High Tide Inc.

Good morning. My name is Jenny, and I will be your conference operator today. At this time, I would like to welcome everyone to High Tide Inc.' 's second fiscal quarter 2026 audited financial and operational results conference call. All lines have been placed on mute. Prevent any background noise. After the speaker's remarks, there will be a question and answer session. Instructions will be provided at that time for you to pick up for questions. I will now turn the call over to your host.

Thank you, Operator. Good morning, everyone, and welcome to Hightide Inc.' 's quarterly earnings call. Joining me on the call today are Mr. Raj Grover, President and Chief Executive Officer, and Mr. Mike Mahajan, Chief Financial Officer. On June 15, 2026, the company released financial and operational results for the fiscal quarter that ended April 30, 2026. Before we begin, please let me remind you that during the course of this conference call, Hightide's 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 security 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 15, 2026, our latest annual information form, and our latest management discussion and analysis, each filed with securities regulatory authorities at cdrplus.ca or on EDGAR at www.sac.gov forward slash EDGAR or on the company's website at www.hightidink.com and which are hereby incorporated by reference herein. Although these forward-look 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 forelooking statements in the future. There can be no assurance that actual outcomes will not differ materially from these results. Accordingly, we caution you not to place undue reliance upon such forelooking results for any reconciliation of non-IFRS measures measured and discussed. Please consult our latest management discussion and analysis filed on CR 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 High Tide Inc.' 's Financial Results Conference Call for the second fiscal quarter that ended April 30, 2026. I'll begin with some high-level comments about the quarter and our strategies before Mayank dives deeper into the financials. The High Tide team built on top of the strength we demonstrated in Q1 and took the company to new heights in Q2. As it is typically the slowest quarter from a seasonal perspective, and given three fewer days, Q2 is usually our weakest quarter. I'm extremely proud to report that not only was this our best Q2 ever, but looking at the financial highlights, it was the best overall quarter we have ever reported to our shareholders. There was strength across the board as we set new all-time records in revenue, gross profit, income from operations, and adjusted EBITDA. These all-time highs were supported by both our core bricks-and-mortar Canadian cannabis business, as well as Rumexian, which generated record levels of tonnage, revenue, gross margin, and adjusted EBITDA in Q2. Let's drill into the highlights. Our consolidated revenue for the quarter was $179.3 million, putting us on an annualized pace well ahead of $700 million. Revenue was up 30% year-over-year, growing at its fastest pace in 11 quarters. Our bricks-and-mortar segments saw cannabis, hemp-derived products, and other revenue post an 8% gain year-over-year. At $48.4 million, our consolidated gross profit set an all-time record. This grew even faster than revenue, up 36% year-over-year, representing the fastest pace of growth in 12 quarters. Sequentially, gross profit was up 9% despite this quarter having three fewer days to make sales. At 27%, our consolidated gross profit margin set an 8-quarter high and was up over 200 basis points sequentially. Our bricks-and-mortar segment posted a sequential gain, but the real standout was our medical cannabis distribution segment, which generated gross profit margin of 27%, which was more than double the 12% it generated in Q1. Since we first disclosed our plans to enter the German medical cannabis market, we had identified our unparalleled ability to be able to procure cannabis at best-in-class terms, and now I am thrilled to see this showing up in our financial results. Income from operations was a record $6.1 million in Q2, up a truly impressive 554% year-over-year and 157% sequentially, highlighting the degree of operating leverage in the business and the extent to which we run a tight ship. Adjusted EBITDA of $13.9 million was an all-time high. This was up 73% year-over-year, marking its fastest pace of growth in nine quarters and up 21% sequentially. Our adjusted EBITDA margin of 8% set an eight-quarter high. Again, while Q2 is typically the seasonally slowest quarter of the year, and with three fewer days, I am proud that we were still able to hit key milestones of positive net income and free cash flow this quarter. Adjusted for non-cash fair value charges of derivative liabilities and excluding non-controlling interest, we generated net income of one cent per fully diluted share, which was a huge reversal from a loss of four cents in the prior year and a loss of two cents sequentially. Excluding the non-cash impact from derivative liabilities, which largely arise from the outperformance of Ramexian's results, we believe we are at the point where we can sustainably generate positive net income going forward. Free cash flow was $1.5 million in Q2. While this was lower than what we had generated in Q1 this year and Q2 last year, the devil is in the details. Cash flow from operating activities prior to changes in non-cash working capital was $8.8 million, which was a seven-quarter high. However, setting the multiple all-time records, I just reviewed required investments in working capital to grow the business. Specifically, we invested $4.3 million in working capital, which was the largest quarterly investment we've made during the past six years. As we always say, we believe it's most appropriate to look at a longer period of free cash flow to smooth out such variability from working capital changes. Over the past 12 months, we have now generated $13.4 million in free cash flow. All of this execution doesn't just happen by accident or because a rising tide is lifting all boats across the industry. That's clearly not the case when you compare our performance versus our peers. We work hard and exceed our own expectations ahead of our own internal timelines. Having been legally selling to cannabis consumers for approaching 20 years now, we understand all aspects of our ever-changing business very well. We don't follow the herd. We don't sit on our hands as markets evolve. We've made bold moves, but thoughtful and calculated ones, not rash decisions. And these have been paying off. Whether it's our differentiated discount club model or our entry into the German medical cannabis market, our innovative moves have carved out a successful winning strategy, and others are struggling to play catch-up later. The Ramexian transaction closed on September 2, 2025, and we have used our unparalleled ability to procure cannabis from Canada to boost the company's results, just like we said we would. Revenue for the two months it contributed to Q4 results was just under $10 million, averaging $5 million a month. In Q1, Ramexian's revenue was $25 million, averaging over $8 million a month. This quarter, Ramexian generated $31.6 million, averaging over $10.5 million a month. In terms of volumes, Ramexian sold 7.6 tons of medical cannabis during the three months ended March 2026, which was up 85% from the three months ended September 2025, and we have more than doubled our market share in the two quarters since the transaction to 14.1% from 6.5%. We believe we are heading towards 20% market share in Germany in the long term. Scaling the top line and boosting market share was an important element of our German strategy, and I'm thrilled with how well and how quickly it is playing out. But the other key component of our strategy was how we could get better terms given our relationships with licensed producers, not just volume for volume's sake. Again, success here was already demonstrated this quarter. Gross margins at Rameshchian were 27% in Q2, more than double the 12% generated in Q1. With strong cost controls and relatively fixed overhead, Almost two-thirds of the sequential increase in gross margin dollars flowed down to adjusted EBITDA in this segment, which posted a significant reversal from negative $265,000 in Q1 to positive $3.2 million in Q2. Looking ahead, I'd like to point out that given its nature, specifically being somewhat reliant on the specific timing of when bulk shipments may arrive around quarter ends, the German medical cannabis business may see more volatility than our bricks-and-mortar business which is supported by 228 stores open to customers every day. Additionally, we are monitoring for any potential changes to the German medical cannabis framework. However, the macro backdrop keeps improving. With Canadian cannabis gaining share now at 53% of all imports into Germany and the last three months, average of Canadian medical cannabis exports to Germany reaching over $400 million annually, a record level and up 85% year over year. Given these macro dynamics and our belief that we are still just getting going on leveraging our strong relationships, we feel that the Q2 results are much more representative regarding the go-forward picture for Romexian than the Q1 results. So Germany has been a smashing success for us in just two quarters, and we are seeing other Canadian companies following our footsteps, making transactions in Germany, or coding industry players. While we think we are still ramping up in Germany, we are already plotting our next move in other jurisdictions. All I can say is that discussions are encouraging. We are already number one in Canada and Germany in terms of market share, and given the potential partners we are eyeing, we see a path to becoming number one in other jurisdictions as well. We are at the point where industry participants are seeing what we've done in Germany in such a short timeframe and are reaching out to us as their potential partner of choice. Accordingly, we have had a lot of inbound interest from multiple partners and various jurisdictions, including the UK. The Cabana Club is the most differentiated concept globally. As other markets inevitably go adult use, we believe our model will be dominant in those markets as well. With that, let's discuss the results from our bricks and mortar segment, which now also includes our e-commerce business. The segment posted a 7% increase in revenue year over year, and daily sales were consistent sequentially. Driven by higher margin initiatives such as elite memberships and white label sales, gross profit margin of 28% in this segment was the highest level in two years. Adjusted EBITDA was up 33% year-over-year. Our innovative discount club model, the Cabana Club, continues to expand. We are now at 2.65 million Cabana Club members across Canada, up 39% year-over-year, adding 750,000 new members over the past 12 months. we continue to move forward towards a long-term goal of 3 million members in Canada. Elite is growing even faster, up 84% year-over-year, and has exceeded 178,000 members. Our retail KPIs remain very impressive. While our same-store sales underwhelmed this quarter, public filings and the intelligence we've gathered cause us to believe that we have nevertheless outperformed our publicly traded and privately held peers. While there are competitive pressures, both from illicit operators and legal competitors, as well as our core customers' wallets being impacted by overall macroeconomic conditions, we are nevertheless taking measures to improve this metric in the coming course. Our long-term trend of outperformance is clear. Chaining our monthly same-store sales increases since launching our innovative discount club model in October 2021, Canna Cabana was up 161% to March 2026. In contrast, as the increase in total sales in the five provinces where we operate has not kept pace with the increase in the number of stores, the average operator has experienced a 7% sales decline during this period. Our market share within the five provinces where we operate was 12% during February and March, which was consistent with a year ago. Excluding British Columbia, where we have been at a regulatory cap of eight stores for two and a half years, I know that our market share was up 14% across the four provinces during February and March, which was up 13% a year ago. Excluding stores open less than six months, which are still ramping up, our annualized revenue per square foot in Q2 was $1,620, once again above many leading blue-chip retailers. In March, the average Kanakabana store was on an annual revenue run rate of $2.4 million of product sales, which was double our peer average at $1.2 million. In Ontario, the largest province, and focused for future growth, our outperformance was even more pronounced. Excluding stores open less than six months, which are still ramping up, our average Ontario store was on $2.7 million annual run rate, which was two and a half times our peers at $1.1 million. For the 12 months ended March 2026, total industry sales in the five provinces where we operate were up 3% year over year. In contrast, total Canada Cabana sales were up 13% during this period. Regarding the outlook, we reiterate our target to add 20 to 30 stores in Canada during this calendar year, and we are already at 10. I'm very happy to have announced an agreement to acquire four Northern Helm stores yesterday. These northern home stores are strong performers, generating $8.5 million of annualized revenue and $1.7 million of annualized adjusted EBITDA for the three months ended March 2026. This transaction is consistent with our stated objective of supplementing organic growth with acquiring strong performing stores which are not close to cabanas at a fair and accretive multiple and aiming to get even more juice out of their results with our model. With the transaction expected to close soon, I welcome the Northern Helm team to the Tana Cabana family. With this one announced, we continue to look for supplemental M&A opportunities which can add shareholder value. We maintain our target to exceed 350 stores across the country, with new locations being additive to the total addressable market of consumers we can sign up to our loyalty programs. Turning to our U.S. e-commerce business, which is a very minor component of our bricks and mortar segment, I'm pleased to report this business has stabilized as we reported last quarter and has improved its adjusted EBITDA generation. Specifically, our EBITDA earned in the U.S. improved by $2.4 million versus the prior year. There are interested parties at the table on the accessory side regarding a potential transaction while we see how the U.S. CBD market unfolds given the anticipated upcoming CBD pilot projects through Medicare and given our well-established and leading New Leaf Naturals brand. As always, we will look to what surfaces the most value for our shareholders. At the same time, given the rescheduling momentum we have seen in the US, we continue to evaluate opportunities to take our Hanna-Kabana brand there across a range of scenarios and without giving up our major US exchange listing. All options are on the table. However, we are being extremely thoughtful in how we approach this massive market. Longer-term investors may recall that we had multiple option-style agreements in many U.S. states that were diligently negotiated and papered back in 2021. Ultimately, we decided not to pull the trigger on them given the limitations of the structure and particularly considering how well our stores were performing in Canada. We ended up passing on those deals and allocating all of our capital on winning the Canadian market, which we did. We are taking the same approach now. While we are very interested in entering the market, you can only shoot that bullet once, so it has to be the right markets with the right partner under the right regulatory environment and terms that make sense for our shareholders. Fortunately, while we wait for the right conditions to enter the U.S. with a big splash, there is no shortage of obvious, immediate term growth ahead for us, be it adding over 100 stores in Canada, continuing to ramp up in Germany, and entering other markets. In conclusion, Q2 was the best quarter in our company's history, and we see a bright path ahead for more growth. Our long-term track record of outperformance in strong results quarter in, quarter out has not gone unnoticed. I am thrilled to announce that we have secured credit approval with Bank of Montreal for $40 million of facilities. This is no small feat for a cannabis retailer. It represents the culmination of years of hard work, persistence, and continued operational execution by our team. We expect the facility to close in the coming weeks to start formally working with our new long-term credit provider to help fuel the growth we anticipate ahead. Having Bank of Montreal in our corner gives us more firepower, boosts confidence in our business, and makes us a more institutional-grade company. That said, I'd like to briefly address the valuation of our shares. I see a clear disconnect between the increasing attractiveness of high titers and investment in the debt markets as evidenced by our announced $40 million commitment with the Bank of Montreal, which was the result of a process where multiple Tier 1 banks were at the table, and where our shares are currently trading in the equity markets. As of Friday's close, our shares are trading at an easy-to-last-quarter annualized adjusted EBITDA multiple of just 5.7 times, a level I believe does not appropriately reflect the business we have already built and what lies ahead. In our view, our adjusted EBITDA is growing faster than the market has been able to digest, with Q2's levels 73% higher than a year ago. Two quarters into fiscal 2026, we have already generated two-thirds of the adjusted EBITDA we did in all of fiscal 2025. Our capital markets team has been meeting with institutional investors across the continent, highlighting the opportunity our shares represent. And I believe our job gets even easier with these Q2 numbers. While we cannot control the market, I'm confident that our efforts will pay off. In the meantime, our management team and board continues to put our money where our mouth is and support the company as evidenced by another round of insider buying last month. I believe the fact that the team that is closest to the operations and sees what we are building has been buying more shares is a very strong signal in our conviction and one I truly appreciate. With that, I'll turn it over to Mayank for his comments and a deeper dive into the numbers.