SNDL reports first profitable quarter for cannabis production, increased losses for retail

| Sarah Clark

SNDL Inc. reported net revenue of $71.3 million from its retail cannabis operations in the first three months of 2024 and $22.4 million from its cannabis production facility in New Brunswick, both up from the same quarter in 2023.

Although these figures represent growth compared to the same quarter in 2023, the company still reported a $1 million loss on its retail operation, up from a $78,000 loss in Q1 2023. 

However, it did report $1.1 million in adjusted operating income for its cannabis production operations, up from a $17.9 adjusted operating loss in the same quarter in 2023.

SNDL’s production facility is located in Atholville, NB, cannabis extraction processing and edibles production is in Kelowna, BC, and cannabis beverages are made in Bolton, ON. In 2023, it closed its facility in Olds, AB, a move the company says contributed to its increase in revenue. 

The increase in sales from its production operations is also attributed to increased production in Atholville. Provincial board revenue from cannabis sales was $14.5 million for the quarter, while wholesale revenue was $7.5 million.

SNDL’s cannabis retail wing is made up of its 63% ownership interest in Nova Cannabis Inc., operating 188 locations under four retail banners: Value Buds, Spiritleaf, Superette, and Firesale Cannabis. These 188 locations represent the largest holding of private retail cannabis stores in Canada, although this is only 9% of all retail stores in Canada.

As of May 9, 2024, there are 84 Spiritleaf locations in Canada (20 corporate stores and 64 franchise stores), four Superette stores, one Firesale store, and 99 Value Buds locations. The majority of these stores are in Alberta and Ontario. 

SNDL also recently agreed to assign its rights to own or operate four Dutch Love stores to Nova, expanding the Value Buds brand into the BC market.  

SNDL/Nova’s “proprietary data licensing program” generated $3.5 million in revenue in the first three months of 2024, an increase of 139% from the same period in the year prior. The data licensing program generated revenue of $12.3 million in 2023, compared to $4.2 million in 2022, a 193% increase year-over-year. 

The company has seen such growth in this program with its retail cannabis locations that it has expanded the program into its liquor retail segment.

In addition to owning the largest number of cannabis stores in Canada, SNDL is Canada’s largest private sector liquor retailer, operating 171 locations, mainly in Alberta, under its three retail banners: Wine and Beyond, Liquor Depot, and Ace Liquor.