Mr. Raj Grover reports

HIGH TIDE RELEASES AUDITED 2023 FINANCIAL RESULTS FEATURING RECORD FOURTH QUARTER REVENUE OF $127.1 MILLION, RECORD ADJUSTED EBITDA OF $8.4 MILLION AND RECORD FREE CASH FLOW OF $5.7 MILLION, RESPECTIVELY

High Tide Inc. filed its year-end audited 2023 financial results on Jan. 29, 2024, the highlights of which are included in this news release. The full set of audited consolidated financial statements for the fiscal years ended Oct. 31, 2023, and 2022, and accompanying management's discussion and analysis can be viewed by visiting the company's website and its profile pages on SEDAR+ and EDGAR.

Fiscal year 2023 and fiscal fourth quarter of 2023 -- financial highlights:

• Revenue increased by 37 per cent to $487.7-million for the year ended Oct. 31, 2023, and increased sequentially by 2 per cent to $127.1-million in the fourth fiscal quarter of 2023.
• Free cash flow increased from $4.1-million in the third fiscal quarter of 2023 to $5.7-million in the fourth fiscal quarter of 2023, representing an increase of 40 per cent sequentially. Annualizing this quarter's performance results in a free cash flow yield of 11 per cent on the company's enterprise value as of the close of Jan. 26, 2024.
• Gross profit increased by 30 per cent to $131.3-million for the year ended Oct. 31, 2023. Gross profit for the fourth fiscal quarter of 2023 was $33.0-million, representing an increase of 12 per cent year over year and 3 per cent sequentially, excluding the one-time $2.4-million impact from the repeal of Manitoba's SRF in the third fiscal quarter of 2023.
• Gross margin was 27 per cent for the year ended Oct. 31, 2023. Gross margin for the fourth fiscal quarter of 2023 was 26 per cent, fairly consistent versus 27 per cent in the fourth fiscal quarter of 2022 and equal to the third fiscal quarter of 2023, excluding the impact from Manitoba's SRF.
• Adjusted earnings before interest, taxes, depreciation and amortization were a record $30.6-million for the year ended Oct. 31, 2023, up 110 per cent year over year, and were also a record at $8.4-million for the fourth fiscal quarter of 2023, up 7 per cent sequentially, and was up 67 per cent versus the fourth fiscal quarter of 2022. Adjusted EBITDA margin for the year ended Oct. 31, 2023, was 6.3 per cent, versus 4.1 per cent for the year ended Oct. 31, 2022. Adjusted EBITDA margin in the fourth fiscal quarter of 2023 was 6.6 per cent, which compares with 4.6 per cent in the fourth fiscal quarter of 2022 and 6.3 per cent in the third fiscal quarter of 2023.
• Salaries, wages and benefits represented 11.6 per cent of revenue for fiscal 2023, compared with 12.3 per cent in fiscal 2022. In the fourth fiscal quarter of 2023, salaries, wages and benefits represented 11.6 per cent of revenue, compared with 12.1 per cent in the fourth fiscal quarter of 2022 and 11.1 per cent in the third fiscal quarter of 2023.
• General and administrative expenses represented 5.5 per cent of revenue for fiscal 2023, compared with 7.3 per cent in fiscal 2022. In the fourth fiscal quarter of 2023, general and administration expenses represented 5.3 per cent of revenue, compared with 7.4 per cent in the fourth fiscal quarter of 2022, and were consistent with the prior quarter.
• Revenue from the Cabanalytics Business Data and Insights platform, including ad revenue, was $26.3-million for fiscal 2023, compared with $21.7-million for fiscal 2022, representing an increase of 21 per cent year over year. Cabanalytics revenue grew to $6.8-million in the fourth fiscal quarter of 2023, representing an increase of 3 per cent sequentially.
• The company's locations generated same-store sales growth of 13 per cent year over year and 3 per cent sequentially. Over the last eight quarters, the company's same-store sales are up a remarkable 110 per cent.
• During the fourth fiscal quarter of 2023, the company completed its annual impairment testing. Driven primarily by a global postpandemic slowdown in e-commerce sales, to which the company's e-commerce assets have not been immune, the company experienced non-cash impairment charges primarily relating to goodwill of $34.3-million. However, these assets represent less than 9 per cent of the company's consolidated revenues for the fourth fiscal quarter of 2023. Loss from operations was $34.2-million in the fourth fiscal quarter of 2023. Excluding the impact of these non-cash charges, the company generated positive income from operations in the fourth fiscal quarter of 2023.
• Cash on hand as of Oct. 31, 2023, was a record $30.1-million, compared with $25.1-million as of Oct. 31, 2022, and $25.7-million as of July 31, 2023.

"Once again, the High Tide team has demonstrated that it is amongst the best in the business by delivering a second consecutive quarter of record free cash flow, clocking in at $5.7-million for the fourth quarter, representing an increase of 40 per cent from the third quarter. This places us amongst an elite group of publicly traded cannabis companies anywhere to consistently generate meaningful amounts of free cash flow while continuing to grow our business. Our operational prowess is starting to get noticed by the capital markets as witnessed by the fact that High Tide closed 2023 as Canada's top-performing cannabis stock, even outperforming several [exchange-traded funds] and [multistate operators]. We did this all while simultaneously reducing our debt to a very manageable debt to 2023 adjusted EBITDA ratio of just 0.9, while adding 13 stores and breaking revenue records since inception and adjusted EBITDA records for five straight quarters," said Raj Grover, founder and chief executive officer of High Tide.

"Looking ahead, we see ample opportunities to build on our success in the Canadian market, where our Cabana Club membership is showing no signs of slowing down and now stands at over 1.28 million Cabana Club members. Elite, our paid membership tier, grew at its fastest pace since inception, up 9,200 members versus Sept. 14, 2023, and has now surpassed 28,000 members. Ontario's recent decision to double its provincial retail cannabis store cap to 150 is a game changer for High Tide as we hope to meaningfully increase revenues over the next several years and now adjust our long-term growth target to 300 bricks and mortar stores in Canada, further solidifying our position as the country's largest non-franchised cannabis retailer.

"While we remain focused on our core Canadian business, like any forward-thinking company, we are always looking at what opportunities may exist to expand our Canna Cabana brand internationally. We are seeing momentum regarding cannabis rescheduling in the United States, which could potentially pave a path for major U.S. exchanges to allow listed companies to engage in plant-touching business. We are also keenly following developments in Europe, particularly Germany, where adult use pilot projects focused on specialty cannabis shops could be possible in 2025. These global opportunities, combined with an improved regulatory environment across many Canadian provinces, gives me confidence that 2024 will be yet another stellar year for High Tide as we work towards our ambition of building a top-tier global adult-use cannabis brand," added Mr. Grover.

Fiscal fourth quarter 2023 -- operational highlights (Aug. 1 to Oct. 31):

• Organic retail store expansion continued with three new Canna Cabana locations in Alberta and Ontario.
• The company filed a $100-million final short form base shelf prospectus and subsequently established an at-the-market equity offering program that allows the company to issue up to $30-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 subject to regulatory requirements. The company notes that its previous ATM program expired with approximately 75 per cent of the facility undrawn.
• The company launched the Altogether Magazine (Cabanalytics Consumer Insights or CCI) to over 1.1 million Elite and Cabana Club members.
• The company ranked 38th out of 425 in The Globe and Mail's annual ranking of Canada's top-growing companies, with 1,040-per-cent revenue growth over three years. This marks the third year in a row the company has earned a spot on this prestigious list.

Subsequent events (Nov. 1 to present):

• As of Jan. 29, 2024, memberships in the Cabana Club loyalty program increased to over 1.28 million, up from 950,000 members as of Jan. 30, 2023, and 1.1 million as of Sept. 14, 2023, representing an increase of 35 per cent year over year and 16 per cent sequentially.
• As of Jan. 29, 2024, Elite memberships have grown to over 28,000 members, up from 18,800 as of Sept. 14, 2023, representing an increase of 49 per cent sequentially.
• The company opened seven new stores: one in British Columbia, two in Alberta, one in Saskatchewan, one in Manitoba and two in Ontario.
• The company entered Ontario's third-largest city, Mississauga, after spearheading efforts to convince city council to opt into cannabis retail sales.
• The company completed a restructuring of approximately $8.9-million of the company's outstanding debt held by a key industry lender under a senior secured convertible debenture issued on July 23, 2020, as amended, maturing on Jan. 1, 2025. With this move and a subsequent cash payment, the current balance remaining on this debenture is $1.0-million.
• The company reported that certain officers, directors and consultants led by the company's founder and chief executive officer, in the aggregate, acquired 125,917 common shares in the capital of High Tide on the open market between Nov. 20 and Nov. 21 at an average price of $1.88 per common share. These purchases come in addition to similar insider buying of shares, which occurred in March, 2023.
• The company grew its World Vision sponsorship support to 326 children internationally after committing to sponsoring two additional children for every new store that opens in Canada.

Outlook

High Tide, through its innovative discount club model, maintains its status and leadership position as the largest non-franchised retail cannabis chain in Canada. The company has exceeded its initial projections, and its Cabana Club now has a membership base of over 1.28 million across Canada. The company has also accelerated the momentum behind its paid Elite membership program by offering attractive consumer-focused incentives, which, combined with its industry-low pricing and leading selection, have resulted in a paid membership base of over 28,000. As the company continues to expand its Elite-focused consumer offerings, sustained growth in Elite membership is expected moving forward.

During the second half of fiscal 2023, the company generated a record $9.7-million in free cash flow. This cash flow profile will allow the company to reaccelerate the pace of organic store openings. This phenomenon has already begun, as demonstrated by the company adding eight stores in the last five months of calendar 2023. Having ended fiscal 2023 with a record cash balance while making meaningful strides in reducing debt subsequent to the end of the fiscal year positions the company well to continue its expansion initiatives across Canada.

Ontario's recent decision to double its retail cannabis store cap from 75 to 150 stores per entity is welcome news. It will have a positive impact as it brings the province closer to Alberta and Saskatchewan, two provinces that do not have a store cap and have greater success at illicit market capture. This change also creates a significant growth opportunity for High Tide. Currently, the company has 54 stores in Ontario, which generated an average annual run rate that was 3.2 times the company's provincial peers' during the month of October, 2023. Accordingly, the opportunity to now add an additional 96 locations will help meaningfully boost the company's revenues and growth trajectory. With this regulatory change now in place, the company anticipates opening an additional 20 to 30 stores in this calendar year and has updated its long-term growth target in Canada to 300 stores. Although the quantum of free cash flow generation may vary meaningfully in any one quarter, particularly given the working capital requirements of new stores and the time required to ramp up operations to maturity, the company expects sustained growth while remaining free cash flow positive.

Webcast and conference call

The company will host a webcast and conference call to discuss its audited results and outlook at 11:30 a.m. Eastern Time tomorrow, Tuesday, Jan. 30, 2024.

Participants may register for the webcast prior to the beginning of the live webcast. Three hours after the live webcast, a replay of the webcast will be available.

Participants may listen to the audio of the High Tide earnings event through either the new webcast format or the conference call line below. However, any participant who wishes to ask a question must attend the event through the conference call, as the webcast does not support live questions.

Participant details

Joining by telephone

Canada (local):  1-226-828-7575

Canada (toll-free):  1-833-950-0062

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

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

Global dial-in numbers are available.

Participant access code:  499316

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 $30-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 fourth fiscal quarter ended Oct. 31, 2023, the company issued an aggregate of 212,324 common shares over the TSX-V and Nasdaq Capital Market, for aggregate gross proceeds to the company of $500,000.

Pursuant to an equity distribution agreement dated Aug. 31, 2023, entered into among the company, ATB Capital Markets Inc. and ATB Capital Markets USA Inc., associated with the ATM program, a cash commission of less than $10,000 of the aggregate gross proceeds raised was paid to the agents in connection with their services under the equity distribution agreement during the fourth quarter ended Oct. 31, 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, and to finance future acquisitions, as well as for working capital and general corporate purposes.

Common shares issued pursuant to the ATM program are issued pursuant to a prospectus supplement dated Aug. 31, 2023, to the company's final base shelf prospectus dated Aug. 3, 2023, 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 Aug. 31, 2023, to the company's U.S. base prospectus dated Aug. 3, 2023, 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 on 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 the Canadian shelf prospectus is withdrawn; and (iii) the date that the ATM program is terminated by the company or the 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, including:

• Bricks and mortar retail: Canna Cabana is the largest non-franchised cannabis retail chain in Canada, with 163 current locations spanning British Columbia, Alberta, Saskatchewan, Manitoba and Ontario, and growing. In 2021, Canna Cabana became the first cannabis discount club retailer in North America.
• Retail innovation: 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.
• E-commerce platforms: High Tide operates a suite of leading accessory sites across the world, including Grass City, Smoke Cartel, Daily High Club and Dankstop.
• Cannabidiol: High Tide continues to cultivate the possibilities of consumer CBD through Nuleaf Naturals, FABCBD and Blessed CBD.
• Wholesale distribution: High Tide keeps that cannabis category stocked with wholesale solutions through Valiant.
• Licensing: High Tide continues to push cannabis culture forward through fresh partnerships and licence agreements under the Famous Brandz name.

High Tide consistently moves ahead of the currents, having been named one of Canada's top-growing companies in 2021, 2022 and 2023 by The Globe and Mail's Report on Business magazine and was ranked No. 1 in the retail category on the Financial Times list of Americas' fastest-growing companies for 2023.

We seek Safe Harbor.