Good morning. My name is Jenny, and I will be your conference operator today. At this time, I would like to welcome everyone to the High Tide Third Quarter 2025 Financial Results Conference Call. [Operator Instructions]. Mr. Brownlee, you may begin your conference.

Thank you, Jenny. Good morning, everyone, and welcome to High Tide Inc.'s quarterly earnings call. Please note that all earnings discussed on this call are presented on an unaudited basis. Joining me on the call today are Mr. Raj Grover, President and Chief Executive Officer; and Mr. Mayank Mahajan, Chief Financial Officer. On September 15, 2025, the company released unaudited financial and operational results for the fiscal quarter that ended July 31, 2025. Before we begin, please let me remind you that during the course of this conference call, High Tide's management may make statements, including with respect to management's expectations or estimates of future performance. All such statements other than statements of historical facts constitute forward-looking information or forward-looking statements within the meaning of the applicable securities laws and are based on assumptions, expectations, estimates and projections as of the date hereof. Specific forward-looking statements include, without limitation, all disclosures regarding future results of operations, economic conditions and anticipated courses of action. For more information on the company's risks and uncertainties related to forward-looking statements, please refer to the company's press release dated September 15, 2025, our latest Annual Information Form and our latest management's discussion and analysis, each filed with securities regulatory authorities at sedarplus.ca or an EDGAR at sec.gov/edgar or on the company's website at hightideinc.com, and which are hereby incorporated by reference herein. Although these forward-looking statements reflect management's current beliefs and reasonable assumptions based on the currently available information to management as of the date hereof, we cannot be certain that the actual results will be consistent with the forward-looking statements in the future. There can be no assurance that actual outcomes will not differ materially from these results. Accordingly, we caution you not to place undue reliance upon such forward-looking results. For any reconciliation of non-IFRS measures measured and discussed, please consult our latest management discussion and analysis filed on SEDAR+ and EDGAR. It is now my pleasure to introduce Mr. Raj Grover, President and Chief Executive Officer of High Tide. Thank you, Mr. Grover. You may begin.

Thank you, Carter, and good morning, everyone. Welcome to High Tide Inc.'s financial results conference call for the third fiscal quarter ended July 31, 2025. I'll begin with some high-level comments on the quarter and our strategy before Mayank takes you through the details. I'm very proud to present what was truly the strongest quarter in High Tide's history. Driven by the continued strength of our bricks-and-mortar business, every major metric showed meaningful gains this quarter with many setting new all-time records. To highlight just a few, revenue reached a record high, putting us essentially at a $600 million annual run rate. Bricks-and-mortar revenue was a record, up 18% year-over-year, representing the fastest pace of growth since we started disclosing the segment 2 years ago. Same-store sales growth accelerated to 7.4%, also our fastest pace in 2 years, extending our multiyear streak of outperformance versus peers. Since launching our innovative discount club model in October 2021, same-store sales at Canna Cabana have increased 137%, while the average operator has declined by 2%. Looking ahead into Q4, our same-store sales showed no signs of slowing down. Canna Cabana's market share across our 5 operating provinces reached 12% during the first 2 months of the quarter, our highest level since the early days of legalization. Gross margin dollars climbed to a record $40.1 million, up 13% year-over-year. Gross margin percentage was 27%, supported by bricks-and-mortar gross margins, which rose sequentially for the third straight quarter, tying their all-time high. Adjusted EBITDA was a record $10.6 million, up 11% year-over-year. Bricks-and-motor adjusted EBITDA was $12.7 million, an all-time high, up 42% year-over-year and the fastest pace of growth in 6 quarters. Bricks-and-mortar adjusted EBITDA margin of 8.7% was up 1.4 percentage points year-over-year, reaching its highest level in 2 years. Income from operations…

Thank you, Raj, and hello, everyone. As Raj mentioned, Q3 was the best quarter in High Tide's history. I am very pleased to go over the details of the numbers and add additional color. Revenue for Q3 was an all-time high of $149.7 million, up 14% year-over-year and 9% sequentially. Our bricks-and-mortar segment led the way up 18% year-over-year, driven by our impressive 7.4% increase in same-store sales as well as the addition of the new stores. We are now at 207 locations across the country. Having opened 16 so far during calendar 2025, all organically and with about a dozen more under construction, we feel confident about being able to reach the higher end of the guidance we gave at the start of the year to add 20 to 30 new locations. In June, the average Canna Cabana store nationwide achieved an annual revenue run rate of $2.6 million. which is more than double the average annualized revenue of our peers in the province where we operate. In Ontario, our largest market and the focus of our future expansion, our outperformance was even more pronounced. Excluding newer stores that have been open for 6 months or less, which are still ramping up, the average Canna Cabana store was on a $3.1 million annual revenue run rate in June. This was 2.6x the average of our peers in Ontario at just $1.2 million. Consolidated gross margins were 27% in Q3, which was consistent with Q3 last year and up from 26% sequentially. We were able to post sequential gains in our core brick-and-mortar segment for the third straight quarter, reaching 27%. Turning to expenses. Salaries and wages represented 12.2% of revenue in Q3. This was an improvement versus 12.7% a year ago and in Q2, and reached the lowest level…

[Operator Instructions] And your first question is from Bill Kirk from ROTH Capital Partners.

So on same-store sales, up over 7% year-over-year, each quarter this year has been better than the prior quarter. So I guess the question is how much of the recent acceleration is the industry getting better versus your market share gains improving each quarter? And then as like a follow-up to that, where you're gaining market share -- in those places where you're gaining market share, are there competitor closures that you're benefiting from? Or is it purely taking business by executing the competitor stores?

Bill, thank you so much for your question. So look, we're definitely the best retail model. I sound like a broken drum because I've been saying it for a few years now. We feel we're the best retail model in the country, and it's not a surprise that our same-store sales just continue to roar. Remember, we -- if we look at a longer-term lens, our same-store sales are up 137% approximately in the last 4 years, while the average operator in the 5 provinces where we operate has declined by 2%. So this is not a one-trick pony. It's not because someone is going out of business and we're picking up that business. This is definitely having the best retail model in the country, which we're very excited about, and it's starting to really, really showcase its momentum. I was very, very happy with 7.4% after 4 years of hitting maturity with the discount club model. But I can tell you that it's not showing any signs of stopping down or slowing down in Q4, the quarter that we are currently in. Now there is definitely competitor closures taking place. That's been happening over the last couple of years, as we've mentioned, that after 5 years, lease renewals come up. And many of the operators are trying not to renew. But those operators going out of business is -- the revenues from those businesses are minimal in nature, Bill, because the reason they're going out of business is sometimes these are $200,000, $300,000 annual stores or $0.5 million annual stores, which are not sustainable in cannabis at all, just simply given the type of expenses you have to incur to run a cannabis store. So I think the competitor closures are playing a small role. The bigger part is that Canna Cabana continues to thrive and is starting to really showcase its momentum.

Wonderful. And Raj, I know I'm getting ahead of myself a little bit on this one. But when you're talking to Canadian LPs about being their conduit into Germany, I'm sure they also ask you about the U.S., the United States someday, what do you tell them when they ask about eventual access to the United States?

Look, Bill, they've seen our execution on what we're able to do in Canada, and they're jumping on board with us to come to Europe. I cannot tell you the enthusiasm I'm hearing from licensed producers saying that, Raj, we already have trust working with the High Tide team here in Canada, and we don't have to worry about payment terms. We know we're good for that with each other. And we know the types of volumes High Tide is moving here, $1.9 billion since Canadian cannabis legalization in the last 6 years, and they're very, very excited to come on board with us in Europe. And the exact same thing will happen when these producers can also do business in the United States, setting up U.S. subsidiaries and wanting to do business with us there. So this is exactly the reason why, Bill, we're so excited about expanding these relationships because in this case, we're truly becoming from regional or domestic partners to global partners, and this partnership will continue working in the United States as well. If and when that happens, we know it's a matter of when, not if. We know that President Trump has already decided to -- that's at least industry consensus to reclassify cannabis to Schedule III and an announcement is pending soon, and we may have opportunities ahead of time looking at that market through a licensing play, which we've already begun to study this -- and we've already begun to study this option. So I think the producers are excited to work with us in Germany and in Europe, and that enthusiasm will remain in place when we go to the U.S.

Your next question is from Neal Gilmer from Haywood Securities.

Raj, maybe I wanted to talk about your philosophy with respect to capital allocation now that the Remexian transaction is done. Obviously, still a strong balance sheet. What sort of, I guess, is your perspective on what you might need to invest in Germany in order to continue to grow into that market? And I guess the second part of the question is, with your target to exceed 300 stores in Canada, is your philosophy more on just opening stores organically? Or are you looking at potential acquisitions to reach that threshold?

Sure. Neal, thank you so much for your question. So look, Remexian business has been growing exponentially, simply put. March -- 6 months annualized March, we're sitting at EUR 70 million, June was an even bigger record month and then July and August were quite slow actually because of a slowdown in Portugal, which is temporary in nature. It's an international processing issue as most distributors that bring their biomass from Canada and other countries get it processed in Portugal and then into Germany, the way the supply chain is set up. So generally speaking, Neal, there's significant working capital requirements because we keep on making more and more sales. So initially, that investment is absolutely required. Remember, we raised $30 million with the subsidiary of Cronos at very attractive terms. We gave half of that cash to Remexian as a cash payment for the cash component. The other half we're going to use as working capital where needed. But Remexian is already very profitable and we are running the business with those profits. But the way the business is growing and with this a little bit of uncertainty in Portugal, we may need to support it with some additional cash. But long term, we see absolute tailwinds in that respect. Your other question was about getting to my goal of 300 stores in Canada, whether that would be organic or through M&A. So look, we've really mastered that playbook, Neal, growing stores consistently, organically in super high-quality locations. I never want to give up on that idea. I'm a big fan of very good locations. And we're going to continue getting that and we're getting some really good locations offered to us from the larger Canadian landlords here that now believe in our execution as they can see it all unfold. So we're going to continue opening that 20 to 30 new stores organically. It takes a lot to open those stores, 3 to 4 stores a month. That's what we are typically doing. I'm opening another 3 potentially this month again. We'll be at 210 stores soon. And in a couple of years, organically alone will be at 250, 260. So if you add any M&A to that, which can absolutely happen, and given our share price momentum, that could probably happen sooner rather than later, we could get to 300 stores sooner rather than later.

That's great. Do you have -- I know this is sort of a crystal ball question, but any visibility into when the Portugal issues may be resolved?

Yes. Good question, Neal. So look, we've been monitoring the situation very closely. Like I said, June was a very lumpy month. We made record highs on revenue that month. And August and -- July and August, the supply really slowed down from Portugal. I'm talking about slowed down by 60%, 70%. And now we're starting to -- just starting to see movement from Portugal again. So I think September, October may face the pressures from Portugal. But from November onwards, things should start looking a bit more normalized. We know that things are starting to work again, but over the last few months, it's been a little slow. So my best guess, my most educated guess would be that September and October would be relatively slower. But then from November onwards, things will be back at full steam ahead from Portugal.

Okay. Great. Maybe one last small one from me. On the gross profit line, when we layer in Remexian here, what sort of gross profit does it have or gross margin does it have relative to your existing business at the 27%?

Yes. So mid-20s. I think mid-20s, think 25%, 26%. Of course, we will fine-tune this, Neal, as we leverage our relationships here in Canada and try to procure biomass at best-in-class terms for High Tide and Remexian. So things will get slightly better on that end. But right now, we're just getting our feet wet. We're trying to understand the business from all perspectives. Remember, Remexian imports from 9 countries. We have a global supply chain to look at. We're looking at Canada as well. But just early conversations with licensed producers, we're getting licensed producers from all over the country offering their cannabis to us, and we think we can procure it at best-in-class terms. So even if Remexian is currently slightly lower on the gross margin profile, I think in the long term, we can absolutely balance it to our levels at 27% or take it even higher.

Your next question is from Frederico Gomes from ATB Capital Markets.

Congrats on the great quarter. First question, just on your e-commerce business. How confident are you that you can execute that turnaround? And if you could talk a little bit more about that entrance into hemp-derived cannabinoids, I mean, the decision behind that and how it can help, I guess, your overall e-commerce strategy?

Fred, thank you so much for your question. So first of all, let me highlight for all our listeners here that e-commerce is less than 3% of our consolidated revenues. We were very excited when we launched this e-commerce initiative. It has not worked out for us yet in terms of CBD sales, which are lower across the board, across all industry participants. We are working to fine-tune that approach with the recent hire of Sri as our VP of Digital and e-Commerce. We've also got external consultants global level to help us out with that approach because we know we have good products. But to your point, the hemp-derived cannabinoid opportunity is very much new to High Tide. We were staying away from that opportunity, given it's a game of whack-a-mole, one state off, one state on. We're hearing Texas was going to discontinue it, but then it didn't pass in the House or Senate, one or the two, and then now the governor is looking at banning it again. So that was the reason why we were not looking at it very closely. But given the decline in CBD sales and you don't need a bong of pipe or a vaporizer every day, but you do need your cannabis every day, accessories have slowed down, too. We're trying to tap into this new opportunity. Now we've only started aggressively looking into it about a month ago. So it will take a couple of months to get off the ground. And we had also told the market that our initial goal is 12 months from launch to assess where the business is. But look, we don't sit on losses. We've just generated a record-breaking quarter from all respects. And this 3% of the business that's not performing, we're also working to turn that around. And it can very much turn around still. If it doesn't, we have divestitures in play. We have partnerships in play. And we also have slimmed down versions of e-commerce platforms that Mayank communicated in his prepared remarks that we may keep just for U.S. federal legalization because we know how potent these platforms can be when we actually sell cannabis products. But hemp-derived cannabinoids could be light at the end of the tunnel. We'll see how that goes early days. We just launched it about a month ago or about 3 weeks ago.

Appreciate that. Second question on the margins in your bricks-and-mortar segment. I guess, it was the third consecutive quarter that you saw expansion. Can you expand on what's driving that expansion, whether it's price or maybe white label initiatives? And would you expect to continue to see margins increasing in bricks-and-mortar for the foreseeable future?

Yes. Great question, Fred. Thank you. So Fred, first of all, we've had 3 consecutive quarters of brick-and-mortar margin increases. Obviously, like any sophisticated business, we cannot do this forever. And remember, we are opening a lot of stores, Fred. While all of this is happening, while we're breaking all of these records financially, we keep on opening new locations. We opened 16 stores this year alone. In the discount world, when you first open locations, your gross margins are typically low to attract clientele. So we're also managing those new openings while you're still seeing an increase in brick-and-mortar gross margin. So stable times, I'm talking about long term when we're at 300, 400 stores in this country, this could be looking very different. When we don't have growth like that coming out of Canada, our gross margin profile could simply increase because we don't have the pressures of new store openings, and we could be close to 30% in the long term. In the medium term, because we keep on opening new stores, and we have to keep in line in terms of how our stores are growing and what type of competition exists in a particular area, we have to manage that very carefully. So we're going to sort of hold the lines on gross margins here. I don't think they're going to decline, but they're not going to go up rapidly either. Again, we're making records already. We're gaining market share. Don't fix something that's not broken, that's my approach. But long term, I can tell you we'll be close to 30% gross margins in Canna Cabana. And I'm sorry, your second question was about white label -- sorry, your question was about what's dictating these gross margin increases. So it's a little bit of everything, Fred. It's white label sales. As you know, Queen of Bud is doing very, very good. We published those numbers last quarter. Queen of Bud and Cabana Cannabis Co. white label products, we were -- I believe we were $5.3 million last quarter, Q2. Now we're $6.3 million on white label. So white label is starting to go up. And typically, on white label, we're making about 7% additional margin, right? So as we onboard new SKUs, you get that benefit from white label. And again, ELITE is breaking records every single quarter, which is a really nice enhancement to our margin profile. So ELITE is also contributing. And then, of course, just some price increases as well because the wholesale prices have stabilized, and it's actually showing us some ticks upwards, so we can also benefit from that margin on the higher stabilized floor.

Your next question is from Michael Kim from Zacks Small Capital Research.

First, just curious what you may be seeing in terms of newer store performance relative to prior cycles, particularly as it relates to the ramp-up of sales and/or payback periods. Just wondering if you're seeing newer stores get up to speed quicker just given your scale and brand as well as your focus on higher traffic locations?

Michael, thank you so much for your question. So look, to my surprise, we've been beating our brick-and-mortar expectations of new store growth. I think our brand has become so powerful, and it's here, there and everywhere in the country that people are now actually looking for Canna Cabana near me, not cannabis near me, which has always been sort of the approach when we were building this brand, that we need to build a moat that is so convincing that people are looking for Canna Cabana near me and not cannabis near me. So all of our new stores in super high-quality locations that we never sacrifice on are actually ramping up quite nicely and ramping up faster than the pace that we thought would happen at this stage of the game. We're talking about 7 years after legalization. A lot of time has passed. It's a very mature landscape, but our stores are ramping up nicely. Now not the same ramp-up, of course, which was 3, 4 years ago, but also not the same ramp-up, which was 2 years ago. We're experiencing a very nice ramp-up trajectory from our stores. It can always be better, but that would just mean that our forthcoming quarters could look even better. Given that more stores we open up, it contributes -- it feeds into the model, contributes into that brand trajectory and more and more customers and Cabana Club members come on board, and then you see that part of the ramp-up and part of sales happening in our stores.

Got it. That makes sense. And then I know you're focused on integration with Remexian, but just wanted to get maybe some incremental color on the opportunities across Europe, particularly as it relates to the potential for similar investments and/or partnerships over time?

Yes, for sure. So look, we've already started -- integration process has already started, and we've already begun to identify and start to execute on joint initiatives. It's looking very, very good, but obviously, it will take some time. There's lots of opportunities to look at and to act on. On the other EU markets, look, our ambitions are global. We don't shy away from saying that, but we need to walk before we can run, and we need to ensure that we can excel in our plans with Remexian. But that said, we continue to monitor other countries and plan to enter them once we see like compelling commercial opportunities pop up, and we're satisfied with the size of the market, we may enter other European markets as well.

[Operator Instructions] And your next question is from Andrew Semple from Ventum Capital Markets.

Congrats on the strong results, Raj and team. First question, just on the Remexian. It was interesting to hear that in your prepared remarks, you mentioned that some of the LPs you've signed up recently had been on an exclusivity basis. When you first entered the Remexian acquisition, were you expecting to see exclusivity agreements? Or was that a positive surprise? And then secondly, do exclusivity deals come with lower margins for the Remexian business? Or is that not the case?

Andrew, thanks for your question. So no, exclusivity is not a surprise. Remember, we've been talking about our house of brands approach that we want to build in Germany and then take it beyond in Europe. Going with that approach, we approach licensed producers that we would like to showcase your brands exclusively because we are doing the hard work, we're the first ones with this approach in the German market. And we already have size and scale here for them to believe what we're able to do in Germany. And on top of that, we got a market leader already in Remexian. So they couldn't be more happier with that, and they're more than happy to give us their brands exclusively. Of course, we have a very solid relationship with the producers here in Canada. So it's not a marriage that anybody cannot get out of or we cannot sort things out. But we have had a very, very good response at exclusive levels from licensed producers. And second -- your second question was about do you make lower margins because it's exclusive? Absolutely not. All we're doing is working closely with each other and making sure that we have consistent supply of top-tier Canadian brands, but that doesn't mean that we're sacrificing at margins at all. In fact, we're able to procure the biomass at best-in-class terms because it's not a one-off smaller German distributor calling these producers to get best-in-class terms. It's just not going to happen. When we have such major buying power here in Canada, and we couple that with the Canadian growth that we're anticipating, we're already being offered very, very good terms from the producers.

That's great. And my follow-up question would turn attention to the brick-and-mortar business. I just want to kind of ask about the performance of the stores across the country and kind of geographic areas. I understand historically, Ontario has been one of the better provinces for store performance there. Your average store there tends to outperform the rest of the country. When you're looking at same-store sales growth and the organic growth you're seeing across the portfolio, are some of the other provinces catching up to Ontario level? Or do those Ontario stores continue to hold a lead in terms of performance?

Great question, Andrew. Our same-store sales are growing in every province in this country. I'm very happy to say that. We did have a little bit of slowdown in Saskatchewan. You probably hear -- you probably remember me saying that we had a ton of illicit activity around Regina. That activity still exists, but it's been tapered down with the competitive approach of ourselves and the rest of the industry. We're not feeling that same pinch that we were feeling in Regina and Saskatoon. Things have actually got better for us there, which showed up in our same-store sales. So I would say things are on the up and up in every Canadian province at the moment, not just Ontario.

Congrats again.

There are no further questions at this time. I will now hand the call back over to Raj Grover for the closing remarks.

Thank you, operator, and thank you to everyone for your interest and continued support for High Tide. We're very proud of what we achieved this quarter and remain excited about the road ahead. With that, I'll ask the operator to close the line. Have a great day, everyone.

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines.