SNDL Inc (NASDAQ: SNDL) (FRA: VY4), formerly Sundial Growers, is expanding its Canadian cannabis repertoire by purchasing 32 dispensaries from 1CM Inc (CNSX: EPIC) (OTCMKTS: MILFF) (FRA: 1Q70) for C$32.2 million.
The T Cannabis and Cost Cannabis branded pot shops in Alberta, Saskatchewan and Ontario will bring SNDL’s total up to 219 nationwide. The deal is expected to close in Q3.
“The addition of these locations will increase SNDL’s exposure to a broad consumer base in key Canadian markets,” CEO Zach George said in a press release on Wednesday.
Both 1CM and SNDL were recently recognized by the Globe and Mail for being two of the nation’s fastest growing companies. Ontario-based “vice retailer” 1CM took spot number 6 on the leaderboard with 7,256 per cent revenue growth over the past three years while SNDL placed 34th out of 416 companies.
They are also both involved with the liquor business. SNDL distributes alcohol through its Ace Liquor, Liquor Depot and Wine and Beyond brands and 1CM operates Costcan Liquor stores in three provinces. In addition to weed and booze, 1CM is involved with tobacco and vape products.
A few weeks ago, SNDL bolstered its national marijuana foothold by taking a 5.4 per cent stake in the popular Calgary-headquartered cannabis company High Tide Inc. (CVE: HITI) (NASDAQ: HITI) (FRA: 2LYA). High Tide earned spot number 87 on the Globe and Mail’s list.
Once SNDL’s acquisition closes it will have even more dispensaries than High Tide’s Canna Cabana line (194) and will become Canada’s top dispensary owner.
Read more: Most cannabis consumers don’t go for junk food when they get the munchies: survey
Read more: Mi’kmaw communities in Nova Scotia get authorization to set up cannabis dispensaries
SNDL has no debt, a rarity among public cannabis distributors
The company boasts a strong financial position and reported favourable numbers in its most recent financials.
In 2024, gross profit rose by 26.2 per cent year-over-year to C$240.3 million. Meanwhile, net revenue increased by a modest 1.3 per cent for the calendar year to C$920.4 million.
Operating losses for SNDL also decreased by over C$60 million throughout last year in comparison to 2023.
As of Dec. 31, SNDL had unrestricted cash exceeding C$218 million and no indebtedness on its balance sheet.
rowan@mugglehead.com
