High Tide Inc.

Good morning. My name is Angeline, and I will be your conference operator today. At this time, I would like to welcome everyone to the high tide second quarter 2025 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star, then the number one on your telephone keypad. If you would like to withdraw your question, please press the pound key. Thank you. Mr. Brownlee, you may begin your conference.

Thank you, Angeline. Good morning, everyone, and welcome to High Tide Inc's quarterly earnings call. Please note that all earnings discussed on this call are presented on an unaudited basis. Joining me on the call today are Mr. Raj Grover, President and Chief Executive Officer, and Mr. Mayank Mahajan, Chief Financial Officer. On June 16th, 2025, the company released unaudited financial and operational results for the fiscal quarter that ended April 30th, 2025. Before we begin, please let me remind you that during the course of this conference call, High Tides Management may make statements, including with respect to management's expectations or estimates of future performance. All such statements, other than statements of historical facts, constitute forward-looking information or forward-looking statements within the meaning of the applicable securities laws and are based on assumptions, expectations, estimates, and projections as of the date hereof. Specific forward-looking statements include, without limitation, all disclosures regarding future results of operations, economic conditions, and anticipated courses of action. For more information on the company's risks and uncertainties related to forward-looking statements, please refer to the company's press release dated June 16, 2025. Our latest annual information form and our latest management discussion and analysis each filed with securities regulatory authorities at cedarplus.ca or on EDGAR at www.scc.gov forward slash EDGAR or on the company's website at www.hightideinc.com and which are hereby incorporated by reference herein. These statements reflect management's current beliefs and reasonable assumptions based on the currently available information to management as of the date hereof We cannot be certain that the actual results will be consistent with the forward-looking statements in the future. There can be no assurance that actual outcomes will not differ materially from these results. Accordingly, we caution you to not place undue reliance upon such forward-looking results. For any reconciliation of non-IFRS measures measured and discussed, please consult our latest management discussion and analysis filed on CEDAR Plus and EDGAR. It is now my pleasure to introduce Mr. Raj Grover, President and Chief Executive Officer. of Hightide. Thank you, Mr. Grover. You may begin.

Thank you, Carter, and good morning, everyone. Welcome to Hightide Inc.' 's financial results conference call for the second fiscal quarter that ended April 30, 2025. I'll begin with some high-level comments about the quarter and our strategy before Mayank dives deeper into the numbers. Another quarterly conference call, and I'm pleased to report yet another set of impressive industry-leading milestones for Hightide. Since 2018, we've been growing Canna Cabana steadily month in, month out, regardless of where we happen to be in the cannabis or capital market cycle. We kept our laser-like focus on expansion, but doing so smartly and efficiently. While so many of our competitors fell by the wayside, last month we announced the opening of our 200th Canna Cabana in Sherwood Park, Alberta, a tremendous milestone. Canna Cabana is clearly the leader in Canada, not only by the sheer number of stores operated under any one banner, but also by the top line and cash flows that our brand is able to generate. While having a much smaller war chest than some of our better capitalized peers, we've been disciplined and relentless in building not only the largest cannabis retail brand in Canada, but the second largest in the world, which is something I'm incredibly proud of. Indeed, our approach has been thriving while the rest of the industry has largely been struggling or slowing down. For example, with the opening of our Sherwood Park location, we now have 87 stores in our home province of Alberta. Our provincial store count is up 10% versus a year ago, while the rest of the industry combined has contracted 6% during this time. In Ontario, where we still see the most growth ahead, we have 82 stores today. Over the past 12 months, we have increased the size of our footprint by 30% in what we consider to be fantastic locations. In contrast, at the same time, the rest of the industry combined has shrunk by 1% in this province. I'm very excited to see how strongly the 90 new Ontario stores will perform when they mature over the coming periods. It is also worth pointing out that this retail foundation we built has been mostly organic as opposed to simply throwing money at competitors to make them go away. Our stellar brand and enviable real estate relationships we've been able to pinpoint the micro-markets and specific locations we want to be in and build winning stores where we want them, as opposed to inheriting others' decisions. Frankly, when I look at our peers, even the few that have still made gains in store counts, they have often almost exclusively been via acquisition. In contrast, given the quality and depth of our pipeline, we can still grow meaningfully organically, even when M&A activity is slower. It also means we aren't pressured to act on marginal deals or chase considerably higher prices that some are willing to pay. Our real estate team is a fine-tuned machine. We're able to get coveted access to Tier 1 locations across the country and pay for construction of new sites from cash flows from our existing base of stores. I can confirm that we have more than a dozen stores currently in our construction pipeline. We can build our stores for an average of $260,000 in hard capex and for about $400,000 all in with working capital and inventory investments and be up and running relatively quickly without paying a multiple. Granted that newer stores take longer to ramp up to maturity given heightened competition versus prior years, given the track record we have, even in heavily saturated markets, we're confident that they will all get there, which will ultimately yield superior ROI for shareholders. We've been very disciplined. It takes a lot of effort to build this network, but we aren't scared of putting in maximum effort to create value for our shareholders. Our stated goal was to add another 20 to 30 locations during this calendar year. We're tracking well with the nine we have already opened year-to-date and with more than a dozen currently at various stages of development.