Press release
SNDL and Nova Cannabis Announce Transformational Strategic Partnership Creating a Sustainable Canadian Cannabis Retail Platform
CALGARY, AB, Dec. 20, 2022 /PRNewswire/ - SNDL Inc. (Nasdaq: SNDL) ("SNDL" or the "Company") and Nova Cannabis Inc. (TSX: NOVC) ("Nova") are pleased to
About this update from Sndl Inc.
[{"type":"text","content":"CALGARY, AB, Dec. 20, 2022 /PRNewswire/ - SNDL Inc. (Nasdaq: SNDL) (\"SNDL\" or the \"Company\") and Nova Cannabis Inc. (TSX: NOVC) (\"Nova\") are pleased to announce that they have entered into an agreement (the \"Agreement\" to implement a strategic partnership (the \"Transaction\") creating a well-capitalized cannabis retail platform in Canada under a vertical integration model with SNDL's upstream capabilities.\n\n \n \n \n \n \n \n\n \nAll financial information in this press release is reported in Canadian dollars unless otherwise indicated.\nThis news release constitutes a \"designated news release\" for the purposes of Nova's prospectus supplement dated July 22, 2022, to its short form base shelf prospectus dated June 27, 2022.\nTransaction Summary\nPursuant to the Transaction, Nova will receive from SNDL:\nRetail contribution: SNDL will vend into Nova's cannabis retail business its existing 26 cannabis retail stores under the Spiritleaf and Superette banners located in Ontario and Alberta. Nova will also have a right of first refusal on SNDL's Canadian cannabis retail pipeline.Corporate services: The existing management and administrative services agreement between SNDL's subsidiary, Alcanna Inc., and Nova is being amended and restated to refresh and maintain the arrangement with SNDL. For the first three years following this amendment and restatement, no fee shall be payable by Nova under the management and administrative services agreement. Following the three-year fee holiday, Nova will benefit from a low-cost annual fee of $2 million thereafter, which is materially lower than the cost of building and operating the infrastructure were Nova required to manage those services in-house.Debt restructuring: A $15 million revolving credit facility is to be eliminated by SNDL, which is expected to be fully drawn at the time of the closing of the Transaction. This will immediately provide Nova with additional liquidity of approximately $5.5 million from drawing the undrawn amount ahead of closing. Further, SNDL will advance a new credit facility of $15 million at a rate of Canadian prime plus 2.75% with a $10 million \"accordion\" feature to become available under certain conditions.Return of equity: Approximately 14.3 million common shares of Nova (\"Nova Shares\") held by SNDL's holdings will be returned to Nova's treasury f...