- Differentiated cannabis stock High Tide, the second-largest cannabis retailer in North America by store count, according to ATB Capital Markets, has added Queen of Bud to its international brand portfolio
- High Tide will pay C$100,000 in cash and C$900,000 in shares for Queen of Bud’s intellectual property, including trademarks and other assets
- High Tide offers exposure to wholly diversified and fully integrated operations across the cannabis industry
- High Tide stock has added 62.50 per cent year-over-year, but has lost a little more than 21 per cent since 2020
Differentiated cannabis stock High Tide (TSXV:HITI), the second-largest cannabis retailer in North America by store count, according to ATB Capital Markets, has added Queen of Bud to its international brand portfolio.
Queen of Bud offers curated cannabis products in Canada direct-to-consumer and through third-party stores, and benefits from a large, Canada-wide customer base, as well as ancillary products cleared for sale in the United States and Europe.
High Tide will pay C$1 million for Queen of Bud’s intellectual property, including trademarks and other assets, including C$100,000 in cash and C$900,000 in High Tide shares. All shares issued are subject to a holding period of four months and one day as per Canadian securities legislation.
Ashley Newman, founder of Queen of Bud, will stay on as global brand ambassador, a role that will see her develop the brand’s reach, as well as High Tide’s exposure to CBD, accessories, home decor and lifestyle products.
The transaction is expected to close in the coming weeks.
Queen of Bud joins High Tide’s popular roster of products under Cabana Cannabis Co., Vodka Glass, Puff Puff Pass, Dopezilla, Atomik, Silipipe, Evolution and a handful of others discussed below.
High Tide is a clear leader in North American cannabis
High Tide is Canada’s largest non-franchised cannabis retail chain, with 165 stores across British Columbia, Alberta, Saskatchewan, Manitoba and Ontario, offering it a strong competitive advantage in terms of brand equity, and the flexibility to respond to market fluctuations as legalization spreads across the United States.
The company is also fully integrated across the cannabis industry, including:
- Retail innovation through Fastendr, an automated technology that integrates retail kiosks and smart lockers to improve the buying experience
- Leading accessory e-commerce platforms, including Grasscity, Smokecartel, Dailyhighclub and Dankstop
- A growing presence in consumer CBD across Nuleaf Naturals, FAB CBD, and blessed cbd
- Wholesale distribution solutions through the Valiant brand
- Partnerships and license agreements under the Famous Brandz name
When we combine High Tide’s well-rounded operations with a 15.5x increase in revenue from 2019 to 2023, prudent debt at 50 per cent of assets as of fiscal 2023, and a responsible cash position of C$30.12 million (up by more than 30x since 2019) to pursue growth and maintain its retail empire, it’s reasonable to place the company on a path to achieving scale, lowering operating expenses, and turning a reliable profit.
The stock, sitting at a 21 per cent loss since November 2020, has priced in none of the company’s growth from the 34 cannabis stores it operated at the time.
Management insights
“I am thrilled to welcome Queen of Bud into our High Tide family. With well-established brand equity and an extensive customer base across Canada, especially among women, this is an exciting new addition with tremendous future opportunities,” Raj Grover, founder and chief executive officer of High Tide, said in a statement. “This is a strategic investment which will fortify our overall ecosystem, and we expect will deliver meaningful value to shareholders, while allowing us to stay nimble and not burden the company with large capex commitments or overhead. With Ontario, Manitoba and Saskatchewan already allowing white-label brands, and with Alberta and B.C. considering it, this is a timely move that will allow us to continue expanding our ever-increasing in-house brand portfolio.”
“As one of the first female founders in the Canadian cannabis industry, it’s been an incredible journey building this brand to where it is today,” Newman said. “This is a pivotal moment for the Queen of Bud. Given High Tide’s expertise, extensive store network and capital resources, I feel confident that this arrangement will elevate the brand to even greater heights. Together, Raj and I envision not only elevating cannabis to new heights of sophistication, but also expanding our horizons beyond borders into international markets, delving into accessories, candles, fragrances and beyond. Our heartfelt commitment to customers and passion for excellence fuel this journey, inspiring positive change and innovation in the cannabis world.”
About High Tide
High Tide offers exposure to wholly diversified and fully integrated operations across the cannabis industry. The company was ranked as a top grower in Canada in 2021, 2022 and 2023 by The Globe and Mail, and was recognized as a top 10 performer in the 2022 and 2024 TSX Venture 50.
High Tide stock (TSXV:HITI) is up by 4 per cent, trading at C$2.34 per share as of 10:28 am ET. The stock has added 62.50 per cent year-over-year, but has lost a little more than 21 per cent since 2020.
Join the discussion: Learn what other investors are saying about this differentiated cannabis stock on the High Tide Bullboard, and check out Stockhouse’s stock forums and message boards.
The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.
