High Tide stock still has huge upside, Beacon says

Beacon Securities analyst Doug Cooper said in an August 14 report that Calgary-based High Tide (High Tide Stock Quote, Chart, News, Analysts, Financials TSXV:HITI), which operates 103 cannabis retail stores in Alberta and Ontario, is entering the German cannabis market through the acquisition of a 51% stake in Remexian Pharma.

The analyst maintained his “Buy” rating on HITI and raised his price target from $5.75 to $6.50

For the six months ended March 2025, Remexian generated annualized revenue of €70-million with €15-million of EBITDA, a margin of about 21.5%.

High Tide is paying €27.2-million for its stake, or roughly 3.6x EBITDA, through a mix of 6.1 million shares (giving Remexian about a 6% stake in High Tide), $12.8-million in cash, and a $12.8-million vendor take-back note.

High Tide ended its last quarter with $35-million in cash, or $65-million including the recent $30-million investment from Cronos Group.

“As opposed to its terminated transaction earlier this year for Purecan, we believe this acquisition is much more significant in terms of scale and market position,” said Cooper.

He pointed to three factors: Remexian is more than four times larger than Purecan by revenue; it is not dependent on telemedicine, which derailed the Purecan deal; and it has significant market share, holding licences to import cannabis into Germany from 19 countries, including Canada. In Q2/F25, Remexian sold seven tonnes of cannabis flower, representing 16% of total imports into Germany.

Cooper called the deal a “Win (Canada) – Win (Germany)” for High Tide. In Canada, Remexian imports about 33% of its cannabis from domestic producers, compared with about 45% of all imports into Germany.

“High Tide is (by far) the leading cannabis retailer in Canada and as such, has leading relationships with all of the domestic LPs,” he said, adding that these relationships should give Remexian better access to quality Canadian product and more competitive pricing.

In Germany, since the 2024 passage of the Consumer Cannabis Act, the number of cannabis patients has grown from about 250,000 to nearly 900,000, with annualized revenues approaching €1-billion.

“While the German market is still much smaller than Canada, this acquisition gives High Tide access to the fastest growing cannabis market in the world that, at this time, has much better profitability metrics than Canada,” Cooper said.

The Remexian deal is expected to close in early September. For modelling, Cooper assumes an Oct. 31 closing, allowing for a full-year contribution in fiscal 2026. Based on a 10% growth rate on its six-month annualized run-rate, Remexian would add €71-million in revenue ($114-million) and $24-million in EBITDA next year on a consolidated basis, with the 49% High Tide does not own reducing the net contribution to about $12-million.

Cooper said that High Tide should do $29.1-million in adjusted EBITDA on revenue of $587.5-million in fiscal 2025. Cooper raised his fiscal 2026 forecast to $768.6-million in revenue and $55.6-million in EBITDA, from $654-million and $43-million previously.

“We believe this is an excellent and cost-effective entry into the fastest growing cannabis market in the world and gives HITI a platform for further European expansion,” he said.

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