High Tide Posts Record Q2 2027 Driven by German Medical Cannabis Sales

Revenue Climbs 47% Year-Over-Year on European Strength

High Tide's Q2 2027 revenue reached $121.3 million, a 47% increase from $82.5 million in the prior-year quarter. The Calgary-based multi-state operator attributed the jump to its German subsidiary Sanity Group, which contributed $38.7 million in the quarter—a threefold increase from Q2 2026. The company operates 14 Sanity Group dispensaries across Germany, capitalizing on the country's medical cannabis framework that took effect in April 2024 and expanded patient access significantly.

Domestic Canadian retail revenue grew 12% to $54.2 million. U.S. accessory sales through Grasscity and related e-commerce channels added $28.4 million. High Tide now operates 178 retail locations across Canada, Germany, and the United States.

Adjusted EBITDA Turns Positive for Third Consecutive Quarter

The company posted adjusted EBITDA of $4.1 million, marking its third straight profitable quarter on that metric. High Tide CEO Raj Grover said the milestone reflects improved operational efficiency as the company scales its European footprint. Net loss narrowed to $2.8 million from $9.1 million a year earlier, driven by reduced SG&A expenses and higher gross margins in the German medical segment.

Gross margin expanded 340 basis points to 38.2%. German operations contributed disproportionately—Sanity Group posted a 44% gross margin compared to 35% for Canadian retail. The company attributed the gap to Germany's pharmacy-model pricing structure and lower patient price sensitivity in the medical market.

Germany Now Represents 32% of Total Revenue

Sanity Group's $38.7 million in Q2 sales represented 31.9% of consolidated revenue, up from 18% a year ago. High Tide opened four new German locations in the quarter and plans to reach 20 dispensaries by fiscal year-end in October 2026. The company cited Germany's 1.5 million registered medical cannabis patients—a figure that's doubled since legalization—as a tailwind for continued expansion.

The cleanest read on High Tide's strategy is this: the company's arbitraging North American retail saturation by deploying capital into undersupplied European medical markets where patient counts are growing faster than dispensary infrastructure.

Management disclosed on the earnings call that same-store sales in Germany grew 89% year-over-year, compared to 6% in Canada. That divergence underscores the maturity gap between the two markets.

U.S. Accessory Business Faces Headwinds

High Tide's U.S. e-commerce segment, anchored by Grasscity and related brands, posted flat revenue of $28.4 million amid softening consumer discretionary spending. CFO Nick Kuzyk said the division faced margin pressure from promotional activity and higher customer acquisition costs. Gross margin compressed 220 basis points to 41.8%.

The company doesn't operate THC retail in the United States due to federal prohibition, limiting its U.S. exposure to ancillary products and CBD. Management said it continues to monitor U.S. federal rescheduling developments but has no immediate plans to enter state-licensed markets.

Balance Sheet Strengthens with Debt Paydown

High Tide reduced total debt by $8.2 million in the quarter to $43.6 million, lowering its net debt-to-adjusted EBITDA ratio to 2.7x from 4.1x a year earlier. The company refinanced a $15 million credit facility in July at a 200-basis-point lower rate, cutting annual interest expense by an estimated $1.1 million. Cash and equivalents stood at $18.9 million at quarter-end.

The debt reduction came despite $6.3 million in capital expenditures, primarily for new store buildouts in Germany. High Tide expects to be free-cash-flow positive on a trailing-twelve-month basis by Q4 2027.

Outlook: 25 German Locations by Mid-2027

Management guided to 25 Sanity Group dispensaries by the end of fiscal 2027, implying 11 net new openings over the next four quarters. The company projects German revenue will exceed $180 million on an annualized basis by that milestone, representing roughly 38% of total sales. High Tide didn't provide consolidated revenue guidance but reiterated its target of double-digit adjusted EBITDA margins by fiscal 2028.

The next catalyst: Germany's parliament is expected to vote in November 2026 on a bill to expand recreational cannabis sales through licensed retailers, a framework that could accelerate Sanity Group's growth if passed. For full background on High Tide's earnings trajectory and European expansion, see the CannIntel topic hub on High Tide (HITI) Earnings & Performance.