SNDL provides update on the Nova Cannabis partnership
by CM staff
The transaction is expected to close on or before June 30, 2023.
CALGARY — SNDL Inc., provided an update on its proposed transaction with Nova Cannabis Inc., to create a capitalized cannabis retail platform in Canada, as contemplated by the implementation agreement entered into between the company and Nova dated December 20, 2022, as amended on April 3, 2023.
The company has amended the terms of the plan of arrangement, and such amended form of the original plan of arrangement being approved by the SNDL shareholders at its annual and meeting of shareholders held on July 25, 2022, pursuant to which SNDL intends to distribute certain of its Nova common shares to SNDL shareholders.
“The strategic partnership between Nova and SNDL is expected to deliver growth opportunities and long-term shareholder value, cementing the two companies’ positions in the Canadian cannabis industry,” said Zach George, CEO, SNDL. “Through a distribution of Nova common shares to SNDL shareholders, SNDL will reduce our ownership stake in Nova to less than 20%. This enables SNDL and Nova to implement our strategic partnership, through which SNDL will manage brand standards via strategic agreements in exchange for a licensing fee against gross profit, and a services fee in return for the provision of management and administrative services.”
Under the terms of the arrangement, among other things, (i) SNDL shareholders who would have been entitled to receive at least one “lot” of Nova Shares from the Nova Shares being distributed had they been distributed to all SNDL shareholders on a pro rata basis will receive Nova Shares with the new SNDL common shares to which they were entitled under the arrangement, and (ii) all SNDL shareholders other than the eligible holders will receive, together with their new SNDL shares, cash in lieu of the fractional Nova Shares that they would have been entitled to receive had the Distributed Nova Shares been distributed to all SNDL shareholders on a pro rata basis.
A final order of the Court of Kings Bench of Alberta approving the amended plan of arrangement and transactions contemplated thereby was granted on May 26, 2023, and, subject to the SNDL Board determining the meaning of a “lot” of Nova Shares, the company is now authorized by the court to complete the share distribution.
