💸 The Tape

High Tide just delivered the kind of quarter that makes you wonder why this company doesn't get more attention — and then you remember the stock price, and the frustration starts to make sense.

The Canadian cannabis retail leader reported record Q2 fiscal 2026 revenue of $179.3 million, up 30% year-over-year — the fastest growth rate in 11 quarters — marking the fourth consecutive all-time revenue high. Gross profit hit a record $48.4 million, up 36%. Adjusted EBITDA reached a record $13.9 million, up 73% — the fastest EBITDA growth in nine quarters. Income from operations surged to a record $6.1 million, up 554% year-over-year. And the company posted positive net income for the first time in recent memory, swinging from a $2.8 million loss a year ago.

CEO Raj Grover has been saying for years that the model would compound. This quarter, the numbers finally started proving it at scale.

The Canadian Retail Machine

High Tide's core Canadian business continues to operate on a different level than virtually every other cannabis retailer in the country. The company's 224 Canna Cabana locations (with four more under acquisition) generated 1.9x the revenue of peer stores during the quarter, while maintaining 12% national market share — rising to 14% when excluding British Columbia, where retailers are capped at eight stores.

The Cabana Club loyalty program has surpassed 2.65 million members, up 39% year-over-year, with ELITE tier membership growing 84% to over 178,000. In the last twelve months alone, the program added 750,000 new members. It remains the largest cannabis loyalty program globally and serves as the flywheel that drives repeat visits, higher basket sizes, and the kind of customer data that informs everything from store placement to product assortment.

Same-store sales dipped 1.2% year-over-year — a number that looks concerning in isolation but deserves context. The quarter had three fewer days than the comparable period, and High Tide believes it still outperformed both publicly traded and private peers. Since launching its discount club model in October 2021, same-store sales at Canna Cabana are up 161% while the average Canadian cannabis operator has experienced a 7% decline. That's not a marginal outperformance — it's a completely different trajectory.

Annualized retail sales per square foot were $1,620 across the network — a figure that, as Grover has repeatedly noted, exceeds many best-in-class international retailers outside of cannabis.

Germany: The Growth Engine Nobody Expected

If the Canadian retail story is about disciplined execution, the German medical cannabis story is about explosive scaling — and it's happening faster than even management anticipated.

Remexian, High Tide's German medical cannabis distribution subsidiary, delivered a record 7.6 tonnes of medical cannabis into the German market during the quarter — up 49% year-over-year and 21% sequentially. That volume propelled Remexian to record segment revenue of $31.6 million, up from $25 million in Q1.

The margin improvement was even more dramatic. Remexian's gross margin more than doubled from 12% in Q1 to 27% in Q2 — a swing that Grover attributed to the integration of Remexian into High Tide's broader supply chain, which eliminated intermediaries and reduced biomass procurement costs. He noted the company achieved key operational and financial objectives approximately 90 days ahead of internal expectations.

Remexian's market share of tonnage distributed in Germany now exceeds 14% for the three months ended March 2026 — a trajectory that started at just 6.5% in September 2025 and climbed to 10.3% by December. In less than a year, High Tide has gone from new entrant to the leading cannabis distributor in Europe's largest medical market by market share.

Grover signaled the ambition extends beyond Germany: "We are now eyeing other markets in Europe to build upon our global ambitions." With pharmaceutical-grade supply chain capabilities already built and German market leadership established, expansion into the UK, Poland, or other European medical markets becomes a natural next step.

The Financial Profile

Beyond the headline records, the underlying financial discipline is what makes High Tide's quarter stand out.

Gross margin improved to 27%, up from 26% a year ago and 25% last quarter — an eight-quarter high driven largely by the Remexian margin expansion. G&A expenses fell to 4.0% of revenue, a seven-quarter low. Salaries and benefits represented just 11.9% of revenue, improving year-over-year. The company is generating significantly more revenue while keeping operating costs remarkably contained.

Free cash flow was $1.5 million — below the $4.9 million generated a year ago, but that decline was driven by working capital investments to support growth, particularly in the Remexian scaling. Cash flow from operations before working capital changes reached a seven-quarter high of $8.8 million. Over the past four quarters, High Tide has generated $13.4 million in cumulative free cash flow.

Cash at quarter end was $36.5 million, and the company subsequently secured credit approval from Bank of Montreal for $40 million in credit facilities — a tier-one banking relationship that Grover called essential for fueling global expansion. In cannabis, where banking relationships have historically been difficult to establish, landing BMO as a senior lender represents a significant institutional endorsement.

The Stock Price Disconnect

This is where the frustration becomes palpable. High Tide is delivering record revenue, record EBITDA, record operating income, positive net income, expanding margins, a dominant loyalty ecosystem, and the fastest-growing medical cannabis distribution operation in Europe — and management has publicly accused unnamed parties of potential market manipulation, citing a recurring pattern over 10+ consecutive quarters where positive earnings are followed by stock price declines.

The company announced earlier this year it was retaining forensic investigators to examine the trading patterns. Insiders — led by Grover himself — purchased 90,882 shares on the open market in May at an average price of $3.39, putting personal capital behind the conviction that the stock doesn't reflect the business.

The Bottom Line

High Tide's Q2 fiscal 2026 is the quarter where the bull case crystallizes: $179 million in revenue growing 30%, $13.9 million in adjusted EBITDA growing 73%, positive net income, German market leadership, 2.65 million loyalty members, and a tier-one banking partner. The operational execution across both Canada and Europe is difficult to fault.

Whether the market eventually prices the stock to reflect that execution is a separate question — one that management is clearly tired of waiting for the answer to.

📈 Dog Walkers

$VFF ( ▲ 0.99% ) Adding 550k Sq Ft

Village Farms International is ahead of schedule on the expansion that could define its next two years of growth — and demand is the reason it's moving faster.

The company announced operational updates on its Delta 2 greenhouse expansion in British Columbia, where 550,000 square feet of its 1.1 million square foot D-2 facility is being converted to cannabis production. The first half of the expansion has already delivered a successful harvest, and cultivation has now commenced in the second half with an expected harvest date in late August.

More notably, Village Farms is accelerating planned technology upgrades — including lighting and other enhancements — that were originally scheduled for 2027. The company is pulling them into Q4 2026 in response to increasing demand from both domestic and international partners. CEO Michael DeGiglio emphasized that the acceleration won't require additional capital expenditure since the equipment was already purchased earlier this year.

That's the kind of operational detail that matters: meeting accelerating demand with infrastructure you've already paid for is the definition of operating leverage.

Once fully ramped, the D-2 expansion will add approximately 40 metric tonnes of annual dried, trimmed flower production capacity — expanding Village Farms' Canadian output by roughly 33%. Full production capacity is expected in Q3 2027, positioning the company for sustained growth through calendar year 2028.

For a company that already believes it operates the world's largest EU-GMP certified cannabis facility, the additional capacity feeds directly into the international medical cannabis pipeline that drove 171% export sales growth in Q1 2026. With Germany, the UK, Australia, and other European markets absorbing increasing volumes, the timing of the D-2 ramp aligns precisely with where demand is heading.

DeGiglio called the expansion a driver of "greater economies of scale" and "continued profitable sales growth." Given Village Farms' 43% gross margins and 118% EBITDA growth last quarter, the foundation to deliver on that promise is already built.

🗞️ The News

📺 Trade To Black

Trulieve's Major News, Canopy Continues The Turnaround, and Vireo Growth With Another Acquisition

• Canopy Growth Earnings: CEO Luc Mongeau breaks down Q4 revenue of $71.2M (up 10% YoY), 20% cannabis revenue growth, a 27% surge in Canadian medical sales, and a $300+ million balance sheet transformation from net debt to $131.3M net cash — with a target of positive adjusted EBITDA in fiscal 2027.

• Vireo Keeps Acquiring: The company announced a definitive agreement to acquire C21 Investments, adding 15 Nevada dispensaries and the award-winning Silver State Relief brand — the latest in a string of deals that now spans eight acquisitions across multiple states and industries.

• Illinois Omnibus Signed: Governor Pritzker signed SB 3222, which doubles possession limits, authorizes drive-through dispensary sales, bans intoxicating hemp for minors, and creates a pathway for adult-use operators to obtain companion medical licenses for DEA registration.

• State-Level Signal: The Illinois bill represents one of the most comprehensive cannabis reforms of the year — closing the hemp loophole, reducing regulatory burdens on social equity operators, and positioning the state's $1.5 billion industry for the post-Schedule III federal environment.