Raj Grover, CEO at High Tide, is not only Canada's biggest non-franchised cannabis retailer but also one of the world's savviest consumer focussed operators in the entire industry. Raj returns to the podcast, and we catch up on two-plus years of consolidation, growth and acceleration in Canada and beyond.
Welcome to The Voice of Retail. I'm your host Michael LeBlanc. This podcast is brought to you in conjunction with Retail Council of Canada.
Raj Grover, CEO at High Tide, is not only Canada's biggest non-franchised cannabis retailer but also one of the world's savviest consumer focussed operators in the entire industry. Raj returns to the podcast, and we catch up on two-plus years of consolidation, growth and acceleration in Canada and beyond.
Thanks for tuning into this special episode of The Voice of Retail. If you haven’t already, be sure and click subscribe on your favourite podcast platform so new episodes will land automatically twice a week, and check out my other retail industry media properties; the Remarkable Retail podcast, the Conversations with CommerceNext podcast, and the Food Professor podcast. Last but not least, if you are into BBQ, check out my all new YouTube barbecue show, Last Request Barbeque, with new episodes each and every week!
I’m your host Michael LeBlanc, President of M.E. LeBlanc & Company & Maven Media, and if you’re looking for more content, or want to chat follow me on LinkedIn, or visit my website meleblanc.co! Have a safe week everyone!
I’m your host Michael LeBlanc, President of M.E. LeBlanc & Company & Maven Media, and if you’re looking for more content, or want to chat follow me on LinkedIn, or visit my website meleblanc.co! Have a safe week everyone!
About Raj
Since starting his first company at the age of 22, Raj has established himself as one of Canada’s foremost business strategists and deal makers. He is the founder of High Tide and its subsidiary companies of Valiant Distribution and Canna Cabana, while also being the co-founder of High Tide’s subsidiary, Famous Brandz.
Through organic growth and strategic acquisitions, Raj has grown High Tide from one small shop of 2 employees in 2009, into one of Canada’s largest cannabis retailers with over 1,000 amazing team members and business interests spanning North America and Europe.
While committed to building a strong, profitable, and sustainable business, Raj also believes passionately that those who enjoy success hold a particular responsibility to give back. That is why he has spearheaded High Tide’s support for World Vision that has seen the company sponsor a growing number of children from developing countries. This support has grown substantially since its inception, from the initial sponsorships of three children in 2006 to over 250 sponsorships in 2022. Under Raj’s leadership, this number will continue to grow.
On a personal level Raj has also been a long-time supporter of Operation Smile, an organization that works to deliver free, safe cleft surgery to children in need saving them from a lifetime of pain and isolation.
About Michael
Michael is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience and has been on the front lines of retail industry change for his entire career. He has delivered keynotes, hosted fire-side discussions with C-level executives and participated on thought leadership panels worldwide. Michael was recently added to ReThink Retail’s prestigious Top 100 Global Retail Influencers for a second year in 2022.
Michael is also the producer and host of a network of leading podcasts, including Canada’s top retail industry podcast, The Voice of Retail, plus the Remarkable Retail with author Steve Dennis, Global E-Commerce Tech Talks and The Food Professor with Dr. Sylvain Charlebois. Most recently, Michael launched Conversations with CommerceNext, a podcast focussed on retail eCommerce, digital marketing and retail careers - all available on Apple, Spotify, Amazon Music and all major podcast platforms. Michael is also the producer and host of the “Last Request Barbeque” channel on YouTube where he cooks meals to die for and influencer riches.
Michael LeBlanc 00:05
Welcome to The Voice of Retail. I'm your host, Michael LeBlanc and this podcast is brought to you in conjunction with Retail Council of Canada.
Michael LeBlanc 00:11
Raj Grover, CEO at High Tide is not only Canada's biggest non-franchised cannabis retailer, but also one of the world's savviest consumer focused operators in the entire industry. Raj returns to the podcast, and we catch up on two-plus years of consolidation, growth and acceleration in Canada and beyond.
Raj Grover 00:28
Yeah, so look, the good news is that elicit is still sitting at 40%. As much as it hurts me every day, I still think that this number is a massive number that will come back in the legal fold. You know, I'm very hopeful that as the industry continues to mature, competition will eventually level out the legal competition, as you know, some of the pockets where things are oversaturated, let's say in Toronto, and then also the illicit share will continue to go down as the quality gets better. The prices have already come down rock bottom, we have very competitive price points being offered by, by the licensed growers and manufacturers. So, we know on that side were really good. So, I'm very hopeful that the listed shares will continue to go down, making bricks and mortar cannabis retail landscape legal landscape much, more healthier.
Michael LeBlanc 01:15
Raj, welcome back to The Voice of Retail podcast. How are you my friend?
Raj Grover 01:18
Michael, it's great to be back and chat with you. Thank you for having me.
Michael LeBlanc 01:22
Well, it's been a couple of years. I think the last time you and I spoke together and together for the podcast was at the Retail Councils Cannabis Forum, but it is great. I'll, li-, a few things have happened since then, 20, - was that 2019? So, I'm really excited to catch up, you guys have been doing such amazing things. So, thanks again for making the time to, to chat with me.
Raj Grover 01:43
Absolutely. You know, I always say cannabis years are like dog years, you know, 2019 to 2022 can make a big difference and you know it.
Michael LeBlanc 01:51
Absolutely. Now, where am I finding you today?
Michael LeBlanc 01:54
I'm in the Calgary office.
Michael LeBlanc 01:55
I know you well, not everyone may know you as well as I, or may, they may recognize the brands but not know enough about the business. So, why don't we start about you. Tell us a bit about yourself, and then tell us all about High Tide. Now i, i, It's a really interesting organization. So, help me help me and help the listeners kind of unpack High Tide?
Raj Grover 02:15
Sure, sure. So, as you may know, Michael, I, I grew up in Mumbai in a middle-class family and started learning about business at an early age from my father. So, you know, starting at the age of 14, I started spending many of my summers in his office, just learning more about his business. And as I come from a family of business owners, which is my father, my, my uncle, my grandfather, they've all been businesspeople all into export import. So, I've also always kind of had a very keen interest in business in general. And, you know, I, I took this interest in, in, learning my father's export business, and that's where I was exposed, exposed to international trade.
Raj Grover 03:02
And then I arrived in Canada with an ambition to start my own business and started my first retail store at the age of 20, 20, at the age of 22. And following that, I also successfully launched some other small businesses in Ontario, you know, including investing in real estate. And then after that, I moved to Alberta and started an independent smoke shop called Smoker's Corner, and then organically built that chain to 19 stores at its peak, out of which 10 were franchised and nine were corporate stores. We were always also the first franchisors in the space at that time in the smoke shop space to launch a franchise model.
Raj Grover 03:41
And then also in 2011, I founded RGR, Canada, which is Valiant Distribution today and at, at Valiant, we design, manufacture and distribute consumption accessories. And then in 2016, I co-founded Famous Brandz and secured celebrity and studio licenses to manufacture licensed consumption accessories. Then with federal legalization of cannabis on the horizon in Canada. Coming up, I blended all of these operating companies, Smoker's Corner, RGR, Famous Brandz into High Tide, into High Tide Inc. and took it public on the CSC in December of 2018.
Michael LeBlanc 04:21
Well, what a what a fast ride and now do you trade outside of Canada? Because I think I seem to remember that your core business also had US presence is that am I remembering that correctly?
Raj Grover 04:33
Oh, we do now? Yes, we have major exposure in the US through our eCommerce platforms at the moment. And we do trade, we do business outside of Canada and we are also trading on the NASDAQ Stock Exchange and the Toronto Stock Exchange Venture as well as the Frankfurt Stock Exchange.
Michael LeBlanc 04:51
It's fantastic. I mean I, I always tell people when they when they look at cannabis retailers to look at at High Tide as an example because you were you remind me of catalog retailers before eCommerce, you were in the space before legalization, operating as a, as a retailer and a manufacturer and private label. So, you, you came to it with a lot of experience. You were just a startup that, that saw an opportunity, you saw that as an opportunity, but like a decade before, right?
Raj Grover 05:19
I think that's what makes a big difference between High Tide and other operators, Michael, I find myself in a very fortunate position to have had, had this industry experience starting in 2009. You know, this is over a decade of very valuable experience, which we were able to leverage in all facets of High Tide. And you know, just knowing your customer this intimately for this long has really helped us differentiate where we are today versus a lot of our peers. So, you know, that's that experience has definitely helped us to be where we are today.
Michael LeBlanc 05:51
Yeah, it was always my sense that you had a very good grasp of the of the customer going in if we're just speaking about legalization of retail cannabis, and, and we'll get more into that. But you already had a grip on the customer. And more importantly, it felt like you had an idea of where you wanted to live and retail in that space. Because you remember back in the early days, there was some you know, we're going to be the apple of cannabis stores or we're going to be a bespoke and, and you had a very particular brand identity and customer in mind when you went to market, yeah.
Raj Grover 06:23
Oh, no doubt. And you know that, that differentiation and that understanding of who our customer is, is how we tailored this entire High Tide ecosystem especially the Canna Cabana brand, Michael because you know, we I am very proud of this very unique retail cannabis experience we have created through our discount club model in Canna Cabana. But it's, it's genuinely a, a makeup of all of the years that we spent, you know, servicing this customer that is passionate about consumption accessories and understands cannabis for not just for not just you know, since legalization, even prior to legalization.
Raj Grover 07:04
We always knew who our customer was, you know, I saw a lot of our peers going towards, you know, we're going to sell to the soccer moms and the baby boomers and everybody else, but hey, they are not the ones purchasing cannabis today, you have to educate them, you have to bring them in the system. And I'm, I'm not saying that customer segment is negligible, or we shouldn't be paying attention to but let's not forget, you know, who is your core cannabis customer? So, we have a very deep understanding of that. And that is a reason why I, I see us tasting success today, you know, ahead of our competitors.
Michael LeBlanc 07:38
Yeah, I, I, often described you as having, and it's maybe not the right description, but kind of patient money, like you knew, it felt like you knew where the industry was, well, as much as any of us know, where the industry is going to evolve and the consumer are going to evolve too but you needed to start with a strong foundation, right? Because I, I, I would, I would I get that sense from the stores that I'm in that in how you get to retail, we need a strong foundation, and then we'll evolve as the market evolves, right?
Raj Grover 08:07
Absolutely. Like we, we always knew where our strength was, you know, we were designing and manufacturing and distributing consumption accessories, since 2011. And we know the customers that, that purchase these accessories, and you need some type of accessory to facilitate the use of cannabis. So, we leveraged that part of our business really well. Michael, if you go to our stores, and I'm sure you visited some stores, like you said, you can see our retail layout, it's very, very shoppable. It's very appealing, you know, it speaks to your at every touch point.
Raj Grover 08:37
And we carry, you know, upwards of 500 Additional skews than any given next competitor. And that again, you know, th-, this comes from our deep experience of knowing the customer on how they shop. What do they prefer? What do what do they want to see in cannabis stores, not from just a concept that, oh, cannabis is legalizing in Cana-, Canada, and it's going to be just another retail store. So, you know, we could do it this way or that way. We did it through experience through past experience that we gained from the Smoker's Corner setup. Now, you know, we have 19 stores at its peak, and we basically service the most mature and heavy users of cannabis through to all the consumption accessories.
Raj Grover 09:20
Yeah, it was a very direct analog for what the market and how the market was going to evolve. So, let's, let's, let's talk about the retail component, the retail cannabis component because you're you've mentioned Canna Cabana, but walk our listeners through the scope and scale of the retail cannabis business today and some of the brands and that's been evolving as the market has evolved, you've taken the opportunity to, to enhance the portfolio. Take us through that for a little bit.
Raj Grover 09:45
Sure. So, we've, we've definitely evolved as a story. So, you know, just to give you a big bit of a background High Tide is made up of various subsidiary companies that have retail focused operations in both bricks and mortar and through eCommerce platforms. We operate in three main business segments Michael, that is THC, CBD and consumption accessories. We are the largest non-franchised bricks and mortar cannabis retailer in Canada through our Canna Cabana brand with a portfolio of 139 locations operating across five Canadian provinces, which are Ontario, Manitoba, Saskatchewan, Alberta and British Columbia.
Raj Grover 10:26
We also acquired two of the most popular CBD brands in the US last year Michael, which were FAB CBD and NuLeaf Naturals. Both have been in business for many, many years, especially NuLeaf has been a leader in cannabinoid science since 2014. And then we also acquired Blessed CBD out of the UK. And all these companies, you know, they are all they all sell direct-to-consumer from their online platforms, and third party platforms such as Amazon, we also acquired brasserie.com, in December of 2018.
Raj Grover 10:59
So, we had started mapping out our strategy, even prior to entering public markets. And we acquired grasscity.com in December of 2018. And then we followed that up with Smoke Cartel, Daily High Club, and DankStop in 2021, you know, positioning us as three out of the top five most popular consumption accessory platforms in the world. So, over the many years, you know, we, we've secured almost 3 million customers in our database, out of which 80% of these customers reside in the US giving us a great opportunity to sell THC products when federal legalization occurs.
Michael LeBlanc 11:35
Yeah, very, very interesting. And then on the retail side, I think your last partnership or acquisition was Choom, Corey's great business that he built up. But that's not your only one. Talk a little bit about that.
Raj Grover 11:48
Yeah, Choom was a, a really great acquisition for us. You know, we, we again, you know, I'd like to think that not only do we execute, you know, we've also been getting some really good opportunities come inbound into us. So, Choom, unfortunately went into CCAA proceedings. And, you know, we had the opportunity to take out Choom even prior to that, but just looking at the Choom portfolio, and where the locations existed in the amount of locations that are not performing really did not make any sense, you know, to, to take the company out at that time. And then when they went into CCAA proceedings, we were able to cherry pick, you know, nine out of the 17 locations that we wanted and one of them are, is Niagara Falls, Ontario, (crossover talk), -
Michael LeBlanc 12:36
I was going to say, you know what it's funny, you mention-, it's funny, you mentioned I was going to ask you about the Niagara Falls one because I know that I know the backstory behind that one. And that's the one I'm most familiar with. And it's a beautiful store in a nice mall off a highway. Like, I feel like, if there's a formula, they had a pretty good location there. So, I'm happy you picked it up?
Raj Grover 12:53
Oh, yes, it's a it's a beautiful store, kind of, you know, situated with other outlets, which very much goes with our personality, what we're trying to do with a discount club model. And, you know, believe it or not, (inaudible), we're both vying for that, for, for that deal with the lottery winner at that time for the Niagara lottery winner, we ended up getting the most, we got three out of the 25. We got Hamilton, Young Street in Toronto, and then Sarina Ontario. And she was able to pick up this Niagara Falls location, which has done extremely well for them.
Raj Grover 13:27
So, for that to come back in a lives turns a full circle and comes back to High Tide. I felt pretty good about that. So, we were able to get that, that location in Niagara Falls, six locations in Alberta, you know, mostly in places where we don't have presence today. So, that really worked out in small town, Alberta. And then we also got two locations in Vancouver, which I'm very excited about. Because, as you know, Michael, you know, BC has been a tough entry for us. First, we have to wait a very long time, because our business kept on evolving and had to pass all the regulatory hurdles in BC. But I am so excited to start servicing our friends in BC now and get to amazing two locations in Vancouver to start with.
Michael LeBlanc 14:11
Yeah, now I think there's also a bit of chop happening in BC, right? There's some disruption in the distribution happening. So, it's never a dull day in retail cannabis, right.
Raj Grover 14:20
Never a dull day. And you know, what happened at OCS, -
Michael LeBlanc 14:23
Yeah, -
Raj Grover 14:24
Just before that just resolved that and, you know, there's, there's never a dull moment in cannabis.
Michael LeBlanc 14:29
So, you know, when we think about your ability, and I think it's kind of nested in our conversation, the, the strategy and the patients and the experience but you know, when you look at the overall cannabis market is, is it that the combination of those things, the operating expertise, that has allowed you to kind of, you know, not just survive but also thrive, spoken or asked differently? So, you know, there's some coll-, obviously consolidation happening in the market. They can't, not all operators can win is, Is it is it those, those three things primarily that's led to your, your success and your I guess we'd call it longevity, though, you know, relatively speaking, you're, you're a, a newbie retailer, but in this space, you got a lot of veteran experience and operating experience. So, is that what sets you a, a as High Tide apart?
Raj Grover 15:15
You know, having this experience like we discussed just a few minutes ago, Michael, I think is priceless. You know, we've definitely navigated through a few storms to, to get where we are today operationally, given the challenges of the broader cannabis industry, and especially the Canadian cannabis industry that we continue to continue to face as Canadian cannabis industry. So, you know, I, I would say that the secret to our business success has been our strategic and innovative thinking, and a very keen focus on what the customer wants. You know, I keep coming back to the customer, because it's a really important point, a as we know, and understand our customer since 2009. And, you know, we know what they like and, and how they shop, and, and you know this deep understanding of our customer has led us to even launch our innovative discount club model, which continues to propel our growth. You know, on a monthly basis, we just continue to, to grow in every market where we exist, even in our, sa-, same store sales basis, which is an extreme rarity in Canada. As you know, Michael, you know, and, and this is all while our peers continue to face fierce challenges, or they're slowing down. But you know, that is just not the case with High Tide.
Michael LeBlanc 16:23
Yeah. And these acquisitions seem to be wh-, what the finance folks call them (inaudible), right? They, they, they're, you're not growing for the sake of growing, you're growing to, to make yourself more, more, more stronger in the markets that you care about. A question for you. So, you know, if we think about cannabis in phases, or let's say if you're a baseball fan in innings, what inning do you think we're in right now? I mean, it's been a couple of years, three years since legalization. Where, where do you see the market? I mean, there's, yeah, of course, it's complicated, because province by province is a bit different. But in your mind what inning are we in the in the retail cannabis space.
Raj Grover 16:58
So, the retail cannabis industry in Canada is, is definitely hitting saturation levels. In most provinces in the country, Michael, it's, it's surely a mature landscape here in Alberta where I am and also in Ontario, but also other provinces are quickly catching up like Manitoba and Saskatchewan, there's still opportunity and a good amount of opportunity that remains in BC. But having said all that, you know, there are still pockets of opportunity that remain in these provinces, Alberta, Ontario, Saskatchewan and Manitoba. Ontario is still a big opportunity for us, we still have a potential to add another 30 stores and, and you know, we are very much on it. But you know, the, the retail cannabis industry is no secret. You know, we've, we've continued to face competitive pressures not only from each other, like legal retailers facing competitive pressures from each other, but also facing major competitive pressures from the illicit market, which is, which is still approximately 40% of the total Canadian cannabis business. But you know, I'm very hopeful, (crossover talk), -
Michael LeBlanc 17:57
Where do you think that'll set-, out ra,- where Raj, where do you where do you know, where would you project that could settle out at in the fullness of time? Like, it's never going to be zero in the legacy, illegal market? But (inaudible) where do you what, what would be good in your mind? Like, what, what number? Do you have a number in your mind that you would say, listen, the market is sat-, you said saturated? So, at what point is the market saturated? Like there's no more growth from a percentage, you know, there's growth in where I am Mississauga, there's no cannabis stores here. So, there's obviously, -
Raj Grover 17:58
Right, -
Michael LeBlanc17:59
As you say, not in significant pockets of opportunity for locations. But when you think of saturation, and maximum, you know, from a consumption perspective, wh-, what do you have a number in your head? How do you think of that?
Raj Grover 18:38
Yeah, so look, the good news is that illicit is still sitting at 40%. As much as it hurts me every day, I still think that this number is a massive number that will come back in the legal fold. You know, I'm very hopeful that as the industry continues to mature competition will eventually level out the legal competition. It's, you know, some of the pockets, where things are oversaturated, let's say in Toronto, and then also the illicit share will continue to go down.
Raj Grover 19:04
As the quality gets better, the prices have already come down rock bottom, we have very competitive price points being offered by, by the licensed growers and manufacturers. So, you know, on that side, were really good. So, I'm very hopeful that the listed share will continue to go down making bricks and mortar cannabis retail landscape legal landscape much more healthier.
Raj Grover 19:23
So, I know that you know, I can't I wish I could tell you that, Michael, I see this drastically changing on the illicit front next year. But I definitely think that, you know, every year we're going to make a solid dent into it. So, in two, three and a half years, four years since legalization. We've lost we've gained about 60% of market share from illicit, we've got another 40 to go so my guess my educated guess would be maybe another two years or so we come down to 15 to 20%. And that (inaudible) is going to make a lot of difference, Michael, -
Raj Grover 19:57
And I guess it's also it's also time but it's also we need some regulatory support, right? Like in a province like Ontario where, you know, the distribution and online, I guess we got a little bit of help from, ironically from the COVID era, because we had home delivery in Ontario that didn't really exist prior too, right. So, I think there's, there's also those extraneous factors that I think we need to help push that push us where we need to be right?
Raj Grover 20:21
Well, definitely, I think the regulatory landscape plays a massive role, you know, in the success or failure of the industry and where the industry goes, and how fast it goes. So, you know, I would always say the governments really need to take Canada as an example, the other, other countries need to look at Canada's legalization rollout as an example. And not make the same mistakes that have been made in Canada. And you know, to, to our defense here, we're the first major G7 country to legalize it. So, of course, we're going to take it slow and go through some hurdles.
Raj Grover 20:53
But you know, there's many, many lessons that can be learned from, from the rollout of a of recreational cannabis in Canada, for example, you know, the excise taxes that are in play, and how quickly do they come into play? You know, at the same time, how do we treat cannabis businesses in comparison to other retail businesses.
Raj Grover 21:13
Another thing I can talk about quickly here is, you know, the edibles THC limit that we have to deal with at 10 milligrams while illicit market can go up to 1200 milligrams, there's no comparison to that. So, you know, we as legal retailers end up getting three to 5% of the edible market share, when the real market share that we see in the US is sitting somewhere around 15% and heading towards 20%. So, massive opportunities remain. The good news is companies like High Tide have set up their infrastructure, we've learned, you know, we've learned how to fight the battle in a very tough (inaudible). And now we're ready for, for the international games to begin.
Michael LeBlanc 21:52
Well, I love it. It's, it's a, it's definitely a glass half full or the bong half full. I guess I could say in the context, I can do that all day. Let's, let's talk about some product for a while because you're deeply entrenched in product, we've touched on it, but it to do it good justice. I mean, you've, you've got a depth of expertise in developing products to talk about what's, what's new, and talking about private label products? And, and what's the strategy? And how does it fit into you know, we get to a good, better, best, and what the kind of the, what can you what can you share about the private label product strategy?
Raj Grover 22:23
Sure, so the quality and variety, you know, that's available at the various provincial boards today, has, has gone up quite a bit, right, as a result of this huge increase, as a number of licensed growers have increased, also manufacturers and processors have increased. So, you know, at the moment, I'm happy with the product quality and availability at these provincial boards that we have to buy from, it's not bad at all.
Raj Grover 22:49
You know, the, the other thing that's really working in our favor, Michael is our 13 years of experience in, in manufacturing, high quality consumption accessories, which is a huge, (inaudible) contributes towards our success. So, you know, we've always been no, we we've always known that if we take care of our customer by offering superior quality products at great prices, we will eventually win and retain their business. And we always stuck to this philosophy. And this is why, you know, we, we proudly manufacture some of the highest quality consumption accessories, and we sell them at unbeatable prices.
Raj Grover 23:23
And then on top of that, we also own three of the most popular CBD brands that our customers love in the in the US and UK with plans to introduce these brands in Canada as regulations evolve. I'm sure you know, you're hearing how Canada's (inaudible) on, on CBD, they want to reevaluate that.
Raj Grover 23:42
And then, you know, on the second part of the question about our own white label, I'm also very excited about our recent launch that we disclosed of Cabana cannabis co-branded products, which, which include pre-rolls, pink combine shatter and gummies in the market today.
Raj Grover 23:59
And we also have an additional approximately 10 skews under development that includes cartridges infused pre-rolls, ounce bags, you know, multi-cannabinoid formulations of THC oils, and, and soft gels. So, we have a ton of exciting stuff under development. And you know, we call these products our greatest space, and rightfully so, because these products are tried and tested winners that we have cherry picked from our cabana analytics data, we wanted our customers to know, you know, to be assured of the quality and performance of these skews. So, we are motivated to introduce the very best (inaudible) cannabis and of course at unbeatable prices, of which is really our team, we're going to get you the best quality products at the best prices. And we plan to launch these additional skews that are under development in Saskatchewan, Manitoba and Ontario in the coming months.
Michael LeBlanc 24:50
Oh, fantastic. And let's, let's turn our minds for a few seconds to the U-, the US market. I mean the New York State legalization could be make that a very huge market. It's always easier said than, than done. How are you thinking about the New York market and, and the US market in general from, from your perspective from your opportunity for High Tide?
Raj Grover 25:11
So, you know, hugely populated states, like California and New York have started to, you know, legalize rec-, cannabis recreationally. I believe we are up to 19 states in the US now where one can purchase recreationally. And in my opinion, you know, full federal legalization is only a question of when, not if, but I don't see this happening for the next three years or so as we know that the current US Congress cannot get aligned on this issue, Michael.
Raj Grover 25:38
And, and then due to the regulated nature of the cannabis industry, brick and mortar stores, are and will remain the primary source of cannabis purchasing for their customers with eCommerce and delivery making up I think, approximately 20 to 30%. Of course, this is just my opinion of the overall retail (inaudible) and the retail industry hits it's majority in the US.
Raj Grover 26:00
So, you know, all the federal legalization presents a massive opportunity for a company like High Tide when it occurs, as we already have 3 million international customers in our database, out of which 80% live in the US, you know, we can convert these customers into THC purchasing customers upon legalization. But thankfully for High Tide our growth has not been has not been and will not be dependent on US Federal legalization due to our diversified retail portfolio, you know, that gives us exposure to a rapidly growing CBD and consumption accessory space, (crossover talk), -
Michael LeBlanc 26:32
That's, that's a, that's a super savvy approach. I mean, I, I was in the US, in July, we're talking to a bunch of folks in the retail tech industry. And they were asking, and we were talking about legalization. And I'm like, I, I it's tough in the States, I think because it's caught up in or tied up in social justice issues. And, and you know, it's more if it's just commerce, you know, the Americans would have legalized it long time ago, right. So, I think I think there's still a rocky road ahead, I agree three years plus.
Raj Grover 26:58
Yeah, totally. And, you know, it's both parties want to do that Republicans want to legalize canna-, de-, Democrats want to legalize, but they just can't get aligned on the social equity part, which we know will happen at some point. But the process needs to run its course. And I believe it's, you know, at least two to three years away.
Michael LeBlanc 27:17
Yeah, -
Raj Grover27:18
But you know, our like I said, Michael, our growth is not dependent on it. And this is evident in our strong financial results, including massive revenue and market share growth over the last three years, you know, for us, which has not slowed down, and I, I am really looking forward to sharing our progress when we report our third fiscal quarter in mid-September.
Michael LeBlanc 27:35
Oh, fantastic. All right, so it's a funny question to ask because there's so much going on. But what's next? Like what, when you, you get together with your leadership team, and you got the whiteboard out, what, what's next for you? Again, it's a funny question, because it's got so much going on. And there's a lot of next already happening. Maybe we've covered it, but you know, if you could summarize how, you know, you're thinking about opportunities, what, what's what jumps to the top of the list?
Raj Grover 27:58
So, Michael, as you can see, you know, the action never stops at High Tide, -
Michael LeBlanc 28:02
Yeah, -
Raj Grover 28:03
We're going to continue to keep our focus on our customers that have made us what we are today, right by introducing innovative products and concepts, which we've always done through our discount club model to the, you know, through the introduction of Cabana, cannabis core products. And, and you know, the, our customers have come to love these products. So, we want to keep our focus on that.
Raj Grover 28:22
We also want to continue to execute on our business plan, which is to gain retail market share in Canada quickly, so at a very rapid pace, both through organic growth, and a creative M&A, you've seen us do both, right. We've been building a ton of organic stores. And we've also been doing a ton of M&A, especially on the brick-and-mortar front. And this is to solidify our position as the number one non-franchised retailer in the country.
Raj Grover 28:47
And then, you know, this one is a really exciting one for me, Michael, and our investors, of course, we also plan to introduce Cabana Elite, in November or December of this year, which is a paid version of our Cabana Club Loyalty Program. Because, you know, since we introduced our discount club model, our loyalty has gone up from 245,000 members to 700,000 members today, right, -
Michael LeBlanc 29:13
Wow, -
Raj Grover29:14
To just over 700,000 members today. And now we have an opportunity to monetize this ahead of our peer group. You know, some of our peer groups don't even believe in a membership model as they publicly put out these statements. You know, that is not the case with High Tide and these opportunities (inaudible) straight to our bottom line, Michael, so super excited about that, (crossover talk), -
Michael LeBlanc 29:33
Well, it's and it's and that's a great and that's a great strategy, because you, you, you'd walk in, in the footsteps of those who provide (inaudible) benefits for that paid loyalty program that what di you call the Elite, right? That's where, you know, your knowledge, decades of knowledge of the consumer says, here's what they'll actually want to pay for. And, you know, (crossover talk), -
Raj Grover 29:52
Absolutely, -
Michael LeBlanc29:53
That sort of things, right? Yeah, yeah, -
Raj Grover 29:55
Absolutely. So, what we're going to do with our Elite model, Michael, is we're not going to take anything away from our current members. But we're going to give so much more to our Elite members. So, stay tuned for that. Because, you know, we will be disclosing a bit on that on the earnings call that is coming up in mid-September then and again, you know, last but not least, Michael, you know, M&A is in our DNA. We always have a robust, robust pipeline of great businesses, you know, that we can add to our portfolio. So, we put some of these deals on ice for now because of our equity prices, just like everybody else is taking a huge beating, -
Michael LeBlanc 30:29
Yeah, -
Raj Grover 30:30
As our equity prices recover, we'll be back at it.
Michael LeBlanc 30:32
I love that. I love that M&A is in our DNA. Is that written above your desk or somewhere in the in the boardroom? I love that statement.
Raj Grover 30:40
(inaudible) I know that was that was very spontaneous, but it, it really is.
Michael LeBlanc 30:43
All right, hey, listen, this has been awesome. It was wonderful to catch up with you. Congratulations on, on your success and, and I wish you much, much continued success and, and here's a fun fact. You're the third Grover that's been on the podcast in six months. You've got, I interviewed Mohit from, from Sobeys, and Tanbir from Pet Valu. So, you're well represented here on The Voice of Retail podcast.
Michael LeBlanc 31:07
The Grover clan is well represented. I'm going to have to look up the other two Grover's for sure. But thank you so much, Michael, for having me here. Always a pleasure to chat.
Michael LeBlanc 31:18
Thanks for tuning into this special episode of The Voice of Retail. If you haven't already, be sure to click and subscribe on your favorite podcast platform so new episodes will land automatically twice a week. And check out my other retail industry media properties, the Remarkable Retail podcast, Conversations with CommerceNext podcast, and The Food Professor podcast with Dr. Sylvain Charlebois.
Michael LeBlanc 31:38
Last but not least, if you're into barbecue, check out my all-new YouTube barbecue show Last Request Barbecue with new episodes each and every week. I'm your host, Michael Loblaw, president of M.E. LeBlanc & Company and Maven Media. And if you're looking for more content or want to chat, follow me on LinkedIn or visit my website at meleblanc.co.
Have a safe week everyone.
SUMMARY KEYWORDS
High Tide, cannabis, Michael, retail, customer, Canada, business, legalization, stores, opportunity, market, Raj, Cabana, legalize, accessories, locations, retailer, illicit, Ontario