Mr. Raj Grover reports

HIGH TIDE REPORTS THIRD CONSECUTIVE QUARTER OF RECORD REVENUE AND ADJUSTED EBITDA OF $118.1 MILLION AND $6.6 MILLION, RESPECTIVELY

High Tide Inc. has released its financial results for the second fiscal quarter of 2023 ended April 30, 2023, the highlights of which are included in this news release. The full set of consolidated financial statements for the three and six months ended April 30, 2023, and the accompanying management's discussion and analysis can be accessed by visiting the company's website, its profile pages on SEDAR and EDGAR.

Second fiscal quarter 2023 -- financial highlights:

• Revenue increased to $118.1-million in the second fiscal quarter of 2023 compared with $81.0-million during the same period in 2022, representing an increase of 46 per cent year over year and was consistent with the previous quarter. Note that the second fiscal quarter of 2023 had three fewer days and is a seasonally slower quarter when compared with the first fiscal quarter of 2023.
• Gross profit increased to $31.6-million in the second fiscal quarter of 2023 compared with $22.7-million during the same period in 2022, representing an increase of 39 per cent year over year and was down 2 per cent sequentially as there were 3 per cent fewer day.
• Gross profit margin in the three months ended April 30, 2023, was 27 per cent, consistent with the previous three quarters. The company notes that gross margins earned in its bricks-and-mortar stores ticked higher sequentially.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased to $6.6-million in the second fiscal quarter of 2023 compared with $2.4-million during the same period in 2022, representing increases of 174 per cent year over year and 20 per cent sequentially.
• Continued cost-saving measures implemented by the company resulted in a decrease in general and administrative expenses as a percentage of revenue to 5 per cent in the second fiscal quarter of 2023, an improvement from 7 per cent in the second fiscal quarter of 2022 and 6 per cent sequentially.
• Salaries, wages and benefits represented 12 per cent of revenue in the second fiscal quarter of 2023, consistent with the prior four quarters.
• Cabanalytics data sales were $6.4-million in the second fiscal quarter of 2023 compared with $5.1-million for the same quarter last year. Sequentially, Cabanalytics data sales decreased by 3 per cent.
• For locations operational throughout the second fiscal quarter of 2023 and 2022, same-store sales significantly increased by 30 per cent year over year. Sequentially, same-store sales increased by 1 per cent. Calculated daily, same-store sales increased by 5 per cent, as there were three fewer days in the quarter, representing the seventh consecutive quarter of same-store sales growth.
• The company continued the rollout of ELITE, the first-of-its-kind cannabis paid loyalty program in Canada, with membership reaching over 13,500 as of June 14, 2023, representing a 42-per-cent increase since March 17, 2023.
• Loss from operations improved to ($2.6)-million in the second fiscal quarter of 2023, compared with ($7.6)-million during the same period in 2022, and ($3.9)-million sequentially, representing a reduction in losses of 65 per cent and 33 per cent respectively.
• Net loss improved to ($1.6)-million in the second fiscal quarter of 2023, compared with ($8.3)-million during the same period in 2022 and ($3.9)-million sequentially, representing reductions in net losses of 81 per cent and 59 per cent, respectively.
• The company generated fully diluted earnings per share of (two cents) in the second fiscal quarter of 2023, compared with (14 cents) during the same period in 2022 and (five cents) sequentially, representing improvements of 86 per cent and 60 per cent, respectively.
• Free cash flow was ($2.0)-million in the second fiscal quarter of 2023 compared with ($800,000) in the first fiscal quarter of 2023. Importantly, this includes a meaningful reduction of $6.8-million in accounts payable and accrued liabilities during the second fiscal quarter. Free cash flow also represented a 66-per-cent improvement versus ($5.8)-million in the second fiscal quarter of 2022.
• Cash on hand as of April 30, 2023, totalled $22.5-million.

"I'm delighted to report continued positive momentum in all aspects of our business, including the third consecutive quarter of record revenue generation and adjusted EBITDA, despite this being a seasonally slower quarter and having three fewer days when compared with the previous quarter. Importantly, this growth was achieved organically, with gross margins remaining consistent. We accomplished this by continuing to focus on our business fundamentals through our superior retail concept, including expanding our higher margin white label offerings in Ontario, Manitoba and Saskatchewan, increasing customer adoption of our Fastendr kiosks across our Canadian bricks-and-mortar stores, driving meaningful cost savings in areas such as G&A expenses, and by temporarily scaling back on our aggressive growth strategy. We remain on track towards achieving our communicated goal of generating positive free cash flow by the end of calendar 2023. Our focus on operating efficiencies and the continued execution of our business plan has set us apart from many of our competitors, some of whom continue to experience significant operational and financial headwinds," said Raj Grover, president and chief executive officer of High Tide.

"Our unique membership-based innovative discount club model has proven yet again to be superior strategically in both attracting and retaining new customers, having surpassed one million members in our Cabana Club loyalty program, which remains the largest cannabis bricks-and-mortar loyalty plan in Canada. ELITE, which is the next evolution of our discount club model, has experienced 42-per-cent growth since we last reported, strengthening our bottom line and solidifying our loyalty loop with our club members. Our bricks-and-mortar margins have increased by approximately 1 per cent every quarter for the last five quarters, and we feel there is further opportunity to increase margins in most markets where we operate. Our same-store sales growth shows no sign of slowing down, as we saw a 5-per-cent sequential increase when calculated daily. While we are very proud to have achieved nearly 10 per cent of the Canadian retail market share outside of Quebec, we believe there remains a significant opportunity to continue moving towards our goal of capturing 15 per cent of this market. I consider these results a huge accomplishment given the extremely competitive market conditions in Canada, and full credit must go to our team, which I firmly believe is the best in the cannabis space," added Mr. Grover.

Second fiscal quarter 2023 -- operational highlights (Feb. 1 to April 30):

• The company ranked 31st out of 500 on the Financial Times Americas' Fastest Growing Companies 2023 List and took the top spot in the retail category.
• The company announced that certain officers, directors and consultants, led by the company's president and chief executive officer, in the aggregate, acquired 258,921 common shares in the capital of High Tide on the open market between March 24 and March 29 at an average price of $1.59 per common share.
• The company presented virtually at the Sequire Cannabis & Psychedelics Conference.
• Organic retail store expansion continued with 1 new Canna Cabana location opening in Edmonton, Alta.
• The company continued the rollout of its higher-margin Cabana Cannabis Co products in Saskatchewan, Manitoba and Ontario, with 13 white label SKUs (stock-keeping units) currently being sold in these markets.
• The company also announced that on April 20, 2023 (4/20), it generated over $2-million in total retail gross revenues across all retail platforms, representing a 64-per-cent increase from the previous Thursday. The company's Canadian bricks-and-mortar stores reported a 46-per-cent increase, while sales across its e-commerce platforms reported an increase of 216 per cent over the previous Thursday.
• The company celebrated Earth Day 2023 by announcing it has contributed to the diversion of over 20,000 pounds of plastic waste from landfills through its partnership with [Re] Waste.
• The company maintained its status as the highest revenue-generating cannabis company in Canada.

Subsequent events (May 1 to present):

• Memberships in the Cabana Club loyalty program have increased to over 1.04 million from 550,000 an increase of 89 per cent year over year and 7 per cent sequentially.
• ELITE memberships for the second fiscal quarter totalled over 13,500 members, representing an increase of 42 per cent from 9,500 on March 17, 2023.
• Organic retail store expansion continued with one new Canna Cabana location opening in Grande Prairie, Alta.
• The company now sponsors 306 children internationally through World Vision as per its previously stated commitment to sponsor two children for every new store opened.
• The company announced that the founder of FABCBD exercised his put option for the remaining 20 per cent of FABCBD not owned by High Tide. Accordingly, the company acquired the remaining 20-per-cent ownership in FABCBD by issuing 386,035 common shares of High Tide valued at $747,827 on the basis of a deemed price per High Tide share of $1.9372.
• The company welcomed the passage of Bill 10 by the Manitoba legislature resulting in the repeal of Manitoba's 6 per cent social responsibility fee on legal cannabis sales retroactive to Jan. 1, 2022.

Outlook

High Tide is the market leader in Canadian bricks-and-mortar cannabis retail, with 153 locations operating across the country and a loyalty base exceeding 1.04 million Cabana Club members. Having generated rising positive EBITDA for 13 straight quarters and with national market share outside Quebec approaching 10 per cent, the company is now working toward its goal of generating positive free cash flow by the end of calendar 2023. The company expects this to be achieved by increasing same-store sales, continued incremental upward momentum in gross margins in its Canadian bricks-and-mortar business and strong cost controls. The company plans to roll out more white-label SKUs of its Cabana Cannabis brand through the course of the year, which should be additive to gross margins. The company is pleased with the initial uptake of Cabana ELITE, its premium paid membership offering, with over 13,500 customers having signed up to date. The company expects this number to climb steadily in the coming quarters, which should add a recurring high-margin revenue line and further enhance customer loyalty.

High Tide's commitment to operational excellence, including its real estate strategy and its differentiated discount club model, has made it a clear standout in the industry which has unfortunately seen firms of all sizes struggle. The company expects that this shakeout will likely continue over the coming 12 months as it passes the pivotal five-year anniversary of cannabis legalization and many expiring leases are not renewed. The company currently plans to open more stores in the second half of calendar 2023 than in the first half of the year. However, considering the macro environment, this growth will still be relatively muted compared with its historical pace. Regarding potential future M&A (mergers and acquisitions), there is currently a heightened level of opportunities coming to market. While the company continues to feel that its share price does not currently reflect the company's true value, High Tide continue to evaluate every opportunity. That said, the company plans to be very selective, as High Tide believes it is very well positioned to engage only on opportunities which are truly the most strategic, attractive and accretive, and thus create lasting, meaningful value for shareholders.

High Tide earnings event webcast

The company will host a webcast and conference call to discuss the financial statements at 11:30 a.m. Eastern Time Thursday, June 15, 2023.

Participants who wish to ask questions during the event may do so through the call-in line, the access information for which is as follows:

Participant details:

Joining by telephone:

Canada (toll-free):  1-833-950-0062

Canada (local):  1-226-828-7575

United States (local):  1-404-975-4839

United States (toll-free):  1-833-470-1428

Access code:  475667

* Participants will need to enter the participant access code before being met by a live operator.

ATM program quarterly update

Pursuant to the company's at-the-market equity offering program that allows the company to issue up to $40-million (or the equivalent in U.S. dollars) of common shares from treasury to the public from time to time, at the company's discretion and subject to regulatory requirements, as required pursuant to National Instrument 44-102 -- Shelf Distributions and the policies of the TSX Venture Exchange, the company announces that, during its second fiscal quarter ended April 30, 2023, the company has issued an aggregate of 22,000 common shares over the TSX-V and Nasdaq Capital Market for aggregate gross proceeds to the company of less than $100,000.

Pursuant to an equity distribution agreement dated Dec. 3, 2021, entered into among the company, ATB Capital Markets Inc. and ATB Capital Markets USA Inc. (the agents), associated with the ATM program, a cash commission of less than $10,000 on the aggregate gross proceeds raised was paid to the agents in connection with their services under the equity distribution agreement during the second fiscal quarter ended April 30, 2023.

The company intends to use the net proceeds of the ATM program, if any, and at the discretion of the company, to finance strategic initiatives, it is currently developing, to support the growth and development of the company's existing operations, financing future acquisitions, as well as working capital and general corporate purposes.

Common shares issued pursuant to the ATM program will be issued pursuant to a prospectus supplement dated Dec. 3, 2021, to the company's final base shelf prospectus dated April 22, 2021, filed with the securities commissions or similar regulatory authorities in each of the provinces and territories of Canada and pursuant to a prospectus supplement dated Dec. 3, 2021, to the company's U.S. base prospectus dated Sept. 17, 2021, included in its registration statement on Form F-10 and filed with the U.S. Securities and Exchange Commission. The Canadian prospectus supplement and Canadian shelf prospectus are available for download from SEDAR, and the U.S. prospectus supplement, the U.S. base prospectus and registration statement are accessible via EDGAR on the SEC's website.

The ATM program is effective until the earlier of (i) the date that all common shares available for issue under the ATM program have been sold, (ii) the date the Canadian prospectus supplement in respect of the ATM program or Canadian shelf prospectus is withdrawn and (iii) the date that the ATM program is terminated by the company or agents.

About High Tide Inc.

High Tide is the leading community-grown, retail-forward cannabis enterprise engineered to unleash the full value of the world's most powerful plant. High Tide is uniquely built around the cannabis consumer, with wholly diversified and fully integrated operations across all components of cannabis.

We seek Safe Harbor.