High Tide Inc. (“High Tide” or the “Company”) (TSXV: HITI) (Nasdaq: HITI) (FSE: 2LYA), a leading retail-focused cannabis company with bricks and mortar as well as global e-commerce assets, announced today that it is transitioning all of its cannabis retail stores to an innovative cannabis discount club concept, with exclusive benefits and everyday low prices for members of its Cabana Club loyalty plan. Modelled after a proven and leading membership-based grocery discount club retailer, High Tide will leverage its existing in-house brands and product lines to provide an exclusive customer experience for its 245,000+ Cabana Club members, which will drive customer loyalty and meaningfully expand the Company’s market share.
Starting today, all of High Tide’s retail cannabis stores will begin to offer steep club discounts on cannabis products in addition to existing member-only discounts on consumption accessories, as well as other exclusive benefits for members of the Cabana Club, which will remain free to join over the short-term. Members will also be given the exclusive ability to purchase items from High Tide’s catalogue of proprietary consumption accessories, which will only be available in Canada through High Tide’s retail brands, with wholesale sales of proprietary consumption accessories being discontinued in Canada in order to focus on providing value and exclusive high-quality products to Cabana Club members. Based on two successful pilot projects that were conducted beginning in mid-April, 2021, which yielded a 184% increase in consumption accessories sales, a 76-100% increase on THC product sales, and a 272% increase in new signups for the Cabana Club, the Company expects cannabis and consumption accessories sales volumes to continue to rise. This increase in sales will also accelerate High Tide’s white-label product strategy to offer unique products to Cabana Club members.
“I am thrilled that with today’s announcement, High Tide becomes the first of its kind, and the largest, cannabis discount club retailer in North America. While other retailers have made moves to service the value segment, our strategy sets us apart as the only retailer in Canada which will have a discount club loyalty plan. Today’s news represents an acceleration of our value-focused strategy, which was initially planned to be rolled out under the Cannabis Chop Club brand in select locations only. By expanding this strategy across all of our retail stores instead, we can focus on continuing to build the Canna Cabana brand and its rapidly-growing base of over 245,000 members, and grow our strong brand equity, while saving time, capital and resources by avoiding conversions of existing locations,” said Raj Grover, President and Chief Executive Officer of High Tide. “We have specifically developed this retail concept to speak to the needs and preferences of today’s cannabis consumer, with a focus on value, quality, and an exclusive product portfolio. This will be done by offering the largest selection of cannabis products and consumption accessories in Canada at unbeatable prices, and at a level of quality, consistency, and safety which is absent in the illicit market. Our successful pilot projects clearly demonstrated that exclusive access to high-quality and affordable products can drive growth in both sales and customer loyalty,” added Mr. Grover.
The Company plans to initially roll out this retail concept across Canadian provinces where it currently operates retail cannabis stores, as well as in British Columbia, where it anticipates launching its first store in the near future. A driving focus of this rollout will be to convert consumers who currently buy products from the illicit market, a potential customer base worth at least $3 billion in annual sales.3 Over the longer-term, depending on the timelines of legalization and regulatory change in jurisdictions outside of Canada, High Tide’s vision is to make the Cabana Club into a global cannabis community.
High Tide President and Chief Executive Officer, Raj Grover, and Chief Financial Officer, Rahim Kanji, will be available to answer shareholder and analyst questions related to this announcement via conference call at 12:00pm Eastern Time.