Here in Canada, with cannabis being legal as of last year for medical and recreational use, just recently we have seen the first few retail brick and mortar stores open on April 1st. The retail market in Canada is completely in its infancy and in my opinion has tons of potential when it comes to profitability for a select few companies that are ready to capitalize on this rare first mover opportunity.
One company that comes to mind is a very interesting company called High Tide (HITIF). High Tide was founded in 2009 starting out as an independent smoke shop chain catering to cannabis users in western Canada, with their headquarters located in Calgary, Alberta. With over 10 years of experience in retail, they have grown to become one of the largest retailers in Canada. High Tide is a dominant distributor and manufacturer that has partnered with some world renowned brands like Snoop Dogg and Paramount Pictures and is in the process of rolling out one of the largest retail cannabis chains across Canada since brick and mortar stores were just recently legalized as of April 1st.
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The Cannabis Accessories market has been going strong for many years with a number of established retailers in the space, and High Tide has definitely capitalized on that opportunity so far but what I am more excited about is the fact that they will be retailing legal cannabis to the public and have big plans when it comes to the recreational cannabis market. Since legalization High Tide has been opening an number of stores across Canada. They already have 36 of the 37 maximum number of development permits that they are authorized per company by the AGLC for retail cannabis stores in Alberta and they expects to receive their last one in the near future. High Tide continues to move along with the development of their 23 locations in Alberta that are at various stages of completion.
High Tide also has a presence in Ontario with their two Canna Cabana-branded retail cannabis locations, one in Hamilton and the other in Sudbury. They were opened on April 20th and both stores are showing great performance so far. Their next branded location in downtown Toronto should be open before or by June 1, 2019. The Company is also working on two locations in Saskatchewan and are going through the last steps to complete two pending retail cannabis acquisitions. Finally in Alberta, British Columbia and Nova Scotia High Tide already has 13 Smoker’s Corner accessories shops with five being corporately owned and eight franchises.
I feel that High Tide is well on their way to be one of the leaders in the Canadian retail cannabis space, having stores in some of the most lucrative markets in Canada. I am not usually bullish on retail when it comes to many businesses but I feel that retail in terms of the cannabis sector is much different and will be very profitable for at least the next 5 to 10 years. The reason I am so bullish on Canadian retail cannabis is for the simple fact that so many recreational users are not properly educated when it comes to cannabis, not to mention, unlike the ontario cannabis store, if you are a new or interested user, most people want to take a look at the product, learn about it and see it before buying it. I think that having great quality cannabis, strong branding and a solid educational approach will create strong customer loyalty. Stressing on education when it comes to retail will not only help the consumer achieve their desired products, but it will improve their product experience resulting in specific brand loyalty.
Long story short I feel that there are lots of opportunities within the Canadian cannabis retail market as I feel that it’s still in its infancy. High Tide has the potential to be one of the industry leaders within this space.
To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here.
Disclosure: The author is Long HITIF.