SNDL INC Stock Price, News & Analysis

SNDL has acquired two liquor retail licenses in Regina and Saskatoon through an auction by the Saskatchewan Liquor and Gaming Authority. This expansion involves introducing its premium liquor retail banner, Wine and Beyond, marking a significant step in the transition to private liquor retail in Saskatchewan. The company expects stable growth from these locations, driven by Saskatchewan's high liquor sales per capita. Currently, Wine and Beyond operates 12 locations generating an annualized $135 million in revenue. SNDL plans to operationalize these new stores within the next 18 months, evaluating further expansion opportunities in the province.

SNDL Inc. (NASDAQ: SNDL) announced significant changes to its operations, including a rightsizing of cannabis cultivation in Olds, Alberta, aimed at focusing on premium products. The company plans to reduce staffing by approximately 85 employees, anticipating nearly $9 million in savings across labor and operational costs. SNDL is responding to market saturation and oversupply, with over 1 billion grams of flower currently in Canadian storage. The adjustments aim to improve efficiency and cost of goods sold, contributing to expected record net revenue and cash flow for Q4 2022. SNDL expects to finalize this transition by Q1 2023, enhancing its competitive edge in the market.

SNDL Inc. announced the successful closure of the Superette Group's proceedings under the Companies' Creditors Arrangement Act (CCAA). This follows a transaction initiated by a purchase agreement from August 2022, with approval from the Ontario Superior Court in December 2022. The Superette Group, recognized for its creative retail strategies, has transferred five retail locations in Toronto and Ottawa to SNDL, enhancing its cannabis retail operations. SNDL plans to leverage Superette's brand and operational efficiencies for growth in the Ontario market, while an option agreement exists to purchase Superette Ontario's shares, contingent on regulatory conditions.

SNDL and Nova Cannabis have established a strategic partnership to create a sustainable cannabis retail platform in Canada. As part of the agreement, SNDL will transfer 26 retail stores to Nova and eliminate a $15 million revolving credit facility, offering immediate liquidity. Nova will benefit from a three-year fee waiver on management services, transitioning to a low-cost fee structure thereafter. The partnership emphasizes vertical integration and aims to enhance profitability and market share. The transaction is subject to regulatory approvals and is expected to close by May 2023.

SunStream Opportunities LP, an affiliate of SNDL, announced the closing of a US$10 million bridge term loan to Surterra Holdings Inc. The loan, aimed at general working capital, carries a 16% annual interest rate and matures in January 2023. This financing highlights SunStream's commitment to the cannabis sector, as it has deployed over US$400 million in the last two years to cannabis operators across the U.S. SunStream is a joint venture between SNDL and the SAF Group, targeting investments in the cannabis industry.

SNDL Inc. announced the renewal of its Share Repurchase Program, enabling the repurchase of up to C$100 million worth of its common shares. This program follows the current one set to expire on November 19, 2022. The new program allows for the purchase of approximately 11.8 million shares, starting from November 21, 2022, until November 20, 2023. The initiative aims to enhance shareholder value through opportunistic buybacks at prevailing market prices, with discretion on timing and method based on market conditions.

SunStream Opportunities LP, affiliated with SNDL, has closed a US$6.25M senior secured term loan financing to SKYMINT Brands. This financing raises the total loan amount to US$81.25 million, supporting SKYMINT's acquisition of 3Fifteen Cannabis and its expansion plans in Michigan. The loan will be used for general working capital and will bear interest between 12.5% to 16.5% annually, maturing on September 17, 2025. Over the last two years, SunStream has issued loans totaling US$400 million to licensed cannabis operators in the U.S.

SNDL reported record net revenue of $230.5 million for Q3 2022, a 1,501% increase year-over-year, driven by strong performance in liquor retail and cannabis retail. However, the company faced a net loss of $98.8 million, primarily due to non-cash charges including $86.5 million for impairments. Adjusted EBITDA surged to $18.3 million, up 169% from Q2 2022. With $988 million in cash and no debt, SNDL is positioned for growth, including acquisitions of The Valens Company and Superette to enhance its market presence.

SNDL has successfully completed the acquisition of the Zenabis Business as part of proceedings under the Companies' Creditors Arrangement Act in Canada. The acquisition includes a 380,000-square-foot indoor growing facility in Atholville, New Brunswick, capable of producing approximately 46,000 kilograms of dried cannabis and 15,000 kilograms for extraction annually. SNDL also acquired over 22 million grams of cannabis inventory, enhancing its international export capabilities. This strategic move aims to strengthen SNDL's market position and drive revenue growth through wholesale and branded product sales.