Good morning. My name is Ina, and I will be your conference operator today. At this time, I would like to welcome everyone to the High Tide First Fiscal Quarter 2026 Unaudited Financial and Operational Results Conference Call. [Operator Instructions] Mr. Brownlee, you may begin your conference.

Thank you, operator. Good morning, everyone, and welcome to High Tide Inc.'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 March 17, 2026, the company released financial and operational results for the fiscal quarter that ended January 31, 2026. 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 March 17, 2026, our latest annual information form and our latest management 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 at www.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 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 first fiscal quarter that ended January 31, 2026. I'll begin with some high-level comments about the quarter and our strategy before Mayank dives deeper into the financials. Fiscal 2026 is off to a great start, and I'm excited for what still lies ahead. Revenue for the quarter was $178.3 million, up 25% year-over-year, growing at its fastest pace in 10 quarters and up 9% sequentially. One quarter into the year, and we are at a revenue run rate exceeding $700 million. Also at $11.5 million, adjusted EBITDA was up 62% year-over-year, marking the fastest pace of growth in 2 years. Our domestic core bricks-and-mortar segment continues to outperform its peers with rising margins, which have now increased sequentially for 5 straight quarters and hitting 28%. At the same time, our newer international business is now picking up steam and reaching new highs since we acquired a majority interest in it. Let's recap how Germany is going. The Remexian transaction closed on September 2, 2025. Revenue for the 2 months it contributed to Q4 results was just under $10 million, averaging $5 million a month. In Q1, Remexian's revenue was $25 million, averaging over $8 million a month. In February alone, Remexian sold 2.6 tonnes of medical cannabis and generated $12 million of revenue, which was a record since we acquired a majority stake in the company. Additionally, preliminary gross margins improved to 20% in February, while we caution that any 1 month's performance may not be consistently repeatable, it nevertheless gives us a strong degree of confidence that looking ahead, Remexian should be able to deliver results far ahead of the metrics used during the valuation period for the transaction. What gives…

Thank you, Raj, and hello, everyone. Q1 was another great quarter for High Tide. We expanded the network in Canada, saw large improvements internationally, realized record revenue, all while generating increasing level of free cash flow. Let's take a deeper dive into the numbers. Revenue for Q1 was once again a new and all-time high at $178.3 million, up 25% year-over-year, the fastest pace of growth in 10 quarters and up 9% sequentially. Consolidated gross margins were 25% in Q1, consistent with Q4 last year and just below 26% sequentially. While our medical cannabis distribution generated a lower gross margin this quarter than its usual historical performance given supply chain delays in Portugal, as Raj mentioned, we anticipate improving gross margins in this segment looking ahead as fresh biomass from Canada purchased at best-in-class terms starts arriving in Germany. Most importantly, we were able to post sequential gains in our core brick-and-mortar segment for the fifth straight quarter to 28%, the highest level in over 3 years. Turning to expenses. Salaries and wages represented 11.8% of revenue in Q1, marking a meaningful improvement versus 12.3% a year ago and compared to 11.5% sequentially, which was a tough comparative as it marked our lowest level in 9 quarters. General and administrative expenses represented 4.1% of revenue in Q1. This quarter was a continuation of this downward trend comparing to 4.6% a year ago and 4.3% sequentially. It is great to see the demonstrated impact of operating leverage as we scale up our revenue. Adjusted EBITDA was $11.5 million for the quarter. This was an outstanding 62% year-over-year. The star of the show here once again was our core brick-and-mortar segment, which posted a 58% increase year-over-year, representing the fastest growth rate in 7 quarters. The segment's adjusted EBITDA margins were 9%…

[Operator Instructions] And your first question comes from the line of Luke Hannan from Canaccord Genuity.

First, I wanted to start with the same-store sales performance that you had in Canada during the quarter. You mentioned you did still deliver growth year-on-year despite the impact of the winter storms. But can you just delineate for us what exactly was the impact of the winter storms, either from a -- on a same-store sales basis or whatever other basis you're comfortable sharing? And then also just give us an indication of where that metric is trending quarter-to-date as well.

Thank you for your question. So yes, same-store sales were definitely impacted mostly in the last 10 days of Germany -- sorry, the last 10 days of January. And it also extended a little bit into February. But that was a once-in-a-lifetime event in Ontario. Things were closed. I believe you're from Ontario, so you would know, Luke, how serious that was. But barring that, the reality is that things are definitely slowing down a little bit in Canada. And when the market is doing that, all you can do is outperform the market. As an illustration, Luke, let's look at the 3 months ended December 2025. The last month, we have Statistics Canada data available. And let's exclude BC, given I'm sure you remember the strike impact there. It was a once-in-a-lifetime kind of event there as well. So total industry sales, including the impact of opening new stores, were down across those 4 provinces for the 3 months ended December. This was the first time since legalization that total sales over a 3-month period were negative year-over-year. And it wasn't just due to marginal players. We actually saw a public company report negative same-store sales year-over-year during those 3 months as well. So like I said, we can only outperform the industry. In contrast, our same-store sales were up 2% during those months. And then again, our same-store sales in January were up as well, but only by a little. So the macro consumer outlook is obviously a big driver, and all we can do is continue to outperform. And given the strength of our model, our Tier 1 real estate selection, our team's superior execution, we believe that we will continue to outperform the market. Like I said, we posted positive same-store sales increases in January as well. But the silver lining here, Luke, is as the growth slows in addition to outperforming the market in general, this is going to put even more pressure on those marginal players that we've been talking about, which are going to be becoming even more incentivized to exit the market. And when they close, those sales have to go somewhere, and we believe they will disproportionately go to us.

Very helpful. And then for my follow-up here, and then I'll pass the line. You talked about wanting to get into the U.K. market in the next 12 months. Can you just give us an idea of what exactly you're looking for, maybe how you intend to fund a deal there? Expect to structurally similar to structure it similar to Remexian? And then on that note as well, what are you seeing as far as the multiples and the kind of assets that are available?

Yes. Sure, Luke. So look, given that we're already a leader in Germany and starting -- and our strategy is starting to yield results there, we're looking to expand our ecosystem, obviously, into other international markets. This is something that I've been talking about that Germany is just a start. It's a step into other European markets as well. And U.K. is a very exciting market, Luke. It's been growing at 100% year-over-year. That's what it did last year. That's what it's projected to do this year between 60% to 100%. So that's very, very exciting for us. So what we're doing right now is we are meeting all key players in the U.K. I've probably spoken to 5 groups already and another 5 or 7 are on my list to speak with. This is ongoing. We are in no rush to enter that market. So it's not like we're cash trapped and we need to do something tomorrow in the U.K. market. But we are very well -- we're definitely prospecting the key players there because it's going to become a very important market for High Tide. It's definitely one of those markets where Canadian cannabis is making huge waves. It's close to that same 50% benchmark that we've been talking about in Germany. So down the road, we have an aim of entering into a transaction in that country within the next 12 months.

And your next question comes from the line of Neal Gilmer from Haywood Securities.

Yes, I'm in Ontario, too. It's been a brutal one here, but I won't get into that. I wanted to talk about Germany. You commented on the February sales of $12 million and a gross margin of 20%. I guess a 2-part question here. Number one, if I take the $12 million and times it by 3, obviously, I get $36 million, which seems like significant growth over '25. I don't want to get over my skis or sort of what sort of message you want to sort of send to investors? Was there anything unique about February? Or should we be sort of thinking of that sort of run rate going forward? And number two, the 20% gross margin that you disclosed, are you comfortable providing a range of where you think the gross margin could be once you get these Canadian sales into the German market?

Thank you so much for your question. So I'm definitely excited about what's happening at Remexian. So like I said in my prepared remarks, Neal, Q4 average revenue per month was $5 million through Remexian sales. Q1 average revenue was $8 million, and February revenue alone was $12 million, the highest since we acquired a majority stake. So look, we're very encouraged with how the overall business is trending. But that said, we continue to have meaningful biomass waiting to be released in Portugal, right? We still have 7, 8 tonnes in Portugal that are coming through. We started with 17, and we're down to about 7 or 8. And as mentioned, February was the best month by tonnage since we acquired Remexian in September. Now some of this was more biomass being released from Portugal, but it was also supplemented by opportunistic buying by the Remexian team in countries outside of Portugal. The Portugal issue will still weigh in on Remexian results for Q2 and no 1 month should be taken as the benchmark going forward, right? Again, I have March's numbers. They're slightly softer than February, but that's, again, because of import permit delays and things like that. Although I am very bullish about Remexian's performance going forward. The second part of your question, I believe, was on the gross margins. We definitely were excited to see that we are already at 20% gross margins in February. Like I said, it's probably not repeatable every month, at least for the next couple of months. But I'm very, very confident that it could become the norm going forward in Q3 and beyond. But we're looking at a range of 20% to 25%. I don't even think it stops at 20%. I think we hit mid-20s gross margins, probably capped at around 25% because like I said, the Canadian biomass that we procured at best-in-class prices and best-in-class terms have not even landed in Germany. It was supposed to be in Germany in the second week of March. That's not happened because of the import permit delays into Germany. So now that's trending towards March, but we've already hit 20% without this biomass. So when that comes in, it gives me good heart that we could see between 20% to 25% gross margins going forward.

Okay. I guess maybe the second follow-up question, and then I'll pass the line is back in Canada here. I take it from your prepared remarks, you talked about the 20 to 30 that you plan to open this year, mostly being organic. It just sounds like it's a pretty dry M&A landscape. Is my correct assumption that, that organic growth that you plan to do is mostly going to be focused on the Ontario market? Or can you talk about whether there's any other markets where you think that will drive that increase in retail stores?

Yes, absolutely, Neal. So look, the organic store goal, 20 to 30 is a tried and tested benchmark for us, which we've been doing for the last couple of years. Now it's definitely getting harder, Neal, to get good organic locations where we don't run into redundancy with our own portfolio or where it's not ultra -- already an ultra-crowded market, but same-store sales pressures on everybody. So that's a balancing act. Maybe we were towards the lower end of the organic growth trajectory this year, but we definitely feel that we would still be able to hit that milestone. To your question about whether that growth is focused on Ontario, it absolutely is focused on Ontario because we can probably still add 54 stores to get to our 150. So there's a lot of growth ahead of us in Ontario. But we continue to grow in other markets as well. In our home province of Alberta, we're in the 90s here, mid-90s here for store count. I believe we can get to close to 130 stores in Alberta as well. Saskatchewan is open playing territory as well, where we have 13 stores, but we believe we can get to 20-plus stores in Saskatchewan. So the growth will not be limited to Ontario alone, although the focus is definitely on the Ontario market.

And your next question comes from the line of Frederico Gomes from ATB Comark.

First question on your bricks-and-mortar gross margins. You've been doing pretty well there, fifth consecutive quarter of expansion. But given the market slowdown on the sales side that we're seeing that you mentioned as the market matures, are you expecting to continue to report sequential margin expansion in that segment? Or could that sales slowdown impact that?

Fred, thank you for your question. So look, I'm very happy to see that we've had 28% gross margins. in our brick-and-mortar segment, which is 5 consecutive quarterly increases that we've seen at that segment. And I couldn't be more happier. But you're right, can we continue this forever? Probably not, probably not. But the one thing we said from the very beginning is that our white label initiatives and ELITE sales, which continue to pick up steam, as you know, white label has now jumped from 1.3% to 1.6% with a long-term goal of getting to 20%. That will happen over the next 5 years, but that will boost gross margins. Each white label SKU contributes to another 6% to 7% additional gross margins on our side. But we're very thoughtful about it. We want to introduce differentiated cannabis products that are made by quality licensed producers. So we're going to take it slow and steady. And then the other major initiative that's contributing towards gross margins that will continue to do so is our ELITE sales. As you know, ELITE is growing at 100% year-over-year faster than our own expectations here. If it does that another year, we'll be close to 350,000, 320,000 ELITE members. This is very, very exciting, but that also means that it helps with our gross margins because it's consolidated, it adds another -- it's a 70% gross margin segment for us. which is very, very healthy. But at the same level, to offset that, we still have illicit market pressures. The competitive pressure is still quite strong. And sometimes we have to adjust our margin downwards in many of our locations to remain competitive and then gain steam again when other operators cannot hold and cannot compete with us, right? So overall, think of if I can do another quarter or 2 of 28%, I'm very happy. I don't think it trends downwards, maybe slightly, but I don't think so, but we've got ELITE and white label sales to back it up to keep going -- to keep chugging it ahead slightly at least in the coming quarters.

I appreciate that. And then a second question, just on your e-commerce platforms. You mentioned early signs of recovery and obviously, revenue increased sequentially for the first time in 3 years. So what changes have you implemented recently in that business to drive that recovery? And since the quarter ended, has the trend continued with continued improvement?

Sounds good, Fred. So on the e-commerce front, we have implemented quite a few changes. As you know, we appointed Sri as our VP of Technology about 5 months ago now, and she's been doing a stellar job since she's come on board. We had identified that given our 3-tier pricing strategy, we had some issues with our tech stack, which we've now changed in 5 of our platforms. We've relaunched Smoke Cartel, Dankstop, Daily High Club, Grasscity was just relaunched about a week ago and Nuleaf Naturals has also been relaunched, and we're seeing very encouraging signs. We're seeing conversion up 30% to 50%. We're seeing orders up 30%. We're up 5% quarter-over-quarter in both our business segments, which is accessories and CBD businesses showing increases. And this is prior to the potential favorable regulatory changes for the CBD industry that I was talking about initially in my prepared remarks. So this is all resulting on the segment's consolidated drag on EBITDA also coming down, which has been the smallest in 4 quarters. And you're absolutely right, we're already seeing that momentum carrying forward into Q2 as well.

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

My first question, Canada is set to lower medical reimbursement amounts. Would you expect the recreational market and your stores to benefit from that change to the medical program?

Bill, thank you for your question. So the medical industry -- cannabis industry in Canada has been shrinking. The patient numbers have considerably gone down. And I don't think that the medical cannabis clientele is competing with the recreational cannabis industry. So I don't think that it's going to matter much. There are cannabis stores on practically every city block or every 2, 3 city blocks in the country. So the convenience factor is already there when it comes to recreational cannabis sales, and we're extremely competitive at the recreational level now even with the illicit market, although illicit market continues to make mayhem on the edible side of things, but we're very competitive, but this change on the medical side is not going to have an impact on the recreational side. I think so.

Okay. And then going back to Germany, there was a comment in the press release about more than 1 out of 7 German pharmacies are now offering cannabis. Do you have an expectation for how widely available product can become in that market as it matures?

Sure, Bill. So look, it's already exceeding our expectations in terms of how the German market is growing. It's at 227 tonnes annualized. BfArM released their Q4 data and they revised Q3 upwards. So they did 57 tonnes in Q4, which was actually the same level of imports that BfArM had previously published for Q3. And the Q4 number is up 75% year-over-year, right? So that's huge growth right there. And from a big picture perspective, the market has gone from 33 tonnes when it started in 2024 to 227 tonnes right now. So there's a lot of growth that's already happened. We're only 10% of the market right now. We think we're going to continue to increase. It's nice to see more and more pharmacies starting to offer medical cannabis products. The patient growth has also gone up from 200,000 patients to now exceeding 1 million patients in Germany. So we're very happy with where things are at. And even if growth was to slow down a little bit, I think this is a massive market already.

And your next question comes from the line of Derek Lessard from TD Cowen.

Congrats on a great quarter. I just wanted to know like given your insights into -- with your POS and your loyalty program, do you have any, I guess, at least first thoughts as to why the market may have slowed or consumption?

Derek, thank you for your question. So the market slowing a little bit could be a result of the dollars that are available in consumers' pockets. We know that there's inflationary pressures here in Canada, we know a potential recession could be looming with what's happening worldwide and just the angst in consumers' minds. And also, we do go through these phases where illicit picks up a little bit and takes a little bit of a bite of the legal market. And that we continue to see in different pockets of the country. So that is probably also making a difference. But given that we are at the forefront of the industry and a legal -- have been a leader for a very long time, I think Canna Cabana will be a disproportionate recipient when these sales come back and when this momentum comes back in the Canadian market. So I am not concerned about it.

Okay. I'd agree with that. And I guess one of your competitors did point to higher selling prices and more of a promotional period a year ago. I was just curious, too, I guess, around the potential impact of a slowdown. Do you think -- do you see any room or concern for any type of irrational competitive behavior from some of your competitors or the ones who are just kind of still trying to stay in business?

Yes, it's definitely possible, right, Derek, this is business. Business never goes up in a straight line. No competitor is the same, and there's different competitors coming and going. So we definitely feel competitive pressures. And this quarter, in particular, Q2 is the slowest quarter of the year in which we are in. And Q1 that we just finished, as we mentioned, the industry growth sales slowed overall. And some competitors try to change their strategy just to see if they can come out of it and still survive. That's not happened to date. We're going to stick to our strategy. We're not raising prices on consumers. We have been gently raising prices. As you can see over the last 5 consecutive quarters, we've had gross margin increases at the brick-and-mortar level. But we're not going gung-ho on this and raising prices on consumers. We want to make sure it's steady and stable, and we're able to enjoy margin increases through our white label program and through ELITE versus raising store level margin increases.

And your next question comes from the line of Tom Kerr from Zacks.

Most of my questions have already been answered and asked. Just I want to follow up on new store growth in Canada. And you might have mentioned this, but with the industry slowdown, does it still make sense to do the 20, 30 stores? Or would you wait for a turnaround in the entire industry? Just how do we look at that?

Tom, thank you for your question. So look, we give a range of 20 to 30 stores. Like I mentioned in my prepared remarks, it is getting a little difficult to find organic locations where it's not redundant to our portfolio, our existing stores already. And it's also getting difficult in the sense to find organic locations where you have a superior power center, which is not surrounded by a lot of competition. So we're being very careful in terms of where we plot these stores. Now we may be at the lower end of that target and do about 20 stores this year, but that would still be a very healthy organic same-store sales increase. We are more focused on M&A this year. So we should be able to get some M&A done this year at the brick-and-mortar level, which will not be a net increase into the market, but we'd be taking over existing stores.

Okay. Got it. One more quick one. And just on the transition or the push to get members to the ELITE subscription status. Is that marketing? Is it sales? Is it advertising? Is it more benefits? How are you going to push that?

Look, it's a little bit of everything, right? We're focused on our marketing, our sales, the advertising around it. But our consumers, our customers, our club members are genuinely seeing the value in ELITE, right? Like I said, when times are tough, as you can see right now, people are not rushing to the till to become an ELITE member or they shouldn't be rushing to a till to become an ELITE member to spend $35 a year, but they're doing that because they see the value in everyday discounts. They see that exclusive product selection is very, very good, and they're excited about it. So ELITE gets a lot of benefits, and they're seeing -- I'm very happy to see that they're seeing value in these tough times or these slow times. And I don't think that ELITE momentum is slowing down anytime soon. We were growing at 100% year-over-year last year. We're still growing at 100% year-over-year right now. And if this keeps happening, we'll be at 320,000 members in no time.

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

This concludes today's call. Thank you for participating. You may all disconnect.