Sundial cannabis could control nearly 200 retail stores with Alcanna deal

Alberta producer Sundial Cannabis announced this week their intention to purchase Alcanna Inc, the parent company of cannabis retail chains Nova Cannabis and Value Buds.

In addition to their current 62 retail stores in Alberta, Saskatchewan, and Ontario, Alcanna is also the largest private liquor retailer in Canada. They own three different private liquor retail chains with 161 locations in total. The deal is worth a reported $346 million.

Earlier this year, Sundial announced its acquisition of another cannabis retail chain, Spiritleaf, with more than 100 stores across six provinces. Once the deal with Alcanna goes through, Sundial would have at least partial ownership of nearly 200 cannabis retailers across Canada. 

Sundial is a cannabis cultivator and processor with facilities in Olds AB, Calgary AB and Merritt BC, producing four different cannabis brands; Sundial Cannabis, Top Leaf, Palmetto Cannabis, and Grasslands Cannabis.

While several provinces that Sundial and its retail stores operate in have rules dealing with the vertical integration of cannabis producers owning retail stores, none prevent the outright ownership. BC’s cannabis regulations prevent cannabis retailers from entering into agreements with producers to exclusively sell their products, and Alberta requires the stores to be operated as a separate company. Ontario prevents any company where more than 25% of the corporation is owned or controlled, either directly or indirectly, by one or more licensed producers or their affiliates from being eligible for a retail licence.

Sundial is not the only cannabis company with at least partial ownership of a retail store. Aurora had originally owned about 20% of Liquor Stores N.A., which later became Alcanna. In 2020 they essentially reversed the deal and sold back the shares.

BC cannabis retailer Costa Canna took partial ownership of BC cannabis producer United Greeneries in 2020. Costa Cannabis has four locations in BC, including two located on Cowachin Tribe lands.  

BC-based cannabis producer Tilray had announced plans to buy Four20 cannabis in 2019 but backed out of the deal last year. Four20 Premium Market has 24 stores across Alberta and one expected to open in Kitchener, Ontario later this year or early next. They have recently acquired three new locations in Alberta that they have re-opened under the value brand FOUR20 Outlet.

Cannabis producer Tweed operates several Tweed-branded retail stores with 29 locations in Alberta, Saskatchewan, Manitoba, Ontario, and Newfoundland. Manitoba Cannabis producer Delta 9 Biotech owns 17 Delta 9 branded cannabis stores in Alberta, Saskatchewan and Manitoba.

Oceanic Releaf, a cannabis producer in Newfoundland runs five retail stores in the province. Atlantic Cultivation, another Newfoundland based cannabis producer, operates two in the province as well, under the Spiritleaf brand owned by Sundial.


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