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    Michael Regan • Excelsior Capital Partners

    Michael Regan's questions to High Tide Inc (HITI) leadership

    Michael Regan's questions to High Tide Inc (HITI) leadership • Q3 2024

    Question

    Michael Regan questioned the impact of the Tokyo Smoke bankruptcy on the competitive landscape and asked for details on the resurgence of the illicit market.

    Answer

    President and CEO Harkirat Grover stated that while High Tide is evaluating closed Tokyo Smoke locations, many are unattractive due to large footprints and high legacy rents. On the illicit market, Grover confirmed a recent surge in illicit brick-and-mortar stores is pressuring legal sales and has forced High Tide to lower margins in certain areas to compete, which he believes will further squeeze weaker legal operators.

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    Michael Regan's questions to High Tide Inc (HITI) leadership • Q2 2024

    Question

    Michael Regan asked about the drivers behind the significant gross margin expansion in the brick-and-mortar segment and inquired about the state of cannabis supply from licensed producers.

    Answer

    President and CEO Raj Grover stated that the 9-quarter high in gross margin was driven by a large base of mature stores and the ability to raise prices as nearby competitors close down. He also noted a positive, albeit small, impact from higher e-commerce margins. Regarding supply, Grover confirmed it remains consistent and is not an issue, as the pain felt by LPs, who often sell at a loss, becomes a benefit for retailers who can offer value to consumers.

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