HIGH TIDE INVESTOR PRESENTATION - OCTOBER 2022 Over 10 Years in Business Unique and Diversified Cannabis Ecosystem
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THE RISING TIDE OF CANNABIS
HIGH TIDE INVESTOR PRESENTATION
OCTOBER 2022
Over 10 Years in Business
Unique and Diversified Cannabis Ecosystem
Retail-Focused Growth Initiatives
1
DISCLAIMER
FORWARD-LOOKING STATEMENTS
This presentation does not constitute an “offering and all economic analysis derived from such estimates assurance that such information will prove to be
memorandum” by High Tide Inc. (“High Tide” or the and forecasts. accurate as actual results and future events could differ
“Company”) as such term is defined under Canadian materially from those anticipated in such statements.
securities legislation and confers no statutory, In general, forward-looking information can be Accordingly, readers should not place undue reliance
contractual or other similar rights of rescission or other identified by the use of forward-looking terminology on forward-looking information. The Company does not
action or remedy to any recipient under securities such as “plans”, “expects”, “anticipates”, “believe” undertake to update any forward-looking information,
legislation in Canada, the United States or other “projects”, “forecasts”, “budget”, “estimates”, except as required under applicable securities laws.
jurisdiction for misrepresentation or otherwise. No “schedule”, “intends”, or variations or the negative of
securities are being offered for sale hereunder. This such words and phrases or state that certain actions, Financial outlook and future‐oriented financial
document does not provide full disclosure of all events or results “may”, “could”, “should” “would”, information contained in this presentation about
material facts relating to the securities offered. Readers “might” or “will be taken”, “occur” or “be achieved”. prospective financial performance, financial position or
must conduct their own analysis and review of the The forward-looking information is based upon factors cash flows is based on assumptions about future
Company and of the information contained in this and assumptions the Company believes is reasonable events, including but not limited to economic
presentation and must contact their own professional based on information currently available to them, conditions and proposed courses of action, based on
advisors. including assumptions that the Company will be able to management’s assessment of the relevant information
add and/or open additional stores, be able to complete currently available. Projections included herein contain
This presentation contains “forward-looking new acquisitions, be able to introduce new programs, forward‐looking statements and are based on a number
information”. Forward-looking information includes, including the implementation of a white label program, of material assumptions and factors set out above.
without limitation, statements regarding the Company the ability of future and current acquisitions to These projections may also be considered to contain
and its business, the Company’s ability to add and/or contribute and provide synergies across the business, future oriented financial information or a financial
open additional stores, complete acquisitions, the Company introducing drop shipping technology and outlook. The actual results of the Company’s operations
introduction of new programs, including the other products across additional platforms, the for any period will likely vary from the amounts set
implementation of a white label program, contributions Company launching existing and new brands across forth in these projections, and such variations may be
between recent and future acquisitions of the Company different geographic markets and that cannabis will material. See the above for a discussion of the factors
and their anticipated synergies, the ability of the become federally legalized in the United States. that could cause actual results to vary. The future-
Company to introduce drop shipping technology and Forward-looking information is subject to known and oriented financial information and financial outlooks
other products across additional platforms, the ability unknown risks, uncertainties and other factors that may contained in this presentation have been approved by
of the Company to launch existing and new brands cause the actual results, level of activity, performance management. Readers are cautioned that any such
across different geographical markets, macroeconomic of the Company to differ from forward-looking financial outlook and future‐oriented financial
factors, future demand and supply dynamics for information, including the risks that the Company will information contained herein should not be used for
cannabis, production and development forecasts and be unable to add and/or open additional stores, be purposes other than those for which it is disclosed
timelines, estimates as to the demand for cannabis and unable to complete new acquisitions, be unable to herein.
cannabis paraphernalia, future cannabis prices, introduce new programs, including the implementation
solutions to past problems, valuations, capital and of a white label program, the inability of future and These materials may contain inaccuracies or
operating expenditures, ability to obtain financing, current acquisitions to contribute and provide synergies typographical errors. The Company shall not be
future currency exchange rates, changes to government across the business, the Company being unable to responsible for any errors or omissions contained in
regulation of cannabis, and environmental risks. introduce drop shipping technology and other products these materials and do not guarantee the accuracy,
Similarly, forward-looking information also includes across additional platforms, the Company being unable completeness or timeliness of the information
economic analysis of the business of the Company and to launch existing and new brands across different contained herein.
the results thereof, including, without limitation, cash geographic markets and cannabis not becoming
flow projections, estimated capital and operating costs, federally legalized in the United States. There can be no
2
COMPANY SNAPSHOT
STOCK SYMBOLS TSXV:HITI | NASDAQ:HITI | High Tide is a retail-focused cannabis company enhanced by
FRA:2LYA the manufacturing and distribution of consumption
SHARE PRICE1 accessories:
$1.92
AVERAGE DAILY VOLUME2 345K RETAIL SEGMENT:
Over 10 years focused on the cannabis consumer
SHARES OUTSTANDING 70.7 MILLION • 140 branded retail cannabis stores across Canada1
(BASIC)1 • Grasscity.com – world’s best known online headshop
MARKET CAPITALIZATION1 $136 MILLION since 2000
• SmokeCartel.com – US online headshop since 2013
TOTAL EMPLOYEES4 1,300+ • DailyHighClub.com – US online headshop & subscriptions
• DankStop.com – US online headshop
LRQ REVENUE4 $95.4 MILLION • NuLeafNaturals.com – a leading US cannabinoid company
• FABCBD.com – a leading US online CBD brand
LRQ EBITDA4 $4.2 MILLION
• BlessedCBD.co.uk – a leading UK online CBD brand
TOTAL ASSETS4 $309.7 MILLION
WHOLESALE SEGMENT:
Designs, manufactures and distributes proprietary and
1
2
As at October 5, 2022.
3-month average daily total from all 3 major exchanges as at October 5, 2022.
licensed consumption accessories.
3 As at August 15, 2022 including all direct retail staff.
4 For the last reported quarter ending July 31, 2022.
• Valiant Distribution and Famous Brandz features over
5,000 SKUs including celebrity and studio licensed
products
3
UNIQUE DIVERSIFIED ECOSYSTEM ACROSS THE VALUE CHAIN - BY GEOGRAPHY & SEGMENT
THC CBD ACCESSORIES
North America’s first and only
discount club retailer of cannabis,
with 140 stores across Ontario,
Manitoba, Saskatchewan, Alberta –
and BC locations under
development1.
Largest corporately owned store
network in Canada, and third largest
in the world.
Membership in the Cabana Club
loyalty program currently stands at
750,000+ members2.
1 Store count represents Canna Cabana stores, as well as stores operated under other banners (NewLeaf, META) as at October 5, 2022.
2 Cabana Club membership count is at September 14, 2022.
4
RECENT FINANCIAL HIGHLIGHTS (IN THOUSANDS OF CAD)
SUMMARY INCOME STATEMENT
In 2Q20, HITI became the first Canadian
4Q20 1Q21 2Q21 4Q21 1Q22 2Q22 3Q22
(UNAUDITED) (UNAUDITED) (UNAUDITED)
3Q21 (UNAUDITED)
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
public cannabis retailer to report positive
Adjusted EBITDA
REVENUE $24,876 $38,319 $40,868 $48,069 $53,867 $72,218 $81,031 $95,354
GROSS PROFIT $8,725 $14,768 $14,998 $16,679 $17,538 $22,982 $22,694 $25,755
$100,000
ADJUSTED $3,625 $4,601 $4,720 $1,540 $1,642 $2,955 $2,402 $4,246 $80,000
EBITDA
$60,000
INCOME(LOSS)
$1,133 ($2,045) ($4,511) ($7,267) ($4,851) ($6,147) ($7,578) ($4,670)
FROM OPS $40,000
$20,000
NET INCOME ($1,324) ($16,845) ($12,266) ($1,750) ($4,176) ($7,352) ($8,277) ($2,717)
(LOSS) $0
SUMMARY INCOME STATEMENT
CASH & REVENUE
$7,524 $16,576 $29,353 $26,640 $14,014 $10,077 $14,999 $18,321
EQUIVALENTS
INVENTORY $5,702 $9,723 $11,851 $15,049 $17,042 $21,557 $22,780 $23,539 $5,000
TOTAL ASSETS $69,811 $166,574 $200,070 $236,802 $246,215 $290,568 $302,039 $309,659 $4,000
CURRENT $27,464 $46,972 $43,022 $34,097 $40,787 $45,047 $50,630 $52,212 $3,000
LIABILITIES
$2,000
NON-CURRENT $30,624 $65,803 $50,506 $55,892 $53,424 $63,419 $62,661 $54,946
LIABILITIES $1,000
TOTAL EQUITY1 $11,723 $53,799 $106,542 $146,813 $152,004 $182,102 $188,748 $202,501 $0
4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22
TOTAL
LIABILITIES & $69,811 $166,574 $200,070 $236,802 $246,215 $290,568 $302,039 $309,659 ADJUSTED EBITDA
EQUITY1
1Includes non-controlling interest
5
RETAILERS ARE NOT LPS
• Years into legalization, many licensed producers
are facing excess supply, inventory writedowns,
shuttered facilities, goodwill impairments and
negative EBITDA.
• Retailers often benefit from issues faced by LPs,
and generally experience completely different
dynamics (revenue growth, positive EBITDA,
minimal capex requirements etc.).
Retailers are a separate asset class for investors. High
Tide has a superior financial profile when compared
to its peers due to:
• Over a decade of experience in selling to cannabis
customers
• Structural advantages of diversified ecosystem
(accessories, U.S. hemp-derived CBD, e-commerce
and wholesale)
• Excellent management team of leading operators
6
RETAIL
A LEADING RETAIL CANNABIS NETWORK ACROSS CANADA
• Industry leading
Cabana Club loyalty plan
offering members instant
discounts at checkout, and
promotions direct to their
phone – over 90% of store
revenue comes from club
members
• ‘Cabanalytics’ data
subscription selling retail
insights to industry
stakeholders
• Built on data from existing
customer base and a decade
of experience catering to
cannabis consumers
• Target location size of 1,200-
1,500 sq. ft.
7
RETAIL
CANNA CABANA BECOMES NORTH AMERICA’S FIRST &
ONLY CANNABIS DISCOUNT CLUB RETAILER
• In October 2021, we transitioned all Canna
Cabana stores to a discount club concept
with exclusive benefits for Cabana Club
members – leveraging our unique strengths
of vertical integration, our diversified
ecosystem and our rapidly growing loyalty
plan (750,000+ members1).
• Cabana Club members receive: everyday
low prices on cannabis merchandise;
exclusive access to our 5,000+ SKUs of
consumption accessories in Canada;
preferential pricing for our wholly owned
brands and white label offerings.
• We expect this exclusive discount club
approach will further cement the loyalty /
market share feedback loop.
1 As at September 14, 2022.
8
RETAIL
• Stores laid out in an open environment,
allowing customers to view products
• Walls surrounded by up to 700 SKUs of
accessories
• Robust employee training program results
in premier customer service
STORE COUNTS BY PROVINCE
PROVINCE CURRENT STORES OPEN
AB 75
ON 43
SK 10
MB 9
BC 3
TOTAL 140
Store counts represent Canna Cabana stores, as well as stores operated under
other banners (NewLeaf, META) as at October 5, 2022. 9
RETAIL
FASTENDR™ TECHNOLOGY OFFERS ENHANCED CUSTOMER EXPERIENCE
• Acquired by High Tide in February 2022,
Fastendr™ is a unique and fully automated
technology that integrates retail kiosks and
smart lockers to facilitate a better buying
experience through browsing, ordering and
pickup.
• The technology is a catalyst to expected
faster transaction times, increased average
basket size, lower overhead and labor
costs, and provides a seamless end-to-end
customer experience.
• Video showing the technology
http://fastendr.com/
• High Tide intends to install Fastendr™
across its entire network of stores in 2022,
following which we plan to license the
technology to other retailers.
10RETAIL
NuLeaf Naturals
• Founded in 2014, High Tide acquired 80% in November 2021 with an option to acquire the remaining 20%
• NuLeaf is a market leader in the production and distribution of premium cannabidiol (CBD) wellness products
• During 2021, NuLeaf had 4.9 million site visits, and an average order value of US$112.53
• Since inception NuLeaf has served ~337,000 customers through its e-commerce channels (80+% of revenue) and many more
through distribution channels
• cGMP facility enables NuLeaf to manufacture ground-breaking cannabinoid formulations
• One of a very few manufacturers that can produce a vegan softgel (60,000/hr)
• NuLeaf’s Multicannabinoid™ is a comprehensive formula designed to supercharge the endocannabinoid system – this blend
contains several key cannabinoids including CBD, CBG, CBN, and CBC in a balanced profile
11RETAIL
FAB CBD
• Founded in 2017, High Tide acquired 80% in May 2021 with an option to acquire the remaining 20%
• One of the most popular brands for hemp-derived CBD products across the U.S.
• FAB CBD carries multiple exclusive product formulations that are manufactured by reputable contract manufacturers across the U.S.
• 100% of sales are direct-to-consumer from FAB CBD’s website
• In 2021, FAB received over 4.4 million site visits, more than 198,000 orders, 1.0MM online sessions and an average order value of
US$99.60
• Potential to list FAB CBD products on High Tide’s e-commerce platforms and bring the FAB CBD brand to Canada and the E.U.
• Launched a CBD Subscribe-and-Save discount program in March 2022 allowing customers to customize orders and automatic delivery
frequency while receiving a 20% discount – expected to boost lifetime value of customers
• Founder, Josh Delaney, has joined the High Tide team to help grow its CBD business globally
12RETAIL
BLESSED CBD
• Founded in 2019, High Tide acquired 80% in October 2021 with an option to acquire the remaining 20%
• One of the most popular brands for hemp-derived CBD products across the U.K.
• Entered the German CBD market in March 2022
• Blessed CBD carries multiple exclusive product formulations that are manufactured by reputable contract manufacturers
• 100% of sales are direct-to-consumer from Blessed CBD’s website
• In 2021, Blessed received over 8 million site visits, and an average order value of £82
• Potential to list Blessed CBD products on High Tide’s e-commerce platforms and bring the brand to Canada and U.S.
• Founder, Vithurs (V) Thiru, has joined the High Tide team to help grow its CBD business globally
13RETAIL
GRASSCITY - WORLD’S BEST KNOWN ONLINE HEAD SHOP
WORLD’S TOP ACCESSORIES LARGE U.S. CUSTOMER BASE FORUMS & SOCIAL MEDIA
E-RETAILER • Visitors: 77% U.S.; 8% United • Over 100 million unique users in
• Founded in 2000, High Tide Kingdom; 5% Canada; 10% Other Grasscity Forums since 2017
acquired 100% in 2018 • Global shipping via fulfilment • Over 287,000 followers on social
• Over 25 million site visits in 2021 centers in Europe (Amsterdam) & media
• Over 120,000 orders annually the U.S. (Las Vegas)
• Database holds 615,000 customers • Large opportunity to add new
• 381,000 newsletter subscribers customers and products – and
• 57,400 verified reviews cannabis, should federal
laws/regulations change
14RETAIL
SMOKE CARTEL
• Founded in 2013, High Tide acquired 100% in March 2021
• Proprietary drop-shipping technology seamlessly connects brands and vendors with Smoke Cartel’s growing customer base
• Carries over 17,000 SKUs on the platform without holding any inventory
• In 2021, approximately 50 million site visits and 172,000+ orders
• Currently in contact with over 775,000 email accounts and 160,000 social media followers
• Trusted by 965,000 total customers to date
• Provides a marketplace of high-quality products, subscription boxes and reliable customer service with rapid shipping across
the United States
• Winner of the High Times Cup Best Glass Award and featured on Forbes, Leafly and Weedmaps
15RETAIL
DAILY HIGH CLUB
• High Tide acquired 100% in July 2021
• Daily High Club is one of the leading online retailers of glass water pipes, vaporizers, and other in demand
consumption accessories
• 1+ million consumption accessories sold and 12,000+ monthly subscribers
• Over 16 million site visits in 2021 - 806,000 followers on Instagram and 138,500 followers on TikTok
16RETAIL
DANKSTOP
• High Tide acquired 100% in August 2021
• DankStop is a leading online consumption accessories retailer
• With an industry leading and innovative website, and dedicated support team, DankStop has raised
the bar for the online consumption supply industry since 2014
• Approximately 333,000 followers across all social media channels
• Co-Founder Feliks Khaykin, is now Director of U.S. Operations of High Tide
17WHOLESALE
VALIANT DISTRIBUTION
Distribution network Manufacturing 10 YEARS >5,000 SKUs
extends from our contracts with industry Experience in the Extensive product
network of facilities in leading factories in design and branding of catalog with ~70%
Calgary, Las Vegas and China, the United in demand manufactured in-
Amsterdam States and the consumption house
European Union accessories
18WHOLESALE
CELEBRITY LICENSES
First to secure licenses from movie studios, musicians & other celebrities for consumption accessories including:
19WHOLESALE
OUR PRODUCTS
20FUTURE GROWTH DRIVERS
• FUTURE ACQUISITIONS – TYPICAL TARGET CRITERIA:
• Complementary to our existing ecosystem
• Immediately accretive to earnings (vs turnaround stories)
• Increased store count in Canada (long-term target of 200 stores)
• Impact of sales of recently launched white label program for our retail network
• Impact of the transition to our discount club concept for Canna Cabana
• Contributions from recent acquisitions and related synergies
• Implementing drop shipping tech across all e-commerce platforms
• Near-term synergies between NuLeaf & FAB CBD / Blessed CBD products (co-packing, shipping, creating new product lines)
• Bringing the FAB CBD and NuLeaf brands to Canada via an agreement with an LP
• Potential to launch the FAB and NuLeaf brands in Europe and Blessed CBD brand in the U.S.
• U.S. federal legalization – can lever our existing presence and customer base to sell cannabis in U.S. if federally legal (our
experience in Canada offers a good precedent)
21EXECUTIVE TEAM
MANAGEMENT TEAM BOARD OF DIRECTORS
Raj Grover Omar Khan
Founder, President & Chief Senior Vice President Raj Grover
Executive Officer of Corporate & Public Executive Chairman
Affairs
Joy Avzar Andrea Elliott
Rahim Kanji EVP Direct to Consumer,
Vice President & Legal
Chief Financial Officer Moose Knuckles Canada
Counsel
Andy Palalas Nitin Kaushal
Chief Revenue Officer President, Anik Capital Corp.
ADVISORS
Shimmy Posen
Aman Sood Arthur Kwan
Chief Operating Officer SECRETARY-TREASURER President & CEO of Aspen
Partner, Garfinkle Island Therapeutics Inc. DBA
Biderman LLP The Newly Institute
Chief Christian Sinclair
Vahan Ajamian
Co-chair of Manitoba’s Northern
Capital Markets Advisor
Economic Development Strategy
22SHARES OUTSTANDING
“HITI” “HITI” “2LYA”
LISTED ON LISTED ON LISTED ON
SHARE CAPITALIZATION TABLE AS AT OCTOBER 5, 2022
COMMON SHARES - ISSUED AND OUTSTANDING 70,699,000
POTENTIAL SHARES FROM EXERCISE OF WARRANTS 11,385,041
POTENTIAL SHARES FROM STOCK OPTIONS 2,268,251
POTENTIAL SHARES FROM RSUs 132,143
POTENTIAL SHARES FROM CONVERTIBLE DEBENTURES 1,405,119
FULLY-DILUTED COMMON SHARES OUTSTANDING 85,899,555
1.Warrants have a weighted average exercise price of $5.89 per share.
2.Options have a weighted average exercise price range of $6.20 per share.
3.Convertible debentures have a weighted average exercise price of $6.38 per share.
Recently closed a $19MM non-dilutive debt facility with Connect First Credit Union. The facility has an initial five-year term at an interest rate of Credit Union
Prime Rate + 2.50%. Connect Union Prime Rate was 5.45% as at October 5, 2022. 23THE RISING TIDE OF CANNABIS
THANK YOU
Raj Grover High Tide Inc.
Founder, President, 11127 15th St. NE
CEO & Executive Chairman Unit #112
raj@hightideinc.com Calgary, AB T3K 2M4
T (403) 265.4207 TF 1.888.9.420.420 hightideinc.com
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