Remexian is outperforming expectations. German market share has more than doubled, gross margins improved from roughly 12% to 27% as procurement efficiencies took hold, and management believes 25-30% margins are sustainable over time.

• Germany's evolving regulations are not viewed as a major long-term risk. Management believes approximately 90% of patients already pay out of pocket, limiting the impact of reimbursement changes while positioning Remexian to benefit from value-oriented demand.

• Management believes sustainable GAAP profitability has now been achieved. Positive net income is expected to continue despite occasional quarterly volatility caused by non-cash accounting items such as derivative liability revaluations.

• Free cash flow is considered the company's most important financial metric. The CEO repeatedly emphasized free cash flow generation and free cash flow per share over GAAP earnings or Adjusted EBITDA because they better reflect the underlying economics of the business.

• Gross margins are expected to continue expanding beyond 30%. Margin improvement is expected to come from operating leverage, procurement scale, ELITE memberships, and white-label products. But not by raising prices to customers.
• White-label brands remain one of High Tide's largest long-term margin opportunities. Although penetration is still only about 1.7% of sales, management continues targeting roughly 20% over time through disciplined product launches.

• Queen of Bud has become a highly successful acquisition. The brand achieved an initial one-year payback, with recent sales accelerating enough to reduce the effective payback period to approximately six months.

• The Cabana Club ecosystem is viewed as High Tide's strongest competitive advantage. With more than 2.7 million members, proprietary customer data, loyalty, and execution provide a competitive moat that management believes competitors have struggled to replicate.

• Same-store sales weakness appears temporary rather than structural. After posting its first negative comparable-sales quarter since Cabana Club launched, June sales returned to positive growth, with management attributing the past weakness largely to macroeconomic pressures. Based on recent trends, we believe July could show positive same-store sales as well.

• The store expansion plan prioritizes long-term returns over speed. High Tide is willing to walk away from overpriced leases, accept longer permitting timelines, and selectively tolerate store cannibalization when it strengthens the overall retail network or blocks competitors from premium locations.

• Capital allocation remains highly disciplined. Management emphasized there have been no ATM equity issuances in six quarters and no equity financings in four years, preferring internally funded growth whenever possible.

• Share buybacks remain part of the long-term capital allocation plan. The CEO indicated he would like to pursue an aggressive NCIB in the future once reinvesting in growth no longer offers superior returns.

• Balance sheet flexibility continues to improve. The expected $40 million BMO credit facility demonstrates increasing access to traditional bank financing which is a notable milestone for a cannabis retailer.

• Management is willing to monetize non-core assets when appropriate. U.S. e-commerce businesses remain under strategic review, and the company would consider selling or partnering if it receives an attractive valuation.

• Executive incentives are closely aligned with shareholders. Executive compensation is determined by an independent board committee, and management stated they have sold only minimal shares for tax purposes while increasing his ownership since the IPO.

• Related-party transactions are governed by independent oversight. Management stated the warehouse lease was independently valued, fully disclosed, has not experienced rent increases since inception, and remains economically justified relative to its operational role.

• Management's overarching philosophy is disciplined long-term value creation. Throughout the AMA, CEO Raj Grover consistently emphasized intrinsic value growth, prudent capital allocation, market share expansion, profitability, and execution over short-term stock price movements or meeting quarterly market expectations.

The entire AMA transcript can be found here

SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR. 

DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives payments totaling a maximum fee of up to $50,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.