Cannabis Giant SNDL Is Taking Care Of Other Companies' Debts, Expects To Acquire Shares Of Canadian Cannabis Edibles Producer

Author: Jelena Martinovic | July 08, 2024 09:46am

SNDL Inc. (NASDAQ:SNDL) said on Friday that it has entered into a purchase agreement with cannabis edibles producer Indiva Limited (OTC:NDVAF) and its subsidiaries.

What Happened

Under the deal SNDL offered to buy all of the issued and outstanding shares of Indiva and the business and assets of the Indiva Group.

The considerations for the deal include:

• A credit bid of all of the indebtedness of the Indiva Group owing to SNDL;
• the retention of certain liabilities of the Indiva Group; and
• cash payments sufficient to repay certain priority indebtedness of the Indiva Group and costs associated with the Indiva Group’s proceedings under the companies’ Creditors Arrangement Act.

Read Also: Canadian Giant SNDL Speeds Up Acquisition Of Majority Positions In Two US Cannabis Companies As Marijuana Rescheduling Looms

The news comes on the heels of Indiva's June announcement that it's restructuring its business.

The deal between the two Canadian companies has been entered into in the context of the CCAA Proceedings, as part of a sales process where the Indiva Assets will be marketed to prospective purchasers by PricewaterhouseCoopers Inc., the monitor in the CCAA Proceedings.

The report from the monitor, issued in the CCAA Proceedings, estimates the value of the credit bid and cash consideration payable by SNDL to be roughly between CA$25 million ($18.3 million) to CA$28 million.

Why It Matters

The acquisition of the Indiva Assets is expected to boost SNDL’s product portfolio, and reinforce its position in the Canadian cannabis market.

Indiva’s cannabis brands include Pearls by Grön, No Future Gummies and Vapes, Bhang Chocolate, Indiva Blips Tablets, Indiva Doppio Sandwich Cookies and Indiva 1432 Chocolate.

What's Next

The sale process is expected to close by September 30, 2024.

Delta 9 Cannabis' Debt

SNDL also reported on Friday that it has wrapped up the acquisition of the principal indebtedness of Delta 9 Cannabis Inc. (OTC:DLTNF) from Connect First and Servus Credit Union Ltd.

The purchase price was CA$28,138,284 under a purchase and sale of indebtedness agreement dated July 5, 2024.

With the move, SNDL has become Delta 9’s senior secured creditor with a priority security interest in all of the assets of Delta 9 and certain Delta 9 subsidiaries. The purchased Indebtedness brings Delta 9’s total indebtedness owing to SNDL to CA$40,653,352.

SNDL Price Action

SNDL's shares traded 0.52% lower at $1.93 per share during the pre-market session on Monday morning.

Read Next:

• SNDL Cannabis Co. Wraps Up Q1 With No Outstanding Debt As It Works On Expanding In US

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Posted In: DLTNF NDVAF SNDL