Mr. Raj Grover reports

HIGH TIDE REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS FEATURING RECORD REVENUE, RECORD ADJUSTED EBITDA, AND THIRD CONSECUTIVE QUARTER OF POSITIVE FREE CASH FLOW AS WELL AS BREAK-EVEN NET INCOME

High Tide Inc. has released its financial results for the first fiscal quarter of 2024 ended Jan. 31, 2024, the highlights of which are included in this news release. The full set of consolidated financial statements for the three months ended Jan. 31, 2024, and the accompanying management's discussion and analysis can be accessed by visiting the company's website, or its profile pages on SEDAR+ and EDGAR.

First fiscal quarter 2024 -- financial highlights:

• Revenue increased to $128.1-million in the first fiscal quarter of 2024 compared with $118.1-million during the same period in 2023, representing an increase of 8 per cent year-over-year and 1 per cent sequentially.
• Gross profit increased to $36-million in the first fiscal quarter of 2024 compared with $32.2-million during the same period in 2023, representing an increase of 12 per cent year-over-year and 9 per cent sequentially.
• Gross profit margin in the three months ended Jan. 31, 2024, was 28 per cent, representing an increase from 26 per cent in the fourth fiscal quarter of 2023 and 27 per cent during the entirety of 2023.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased to $10.4-million in the first fiscal quarter of 2024 compared with $5.5-million during the same period last year, representing an increase of 90 per cent compared with the same period in 2023 and 25 per cent sequentially.
• Adjusted EBITDA margin increased to 8.1 per cent, representing a significant increase from 4.7 per cent year-over-year and 6.6 per cent sequentially.
• Salaries, wages and benefits represented 12 per cent of revenue in the first fiscal quarter of 2024, which was consistent year-over-year and sequentially.
• Given the strong cost controls the company has been implementing, general and administrative expenses represented 4.4 per cent of revenue in the first fiscal quarter of 2024, which improved from 6.3 per cent year-over-year and 5.3 per cent sequentially.
• Revenue from the Cabanalytics business data and insights platform, including ad revenue, was a record $7.3-million for the first fiscal quarter of 2024, compared with $6.6-million year-over-year and $6.8-million sequentially, representing increases of 11 per cent and 8 per cent, respectively.
• For locations operational throughout the first fiscal quarter of 2024 and 2023, same-store sales increased by 7 per cent year-over-year. Sequentially, same-store sales remained consistent across Canna Cabana while total cannabis retail sales across Canada, excluding Quebec, were down 6 per cent, including the impact of new store growth.
• The company continued the rollout of Elite, the first-of-its-kind cannabis paid loyalty program in Canada, with membership reaching approximately 32,000, representing an increase of 237 per cent year-over-year and 14 per cent since Jan. 29, 2024, which is the fastest pace of onboarding since Elite was launched in late 2022.
• Cash on hand as of Jan. 31, 2024, totalled $28.7-million compared with $23.7-million as of Jan. 31, 2023, and $30.1 as of Oct. 31, 2023. This includes the impact of a $2.8-million one-time cash payment to pay down a convertible debenture in the first fiscal quarter of 2024.

"I am very proud to announce that High Tide has reached break-even net income this quarter, which is a critical milestone in our ongoing corporate trajectory and is a rarity in the global cannabis space. While there has been industry-wide softening of Canadian cannabis sales in the postholiday months and having made essentially no acquisitions in over a year, I am proud to report that our company continues to grow organically and has never had a sequential decline in revenue since going public in 2018. Our focus on responsible growth is leading to robust free cash flow generation, which has totalled over $13-million during the past three quarters. Due to our strong cost controls, we have generated significant increases in our adjusted EBITDA margin as shown by achieving a level of 8.1 per cent this quarter versus 4.7 per cent in the first fiscal quarter of 2023. Given our size and scale, we are seeing the positive impact of operating leverage. For instance, while revenue increased by 1 per cent sequentially, we were able to increase adjusted EBITDA by 25 per cent, resulting in a record adjusted EBITDA of $10.4-million. While CCAA filings continue in the Canadian cannabis sector, our balance sheet remains strong, supported by our free cash flow profile," said Raj Grover, founder and chief executive officer of High Tide.

"Our Elite program continues to be the biggest differentiator in our innovative discount club model and is yielding results ahead of our expectations. We welcomed new Elite members at the fastest pace since inception, and our Cabana Club now includes approximately 32,000 paid members as part of the overall membership base, which now exceeds 1.32 million members and growing. Accordingly, we see a tremendous opportunity to continue upgrading many more base members to Elite. We have reached over 10-per-cent market share across the five provinces where we operate. Our long-term goal is to reach 15-per-cent market share while operating approximately 300 retail stores across Canada. I look forward to announcing a number of new exciting Ontario Canna Cabana locations in the coming weeks. We are also very excited about our announcement this morning related to our agreement to acquire Queen of Bud, an innovative and well-established Canadian cannabis brand with a particularly strong appeal amongst female cannabis connoisseurs. This acquisition will help bolster our roster of in-house brands, which will also deliver premium, higher-margin white-label product offerings to our Elite and Cabana Club members. Finally, alongside the enormous growth opportunities in front of us in Canada, we continue to closely monitor developments in Germany, where legislative changes could enable Canna Cabana to participate in cannabis bricks-and-mortar retail by mid-2025. I would like to thank our hard-working team and our loyal customers for another fantastic quarter, and I remain very enthusiastic for what lies ahead," added Mr. Grover.

First quarter 2024 -- operational highlights (Nov. 1 to Jan. 31):

• 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 the city council to opt into cannabis retail sales.
• The company successfully 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 made during the quarter, the current balance remaining on this debenture is $1-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.

Subsequent events (Feb 1. to present):

• As of March 15, 2024, memberships in the Cabana Club loyalty program increased to over 1.32 million, up from 975,000 members as of March 18, 2023, and 1.28 million as of Jan. 29, 2024, representing increases of 35 per cent and 3 per cent, respectively.
• As of March 15, 2024, Elite memberships have grown to approximately 32,000 members, up from 28,000 as of Jan. 29, 2024, representing an increase of 14 per cent sequentially.
• The company announced the opening of two new stores in Ontario.
• The company strengthened its Canadian supply chain through a limited distribution agreement with Manitoba Liquor and Lotteries.
• For the second time in three years, High Tide was recognized as a top 10 ranked company in the diversified industries sector by the TSX Venture 50.
• The company announced that it has entered into a definitive agreement pursuant to which High Tide will acquire all intellectual property, including trademarks and other assets, of the Queen of Bud cannabis and lifestyle brand.
• The company grew its World Vision sponsorship support to 330 children internationally after committing to sponsoring two additional children for every new store that opens in Canada

Outlook

High Tide continues to lead the Canadian cannabis retail landscape as the largest non-franchised retailer across Canada, with 165 locations. The company's rapid progress can be attributed to the success of its innovative discount club model, which includes the Elite paid membership program and the Cabana Club supported by its on-line global customer base. Elite memberships are on the rise, having grown at its fastest pace since inception over the past quarter. The company's Cabana Club loyalty program has also shown impressive increases, with membership now exceeding over 1.32 million. Given the company's goal to add 20 to 30 new Canna Cabana locations during this calendar year, the company anticipates new Cabana Club members will continue to join its loyalty program throughout the year. Currently, Elite offerings make up 12 per cent of SKUs (stock-keeping units), which is up from 2 per cent a year ago, and the company continues to lay the groundwork to reach its communicated goal of 20 to 30 per cent of in-store inventory cater toward Elite. As it continues to scale up these exclusive Elite product offerings, the company expects membership numbers to continue rising.

The company currently holds an average of over 10-per-cent market share in dollars across the provinces where it operates. The company anticipates reaching 15-per-cent market share in Canada, driven by organic store openings, as well as strategic and accretive mergers and acquisitions to reach its target of 300 Canna Cabana locations in the long term.

The company currently has 120 stores equipped with its Fastendr technology. The company anticipates completing this rollout in the remainder of its store portfolio prior to the end of this fiscal year. With the recently announced acquisition of the Queen of Bud brand, the company looks forward to developing and launching innovative high-margin cannabis and consumption accessory offerings to its Elite and Cabana Club membership base.

The company has generated over $13.3-million in free cash flow during the past three quarters and intends to remain free cash flow positive through fiscal 2024, although the quantum of free cash flow generation could vary in any given quarter, depending on the nature of working capital requirements needed to launch and ramp up new locations to maturity. A robust balance sheet, coupled with strong cost controls, should enable High Tide to take full advantage of opportunities to expand its network of Canna Cabana retail stores across Canada, focused on Ontario.

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) on Monday, March 18, 2024.

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

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

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

Participant access code: 146693

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 the 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 first fiscal quarter ended Jan. 31, 2024, the company issued an aggregate of 1,400 common shares over the TSX-V and Nasdaq Capital Market, for aggregate gross proceeds to the company of $3,000.

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. (the agents), associated with the ATM program, a nominal cash commission on the aggregate gross proceeds raised was paid to the agents in connection with their services under the equity distribution agreement during the first fiscal quarter ended Jan. 31, 2024.

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, 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 SEC). 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 and is the second-largest cannabis retailer in North America by store count. 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.