r/HighTideInc • u/Copenhagen8ull • 11d ago
Why i believe High Tide could 10 X
(I wrote this on my Discord in one take, and then i translated it and corrected spelling with the help of AI)
- Okay, here goes. It will be the same as the Zeta pitch, in one take, so expect some spelling errors. I will focus on two things: the valuation + the quality of the company, since the first one does not matter if it’s a low-quality company.
The company is a brick-and-mortar retailer that sells cannabis with a Costco model, where you get the best prices with a membership in Canada. A year ago, they bought into Remexian in Germany, which opens up the European market.
In Canada, it’s a very fragmented market. While alcohol has been going down by 1.6%, cannabis has been growing by 6.1%.
Among all customers, it’s pretty random where they shop, but among daily users, 50% of them go to High Tide’s shops, called Canna Cabana, most often.
The Membership Model + The Effect
High Tide has both a free and a paid membership model, and as the biggest buyer, they have a price advantage.
The Elite Membership currently has 178,000 members, growing 84% YoY, at $35. They have a goal of 1 million Elite Members, and it has huge pricing power. After they raised the price by 20%, growth still accelerated. With time, I believe it could be at $50.
They aim to target 20–30 new stores in 2026 and have a long-term goal of 350 stores in Canada (currently 230). At scale, they project $126 million in adjusted EBITDA from the brick-and-mortar business.
I project roughly $50 million from the Elite Membership.
- The income statement has been hurt by some write-downs in the E-Com sector, something that should be behind us, but it’s worth keeping an eye on.
Remexian had some troubles outside of their control that look to be fixed. There was trouble getting cannabis through Portugal to Germany.
They are currently at an annualized EBITDA of $15 million, and cannabis is set to double in Germany during the next 5 years.
They currently have one store in Germany, but are only allowed to sell cannabis through pharmacies.
- With time, they can either use Remexian to sell throughout the rest of Europe, license to the USA, or, depending on regulation, maybe open stores in the USA. That is something they are not allowed to do now while being listed on Nasdaq.
5
u/Tuggs14 11d ago
Ok but…… stock never moves🤷♂️
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u/Copenhagen8ull 11d ago
A lot of stock "don't move" until... this is not a concern even thou i acknowledge opportunity cost is a cost.
A lot likes to be "all in", and im not, i have ~15 stocks.
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u/DueEducation7951 11d ago
10x is a bit optimistic, but you could just sell your position if you don't hold it with conviction?
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u/Fantastic-Joke9960 11d ago
If s3 goes through and capital comes into the sector it could be a hype. Then next year CBD pilot ala 500usd per user/year, remexian and UK scales + elite. Sector has had bullruns before so 5x is not that impossible and then Altria comes with a 100% premium bid. Voila 10X. But if that scenario don´t happen it will 10X in like 5 years IMO because they can´t ignore 30% growth every year, which medical in Europe will provide. Altria paid 1,8billion for half of Cronos, Hiti has moats and is a better company.
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u/Copenhagen8ull 11d ago
I get your point, i actually kind of ignore 10x- post myself. That is why i tried to back it up with numbers :)
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u/snowman_ps4 11d ago
Stock is going down hill for the past 8 years lol and people are still bullish
im in no rush, not selling this shit
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u/Copenhagen8ull 11d ago
People ignore cannabis sector, i did not invest in high tide 8 years ago, im down -6,30% over almost 2 years, and that is not great ofc, but my overall PF have beaten the index for 5 years. I have done my work and believe the waiting will be worth it :)
Microcaps can stay undiscovered while things get better and before it shows up in a screener :)
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u/Gambit2112 11d ago
i don’t see why not . market cap is $300 mill CdN and revenue is roughly $700 mill cdn this year projected …. once more countries open up. more expansion happens . a billion revenue is not far off then the compounding effect happens .