$HITI , a long-term winning choice, called "The Costco of cannabis"

The importance of buying young, great companies is something everyone knows, but few people actually do it or really care. The truth is that in the market you earn more by investing in young, transformative and disruptive companies, which offer unique services; they also must be capable of being leaders in what they offer and they must have proven this. https://preview.redd.it/tlfflxxa7pcg1.png?width=1080&format=png&auto=webp&s=71cfe06868cda1f369bdbdb6fe9d25aa8e69e728 Large companies take years to build, or decades, and in the meantime the stock is subject to significant fluctuations for various reasons, rates at historic highs that weigh on valuations, wars, uncertainty, etc.. The key is to let the business grow, year after year, not by focusing on the stock, but on the continuous progress of the company's business, remaining invested for years or even decades. A 100-bagger happens when: •You see what others ignore •You act before others believe •You hold while others panic •You evolve faster than your fear •You build conviction through chaos Peter Lynch explains when to sell a stock: “You have to say to yourself: in this stock, do I have a 10–year story? A 20–year story?…That’s what I do with the company. That’s how you sell it.” https://preview.redd.it/k1poyoel7pcg1.png?width=640&format=png&auto=webp&s=d8f61ddd3ab0311d24f951015f6a6cb3873fa207 https://preview.redd.it/wfkd5cim7pcg1.png?width=1080&format=png&auto=webp&s=ef672e89f6b578ffb8e1f8358b3676790a5d6ebf https://preview.redd.it/3wqskv1n7pcg1.png?width=1080&format=png&auto=webp&s=b23aadcf77664cd253f2db7e054b061c6eb06541 # 1. Canadian Business # 2. E-commerce Business # 3. Germany # 1. Update on the Canadian Business When cannabis was first legalized in Canada in 2018, the market was flooded with entrants, with high supply leading to low prices, whilst stringent government regulations and high taxes meant high costs. However, today, as a result of a wave of bankruptcies and some provinces reducing regulations, the industry is stabilizing, leading to the demand consolidating with the best players. And High Tide is certainly one of the best players, thus their Canadian business has been performing exceptionally well.First, so far in 2025, High Tide has opened 28 new locations, reaching 218. Long-term target is to have over 400 locations in Canada. https://preview.redd.it/zaveewfo7pcg1.png?width=1080&format=png&auto=webp&s=91c925b6b45a6ee3e6f10c014fb2b7d6199181e7 The company has a 12% market share in the provinces in which it operates, an increase from 11% last year. High Tide continues to demonstrate steady market share gains, as it grows faster than the industry. https://preview.redd.it/a5e5n4hp7pcg1.png?width=640&format=png&auto=webp&s=d0dbf8e2d289b70edc147b65f2a6b4d9774f2d71 Revenue growth has increased from a mere 5.9% in Q3 2024 to 13.7% in Q3 2025, reaching CA$149.7M. https://preview.redd.it/of77opnq7pcg1.png?width=640&format=png&auto=webp&s=fa6ddb6d820b2ab12d72a2128cb75a88754f4f60 Revenue growth rates show a clear accelerating trend, despite a challenging macroeconomic environment in Canada. The company achieved this result not only because of new stores, but also because existing stores continue to perform better. https://preview.redd.it/gog3wpor7pcg1.png?width=1080&format=png&auto=webp&s=11016c6d4db559fa8224f03baa829709291ec1e9 Same-store sales were up 7.4% in Q3 2025, and 137% since June 2021, which compares extremely favorably to the industry average, which saw a 37% same-store growth since 2021. In fact, the 7.4% same-store sales growth in Q3 2025 was High Tide’s fastest SSS growth rate in over 2 years. ***On a LTM basis, Canna Cabana dispensary sales grew 15% Y/Y, compared to 5% growth of the industry!*** It is clear that High Tide is a significant market share taker, largely thanks to its innovative Costco-like subscription model. But essentially, High Tide’s Cabana Club loathly program offers special perks and discounts to its members. As of Q3 2025, Cabana Club has 2.15M members in Canada, an increase of 39% Y/Y, while Elite members grew by 102% Y/Y to 115K! Members of the loyalty program are crucial to drive recurring purchases and increase same-store sales growth. # 2. E-commerce Business https://preview.redd.it/45ik113u7pcg1.png?width=1080&format=png&auto=webp&s=a538d9944809c8747a4f0ce498c558df262777e5 # 3. Expansion to Germany The company decided to enter into an larger deal, by acquiring a 51% stake in a German cannabis distributor, Remexian, for €26.4M Remexian operates at an annualised sales rate of €70M and ADJ EBITDA of €15M, resulting in an acquisition multiple of 3.64x ADJ EBITDA. High Tide holds the right to acquire the remaining stake for the same multiple for 5 years after 2 years from the deal closure, so from September 1, 2027, till September 1, 2032. This is a very reasonable valuation considering the growth potential of the German medicinal cannabis market. researchers at Spherical Insights forecast that the legal German cannabis market will grow with a 16.76% CAGR to US$4.85B! https://preview.redd.it/vmzqgu0v7pcg1.png?width=640&format=png&auto=webp&s=410528e0b78ae1632f4a0f5d8adcfc2ed2ea6e85 https://preview.redd.it/qaho2bjv7pcg1.png?width=1080&format=png&auto=webp&s=f7dc22624b3d5fdfc3d31e39bf178ed14a97cc97 https://preview.redd.it/yns6avuv7pcg1.png?width=1080&format=png&auto=webp&s=becf23c32bbb6a37a5701ad54f6b239f0d64eb25 Let me explain how the German export business will work: 1. **High Tide negotiates** a price with Canadian growers, let’s say CA$3 per gram. 2. It then adds **its markup, let’s say 40%** and **sells that cannabis to Remexian** for CA$4.2 per gram. 3. **Remexian adds its mark-up, let’s say also 40%,** and sells cannabis wholesale to pharmacies, for CA$5.6 per gram. 4. **Pharmacies add their markup**, 19% VAT, and sell retail for likely around CA$15 or €9 per gram. High Tide makes money at two steps of the process. First, as a **wholesale exporter to Germany, it keeps 100% of the markup** that it adds to the purchase price. It recognizes the entire CA$4.2 as revenue, and $CA1.2 as gross profit. High Tide operates as a middleman, taking a fee for its services, without incurring large operating expenses. This is why the export business could be so profitable for High Tide. In the above example, they will recognize a 28.6% gross profit margin, of which a large portion will just go down to the bottom line, as the costs of actually shipping the product to Germany are much lower than the distribution costs of running a retail brick-and-mortar business in Canada. ***This segment could have a 20% EBIT margin, compared to the 3.6% Q3 2025 EBIT margin!*** Second, as a 51% owner of Remexian, **High Tide has rights to 51% of the profits** that their medical cannabis wholesale distribution business generates in Germany. So, after Remexian adds its mark-up and incurs all its distribution expenses. While the idea is simple, the actual accounting will get a bit murky. As the majority owner, High Tide will have to consolidate all revenues and expenses of Remexian into High Tide, but then recognize 49% of Remexian’s net income as non-controlling interest. This deal is beneficial to High Tide in many aspects. Firstly, and most obviously, it enables High Tide to enter a new region, expanding to the fast-growing German medicinal cannabis market. Secondly, it positions them well to enter the German recreational retail cannabis market. Currently, recreational cannabis sales are not legal, and it is unclear when that might change. However, I find it likely that full legalization will happen. Medicinal cannabis legalization is always the first step, and often the second follows, as it was in Canada and many US states. Third, it strengthens its negotiating power with growers. High Tide will be able to get better prices from suppliers because the quantity of cannabis purchased will increase. Higher volume discounts will make the company more competitive domestically, enabling lower prices for consumers and higher margins for High Tide. Fourth, High Tide now has a foothold in Europe that it can use to expand to other medicinal cannabis markets such as the UK, Poland, Denmark, Italy, and others. # Shares of High Tide “could easily double”, this analyst says Beacon Securities analyst Doug Cooper has maintained a “Buy” rating and raised his target price on High Tide [https://www.cantechletter.com/2025/10/shares-of-high-tide-could-easily-double-this-analyst-says/](https://www.cantechletter.com/2025/10/shares-of-high-tide-could-easily-double-this-analyst-says/) I have a long position in the company and I strongly believe in its long-term success. **Company presentation ->** [**https://hightideinc.com/presentation/**](https://hightideinc.com/presentation/) That’s it. Thanks for reading!