SNDL Granted MCTO, Amends Strategic Partnership Agreement With Nova Cannabis

SNDL Inc. SNDL and Nova Cannabis Inc. NVACF NOVC have entered into an agreement to amend the implementation agreement entered into on December 20, 2022.

Pursuant to the implementation agreement, the parties have agreed to implement a strategic partnership to create a well-capitalized cannabis retail platform in Canada. The amendment contemplates, among other things: increasing the number of cannabis retail stores Nova will acquire from 25 to 31 and decreasing the number of common shares in the capital of Nova to be surrendered by SNDL for cancellation to approximately 2.01 million from approximately 14.3 million. The additional stores consist of prime real estate located primarily in Toronto and Vancouver and currently generate approximately $2.4 million of annualized in-store EBITDA.

The 31 Acquired Stores include 12 in Alberta, 11 in Ontario, three in British Columbia, three in Saskatchewan and two in Manitoba. In connection with the Amendment, SNDL has agreed to increase the number of Nova shares to be distributed pursuant to a capital distribution of Nova shares owned by SNDL to holders of common shares of SNDL by a corresponding amount such that, upon completion of the transaction, SNDL will hold approximately (and no more than) 19.9% of the issued and outstanding Nova shares. As a result of SNDL's ownership in the Nova shares being reduced below 20%, Nova will be permitted to directly own and operate cannabis retail stores in Ontario and British Columbia, in accordance with applicable laws.

Nova Cannabis will hold an annual and special meeting of Nova shareholders on May 5, 2023 to consider, among other things, the transaction resolution.

SNDL Granted MCTO

SNDL announced that its principal regulator, the Alberta Securities Commission, has granted a management cease trade order (the "MCTO").

The company applied for the MCTO due to an expected delay in the filing of the audited consolidated financial statements for the year ended December 31, 2022. The MCTO restricts the CEO and CFO from all trading in securities of the company until such time as the filings have been filed by the company and the MCTO has been lifted. The MCTO does not affect the ability of other shareholders of the company to trade in securities of the company.

The company expects to report fourth quarter and full year 2022 earnings and complete the filings on April 14, 2023.

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