Cannabis Producer Sundial to Buy Retailer Inner Spirit For CA$131 Million

Article by Marijuana Business Daily

Cannabis producer Sundial to buy retailer Inner Spirit for CA$131 million Sundial Growers Inc--Sundial and Indiva Announce Closing of -22 Sundial Growers (CNW Group/Sundial Growers Inc.)

Sundial Growers plans to acquire Inner Spirit Holdings, a major Canadian cannabis retailer and franchisor of Spiritleaf stores, in a deal worth 131 million Canadian dollars ($107 million) in cash and shares.

The purchase involving the Alberta-based companies, announced Wednesday, continues a consolidation trend in Canadian cannabis retail over the past year.

Inner Spirit shareholders will receive consideration worth 39 Canadian cents per share, including CA$0.30 in cash and 0.0835 of a Sundial common share.

“Sundial becomes a stronger and more diverse cannabis company by acquiring Inner Spirit and the Spiritleaf retail store network,” Sundial CEO Zach George said in a statement.

“Sundial’s capital base will enable us to support continued expansion and deepen the capabilities of the Spiritleaf retail brand.”

Regulatory filings show that Sundial is interested in using retail analytics to respond to shifting preferences among cannabis consumers.

“To be more agile and responsive to these changing preferences, Sundial continues to emphasize and invest in industry data, with a focus on point-of-sale level retail data and social sentiment and continuous and iterative product development practices,” Sundial management wrote in a March filing.

Sundial management also noted that it was prioritizing “in-store brand experiences and touchpoints to enable the growth of retail sales and take advantage of net new industry growth,” citing recreational cannabis sales that are “primarily driven by brick and mortar retail sales.”

Inner Spirit’s Spiritleaf retail brand currently has 86 stores open in Alberta, British Columbia, Newfoundland, Ontario and Saskatchewan.

Read the full article here.

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