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SNDL Inc. (NASDAQ:SNDL) announced its financial and operational results on Thursday for the first quarter ended March 31, 2024.
The company reported a total net revenue of CA$197.7 million, up from CA$191 million in the prior year's period. Out of that sum, cannabis retail revenue amounted to CA$71.3 million, while cannabis operations totaled CA$22.4 million.
SNDL attributed the increase to the cannabis retail and operations segments, as the liquor retail segment reported flat net revenue.
“The SNDL team has delivered a solid first quarter result, exemplified by a record gross margin of 25% and the undeniable improvement in the profitability of all of our operating segments over multiple years,” Zach George, CEO of SNDL said. “We are well positioned to further expand our retail network and product distribution in Canada where we expect further consolidation and attrition."
SNDL Inc. has separately and together with Nova Cannabis Inc. (TSX:NOVC) announced it has completed the assignment of SNDL’s rights to own or operate four Dutch Love stores to Nova, upon the terms announced on April 1, 2024.
“We are excited to transition these stores to the Value Buds banner, marking our entry into the B.C. market," Marcie Kiziak, Nova’s CEO said. "We are confident that our Value Buds banner is exceptionally well-positioned to fill a critical gap in the marketplace. This move aligns perfectly with our objective for smart, value-driven expansion.”
As consideration for the assignment, Nova issued $8.179 million of shares to SNDL based on the 20-day VWAP of the Nova shares on March 28, 2024. The addition of the Dutch Love Stores brings Nova’s total store count to 99 and SNDL’s direct and indirect cannabis store count across all retail banners to 188.
Meanwhile, through its joint venture with SunStream Bancorp Inc., SNDL also announced on Thursday that SunStream USA group of companies will proceed with the process of acquiring equity positions in U.S. cannabis assets, like Parallel and Skymint, following the completion of a review by SNDL's listing authority, NASDAQ.
With cannabis rescheduling seeming to be right around the corner, SNDL’s U.S. business strategy comes as no surprise.
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SNDL's shares traded 1.02% lower at $2.435 per share at the time of writing on Thursday afternoon.