SNDL Inc. has entered into an agreement to acquire 32 1CM cannabis retail stores operating under the Cost Cannabis and T Cannabis banners in Ontario, Alberta, and Saskatchewan.

The deal is expected to close by the end of the third quarter of 2025.

Under the terms of the Agreement, SNDL will acquire, with the option to assign, the 1CM Stores for total consideration of $32.2 million in cash, subject to certain adjustments. 

Two stores are located in Alberta, three in Saskatchewan, and 27 in Ontario. The acquisition will bring SNDL’s total owned and franchised cannabis retail store count to 219.

The 1CM retail locations generated an aggregate annual revenue of $53 million for the fiscal year ending August 31, 2024, with 30 active stores at the fiscal year end. The company reported revenue of $50.5 million and cost of goods sold of $41.5 million in relation to cannabis for the year ended August 31, 2024. 

1CM also operates two stores in BC and two in New Brunswick, which are not named as part of the deal, and a distribution licence in Manitoba. 

SNDL Inc.’s net revenue for the fourth quarter of 2024, its most recent quarterly report, was $257.7 million, while gross profits were $68.8 million, with an operating loss of $76.1 million. The company also recently purchased just over five percent of High Tide, the company behind the largest brand of cannabis stores in Canada, Canna Cabana.

The company has taken, at times, what some have said is an aggressive approach to deploying its capital through direct and indirect investments and partnerships throughout the cannabis industry, which has led to numerous acquisitions. 

“We are excited to expand SNDL’s retail network and reinforce our leadership in Canada,” said Zach George, Chief Executive Officer of SNDL. “The addition of these locations will increase SNDL’s exposure to a broad consumer base in key Canadian markets and align with our stated capital priorities as we build a sustainable cannabis retail portfolio at scale.”

1CM’s board of directors unanimously approved the agreement and recommended that shareholders vote in favour of the Transaction at the upcoming annual and special meeting of shareholders of 1CM, which is expected to be held in June of 2025. 

Tanvi Bhandari, Chief Executive Officer of 1CM, added, “We are excited about the opportunity to unlock shareholder value with this transaction. We look forward to assisting SNDL with the transition and remain available to guide the company in its Canadian retail operations.”

SNDL Inc., through its wholly owned subsidiaries, is one of the largest vertically integrated cannabis companies, and the largest private-sector liquor and cannabis retailer, in Canada, with retail banners that include Ace Liquor, Wine and Beyond, Liquor Depot, Value Buds, Spiritleaf, and Superette. 

SNDL’s consumer-facing cannabis brands include Top Leaf, Contraband, Palmetto, Bon Jak, La Plogue, Versus, Value Buds, Grasslands, Vacay, Pearls by Grön, No Future, and Bhang Chocolate. The company’s investment portfolio aims to use its strategic capital through direct and indirect investments and partnerships throughout the North American cannabis industry. 

SNDL and 1CM were both recently named by the Globe and Mail among the top-growing companies in Canada.

Featured image shows a sign advertising a Cost Cannabis location in Calgary. Via Google Maps

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