High Tide Inc. Stock Falls Despite Market Gains, Analysts Eye Earnings

High Tide Inc. (HITI) stock dipped -1.26% to $2.36, missing the S&P 500's 1.14% gain. The company's earnings per share are projected to be -$0.01, a 200% decrease from last year, with revenue expected to rise 10.97% to $106.58 million. The Zacks Rank system has ranked HITI a #2 (Buy) stock, with a Zacks Industry Rank of 145, indicating it ranks in the bottom 42% of all industries.

Cronos Group (CRON) has been navigating the complexities of the U.S. cannabis rescheduling process through a strategic approach that combines global expansion and operational resilience. The company's second-quarter 2025 results, despite a net loss of $38.5 million, highlight its ability to achieve a 21% year-over-year revenue increase to $33.5 million, driven by its Israel-based PEACE NATURALS® brand and international diversification [1].

Cronos's geographic diversification is a critical advantage. While the U.S. rescheduling remains uncertain, the company has leveraged its foothold in Israel, a global medical cannabis hub, and expanded into Europe and Asia-Pacific markets. This strategy mitigates reliance on any single regulatory environment and positions the company to benefit from incremental policy reforms in multiple jurisdictions [1].

The company's balance sheet remains robust, with $834 million in cash and short-term investments as of June 2025, providing flexibility to fund strategic initiatives. Cronos has recently invested $18.5 million in High Tide Inc., Canada's largest cannabis retailer, which not only solidifies its retail presence but also aligns with its long-term vision of capturing market share in a post-rescheduling era [1].

Cronos's valuation metrics remain compelling. At a forward P/E ratio of approximately 12x (based on projected 2026 earnings), the company trades at a discount to peers like Aurora Cannabis (ACB) and Tilray (TLRY), which carry forward P/E ratios of 18x and 22x, respectively. This discount reflects market skepticism about U.S. rescheduling timelines but also creates a margin of safety for investors who believe in the long-term upside [1].

The Trump administration's recent comments have injected renewed optimism into the sector, acknowledging the need to "make a determination over the next few weeks" on rescheduling. While the DEA Administrator Terrence Cole's cautious approach has delayed the process, the administration's internal debate suggests a potential path forward [1].

A Schedule III reclassification would allow Cronos to access federal tax relief under Section 280E, reduce banking restrictions, and accelerate R&D in pharmaceutical applications. Cronos's existing pipeline of high-margin products, including hash-infused pre-rolls under the Lord Jones® brand and medical cannabis formulations, positions it to scale rapidly in a deregulated environment [1].

Investors must weigh the risks: delays in U.S. rescheduling, currency volatility, and competitive pressures in saturated markets. Cronos's strategic initiatives—international expansion, product innovation, and financial prudence—make it a compelling play in a sector characterized by regulatory uncertainty [1].

References:
[1] https://www.ainvest.com/news/cronos-group-cannabis-rescheduling-catalyst-strategic-positioning-regulatory-transforming-market-2508/