High Tide (NASDAQ:HITI) reported record third-quarter fiscal 2026 results, with management highlighting growth in both its Canadian retail cannabis business and German medical cannabis distribution operations.
For the quarter ended July 31, 2026, revenue rose 33% year over year and 11% sequentially to a record CAD 198.8 million. Adjusted EBITDA increased 52% from a year earlier and 17% sequentially to CAD 16.2 million, while the company’s adjusted EBITDA margin reached 8.2%, its highest level in 12 quarters.
Operating Leverage and Cash Flow
Management attributed the results partly to operating leverage and cost controls. Grover said gross profit dollars grew 2.5 times faster than operating expenses compared with the prior quarter, with 60% of the gross-margin increase flowing to operating income.
Chief Financial Officer Mayank Mahajan said consolidated gross margin was 27%, unchanged from both the prior-year period and the second quarter. The company’s brick-and-mortar segment generated a 27% gross margin, while medical cannabis distribution posted a 26% gross margin.
Salaries and wages accounted for 11.4% of revenue, compared with 12.2% a year earlier and 11.9% in the preceding quarter. General and administrative expenses were 3.9% of revenue, down from 4.4% a year ago and 4% sequentially.
High Tide generated CAD 7 million in free cash flow during the quarter, its highest level in four quarters. Cash flow from operations before changes in non-cash working capital reached a record CAD 11.9 million, up 44% year over year. The company invested CAD 1.8 million in working capital during the period.
Mahajan said High Tide had CAD 60 million of debt at the corporate level and had not drawn on its CAD 25 million Bank of Montreal credit facility. Grover said the company does not have meaningful debt maturities for three years and intends to continue funding store growth and working-capital needs through internally generated cash flow where possible.
Canadian Retail Business Maintains Market-Share Focus
High Tide operated 232 Canna Cabana stores in Canada at the end of the quarter. Grover said the company remains on track to add 20 stores during calendar 2026, with 14 openings already completed, and reiterated its long-term objective of reaching 350 locations nationally.
The company’s Cabana Club loyalty program reached 2.73 million members, up 27% year over year. Its paid ELITE program grew 62% over the past year to more than 186,000 members. Grover said ELITE members tend to shop more frequently and generate larger baskets after joining the program.
Same-store sales were consistent with the prior-year quarter, although June and July posted gains, according to management. Same-store transaction counts increased 1.1%, but the benefit was offset by smaller average baskets and wholesale price compression.
Grover said customers are purchasing less per visit amid inflationary and employment-related pressures, including a shift toward larger-format ounce bags rather than smaller 3.5-gram purchases. He said transaction growth continued into August and the fiscal fourth quarter to date.
- Excluding British Columbia, where High Tide has reached a regulatory cap of eight stores, the company said its market share in its other four operating provinces was 14% during May and June, versus 13% a year earlier.
- For the 12 months ended June 2026, total cannabis-industry sales in High Tide’s five operating provinces increased 3%, while total Canna Cabana sales rose 10%.
- Excluding stores open fewer than six months, High Tide reported annualized revenue per square foot of CAD 1,721 in the third quarter.
- In June, the average Canna Cabana store had an annualized product-sales run rate of CAD 2.6 million, compared with a peer average of CAD 1.4 million, according to management.
Grover acknowledged that increased store counts in Ontario and Alberta, combined with consumer pressures, have created a more difficult operating environment. He said the number of stores in key markets increased 5% over the prior 12 months, but added that consolidation could return if current conditions persist.
German Medical Cannabis Volumes Accelerate
High Tide’s Remexian medical cannabis distribution business in Germany sold 10.2 metric tons during the quarter, up 35% sequentially and 165% above the pace when High Tide completed its transaction involving the business a year earlier.
Remexian generated CAD 38.2 million of revenue, a 21% sequential increase. Adjusted EBITDA for the segment rose 38% sequentially to CAD 4.4 million, representing a 12% adjusted EBITDA margin.
Grover said demand for Canadian medical cannabis in Germany remains strong. Citing Statistics Canada data, he said Canadian medical cannabis exports to Germany reached CAD 49.4 million in July and were running at an annualized CAD 517 million based on a three-month average, up 62% from a year earlier.
Management said Remexian’s market share was 10.5% for the March quarter after German regulator BfArM restated industry import figures. Grover said High Tide continues to target long-term German market share of 15% to 20%, though rapid industry growth could make share gains take longer than previously anticipated.
Management also addressed potential annual import-quota constraints in Germany. Grover said such restrictions can create a short-term disruption lasting roughly four to six weeks before additional quota approvals are issued, but he said the company does not view the issue as a long-term concern.
Regarding margins, Grover said Remexian’s procurement relationships with Canadian licensed producers have helped offset broader price compression. He said management expects the distribution business to maintain gross margins in the mid-to-high 20% range over the long term.
International Expansion Remains Under Review
High Tide said it is evaluating opportunities in additional international markets, including the United Kingdom, but does not feel compelled to complete a transaction quickly. Grover described the U.K. market as smaller than Germany but growing faster, and said the company has been conducting market due diligence and meeting operators across the supply chain for several months.
“We have absolutely no pressure to do a deal,” Grover said, citing the company’s remaining Canadian store-expansion runway and the growth of Remexian in Germany.
He also said High Tide’s lack of cultivation assets gives it flexibility to work with a broad range of Canadian producers as a buyer and distributor, rather than competing directly with suppliers. The company said it will prioritize transaction discipline while continuing to pursue growth through its existing Canadian and German operations.
About High Tide (NASDAQ:HITI)
High Tide Inc is a Canadian cannabis company focused on the retail and sale of cannabis products and consumption accessories. Its retail operations are conducted primarily under the Canna Cabana brand, while its digital platforms support online shopping, customer engagement and loyalty programs.
The company offers a range of products, including dried cannabis, pre-rolls, cannabis oils, edibles, beverages and other cannabis formats, subject to applicable regulations. Through related brands and platforms, High Tide also sells smoking accessories and other products designed for cannabis consumers.
Founded in 2009, High Tide is headquartered in Calgary, Alberta, and serves Canadian consumers through its retail network and e-commerce operations.
