Good morning. My name is Constantine, and I'll be your conference operator today. At this time, I would like to welcome everyone to High Tide Inc.'s Fourth Fiscal Quarter 2025 Audited Financial and Operational Results Conference Call. [Operator Instructions] I will now turn the call over to your host.

Thank you, operator. Good morning, everyone. My name is Omar Khan, I'm the Chief Communications and Public Affairs Officer for High Tide Inc. Welcome High Tide's quarterly earnings call. Joining me on the call today are Mr. Raj Grover, President and Chief Executive Officer; and Mr. Mayank Mahajan, Chief Financial Officer. On January 29, 2026, the company released financial and operational results for the fiscal year and quarter that ended October 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 risk and uncertainties related to forward-looking statements, please refer to the company's press release, dated January 29, 2026, our latest Annual Information Form and our latest management's discussion and analysis, each filed with securities regulatory authorities at sedarplus.ca or on EDGAR at www.sec.gov/edgar or on the company's website, www.hightideinc.com, and which are hereby incorporated for 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 to place -- 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 Inc. Thank you. Mr. Grover, you may begin.

Thank you, Omar, and good morning, everyone. Welcome to High Tide Inc's. financial results conference call for the fourth fiscal quarter that ended October 31, 2025. I'll begin with some high-level comments about the quarter and our strategy before Mayank dives deeper into the financials. Looking at the numbers, what a way to cap off fiscal 2025. Last night, we reported stellar Q4 results featuring record revenue of $164 million and annual revenue run rate exceeding $650 million and record adjusted EBITDA of $12.4 million. Once again, our core Bricks-and-mortar segment led the way. Same-store sales growth of 5.5% helped drive 15% growth in the segment year-over-year and increased gross margins led to a record adjusted EBITDA margin of 9.4%. our bricks-and-mortar adjusted EBITDA annual run rate now exceeds $56 million. Regarding footprint expansion, we added another 27 stores during calendar 2025, all organically. Once again, we met the higher end of the target we established at the start of the year to add 20 to 30 locations. Our goal for calendar 2026 is to add another 20 to 30 new stores. Clearly, we are not afraid of organic growth. While newer stores are taking longer to mature due to increased competition, given the strength of our brand and our commitment to only high-quality locations, we believe organic growth provides excellent ROI for our shareholders. Our new store pipeline remains robust with 15 Tier 1 locations currently under development, particularly in Ontario, but we are also in talks with operators of various sizes regarding M&A possibilities. The other thing I would like to highlight is how for our second straight year, our impressive organic growth of store build-outs was financed entirely by internally generated free cash flow which totaled $12 million for the fiscal year, meeting our stated objective of…

Thank you, Raj, and hello, everyone. Q4 was another great quarter for High Tide in meeting our objectives and executing on our future growth strategy. Let's take a deeper dive into the numbers. Revenue for Q4 was an all-time high of $164 million, up 19% year-over-year and 10% sequentially. Our bricks-and-mortar segment led the way, up 15% year-over-year, driven by our strong same-store sales of 5.5% and the addition of more stores. In addition to the merchandise sales, our Cabanalytics platforms continue to set new highs. Cabanalytics Business Data and Insights platform, advertising revenue and other revenue, including management fees, interest income and rental income totaled $13.1 million in Q4, up 20% year-over-year and up 9% sequentially. Consolidated gross margins were 26% in Q4 consistent with Q4 last year and just below 27% sequentially. Most importantly, we were able to post sequential gains in our core brick-and-mortar segment for the fourth straight quarter. Turning to expenses. Salary and wages represented 11.5% of revenue in Q4 versus 12.4% a year ago and 12.2% sequentially, marking our lowest level in 9 quarters. This was due to the leverage seen in store growth as incremental new stores don't require more head office overheads as well as the addition of Remexian. General and administrative expenses represented 4.3% of revenue in Q4, consistent with 4.2% a year ago and 4.4% sequentially. Adjusted EBITDA was $12.4 million for the quarter. This was truly impressive, growing 51% year-over-year and up 17% sequentially. The star of the show here was, once again, our core bricks-and-mortar segment. Highlighting our strong cost controls, the 0.7% sequential increase in gross margin followed by all the way down to a 0.7% sequential increase in adjusted EBITDA margin. Our adjusted EBITDA margins hit a new record of 9.4% this quarter, and we posted…

[Operator Instructions] Your first question comes from the line of Neal Gilmer from Haywood Securities.

Congrats on a good quarter. Raj, I guess I just wanted to dive a little bit deeper into your comments with respect to Germany and the inventory that you're trying to work through. It sounds like it sees another couple of months. So I guess we'll see a bit of an impact in Q1 when you report that. And through Q1, did you sort of have to continue to sell this at the margin that we saw for the first couple of months that you had Remexian under your control?

Thank you very much for your question. So look, the Portugal issue definitely impacted our Q4 results. And while things are getting better, it'll have some impact on Q1 as well. Despite that, we still had record adjusted EBITDA. Compared to the normal cycle of business revenue and gross margins, we know that we're going to have to plan for this, and we have done that. We had close to 16, 17 tons sitting in Portugal, Neal, when we first acquired the business. We're down to about half of that or a little bit less than half of that. And things are picking up pace. Like we said, December was the second highest month in tonnage after June. June was 2.9 tons. December was 2.6 tons. And we've had to sell this biomass which is like 3, 4 weeks away from expiry. That is how it's getting released from Portugal, where export permits are being issued. But Infarmed, the authority there is only releasing a biomass that is closer to expiry. So once we're behind this particular issue of existing inventory in Portugal, I see green pastures ahead. I'm ultra excited about this business. This may continue. We're already procuring biomass here 30%, 40% less than what Remexian was doing. So the opportunity is endless, especially, when adjacent markets to Germany are opening up. So you're absolutely right. Q1, we're going to feel similar pressures. It will trickle into a couple more months into Q2. But then I think we have super green pastures ahead from Q3 onwards. In fact, end of Q2 or even mid-Q2, things could get very interesting. We've already sourced about 5, 6 tons ourselves since we purchased Remexian. But none of that biomass actually makes it to Germany until March first week. And the reasoning…

I appreciate that color. That's helpful. I guess the other question for me comes back to the bricks-and-mortar business here in Canada. Obviously, what helped you achieve that record EBITDA? Was that continued to expanding gross margins in that business to, I think it's about 27.5% from 26.7%, I think it was in Q3. How should we think about that? Like do you have more room for that? Is that -- I guess, it's partly driven by some of the white label sales, I assume carries a little bit higher margin, but just sort of wondering how we should be thinking about the fluctuations in that margin. Not like on a quarter-to-quarter basis, I understand that goes up and down, but just sort of on a year-to-year basis?

Yes, absolutely, Neal. Look, we've had 4 consecutive quarters of margin increases in our core bricks-and-mortar segment, which generates 92% of our revenue. 4 straight quarters of margin increases, and it's absolutely being driven by ELITE sales. It's being driven by same-store sales growth. It's being driven by our white label portfolio and just the strength of our brand overall in Canada. I mean I was so impressed that we grew -- our same-store sales grew 5.5% again. And our bricks-and-mortar revenue is up 15% year-over-year. I mean, this is mature state in Canada, we're talking about. We're talking about 7, 7.5 years after legalization. And we can still grow our brick-and-mortar revenue in one of the most competitive cannabis markets in the world at 15% year-over-year, and that's 92% of our business. I will take this any day. So we remain very bullish. The more time we are in the market, the more stores we plant. Our brand is so potent and so powerful that I can literally place it, provided we have the best location, which we never sacrifice on. I can literally place it in the middle of competition and the juice flow starts flowing back to us. So I don't think that changes at all. Neal, we hit 9.4% as brick-and-mortar adjusted EBITDA margin, which was a new record for us. And our brick and mortar is on an annual run rate of EBITDA of $56 million now. So exponential opportunity still lies ahead because we can get to 350 stores, minimum. I think we will exceed that number. We continue to raise this bar. We said we're going to have 250 stores, and we raised it to 300 stores. Now we're 350 stores. I feel that we can just keep going because our business is so strong. And we can literally replicate this model in the rest of the cannabis world as well when the opportunity comes because we've rehearsed and we practice this model really well. And there's nothing like this that exists anywhere else, Neal. One main thing that's driving all of this success is our Cabana Club. Cabana Club reached 2.5 million members in Canada, up 45% year-over-year and the fastest pace of growth in 4 quarters. Same with ELITE. ELITE membership reached 151,000 in Canada, up 107% year-over-year, and it's the fastest pace of onboarding since inception. So we keep talking about this every single quarter. And this is going to continue. I don't think we're going to be stopped in this regard. Our club is exploding to grow 45% year-over-year after 7 years of legalization is very, very heartening.

Your next question comes from the line of Frederico Gomes from ATB Capital Markets.

Congrats on the great quarter here. Raj, you made a comment about new stores. You continue to open them, but they take a little bit longer now to mature because of increased competition. At the same time, you're posting excellent same-store sales growth consistently. So can you just help us square those 2 comments in terms of the stores taking longer to mature at the same time, your existing store base continues to grow very healthily.

Fred, thank you so much for your question. So look, 7 years into legalization, of course, stores are taking longer to ramp up because things are competitive in Canada, right? We've got to first find an area where we don't operate currently. Then we got to find the best location in that area because you can almost count on it that there's going to be other competitors around it. If you go back to 2021, we were ramping up twice as fast as we are ramping up right now. But one thing you can be rest assured that we are going to ramp up to our average run rates and the weaker operators with the weaker locations are all going to start phasing out. And we're starting to see this now, Fred. You and I have talked about it for years that when is the impact really going to be felt, it's being felt now. Alberta is experiencing negative store growth outside of us, we grew 10% in a year, while the overall province experienced negative growth. We were all of the growth in Ontario, Canada's largest province where the rest of the industry remained flat. So even though all of this is happening, because our model is so strong, our same-store sales just keep on chugging along. A lot of our customers refer us by word-of-mouth to their friends, their family because they're seeing tremendous value, and it's just not available anywhere else in Canada. And if anyone tried to replicate our model, which many have tried and failed, we're so far ahead now and we're so far dominating now, I don't think anyone will be able to catch up with us. I am genuinely surprised that same-store sales in Q3, 7%, 5.5% right now in Q4, if it was a bit more timid than this, I wouldn't mind it. But this is just excellent. So I think this will continue Fred. I don't see signs of it stopping right now.

Appreciate that. And then just to follow up on that in terms of do you see competitors exiting, struggling. How is the M&A environment looking like at this point? Do you see any chance of maybe executing on a large-scale transaction of stores in Canada anytime soon?

Yes, absolutely. So what's happening here is that the smaller players, Fred, the independents with the one-off stores or a couple of stores are definitely facing the music. And they're phasing out of the market and not renewing their leases. But remember, these were bad quality locations to begin with. These were street front stores, not strategic at all, in the middle of the action with 10 other operators. Those locations just don't work. So we have to just stay on the sidelines and let that all play out and let people get out. On the other hand, I think this year would be very special for High Tide. I don't want to put the cart ahead with the horse, but we are speaking with blocks of 40, 50 and may be even larger. So we can, like, we're still coming to 20 to 30 stores organic growth, but I think you can count on some M&A this year. I think multiple groups have realized that High Tide is here to stay and Canna Cabana is here to stay and win. And they want to join the High Tide family. And not just we are approaching the outside world in a more aggressive way to just take the market, take the bull by horns and just wrap this up relatively quickly. We're getting a lot of inbound action too as well now, that just want to join the Canna Cabana High Tide family. So I think we'll be able to share some exciting news during this year. We are working on a lot. So stay tuned on that.

Your next question comes from the line of Bill Kirk from ROTH Capital Partners.

So to try to market their brands, LPs talk about how they need to work with budtenders, your budtenders to help them. So can you remind us, Raj, what your budtender education and training programs look like? And how can you capitalize on the assets that they are, especially as the LPs want to get in front of them to try to help their brands. Hopefully, you guys got that. Did I get cut off?

I'm sorry, Bill, do you hear me now? You hear me?

I do, yes. I do, yes, I hear you, Raj.

Okay. Okay. Perfect. So Bill, I was just saying that it was great chatting with you at ICR, and here our conversation continues. So Bill, what we do is we put a lot of emphasis into our budtender engagement. One of the most important things, although we are a discount retailer and people sometimes think about discount and they think that discount retail cannot give a quality experience. The Cabana level experience is opposite of that. We are all of it. We're beautiful stores. We're open refreshing layout, retail focused, and our budtenders are very engaged with our customers. So we give them a robust level of training, not only in the physical stores where we hire them up to 1 month in advance, then when they actually start their position, we put them in multiple stores just to get them exposure of customers and learn about sales in real time, just to train them for 2 to 3 days in their new location, we do that. And we have a Cabana learning portal online that they must all pass and continue to pass every quarter. So we put a lot of emphasis into training because we want to wow our customers, our loyal club members, not just by exciting products and the lowest prices guaranteed, but really provide them that Cabana level service for what they're really looking forward to and how we can make their day better. So all of that is already happening. You're right, many LPs do try to approach our budtenders and try to position their products. But we are centralized in terms of how we do our product assortment. It's not based on what one store manager wants. People can get influenced by license producers. So we don't allow that to happen. We're very centralized in our ordering. And typically, this is not an issue that comes up in our organization at all.

Awesome. And I wanted to follow up on Remexian. You gave us those highlights of improvements in December, what are you seeing in January? So December was better. Have you seen more of that continuing in January?

Yes. So look, I have the numbers for January. We're slightly lower than December, but were much higher than September, October and November, right? So things have definitely turned. We know it's going in the right direction now. However, we do have some remaining biomass in Portugal, and this biomass is being sold in its single-digit gross margins. Imagine selling cannabis after 10 months and still being able to sell it over cost. That's how much an amazing distribution network Remexian has and what they've built. So we are very bullish. If I could get them 4 tons of cannabis, guess what, they're selling 4 tons of cannabis. And we're very sure that we can get cannabis gross margin profile, medical cannabis distribution profile north of 23%, 24%. I think it'll be the high mid-20s in the second half of the year when we get all this fresh biomass. We've already purchased close to 5 tons here in Canada, and I am very excited about the prices that we are procuring them at. Remexian has not seen such pricing, and this is just the beginning. Every producer wants to work with us. We actually also have some partners from U.K. We reached out to all of them and now we are in regular contact with them and what we're hearing is they can believe the prices that we are offering them and we're going to start selling into the U.K. as well. It won't happen immediately. Again, there's supply chain qualifications that we need, which takes 2 to 3 months to set it all up, but we are very sure that we can do it even before the second half of this fiscal year, maybe even in Q2, make our first sale in the U.K. market. And once again, what we have in our hands in Canada is attractive for people in Poland, for groups in the U.K. or Germany, France and Spain are going to open up and we want to be the preeminent distributor in Europe. So getting past the noise of Q1, remember this multiple was already baked in. We paid just 3.6, 4x for this business. It was worth a lot more. But we paid that because of this Portugal slowdown. So we got to get through it. And also the looming German law change. And we disclosed all of this to our investors prior to buying the business. You don't buy a business for 2, 3, 4, 6 months. You buy a business for the long term, and I cannot tell you how bullish I am on the prospects of Remexian long term.

Your next question comes from the line of Michael Kim from Zacks Small Capital Research.

So first, just assuming rescheduling ultimately goes through here in the U.S. Just curious if you could sort of flesh out how some of these potential strategic partnerships or licensing agreements, sort of how they might look like? And then related to that, would you expect the competitive backdrop to shifts as maybe more noncannabis pharmaceutical companies or consumer firms potentially look to invest or partner with U.S. players?

Michael, thank you so much for your question. So look, yes, we are seeing a lot of inbound interest from U.S. operators who are recognizing our leadership positioning here in Canada and exploring ways to partner up with us in the U.S., given the apparent regulatory shift. We think rescheduling news could be out next month. So we're getting pretty close to it. And look, we're evaluating all options across the spectrum on how we can work together from licensing agreements to full-blown mergers. Although it's still early days, and we're proceeding with caution. Things are looking fantastic here in Canada and we're looking forward to getting our German operation running full speed. So we've got a great thing going. As much as we want to be a meaningful player in the U.S., we don't want to rush. So we will take our time to evaluate potential structures and partners, while keeping an eye on how regulations develop. And make sure that we select the most optimal move at the right time for our shareholders, just like I believe we did in Germany. The other factor regarding rescheduling, which I think has flown under the radar in terms of market appreciation is the potential degree to which the proposed changes to CBD can be a game changer for Nuleaf and FAB. And then I think your second part of the question was, do I see outside players outside of cannabis entering due to rescheduling? I don't, at the moment, I don't. I think cannabis industry is going to be able to capitalize on this momentum. I don't think we face a very significant risk from outside operators, but hey, look, operators like ourselves, the Canadian operators could be getting interested into the U.S. market. Some German operators could be getting interested. So the market will expand, but I think it will remain amongst industry insiders.

Got it. That makes a lot of sense. And then maybe just a follow-up on sort of the M&A discussion. Just maybe curious to get your take on potential tax and banking reform here in the U.S., how that might shift the competitive environment? And then how that might impact valuations from a from a potential transaction multiple perspective?

Sure. So at the moment, we are focused on M&A in Canada and not in the U.S. And even given that rescheduling is at the doorstep, you can see the multiples at where U.S. MSOs are trading at. It's all quite miserable, to be honest, Michael. So M&A can -- it can't really pick up steam and multiples are that depressed for large U.S. operators. Thankfully, we're busy in Canada. We're still playing here. But like I said, multiple U.S. operators have reached out. Some of them very, very large and they're very interested in seeing what we can do together. And when Canna Cabana turns on its M&A engine in the U.S., I think we'll be able to roll up and consolidate more players than the U.S. operators that are -- just have regular retail platforms because we offer something very different, and we offer something very attractive, and it's not gone unnoticed with even some of the very large players in the U.S. So given that the tax reform, we are going to experience, capital should definitely flow back a little bit more into the U.S. market. It's been very dismal. We don't have any capital constraints here in Canada. We've been able to raise capital at attractive terms. But the U.S. players have been -- are have been having problems with that. So I don't think M&A activity will pick up very aggressively. But you never know. After rescheduling the industry should be on the right footing and move forward in the right light.

[Operator Instructions] Your next question comes from the line of Eric Zhu from Canaccord Genuity.

This is Eric on for Luke Hannan. I just have like a very quick -- I guess 2 questions. First one is on Germany. I noticed you've opened new Canna Cabana in Germany. And just wanted to ask about what's your strategy there, currently selling accessories I believe? And what's the early performance there, if there's any more new stores planned? That's the first one.

Eric, thank you so much for your question. So Germany, we just planted our flag with the first Canna Cabana store. We had some certain permitting issues, which are getting course corrected and the stores should be live again in 1 week or so or about 2 weeks. But remember, that store is only selling accessories. The stores -- the sales are going to be very minimal in that regard. That was more symbolic. That was us more getting native with the market, and it was also secured because we've applied for these pilot projects where we could secure retail licenses. But the chances of those pilot projects going through are very slim. So I wouldn't want to get anybody's hopes up. So the numbers we expect to yield out of these stores are very minimal in nature. Our real focus in Germany remains Remexian. But because the Canna Cabana brand is starting to get native in Germany, I think that will lead to an added advantage going forward, when we are able to start building retail stores in Germany, which will always remain the forefront of our strategy. Remember, we are cannabis retailers first. The medical cannabis distribution is very, very exciting. And I think we're going to be fantastic players with a significant market share in that business. But the Canna Cabana concept is so unique that we just wanted to enter a market like Germany, plant our flag there and just wait for the right time and the right opportunity to come. So we're already positioned in that market.

Makes sense. It's definitely nice to have the optionality. And my second question is related to the Cabana Club membership program and the ELITE program. Since they have been growing at historical speeds, has there been any changes to your marketing strategy or the unit economics on the 2 membership programs? And maybe if there's any metrics that you can share with us, penetration, average order value frequency, et cetera?

Yes. So look, Eric, I'm so pleased. I was just talking to Neal about this, that our Cabana Club is absolutely exploding. We had 2.5 million members in Canada, up 45% year-over-year. And this was not the pace that we were -- our team was expecting. If this grows at 20% a year, that's a wow number. We're talking about almost 50% growth year-over-year. So I don't think that slows down. I did in my prepared remarks, I did talk about how potent our brand is, how daily users of cannabis are choosing us. 49% of them, how we are so dominant nationally. We're the most recognized brand. We have 29% recognition nationally, which is twice as much higher than our next closest competitor. So you can see the delta there. And then our program is so unique to our ELITE membership, where the loyalty loop is getting even more stickier. We have 151,000 ELITE members in Canada now, which also continues to grow at the fastest pace of onboarding since inception. It's up 107% year-over-year. And ELITE member tends to come shop more often with us. Their baskets are much larger. Think about this, when you're an Amazon member and you're paying your Prime Membership fees, or you're paying for Costco membership fees, you're buying at Amazon and you're automatically going to Costco and purchasing your stuff. This is exactly what is starting to happen at Canna Cabana. The loyalty in our ecosystem has become so strong. It's actually the driver of all of it. Of course, combined with our very, very good locations that we never sacrifice on. So I think this trend will continue. It's showing us no signs of slowing down. It's actually exceeding all our expectations.

Ladies and gentlemen, there are no further questions at this time. So I'd like to turn the call back over to Mr. Raj Grover for closing comments. Sir, please go ahead.

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.

Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.