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SNDL Inc. (NASDAQ:SNDL) and Nova Cannabis Inc. (TSX:NOVC) announced a mutual decision to terminate the implementation agreement dated December 20, 2022, related to their previously announced strategic partnership.
Simultaneously, the two companies reaffirmed a strong commitment to their ongoing partnership under the management and administrative services agreement.
"We are dedicated to building a consumer-centric, regulated products business model within a complex regulatory environment," said Zach George, CEO of SNDL. "The synergy between our companies has already demonstrated great results, and combined efforts and shared vision are key drivers in this journey towards market leadership.”
In connection with the termination of the agreement, SNDL and Nova have extended the maturity date of Nova's credit facility with SNDL to March 31, 2024.
“SNDL remains committed to being a strong financial partner to Nova, with a focus on fostering sustainable business growth and development," George continued.
The previously planned distribution of Nova common shares to SNDL shareholders in connection with the transaction under the plan of arrangement approved by SNDL shareholders at its annual and special meeting of shareholders held on July 25, 2022, will not proceed at this time.
SNDL and Nova first agreed to implement a strategic partnership to create a well-capitalized cannabis retail platform in Canada under a vertical integration model with SNDL's upstream capabilities in December 2022.
The deal would have allowed SNDL to blend into Nova's cannabis retail business its existing 26 cannabis retail stores under the Spiritleaf and Superette banners located in Ontario and Alberta, while Nova would also have the right to first refusal on SNDL's Canadian cannabis retail pipeline, to name a few.
As consideration, SNDL would receive the intellectual property rights to Nova's Value Buds banner of 88 stores and the license to grant Nova to operate the Value Buds, Spiritleaf and Superette banners.
SNDL’s shares traded 1.35% higher at $1.5 per share during the pre-market session on Monday morning.
Photo: Courtesy of Tim Foster on Unsplash
