SNDL Inc (NASDAQ: SNDL) (CNSX: SNDL) (FRA: VY4) has pulled the plug on its plans to scoop up the last batch of 1CM Inc‘s (CNSX: EPIC) (OTCMKTS: MILFF) (FRA: 1Q70) Ontario cannabis stores.
The move came after regulatory approvals dragged on far longer than either company wanted. On May 27, SNDL announced that the second and final closing under their amended arrangement agreement simply won’t happen before the May 31 outside date.
These proceedings started back in April 2025 when SNDL struck an original deal to buy 32 stores across Ontario, Alberta and Saskatchewan from 1CM for about C$32.2 million. They then tweaked the agreement in December to split things into two stages, making it easier to clear the different provincial hurdles.
The first stage wrapped up smoothly in January, which saw SNDL pick up five stores in Alberta and Saskatchewan. But the hand off of a larger bundle of assets, 27 Ontario locations running under Cost Cannabis and T Cannabis banners, hit a wall. Ontario regulators took their sweet time with this and the clock ran out.
Instead of pushing forward with a deal that no longer made sense on the original timeline, SNDL decided to redirect that capital. The company plans to buy back more of its own shares under its existing C$100 million repurchase program. They’ve already snapped up over 5.5 million shares since late March, worth roughly C$11.1 million.
CEO Zach George called this a disciplined way to create value at current valuations while keeping faith in their retail strength. However, buybacks at current valuations assume management sees shares as undervalued — a bet that may or may not pay off if cannabis margins compress further.
On the performance side, SNDL delivered steady results in its Q1 report and retains a solid cash position of over C$213 million with no debt. The company posted C$195.9 million in net revenue and held a solid 27 per cent gross margin despite softer market conditions that hit both alcohol and cannabis segments.
Meanwhile, 1CM is currently eyeing a path to C$100 million in annual revenue by adding roughly 10 new locations this year. It has now pocketed a C$250,000 termination fee from SNDL to help fuel those plans.
Read more: Curaleaf scoops trio of accolades at Business of Cannabis Awards
Follow Rowan Dunne on LinkedIn
rowan@mugglehead.com
