High Tide Welcomes Passage of First Pillar of Germany';s Cannabis Legalization Plan

Rhea-AI Summary

High Tide Inc. welcomes Germany's vote to legalize recreational cannabis, positioning the country as the second G7 nation to allow consumption and cultivation for adults. The approval sets the timeline for personal use by April 1, 2024, with social clubs operating by July 1st. The government plans to draft laws for commercial supply chains and cannabis specialty stores.

Insights

Market Research Analyst

The approval of recreational cannabis use in Germany represents a significant shift in the European cannabis market landscape. As one of the largest economies in Europe, Germany's decision to legalize cannabis for adult use could serve as a catalyst for broader acceptance and potential legalization in other neighboring countries. This development could lead to increased demand for cannabis products, influencing global production and supply chains.

From a market research perspective, this regulatory change opens up a new consumer market, which could significantly boost sales for companies like High Tide Inc. that operate within the cannabis industry. The establishment of a legal market in Germany might also attract new investments and partnerships, potentially leading to an increase in market capitalization for companies poised to enter or expand within the German market.

Furthermore, the 'social clubs' model, which is distinct from the more common dispensary model seen in North America, may require a tailored approach to branding and consumer engagement. Companies will need to understand the cultural nuances and consumer behavior in Germany to effectively capitalize on this new opportunity.

Legal Expert

The legislative progress in Germany is not only a cultural milestone but also a complex legal undertaking that will have implications for international trade agreements and domestic law. The introduction of 'pillar 2' of the legalization plan suggests a careful, phased approach to legalizing commercial supply chains and for-profit cannabis stores.

This phased approach may provide a framework for other nations considering legalization, potentially influencing international drug policy. Companies like High Tide Inc. will need to navigate the new regulatory environment, which will involve compliance with both German laws and any applicable international treaties.

Legal experts will be closely monitoring the drafting and implementation of the new laws to ensure that businesses can operate within the legal parameters while maximizing their growth potential. The legal landscape will also affect intellectual property considerations, as branding and trademarks in the cannabis sector become increasingly important in a competitive market.

Financial Analyst

The legalization of cannabis in Germany could significantly impact the financial projections for companies operating in the cannabis space. As the market opens, early movers like High Tide Inc. could experience a considerable uptick in revenue. This could translate into stronger financial performance, potentially improving their stock valuations.

Investors will be keenly observing how High Tide Inc. positions itself to take advantage of this new market. Strategic partnerships, supply chain readiness and market entry strategies will be critical factors in determining the company's ability to leverage this opportunity. The potential increase in competition as the market matures may put pressure on margins, making operational efficiency and brand strength key determinants of long-term success.

It's also important to consider the potential risks associated with regulatory changes. While the current outlook seems favorable, any delays or restrictions in the implementation of the legalization plan could affect expected financial outcomes for companies like High Tide Inc.

CALGARY, AB, Feb. 23, 2024 /PRNewswire/ - High Tide Inc. ("High Tide" or the "Company") (Nasdaq: HITI) (TSXV: HITI) (FSE: 2LYA), the high-impact, retail-forward enterprise built to deliver real-world value across every component of cannabis, welcomed today's vote in the German parliament to approve a bill making Germany the second G7 country to allow the consumption and private cultivation of cannabis for recreational purposes by adults. Today's vote sets the stage for Germany to begin implementing "pillar 1" of its legalization plan, which will see possession and cultivation for personal use permitted by April 1, 2024, and not-for-profit social clubs begin operation as of July 1st, 2024. The German government has indicated that it will now begin work on a draft law related to "pillar 2" of its legalization plan, focusing on regional adult use pilot projects supported by commercial supply chains and for-profit cannabis specialty stores.

"We are very excited about the potential to bring our first-of-its-kind innovative discount club model to Germany, which is the world's third-largest economy and a country with a population of over 83 million. That's why our team has been closely monitoring legislative developments in Germany ever since the ruling coalition government indicated its desire to move towards adult-use legalization in December 2021," said Raj Grover, Founder and Chief Executive Officer of High Tide.

"The passage of this bill is a historic moment as it makes Germany the second G7 country to legalize the consumption and private cultivation of cannabis for recreational purposes by adults, and sets the stage for the government to move forward with the second pillar of its plan which aims to set up regional adult use pilot projects focused on cannabis specialty shops. Our intention is to capitalize on this opportunity, given our deep experience and success through our unique and differentiated retail model, that we will seek to replicate in Germany as soon as legislation allows," added Mr. Grover.

ABOUT HIGH TIDE

High Tide, Inc. is the leading community-grown, retail-forward cannabis enterprise engineered to unleash the full value of the world's most powerful plant and is the second-largest cannabis retailer in North America by store count¹. High Tide (HITI) is uniquely-built around the cannabis consumer, with wholly-diversified and fully-integrated operations across all components of cannabis, including:

Bricks & Mortar Retail: Canna Cabana™ is the largest non-franchised cannabis retail chain in Canada, with 163 current locations spanning British Columbia, Alberta, Saskatchewan, Manitoba and Ontario and growing. In 2021, Canna Cabana became the first cannabis discount club retailer in North America.

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1 As reported by ATB Capital Markets based on store counts as of February 8, 2024

Retail Innovation: Fastendr™ is a unique and fully automated technology that integrates retail kiosks and smart lockers to facilitate a better buying experience through browsing, ordering and pickup.

E-commerce Platforms: High Tide operates a suite of leading accessory sites across the world, including Grasscity.com, Smokecartel.com, Dailyhighclub.com, and Dankstop.com.

CBD: High Tide continues to cultivate the possibilities of consumer CBD through Nuleafnaturals.com, FABCBD.com, blessedcbd.de and blessedcbd.co.uk.

Wholesale Distribution: High Tide keeps that cannabis category stocked with wholesale solutions via Valiant™.

Licensing: High Tide continues to push cannabis culture forward through fresh partnerships and license agreements under the Famous Brandz™ name.

High Tide consistently moves ahead of the currents, having been named one of Canada's Top Growing Companies in 2021, 2022 and 2023 by the Globe and Mail's Report on Business Magazine, and was named as one of the top 10 performing diversified industries stocks in both the 2022 and 2024 TSX Venture 50. High Tide was also ranked number one in the retail category on the Financial Times list of Americas' Fastest Growing Companies for 2023. To discover the full impact of High Tide, visit www.hightideinc.com. For investment performance, don't miss the High Tide profile pages on SEDAR+ and EDGAR.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release may contain "forward-looking information" and "forward-looking statements within the meaning of applicable securities legislation. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of such future events. The forward-looking statements herein include, but are not limited to, statements regarding: the ability of the Company to execute its expansion plans in Germany and the success thereof. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements. Although the Company believes that the expectations reflected in these statements are reasonable, such statements are based on expectations, factors, and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including but not limited to the risk factors discussed under the heading "Non-Exhaustive List of Risk Factors" in Schedule A to our current annual information form, and elsewhere in this press release, as such factors may be further updated from time to time in our periodic filings, available at www.sedarplus.ca and www.sec.gov, which factors are incorporated herein by reference. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement and reflect the Company's expectations as of the date hereof and are subject to change thereafter. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results, or otherwise, or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law.

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SOURCE High Tide Inc.

FAQ

What did the German parliament vote on regarding cannabis?

The German parliament voted to approve a bill allowing the consumption and private cultivation of cannabis for recreational purposes by adults.

When will possession and cultivation for personal use be permitted in Germany?

Possession and cultivation for personal use will be permitted by April 1, 2024.

When will not-for-profit social clubs begin operation in Germany?

Not-for-profit social clubs will begin operation as of July 1st, 2024.

What is the focus of 'pillar 2' in Germany's cannabis legalization plan?

'Pillar 2' of Germany's legalization plan will focus on regional adult use pilot projects supported by commercial supply chains and for-profit cannabis specialty stores.