Sundial Purchases Cannabis Retailer and Alcohol Behemoth

Sundial Growers- A Calgary based cannabis producer announced it has reached an agreement to acquire all outstanding shares of Alcanna. Alcanna is Canada’s largest private liquor store chain and majority owner of Nova cannabis. The total size of mentioned deal is a whopping C$346M with the majority ($277M) in stock.

Rick Brar, chief executive officer of Alcanna and Nova said: "From day one we've been dedicated to providing an exceptional experience for our guests and cultivating a welcoming environment for our retail partners. This transaction will allow us to offer the best of both worlds - an industry leading private retail platform along with access to the trusted product and service offering.

Alcanna is the largest shareholder of the Nova Cannabis retail chain (Approx 63% stake). Nova currently runs 55 stores throughout Alberta, Ontario and Saskatchewan, with the majority (50 stores) in Alberta and four in Ontario under. Just recently Nova has started re branding their Nova Cannabis and Sweet Tree brand over to the super discount brand “Value Buds”. Value Buds has done a great job of capturing the lower margin market, causing ripples through the industry as they attempt to under cut the market and gain market share.

This is a huge deal in the industry, as it follows Sundials earlier purchase of Inner Spirit Holdings for $131M. Inner Spirit Holdings was the parent company of the SpiritLeaf retail chain which included over 100 cannabis stores across Canada.

When this deal with Alcanna finalizes, Sundial plans to run the retail chain topping 170 stores across Canada. This cannabis store network should prove to be an effective channel to distribute the various brands grown by Sundial. Which include: Sundial Cannabis, TopLeaf, Palmetto, Grasslands along with surely more to come.

The Alcanna transaction is pending shareholder approval. You can follow along with the transaction and company news on the Nasdaq under the ticker symbol SNDL