- Starting today, all Canna Cabana retail cannabis stores will
transition to a discount club concept with exclusive benefits
targeted to Cabana Club members. This accelerates High Tide’s
previously-announced entry into the value segment, and positions
the Company as the largest cannabis value retailer
overnight.
- High Tide’s mature ecosystem of in-house brands and products
perfectly positions the Company to become an exclusive cannabis
discount club retailer and to eventually grow its Cabana Club
loyalty plan into a global, membership-based cannabis
community.
- Approximately 40% of Canadian cannabis sales are still
conducted through the illicit market.1 With over 70% of Canadian
cannabis consumers being especially price-sensitive, this
announcement positions High Tide to gain market share by converting
legacy customers into Cabana Club members.2
- Cabana Club members will gain exclusive access to everyday
low prices, member deals, and high-quality proprietary consumption
accessories and brands. As regulations evolve, the Company also
plans to explore the potential to launch subscription boxes for
Cabana Club members, featuring brands and products from High Tide’s
portfolio companies.
- Same-store sales and customer loyalty are projected to
continue their upward trajectory in the coming weeks and months
based on the results from two successful pilot projects which the
Company undertook beginning in mid-April, that involved reduced
margins on consumption accessories and THC products.
- Regulatory environment permitting, the Company may explore
the potential to introduce a membership fee for the Cabana Club,
and provide annual profit share/cashback or other perks to
members.
High Tide Inc. (“High Tide” or the “Company”) (TSXV: HITI)
(Nasdaq: HITI) (FSE: 2LYA), a leading retail-focused cannabis
company with bricks and mortar as well as global e-commerce assets,
announced today that it is transitioning all of its cannabis retail
stores to an innovative cannabis discount club concept, with
exclusive benefits and everyday low prices for members of its
Cabana Club loyalty plan. Modelled after a proven and leading
membership-based grocery discount club retailer, High Tide will
leverage its existing in-house brands and product lines to provide
an exclusive customer experience for its 245,000+ Cabana Club
members, which will drive customer loyalty and meaningfully expand
the Company’s market share.
Starting today, all of High Tide’s retail cannabis stores will
begin to offer steep club discounts on cannabis products in
addition to existing member-only discounts on consumption
accessories, as well as other exclusive benefits for members of the
Cabana Club, which will remain free to join over the short-term.
Members will also be given the exclusive ability to purchase items
from High Tide’s catalogue of proprietary consumption accessories,
which will only be available in Canada through High Tide’s retail
brands, with wholesale sales of proprietary consumption accessories
being discontinued in Canada in order to focus on providing value
and exclusive high-quality products to Cabana Club members. Based
on two successful pilot projects that were conducted beginning in
mid-April, 2021, which yielded a 184% increase in consumption
accessories sales, a 76-100% increase on THC product sales, and a
272% increase in new signups for the Cabana Club, the Company
expects cannabis and consumption accessories sales volumes to
continue to rise. This increase in sales will also accelerate High
Tide’s white-label product strategy to offer unique products to
Cabana Club members.
“I am thrilled that with today’s announcement, High Tide becomes
the first of its kind, and the largest, cannabis discount club
retailer in North America. While other retailers have made moves to
service the value segment, our strategy sets us apart as the only
retailer in Canada which will have a discount club loyalty plan.
Today’s news represents an acceleration of our value-focused
strategy, which was initially planned to be rolled out under the
Cannabis Chop Club brand in select locations only. By expanding
this strategy across all of our retail stores instead, we can focus
on continuing to build the Canna Cabana brand and its
rapidly-growing base of over 245,000 members, and grow our strong
brand equity, while saving time, capital and resources by avoiding
conversions of existing locations,” said Raj Grover, President and
Chief Executive Officer of High Tide. “We have specifically
developed this retail concept to speak to the needs and preferences
of today’s cannabis consumer, with a focus on value, quality, and
an exclusive product portfolio. This will be done by offering the
largest selection of cannabis products and consumption accessories
in Canada at unbeatable prices, and at a level of quality,
consistency, and safety which is absent in the illicit market. Our
successful pilot projects clearly demonstrated that exclusive
access to high-quality and affordable products can drive growth in
both sales and customer loyalty,” added Mr. Grover.
The Company plans to initially roll out this retail concept
across Canadian provinces where it currently operates retail
cannabis stores, as well as in British Columbia, where it
anticipates launching its first store in the near future. A driving
focus of this rollout will be to convert consumers who currently
buy products from the illicit market, a potential customer base
worth at least $3 billion in annual sales.3 Over the longer-term,
depending on the timelines of legalization and regulatory change in
jurisdictions outside of Canada, High Tide’s vision is to make the
Cabana Club into a global cannabis community.
High Tide President and Chief Executive Officer, Raj Grover, and
Chief Financial Officer, Rahim Kanji, will be available to answer
shareholder and analyst questions related to this announcement via
conference call at 12:00pm Eastern Time.
Conference Call Dial-In Information:
US/CANADA Participant Toll-Free Dial-In Number: (833)
570-1148
International Participant Dial-In Number: (914) 987-7095
Conference ID: 7951116
In order to join the conference call, all speakers and
participants will be required to provide the Conference ID listed
above.
About High Tide Inc.
High Tide is a leading retail-focused cannabis company with
bricks and mortar as well as global e-commerce assets. The Company
is the largest Canadian retailer of recreational cannabis as
measured by revenue, with 101 current locations spanning Ontario,
Alberta, Manitoba and Saskatchewan, and was featured in the third
annual Report on Business Magazine’s ranking of Canada’s Top
Growing Companies in 2021. The Company is also North America’s
first and only cannabis discount club retailer, featuring Canna
Cabana, Meta Cannabis Co., Meta Cannabis Supply Co. and NewLeaf
Cannabis banners, with additional locations under development
across Canada. High Tide has been serving consumers for over a
decade through its established e-commerce platforms including
Grasscity.com, Smokecartel.com, Dailyhighclub.com, and Dankstop.com
and more recently in the hemp-derived CBD space through
CBDcity.com, FABCBD.com, and BlessedCBD.co.uk, as well as its
wholesale distribution division under Valiant Distribution,
including the licensed entertainment product manufacturer Famous
Brandz. High Tide’s strategy as a parent company is to extend and
strengthen its integrated value chain, while providing a complete
customer experience and maximizing shareholder value. Key industry
investors in High Tide include Tilray Inc. (TSX: TLRY) (Nasdaq:
TLRY) and Aurora Cannabis Inc. (TSX: ACB) (Nasdaq: ACB).
Neither the TSXV nor its Regulation Services Provider (as that
term is defined in the policies of the TSXV) accepts responsibility
for the adequacy or accuracy of this release.
For more information about High Tide Inc., please visit
www.hightideinc.com, its profile page on SEDAR at www.sedar.com,
and its profile page on EDGAR at www.sec.gov.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this news release are forward-looking
information or forward-looking statements. Such information and
statements, referred to herein as “forward-looking statements” are
made as of the date of this news release or as of the date of the
effective date of information described in this news release, as
applicable. Forward-looking statements relate to future events or
future performance and reflect current estimates, predictions,
expectations or beliefs regarding future events. Any statements
that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions
or future events or performance (generally, forward-looking
statements can be identified by use of words such as “outlook”,
“expects”, “intend”, “forecasts”, “anticipates”, “plans”,
“projects”, “estimates”, “envisages, “assumes”, “needs”,
“strategy”, “goals”, “objectives”, or variations thereof, or
stating that certain actions, events or results “may”, “can”,
“could”, “would”, “might”, or “will” be taken, occur or be
achieved, or the negative of any of these terms or similar
expressions, and other similar terminology) are not statements of
historical fact and may be forward-looking statements.
Such forward-looking statements are based on assumptions that
may prove to be incorrect, including but not limited to the ability
of High Tide to execute on its business plan and that High Tide
will receive one or multiple licenses from Alberta Gaming, Liquor
& Cannabis, British Columbia’s Liquor Distribution Branch,
Liquor, Gaming and Cannabis Authority of Manitoba, Alcohol and
Gaming Commission of Ontario or the Saskatchewan Liquor and Gaming
Authority permitting it to carry on its Canna Cabana Inc. and
KushBar Inc. businesses. High Tide considers these assumptions to
be reasonable in the circumstances. However, there can be no
assurance that any one or more of the government, industry, market,
operational or financial targets as set out herein will be
achieved. Inherent in the forward-looking statements are known and
unknown risks, uncertainties and other factors that could cause
actual results, performance or achievements, or industry results,
to differ materially from any results, performance or achievements
expressed or implied by such forward-looking statements.
The forward‐looking statements contained herein are current as
of the date of this news release. Except as required by law, High
Tide does not have any obligation to advise any person if it
becomes aware of any inaccuracy in or omission from any
forward-looking statement, nor does it intend, or assume any
obligation, to update or revise these forward-looking statements to
reflect new events or circumstances. Any and all forward-looking
statements included in this news release are expressly qualified by
this cautionary statement, and except as otherwise indicated, are
made as of the date of this news release.
1
https://www.cannabisbenchmarks.com/report-category/canada/page/2/ 2
https://cdn.shopify.com/s/files/1/2636/1928/files/Final-OCS-InsightsReport_Q3-2020.pdf?v=1614968675
3
https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=3610012401
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211020005378/en/
Media Inquiries Omar Khan Senior Vice President - Corporate and
Public Affairs omar@hightideinc.com Investor Inquiries Vahan
Ajamian Capital Markets Advisor vahan@hightideinc.com
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