CA - High Tide: Immense Upside If Margins Can Be Lifted

2024-02-12 00:01:46 ET

Summary

• High Tide operates as a cannabis product retailer with 163 retail stores in Canada under the Canna Cabana brand, among other products.
• The company has had significant revenue growth but has slowed down new store openings temporarily in FY2023 to elevate cash flows.
• Canna Cabara's discount club has made High Tide very competitive in the industry.
• The discounted prices pressure High Tide's currently near break-even profitability - increasing white label sales and operating leverage seem critical for sufficient profitability.
• The current price reflects an attractive investment case. Although a risky stock, High Tide's risk-to-reward seems high.

High Tide ( HITI ) operates as a cannabis product retailer in Canada, the United States, as well as other countries. As Canada’s legalized cannabis, High Tide has begun to grow its retail network under the Canna Cabana brand, bringing value through the retail chain’s discount club. As of January 29th, Canna Cabana operates 163 retail stores....

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