Is High Tide Stock a buy? (January, 2025)

Following a new development, Ventum Capital Markets analyst Andrew Semple remains bullish on High Tide (High Tide Stock Quote, Chart, News, Analysts, Financials TSXV:HITI).

On January 13, HITI announced it had entered the German market by acquiring 51% of Purecan GmbH for approximately 4.8 million euros.

“I am thrilled to announce that High Tide is taking a significant step towards becoming a truly global cannabis company,” CEO Raj Grover said. “By acquiring a 51-per-cent stake in Purecan, including its European wholesale and import licence, its fully built warehousing and logistics infrastructure, and in-development telemedicine platform, we are strategically positioned to leverage our robust networks and relationships with Canadian licensed producers. With almost half of all German medical cannabis imports coming from Canada, this acquisition paves the way for us to emerge as a leading supplier of medical cannabis from Canada into Germany, potentially replicating our market share success in Canada.”

The analyst summarized the development.

“High Tide announced this morning that it is acquiring a 51% majority interest in German-based wholesaler Purecan, marking its first boot-on-ground entry into the nascent German cannabis market,” he wrote. “Purecan is a pharmaceutical wholesaler with a license to import medical cannabis into Germany and is also preparing to launch a telemedicine portal for cannabis patients. High Tide paid €4.8M to acquire this interest, comprised of common shares (€2.4M), cash (€1.2M), and a promissory note (€1.2M). We view this transaction positively, as it positions High Tide to be an early mover in the rapidly expanding German cannabis market. The transaction also offers significant synergy potential by combining High Tide’s existing Canadian LP relationships and wholesaling experience (in cannabis accessories) with Purecan’s warehouse and logistics infrastructure and local market expertise.”

In a research update to clients January 13, Sedmple maintained his “Buy” rating and price target of $8.50 on HITI, implying a return of 95.9% at the time of publication.

The analyst thinks the company will post Adjusted EBITDA of $37.8-million on revenue of $519.5-million in fiscal 2024. He expects 2025 number will come in at $35.4-million in Adjusted EBITDA on a topline of $585.3-million.