High Tide Inc. Q2 FY2025 Earnings Call

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

Thank you, Angeline. 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 June 16, 2025, the company released unaudited financial and operational results for the fiscal quarter that ended April 30, 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 June 16, 2025, our latest annual information form and our latest management discussion and analysis, each filed with securities regulatory authorities or on the company's website at www.hightideinc.com and which are hereby incorporated by reference herein. 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 not 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 second fiscal quarter that ended April 30, 2025. I'll begin with some high-level comments about the quarter and our strategy before Mayank dives deeper into the numbers. Another quarterly conference call, and I'm pleased to report yet another set of impressive industry-leading milestones for High Tide. Since 2018, we've been growing Canna Cabana steadily month in, month out, regardless of where we happen to be in the cannabis or capital market cycle. We kept our laser-like focus on expansion but doing so smartly and efficiently. While many of our competitors have fallen by the wayside, last month, we announced the opening of our 200th Canna Cabana in Sherwood Park, Alberta, which is a tremendous milestone. Canna Cabana is clearly the leader in Canada, not only by the sheer number of stores operated under any one banner, but also by the top-line and cash flows that our brand is able to generate. While having a much smaller war chest than some of our better capitalized peers, we've been disciplined and relentless in building not only the largest cannabis retail brand in Canada, but the second largest in the world, which is something I'm incredibly proud of. Indeed, our approach has been thriving while the rest of the industry has largely been struggling or slowing down. For example, with the opening of our Sherwood Park location, we now have 87 stores in our home province of Alberta. Our provincial store count is up 10% versus a year ago, while the rest of the industry combined has contracted 6% during this time. In Ontario, where we still see the most growth ahead, we have 82 stores today. Over the past 12 months, we have increased the size of our footprint by 30% in what we consider to be fantastic locations. In contrast, the rest of the industry combined has shrunk by 1% in this province. I'm very excited to see how strongly the 19 new Ontario stores will perform when they mature over the coming periods. It is also worth pointing out that this retail foundation we've built has been mostly organic as opposed to simply throwing money at competitors to make them go away. With our stellar brand and enviable real estate relationships, we've been able to pinpoint the micro markets in specific locations we want to be in and build winning stores where we want them as opposed to inheriting other decisions. Frankly, when I look at our peers, even the few that have still made gains in store counts, they have often almost exclusively been via acquisition. In contrast, given the quality and depth of our pipeline, we can still grow meaningfully organically even when M&A activity is slower. It also means we aren't pressured to act on marginal deals or chase considerably higher prices that some are willing to pay. Our real estate team is a fine-tuned machine. We're able to get coveted access to Tier 1 locations across the country and pay for construction of new sites from cash flows from our existing base of stores. I can confirm that we have more than a dozen stores currently in our construction pipeline. We can build our stores for an average of $260,000 in hard CapEx and for about $400,000 all-in with working capital and inventory investments, and be up and running relatively quickly without paying a multiple. Granted that newer stores take longer to ramp up to maturity given heightened competition versus prior years, given the track record we have, even in heavily saturated markets, we're confident that they will all get there, which will ultimately yield superior ROI for shareholders. We've been very disciplined. It takes a lot of effort to build this network, but we're not scared of putting in maximum effort to create value for our shareholders. Our stated goal was to add another 20 to 30 locations during this calendar year. We're tracking well with the 9 we have already opened year-to-date, and with more than a dozen currently at various stages of development. Should we enter into any M&A transaction, it would have to be attractive and accretive and would be supplemental to our proven organic growth. The beauty of our model, with proven returns on investment, is showing up in our same-store sales. In Q2, our daily same-store sales were up 6.2% year-over-year, which was the fastest rate in 5 quarters. Our model has been a huge outperformer over the long term as well. From October 2021 to March 2025, our same-store sales have increased an incredible 132% while the average operator has seen a 10% drop in sales during the same time period. We look forward to continuing to scale our proven model in the years ahead and surpassing 300 stores across Canada. Our success is also showing up via market share gains, which climbed to 12% where we operate in February and March, up from 11% previously. This is quite the feat when you consider that Canna Cabana only represents 6% of the total store count in these provinces. In March, our average store achieved an annual revenue run rate of $2.6 million, which is 2.3x the average annualized peer revenue of $1.1 million in the provinces 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 opened for 6 months or less, which are still ramping up, the average Canna Cabana store was on a $3.2 million annual revenue run rate in March. This was triple the average of our peers in Ontario at just $1.1 million. Our innovative discount club model is fueled by our unique Cabana Club loyalty program, which is the largest of its kind in all of cannabis. Our Cabana Club membership base has reached 1.9 million across Canada, up 33% or 470,000 consumers year-over-year and 8% sequentially. We're making great progress towards our goal of reaching 2.5 million members across the country. Our model suggested that our discount structure wouldn't work and that no one would pay to be a member to buy cannabis. Our team worked hard, and boy, did we prove them wrong. We led with our unique edge and accessories, leveraged our scale and White Label products, and our marketing team kept devising new and compelling compliant promotions. And here we are; our ELITE membership tier has now reached 97,000 members across Canada, up 120% year-over-year and 20% sequentially. This was once again the best growth we have ever experienced. Canna Cabana is becoming a household name, which has solidified the loyalty loop with our customers. We have long believed that competitor store closures would accelerate, and this is now happening, which benefits our existing stores. Putting all these components together has resulted in us now reporting trailing revenue of more than $550 million for the first time in our history. Our bricks-and-mortar business, which represents 97% of our consolidated revenue, is clearly firing on all cylinders and up an impressive 16% year-over-year. Despite its relatively negligible impact, our e-commerce segment only represented 3% of our consolidated revenue during the quarter. While we still have 6 months to reach our previously stated goal of getting to EBITDA neutral, it is proving to be a challenge. We continue to view e-commerce as having strategic value, particularly because it helps us build our customer database in Europe and the United States, which we can leverage further upon regulatory reform in these jurisdictions. That said, we are flexible and open to considering all eventualities regarding this business unit. We will do whatever it takes to maximize value for shareholders. I note that despite e-commerce weakness, our bricks-and-mortar franchise is so strong that we were able to increase our consolidated adjusted EBITDA by $1 million or 14% sequentially to $8.1 million. Our consolidated revenue was $4.9 million, marking a huge improvement from a negative $1.9 million in Q1 due to an order reversal. Now let's look ahead. Q3 is traditionally a stronger quarter for us, and we have seen that so far. Our retail machine keeps rolling on. One initiative that is bearing more and more fruit is our White Label, particularly our Queen of Bud brand. You'll recall that on our last quarterly conference call 3 months ago, we indicated that we had sold over $0.5 million worth of Queen of Bud products to date, and that our largest problem was that sales were doing too well, resulting in out-of-stocks, and we have tripled our orders going forward. I'm pleased to announce that as of today, cumulative cannabis and accessory sales of our Queen of Bud brand have reached $1.4 million, marking a significant jump from where we were 3 months ago. We have more SKUs live now, currently in our Cabana Cannabis Co. arrangement, and we're in the final stages of due diligence regarding a transaction. While we had wished to be live in the country by now, we've ensured to be thorough with our due diligence given the market's changing nature and how transformational such a move would be for us and our shareholders. This period has also been a major confidence booster. Recall that a few months ago, when we discussed our strategy in Germany, our plan was to leverage relationships we've built with licensed producers across Canada, enabling them to export large quantities through our German partner. Today, much of the risk in our plan has significantly diminished. We no longer have to hope that licensed producers will sell large quantities of cannabis into Europe through us with best-in-class terms. They are already here. Dozens of LPs have expressed their willingness, often on an exclusive basis, and they're eager to get going. Now that we have identified our preferred partner and transaction terms, it's largely a matter of being a little more patient until everything is finalized. Meanwhile, our business model has already been devised since supply has been secured, which gives us even more confidence regarding our strategy. We are looking forward to announcing this transaction as soon as we can and will update our shareholders in detail. Simultaneously, we submitted a model project proposal to the German Federal Office for Agriculture and Food in response to a December 2024 ordinance signed by the German Agriculture Minister, related to the study of commercial cannabis used by adults. We will have to see exactly where this program goes with the new government. But in any case, we and a research partner are prepared with our submission already in. As a reminder, we are only interested in federally legal jurisdictions as our shares trade on the NASDAQ. In conclusion, Q2 was another fantastic quarter for High Tide. We posted an acceleration in same-store sales, increased our market share, expanded our base of loyal club members, and surpassed the $550 million mark in reported trailing 12-month sales. We continue to cement our leadership in Canadian cannabis retail every day while preparing to establish a beachhead into Europe. I'm so grateful to our talented and hard-working team for getting us here and for where I know they will take us moving forward. With that, I'll turn it over to Mayank for his comments and a deeper dive into the numbers.

Thank you, Raj, and hello, everyone. Q1 was another great quarter for High Tide, meeting our objectives and executing on our future growth strategy. Let's take a deeper dive into the numbers. Revenue for Q2 was an all-time high of $137.8 million, up 11% year-over-year, while it was down 3% sequentially. This was entirely due to there being 3% fewer days this quarter, as our average revenue per day was the same as Q1, which is usually seasonally stronger. Our bricks-and-mortar segment led the way, up 16% year-over-year, driven by our strong same-store sales and the addition of more stores. In addition to merchandise sales, our Cabanalytics platform continues to set new highs. Cabanalytics Business Data and Insights platform, advertising revenue, and other revenue, including management fees, interest income, and rental income, totaled $11.3 million in Q2, up 26% year-over-year and up marginally sequentially. Consolidated gross margins were 26% in Q2 versus 28% in Q2 last year, and 25% sequentially. We were able to post sequential gains in our core bricks-and-mortar segment for the second straight quarter. As Raj mentioned, we expect to be able to raise margins in this segment once more in Q3. Q2 was also the first full quarter since we launched the Cabana Club loyalty program across all our e-commerce businesses. Our primary feature of this initiative is unbeatable prices. Turning to expenses. Salaries and wages represented 12.7% of revenue in Q2 versus 12.4% a year ago, and 12.3% sequentially as our store count continues to grow. Recall that we have to hire teams 4 to 6 weeks before opening for training to ensure Cabana-level service on day 1. General and administrative expenses represented 4.2% of revenue in Q2. This was an improvement versus 4.5% a year ago and 4.6% sequentially. Adjusted EBITDA was $8.1 million for the quarter. This was down 20% year-over-year but up 14% sequentially. Our core bricks-and-mortar segment continued to perform exceptionally despite there being fewer days during the quarter. As expected, given our new model, our e-commerce businesses posted declines in adjusted EBITDA. As mentioned by Raj, we are closely monitoring this segment. And while we are planning for higher volumes to offset the decline in margins in the coming quarters, we will remain vigilant and flexible to ensure shareholder value is maximized. High Tide generated $4.9 million of free cash flow in Q2. This compared to $9.4 million in Q2 last year, and negative $1.9 million during Q1. We have cautioned that working capital can vary in any given quarter, and that investors need to focus on this metric over a longer period. We continue to make improvements to our balance sheet. As of today, our total debt stands at just $25.4 million, which is just 0.8x our trailing adjusted EBITDA, a level where we believe makes us quite underlevered. We had $34.7 million in cash and cash equivalents at the end of the quarter, and we are well positioned with no upcoming maturities for over 2 years. In closing, Q2 was another great quarter for High Tide. We continue to excel and lead our peers in our core businesses, as shown by our strong same-store sales and increased market share. We are generating free cash flow, which is fueling the expansion of our store network and should drive record quarters ahead. Thanks to our amazing team, without whom none of this would be possible. With that, I will now turn the call over to the operator to open the line for the question-and-answer session.

Your first question comes from Bill Kirk with ROTH Capital Partners.

Raj, how has the success of your White Label SKUs impacted the dynamic with the third-party LPs in your stores? Does it give you more negotiating power when dealing with those suppliers? Or does it create any sort of competitive stress in the relationships?

Bill, thank you for your question. That's a different type of question, but I see where you're coming from. Just to let you know, Bill, our total sales of Queen of Bud amounted to $1.355 million. Out of that, close to $0.5 million of sales were in accessories. Overall, we have about $5.3 million in sales, and at an annual level, we're talking about just 1% of our total sales, with 30% to 40% of that being accessories. So this is practically peanuts at this point in terms of competing with the producers we are also buying from. We're buying their unique brands and products, which makes up 99% of our portfolio. So we're not concerned at this point. We are friendly with the industry. We don't want to compete with our customers, and we don't plan to become licensed producers anytime soon. That is not on our horizon. The producers that are backing us up for White Label are best-in-class in the country. They're very, very good at their craft, and that is why we are doing business with them. We have a fantastic relationship with them, and it works for both sides. They can move their biomass, and we're able to do some White Label offerings. We were able to bring some White Label products to please our customers and get some enhanced margins. But like I said, the business is very, very small to worry about it right now. We could take it to 10% in our store network, and I think that would still be well accepted.

Okay. And then from a regulatory perspective, the new Prime Minister said there'd be a budget in the fall. What, if any, changes for the cannabis industry could be included? And what would you want included?

So look, we're staying very close with all levels of government in Canada. We continue to work closely with regulators and our provincial partners to advocate the changes to support legal retailers that we very badly need. As you know, there's still an illicit market problem here in Canada. Some of the recent progress I can tell you about is Manitoba's decision to limit cannabis licenses for gas stations and convenience stores to smaller communities. We have been established in Manitoba from day one. We thought it was unfair for convenience stores and gas stations to be getting licenses when this does not protect youth who come to these stores shopping with their family. That restriction is now gone. Ontario also removed outdated restrictions on street visibility for stores recently following British Columbia, Manitoba, and Alberta. We are especially engaged with Alberta and Ontario, our two largest markets, where both governments are exploring additional changes that could help licensed retailers compete more effectively with the illicit market.

The next question comes from Frederico Gomes with ATB Capital Markets.

Congrats on the great quarter. First question, Raj, on the sequential gross margin improvement that you saw in bricks-and-mortar. Could you talk about the drivers behind that? And what will be driving the improvement in the next quarter and maybe the following quarters as well?

Yes, absolutely. Fred, thank you so much for your question. This is not only sequential gross margin improvement; it was 2 quarters in a row now. So we're up 150 basis points in total in the last two quarters. We still think there's room. I think you'll see another uptick in Q3 when we report that in September. So things are going really well on that side. Last quarter, you heard me express concerns about the illicit market remaining strong in markets such as Ottawa and Toronto. That has not changed, but it's also not gotten worse. What we are seeing in other pockets of the country where we don't have this illicit market issue is a significant closing of competitor stores. This is something that I've talked to you about and other analysts as well. We had actually discussed how we should be able to raise margins in the second half of this year, fiscal 2025, and that is clearly starting to happen. So we're right on target with our predictions. It’s not happening in Toronto and Ottawa, but there's no further deterioration in those markets, which is good news. However, in smaller markets where competitors are quickly closing, we can now raise our margins, and I think this trend will continue moving forward.

Perfect. And then a second question on your e-commerce platform. So there's a significant drag on adjusted EBITDA from e-commerce. I guess, you mentioned that you're looking at that segment, and everything is on the table. So just what’s the point where you think it might not be worthwhile to pursue this strategy anymore? When might we start seeing results from that discount strategy? What could you shift to here in terms of making that segment profitable or even exiting CBD e-commerce entirely?

Yes. So Fred, let me start by saying that e-commerce is a negligible division at this point with only 3% of our consolidated revenue. However, we continue to see strategic value in this segment as it helps us to get more customers in the U.S. and Europe for the inevitable legalization. We know federal legalization will eventually take place, and we're able to onboard customers today through these platforms. So there's significant strategic value there. We've also aligned it with our global Cabana Club programming. So we continue to push ahead on our unbeatable prices and Cabana Club discount strategy, but it has been a challenge for sure. Fortunately, as I mentioned, it's a very small part of our business. We're in the process of advertising heavily to ensure that people know that it offers the best value on the Internet. Gross margins should remain around 30% as they have been over the past two quarters. But ultimately, we will be completely flexible to do whatever is required to maximize shareholder value, whether that means getting a leaner structure for our e-commerce divisions, putting them on hold and raising back pricing to hold them for federal legalization, or selling them entirely. Everything is on the table. We're not married to the e-commerce segment; we know what our core business is, and that has never changed. You can clearly see that our core businesses are thriving, with bricks-and-mortar business growing by 16% year-over-year. As soon as we turn off e-commerce or if it recovers—which it may very well do—you can anticipate a lot more EBITDA flowing back into the business, which will be an added bonus.

The next question comes from Matt Bottomley with Canaccord Genuity.

Raj, I just wanted to touch briefly on Germany. So I guess, first, just some of your prepared remarks regarding some relationships already with the LPs. Was this an exclusive commentary with respect to them being involved in this negotiation? Or whatever color you can provide there? And then secondly, just going back to some of the concerns regarding potential changes in telemedicine following Germany's election, what's happened since the last time you reported or the last time we chatted concerning that issue, or the overall market dynamics?

Matt, thank you so much for your question. Firstly, we had begun our license producer outreach when we initially announced that we might enter a transaction with Purecan. We reached out to multiple LPs, and the response we've received has been overwhelmingly positive. We have over 40 licensed producers who have already confirmed their willingness to do business through us in Europe, rerouting their offerings through our channels. Many of them have voluntarily expressed interest in exclusivity in Europe for their products. This is not partner-dependent in Germany. I can literally choose any partner in Germany, and nothing changes on the Canadian front. The relationships we have in Canada are tied to how much procurement we do and the long-term relationships we've established, and that has no direct impact on a particular German partner that we may select. Regarding your other question about the German political update, there's much to discuss. Germany recently swore in a new coalition government led by the Christian Democrats supported by the Social Democrats. The two parties don't currently see eye-to-eye on cannabis. The Christian Democrats campaigned on rolling back some of the previous government's reforms, while the Social Democrats have pushed back against those efforts. As a compromise, they’ve agreed to a joint review of the adult-use cannabis law in Germany, with initial findings expected this fall and a full report coming out next spring. The newly appointed Health Minister, also from the Christian Democrats, has expressed interest in tightening e-prescribing rules, especially from doctors outside Germany, which we believe is a fair move and should happen. Nevertheless, the industry view remains that it is very unlikely the government will reclassify cannabis as a narcotic.

Perfect. I appreciate that. And then just one more question for me. Just going back to one of the first questions in the Q&A here regarding your own in-house brands. You mentioned at the end of your remarks that a 10% allocation probably wouldn't upset any producers. So I’m curious, is that something we should anticipate a significant ramp in the near term or medium term? That would be margin accretive. What would be the obstacles to getting there, whether they are your own decisions or market dynamics?

Look, Matt, I've been asked this question quite a bit. I put 10% out there, but I can tell you that even if we reached 20% or 25% of our total offerings with the volumes we have and plans to expand to 300 stores, I don’t think our partners or licensed producers are concerned about that. I believe they’re completely okay with that situation. Like I said, I don't compete with my customers, and I'm not a grower myself. We don't intend to become that, and we intend to maintain our focus on the growers here in Canada. So, there is absolutely no issue on that front. We might even increase our in-house offerings to 20% or 25% in the long run. My point was that even reaching 10% wouldn’t trigger concerns from other LPs. We’ve been very thoughtful about creating unique offerings, like our Queen of Bud SKUs, which feature creative products like rose petal blunts and chamomile blunts that aren’t available in the Canadian market today. Queen of Bud is an extremely unique brand, and we're able to obtain upwards of 6% to 8% additional margin on some of the Queen of Bud products. We're very, very excited to launch more, and in fact, more products are already in the works. By the end of this summer, we will be introducing many more SKUs to the market, and it will continue rolling out from that point.

The next question comes from Andrew Semple with Ventum Financial.

Congrats on the solid Q2 results and also on reaching the 200-store milestone. I’d like to touch on something you mentioned earlier, Raj, about potentially exceeding 300 retail stores in Canada. I saw that the company tweaked its outlook in the press release previously. High Tide was aiming to reach 300 stores, which indicates you're increasingly confident about achieving that milestone. What are you seeing recently that supports this increased confidence? Additionally, have there been any changes in expectations on whether the majority of stores will be organically developed versus acquired as you look to possibly exceed the 300-store threshold?

Thank you, Andrew. As you know, we've disclosed our goal of reaching 300 stores for quite some time. While we're currently at 200, I have big dreams for the future. I believe we will surpass the 300 mark, but I prefer to reach certain goals before raising those targets. I see tremendous opportunity in Canada right now. As I’ve been mentioning in previous calls, we are witnessing heightened store closures among competitors. This is now happening, and we are seeing our store sales start to pick up rapidly, which has not been the case in recent years. This trend provides us with a tremendous opportunity to raise gross margins in many areas of the country. I have maintained that the 5-year leasing point is a crucial juncture for the industry, where operators must decide whether to endure continued losses or to exit the market. This shift is also beginning to happen now. Furthermore, we have positioned ourselves as the premier and largest cannabis retail brand in the country, and we are receiving excellent access to Tier 1 locations ahead of competitors. I currently have about a dozen locations under construction, and the 9 locations we built year-to-date were all organic. I also have a steady stream of more Tier 1 leases coming our way. We are very confident in our target, especially in Ontario, where we currently have only 82 stores, but 150 are permitted. We anticipate increasing our presence by another 70 stores in Ontario alone. In Alberta, which has been a mature market for us, we believe we can still add another 30 to 40 Canna Cabanas here. So there is immense growth potential available. Regarding your question about organic versus M&A growth, I believe that organic growth will dominate for a player of our size that is disciplined about what multiples we are willing to pay. Our focus is on pinpointing micro markets and targeted locations where we need to be. Many of our competitors are far behind us; thus, if we were to acquire those stores, we need to double or triple those revenues, and that’s not easily achievable if the location is not optimal. However, since we can secure high-quality Tier 1 locations for $260,000 in hard CapEx, with an additional $100,000 for working capital and inventory investments, we can continue to grow organically, day in and day out.

Great. I appreciate that additional color; that was very helpful. My follow-up here would be on some of the market dynamics. We've been hearing from a number of the Canadian LPs that domestic cannabis prices have begun to stabilize or even increase for the first time in years at the wholesale level. Are you seeing any higher prices for branded cannabis SKUs at retail yet? Or has that not materialized on store shelves quite yet? Additionally, what would be the impact on your business if we were to see a substantial increase in cannabis prices across the country? Not that we're necessarily expecting that, but I just want to hear your thoughts on whether that's positive, negative, or neutral for your business.

Absolutely, Andrew. The situation has improved considerably from a year ago. It took us 6 years to reach this point, and I have been vocal about our struggles with White Label products. By the time we would order and land the product, we often found ourselves at a disadvantage because the original SKU's prices would have already dropped. However, the current scenario is looking much more balanced, with exports playing a role. Many Canadian LPs are now exporting their products to Europe and other markets, and Canada continues to hold its position as the largest cannabis exporter globally. This is why we are so eager to enter the German market; we have the purchasing power and procurement expertise. Additionally, prices are stabilizing, which is beneficial not just for Canada but also for our licensed producer partners. We are likely to see a slight increase in prices moving forward since inventory levels are becoming depleted, and we are reaching a much better balance in supply and demand than we have seen in the last 6 years. This is promising for the expansion of our White Label offerings as well. It has been a significant challenge, but now we've established consistency, and we are ready to ramp up our White Label portfolio. We're confident that as the Canadian market stabilizes, we'll see beneficial effects on our margins.

There are no further questions at this time. Let me turn the call over to Mr. Raj Grover, Founder and Chief Executive Officer, for closing remarks. Please go ahead, sir.

Thank you, Angeline, and thank you to everyone for your interest and continued support for High Tide. We're very proud of what we've 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 for your participation. You may now disconnect.