EXCLUSIVE: Sundial CEO Says Support Of Retail Investors Key To Turnaround

The saturation of the Canadian cannabis market and the ways that retail traders are helping Sundial’s turnaround were among the topics Sundial Growers Inc SNDL CEO Zach George discussed during the last iteration of the Benzinga Cannabis Capital Conference, which is returning to a live format next week in New York City.

The interview with George was moderated by Jeremy Berke, a senior reporter for Business Insider covering the cannabis industry.

Note: Article originally published on 6/4/21.

Sundial's CEO On The Cannabis Market: Three main factors are affecting the Canadian cannabis market right now, George said at the virtual Benzinga conference. 

Price compression is a large concern, with oversupply issues leading to flower prices being down over 50% at some points, he said. 

Regulatory dysfunction — including conflicting provincial regulations — is another big factor for the cannabis market in Canada, the CEO said. 

The third factor George named was market share competition that he said could be solved by consolidation and attrition.

“Too many companies are vying for market share,” George said, adding that not all of them will survive.  

The famed Benzinga Cannabis Capital Conference will gather industry insiders and investors from around the world once again on October 14 and 15 in New York City. Attendees can expect two full days of keynotes, panel discussions, fireside chats, networking, company presentations, celebrity appearances and an impressive lineup of the top journalists in the cannabis space.

Sundial's CEO On The Rise Of Retail Traders: George was asked about the rise in retail traders and the impact it is having on cannabis companies like Sundial, which has been a frequently mentioned Reddit stock.

“I think the retail investor needs to be respected and recognized as a market participant,” the CEO said. 

Retail investors behave differently than institutional investors, and this offers a number of opportunities for a company like Sundial, he said. 

Retail investors have more access to tools and have become “more and more sophisticated,” George said. 

“We believe the support from our retail investor base has been key to the turnaround for Sundial.”

George called what is happening with AMC Entertainment Holdings AMC a learning lesson for Sundial and other companies.

“The AMC case study is certainly a fascinating one.”

What’s Next for Sundial? Sundial is working to limit the number of discounted products that it offers, George said. 

“We have no interest in pursuing unprofitable revenue growth.”

Sundial will not seek to maintain market share at any cost and is using a restructured cultivation strategy to help improve more quality metrics, he said. 

“We’re excited to commercialize some of our new strains in the fourth quarter of this year.”

With its healthy balance sheet, Sundial can take advantage of industry consolidation, George said.

The company is committed to Canada but sees some opportunities in the U.S. as well, he said. 

When asked about recent speculation that Amazon.com, Inc. AMZN could enter the cannabis market, George said: 

“We’re not going to lose sleep over it right now.”