High Tide's Cornwall Expansion Fuels Growth Amid Record Revenue Surge

High Tide Inc. (HITI), Canada’s leading cannabis retailer, is doubling down on its Ontario dominance with the May 12, 2025, opening of its second Canna Cabana store in Cornwall—a strategic move that underscores its rapid expansion and loyalty-driven growth model. This new location, part of a broader push to reach 300 stores nationwide, comes amid record financial performance, with Q1 2025 revenue hitting $142.5 million, up 11% year-over-year. Let’s dissect the implications for investors.

Financial Momentum Drives Expansion
High Tide’s Q1 results reflect a company in growth mode. The Bricks-and-Mortar segment, accounting for 95% of revenue, surged 17% year-over-year to $135.7 million, fueled by 5% same-store sales growth—the fastest pace in four quarters. This outperforms the average operator in key provinces, which saw a 4% decline over the same period. The secret? Its Cabana Club loyalty program, now boasting 5.66 million global members, including 1.76 million in Canada (a 33% annual jump). Elite members, who spend 3x more than standard users, hit 81,000 in Canada, up 153% year-over-year, driving foot traffic and repeat purchases.

Cornwall’s Strategic Significance
The new Cornwall store, located at 525 Ninth Street, targets the city’s east end—a high-traffic area adjacent to a national grocery chain. With over 50,000 residents, Cornwall offers a prime market for High Tide’s discount club model. The site’s proximity to fast-growing residential zones and minimal local competition position it to capture $2.5 million+ in annual sales, based on comparable store performance. This expansion brings High Tide’s Ontario store count to 81, solidifying its hold on Canada’s largest cannabis market. CEO Raj Grover emphasized the move as “demand-driven, funded by free cash flow,” contrasting with peers reliant on debt-fueled growth.

Stock Performance & Technical Outlook
High Tide’s share price has tracked closely with its expansion pace. A visual>High Tide Inc. (HITI) stock price since 2023 shows a 40% surge in 12 months, fueled by store openings and loyalty program traction. Analysts forecast a $2.82 high in May 2025—a 17.53% ROI from current levels—citing bullish technicals like a 83.13 RSI (overbought but not yet signaling a reversal) and rising moving averages. Short-term dips (e.g., to $2.38 on May 11) are seen as buying opportunities, with the 50-day SMA at $2.21 offering support.

Risks & Considerations
While the outlook is bright, challenges linger. Adjusted EBITDA fell 32% year-over-year to $7.1 million, due to store ramp-up costs and margin cuts to fuel global loyalty growth. Free cash flow turned negative ($1.9M) in Q1, though High Tide remains confident in annual positivity. International expansion, including its paused German acquisition, carries execution risks. Competitors like Aurora and Tilray may also intensify price wars, though High Tide’s $1.5B procurement network buffers against cost pressures.

Conclusion: A Buy with Long-Term Upside
High Tide’s Cornwall store exemplifies its “build, then scale” strategy, leveraging loyalty-driven foot traffic and prime real estate to dominate markets. With 20–30 store openings planned in 2025, including high-growth Ontario hubs, and Canadian Cabana Club membership targets raised to 2.5 million, the company is well-positioned for sustained growth.

The $2.82 May 2025 price target aligns with its $570M annualized revenue run rate and 200-store milestone (achieved by May). While short-term EBITDA pressures and overbought technicals warrant caution, the strong balance sheet ($33.3M cash, 0.8x debt/EBITDA) and disciplined capital allocation justify a buy rating. Investors should monitor same-store sales trends and international membership growth, but the data points to High Tide as a key beneficiary of Canada’s maturing cannabis market—and a global loyalty play in the making.

Final Take: Hold for the long game.