Zacks Small-Cap Research has initiated coverage of High Tide, a Canadian cannabis retailer listed in the U.S. It sees "plenty of growth levers" – from expanding the domestic retail network to making international acquisitions – and has assigned a target price that implies more than 80% upside.

Details

Michael Kim, senior analyst at Zacks Small-Cap Research, has started tracking High Tide shares, assigning a target price of $6 per share, about 82% above current quotes. Yesterday, September 9, the stock closed at $3.30 per share.

The company has "plenty of growth levers to pull," Kim argues, the main one being the acquisition of a 51% stake in Germany's Remexian in early September. This, High Tide founder and CEO Raj Grover said, marked "a transformational moment in High Tide’s journey as we officially plant our flag in Europe. With the closing of this majority acquisition of Remexian, High Tide is... now a global cannabis company with real scale in Europe’s largest federally regulated market."

Kim lays out other "growth levers." For example, even though High Tide’s Canna Cabana remains the largest retail cannabis retailer in Canada (about 12% market share), the industry is still highly fragmented. Kim expects High Tide's market share to reach 15% in "relatively short order."

Same-store sales (SSS) increased 132% between October 2021 and March 2025, whereas peers suffered a 10% decline in SSS on average during the same time period. In addition, the management remains focused on continuing to broaden the retail footprint, and recently reiterated the company’s goal of adding 20-30 new stores this year. 

Equally important, according to Kim, is the development of the Cabana Club loyalty program, which already has more than 2 million memberships in Canada, with participants accounting for more than 90% of daily transaction volumes. While the base program remains free to join, the company introduced a paid loyalty tier ("ELITE") in late 2022. From a financial perspective, ELITE members typically generate higher-dollar receipts with greater frequency.

Looking ahead

"Looking longer-term, we see a clear pathway for HITI to reach a $900+ million revenue run-rate over the next five years after factoring in seemingly conservative assumptions around organic growth for the legacy business, new store openings, and accelerating growth at Remexian," Kim argues. For context, the company reported revenue growth of 7% in 2024 to CAD522.3 million (about $376.9 million at the September 10 exchange rate).

Kim estimates that EBITDA will approach $90 million within five years (25% annual growth from the CAD38.3 million in 2024). He thinks High Tide will be profitable in the next fiscal year, which begins on November 1, with net EPS estimated at $0.09.

"High Tide’s strong balance sheet remains a key differentiating factor relative to most other U.S.-based cannabis operators that typically struggle to source capital to fund growth due to regulatory restrictions, with highly-dilutive financings often the only course of action," writes Kim. This is what held back the growth of Curaleaf, one of the largest U.S. medical marijuana producers, which ultimately went to Canada to raise capital. High Tide reported a 217% increase in free cash flow in 2024 to nearly CAD22 million.

Stock performance

Since the beginning of the year, shares of High Tide are up almost 8%. The name is covered by four Wall Street analysts, all of whom rate it a "buy," according to MarketWatch. The average target price of $5.39 per share implies upside of more than 63% versus current quotes.

The AI translation of this story was reviewed by a human editor.

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