If you’re hungry for good news in Canadian cannabis look no further than yesterday’s announcements from Canadian retail giants High Tide and Fire & Flower. Both are clearly anxious to show strength for their inevitable US expansion.
High Marks at High Tide
Yesterday we learned that Q4 2020 revenues were up by 118% at High Tide (Canna Cabana, Grasscity and Kushbar) and up 166% to $83.3 million for year-end (Oct. 31, 2020). Year-end gross profits were also up by 172% and the adjusted EBITDA was $8 million. (And this doesn’t include the recently acquired Meta Growth chain.)
“From an EBITDA perspective, this was the strongest quarter ever generated by a Canadian cannabis retailer – and was also above the highest analysts’ expectations,” tweeted High Tide president and CEO Raj Grover. (Note: Grover recently joined Twitter – probably to Tweet stuff just like this.)
And…then there’s Fire & Flower
Fire & Flower plans to convert $52 million in debt to equity, bringing major investor Alimentation Couche-Tard Inc.’s equity stake to 19.9%. Why does it matter? Well, Alimentation Couche-Tard Inc. operates 7,100 Circle K and other convenience store brands in the US. (Not a typo: 7,100.) So, any increased position of Alimentation Couche-Tard Inc. into Fire & Flower is a big boost to Fire & Flower’s US aspirations.
Both companies have expansion top of mind: High Tide has started selling hemp-derived CBD products in the US and Europe through its Grasscity brand and Fire & Flower is licensing its name and proprietary tech to American Acres Managers, which will open its first store in Palm Springs store this year. (Fire & Flower plans to acquire American Acres when US federal legalization happens.) SO… expect rapid expansion in the race toward Canadian cannabis retail superiority – both north and south of the border.