High Tide (NASDAQ:HITI) executives highlighted record revenue, faster growth in adjusted EBITDA, and positive free cash flow during the company’s fiscal first-quarter 2026 earnings call covering the period ended Jan. 31, 2026. Management also discussed improving performance at its recently acquired German medical cannabis distributor Remexian, continued expansion of its Canadian retail footprint, and early signs of stabilization in its U.S. e-commerce operations.
Record revenue and higher profitability
CEO Raj Grover said fiscal 2026 started “off to a great start,” with quarterly revenue of CAD 178.3 million, up 25% year-over-year and up 9% sequentially, which he described as the fastest pace of growth in 10 quarters. CFO Mayank Mahajan said the revenue figure represented a new all-time high.
On margins, High Tide reported consolidated gross margin of 25% in Q1, consistent with Q4. Mahajan noted that medical cannabis distribution delivered lower-than-usual gross margin due to supply chain delays in Portugal, but he and Grover said they expect improvement as lower-cost Canadian-sourced biomass begins arriving in Germany.
Free cash flow turns positive; expenses show leverage
Grover emphasized that the company generated CAD 2.9 million in free cash flow during the quarter, a reversal from -CAD 1.9 million in the same quarter last year and more than double the CAD 1.3 million generated in Q4. Over the trailing 12 months, High Tide generated CAD 16.8 million in free cash flow, which Grover said was the highest level in the past five quarters, even as the company opened seven new stores in Q1.
Management also pointed to cost controls. Grover said general and administrative expenses represented 4.1% of revenue, a six-quarter low. Mahajan added that salaries and wages were 11.8% of revenue, improving from 12.3% a year ago.
On the balance sheet, Mahajan said total debt at the High Tide level stood at CAD 64.5 million, with CAD 46.4 million in cash and restricted cash at quarter-end, and no near-term maturities.
Canadian retail: expanding margins, membership growth, and store openings
Grover said the company’s Canadian brick-and-mortar segment continued to “outperform its peers,” with gross margin increasing sequentially for the fifth straight quarter to 28%, which he said was the highest level in more than three years. Brick-and-mortar revenue totaled CAD 150 million in Q1, which he framed as a CAD 600 million annual run rate.
The company also reported continued growth in its loyalty program. Grover said High Tide had 2.58 million Cabana Club members, up 47% year-over-year, and 162,000 Elite members, up 100% year-over-year. Management reiterated confidence in reaching long-term goals of 3 million members in Canada, with more than 1 million Elite members.
Grover said same-store sales were positive year-over-year despite “extremely harsh weather” in Ontario in January. In Q&A, he told analysts the winter storms impacted sales mostly in the last 10 days of January and extended “a little bit into February,” calling it a “once in a lifetime event in Ontario.” He also said the broader Canadian market has slowed, citing Statistics Canada data showing total industry sales in four provinces were down year-over-year for the three months ended December 2025—the first negative year-over-year three-month period since legalization—while High Tide’s same-store sales were up 2% during those months.
Management reiterated a target of adding 20 to 30 stores in Canada during the calendar year, mostly organically. In Q&A, Grover said it is getting harder to find attractive organic locations without redundancy or “ultra-crowded” competition, and suggested the company may land toward the lower end of the range. He said Ontario remains the primary focus, while also outlining potential growth in Alberta and Saskatchewan.
Germany’s Remexian: higher revenue, improving margins, and supply chain constraints
Grover said High Tide’s international business “is now picking up steam,” led by Remexian in Germany. He recapped that the transaction closed Sept. 2, 2025, and that Remexian contributed just under EUR 10 million over two months in Q4 (about EUR 5 million per month). In Q1, Remexian generated EUR 25 million in revenue, averaging over EUR 8 million per month.
Management highlighted February performance: Grover said Remexian sold 2.6 tons of medical cannabis and generated EUR 12 million in revenue, a post-acquisition record, with preliminary gross margin improving to 20%. In Q&A, he cautioned that one month should not be viewed as a new baseline, noting March was “slightly softer” than February and pointing to import permit delays. He said Remexian still had 7 to 8 tons of biomass waiting to be released in Portugal, down from 17 tons previously.
Grover said High Tide has begun sourcing biomass from Canada at “best-in-class” terms that are better than what Remexian had been procuring, but noted those shipments have been delayed by import permits and were expected to start arriving about a month after the call. He told analysts he expects gross margins could reach 20% to 25% in Q3 and beyond, potentially “capped at around 25%,” once the Canadian product is landing consistently.
Grover also discussed market share trends in Germany, saying Remexian increased its share of German imports from 6.5% for the three months ended September 2025 to 10.3% for the three months ended December 2025, and that average monthly shipments in January and February were up 25% versus the three months ended December. He acknowledged potential headwinds from a new German law governing medical cannabis access but said the company was encouraged by parliamentary debate and hopeful changes would be more benign than previously feared.
E-commerce stabilization and international expansion plans
Grover said High Tide’s e-commerce segment posted its first sequential revenue increase in two years, with gains in both CBD and accessories, and that the segment’s drag on consolidated adjusted EBITDA was the smallest in four quarters. He added the company is exploring options for that business, including potential transactions.
In Q&A, Grover said High Tide made technology stack changes across several platforms after appointing a vice president of technology about five months earlier. He cited relaunches of Smoke Cartel, Dankstop, Daily High Club, Grasscity, and NuLeaf Naturals, and said the company is seeing “conversion up 30%-50%” and “orders up 30%,” along with quarter-over-quarter growth in both the accessories and CBD segments.
Grover also said High Tide helped found the National Compassionate Care Council, an industry group aimed at shaping U.S. federal cannabis policy following rescheduling efforts. He said the company believes potential U.S. CBD pilot projects through Medicare could be meaningful for NuLeaf and FAB CBD, while noting it is waiting for regulations to be unveiled.
On further international expansion, Grover said the company is meeting with key players in the U.K. with the aim of entering into a transaction there within the next 12 months, describing the U.K. market as “very exciting” and citing expectations for strong growth. He said High Tide is “in no rush” and is evaluating potential opportunities.
About High Tide (NASDAQ:HITI)
High Tide Inc (NASDAQ: HITI) is an omnichannel retailer and branded consumer packaged goods company serving the regulated cannabis market. The company operates a network of licensed cannabis retail stores across Canada, offering a curated assortment of cannabis flower, pre-rolls, vapes and lifestyle accessories. In parallel, High Tide maintains an e-commerce platform that delivers hemp-derived products, vaporizers, glassware and other ancillary goods to consumers in multiple jurisdictions.
Within Canada, High Tide’s retail division includes banners such as Canna Cabana, Meta Cannabis Supply Co and The Hunny Pot, each designed to provide differentiated in-store experiences.
