Cannabis Producer Sundial to Buy Chain of Liquor and Pot Stores
(Bloomberg) -- Canadian cannabis producer Sundial Growers Inc. said it will buy liquor and pot retailer Alcanna Inc. for C$346 million ($276 million) in stock, building on a vertical-integration strategy of acquiring stores.
Sundial, which is based in Calgary and listed on Nasdaq, will pay C$9.12 per Alcanna share, the companies said Thursday evening.
Alcanna’s stock price had jumped in late August and the first half of September. The trading activity prompted regulators to ask the company to make a statement on Sept. 15, which confirmed it was in “early-stage discussions” with a company it didn’t name.
Alcanna runs a network of 171 alcohol shops, mostly in the oil-rich province of Alberta, under the name Liquor Depot and two other brands. It spun off a cannabis retail chain into a separate company, Nova Cannabis Inc., in which it still owns a 63% stake.
“Alcanna’s value-focused model in liquor retailing has created market stability and we believe that the replication of this playbook in cannabis has strong potential to drive a similar result,” Sundial Chief Executive Officer Zach George said in a statement.
Nova has 62 stores selling marijuana in three provinces. If the deal is completed, Sundial would have control of more than 170 cannabis retail outlets, Sundial said.
Alcanna shareholders would own about 16% of the merged company. “Having reviewed various strategic alternatives for Alcanna over the past 18 months, I am confident that the transaction with Sundial offers the best alternative for Alcanna,” James Burns, the retailer’s CEO, said in a statement.
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