Alberta-based SNDL reported an operating income loss of $112 million for its cannabis operations and net earnings of $4.9 million for its retail cannabis operations in 2023.
After calculating restructuring costs and asset impairments, the total adjusted operating loss for its cannabis operations was $52.4 million.
The newest annual report also shows $24.6 million in net earnings from SNDL’s alcohol businesses, for an operating income loss of $162.8 million for 2023. Part of this loss is attributed to restructuring charges of $19.6 million and goodwill impairment of $29 million.
Despite these losses, SNDL says it is well positioned in 2024 given its recent acquisition of The Valens Company Inc., the closing of its facility in Olds, Alberta, and the transition of its remaining cultivation activities to Atholville, New Brunswick, and manufacturing and processing activities in Kelowna, British Columbia.
SNDL’s cannabis operations include the operations of Valens from January 18, 2023, to December 31, 2023.
The company’s cannabis operations segment achieved a record net revenue of $87.1 million in 2023, a 96% increase from $44.4 million in 2022. Net revenue for the fourth quarter of 2023 was $26 million, up 111% from $12.3 million in the same quarter of the previous year.
Gross margin was negative $20.6 million in 2023, compared to negative $13.3 million in 2022. Gross profit for the fourth quarter of 2023 was negative $1.1 million, compared to negative $9.0 million in the fourth quarter of 2022. This 88% improvement in gross profit during the fourth quarter is largely attributable to the strategic decision to close the facility in Olds.
Countering its overall losses on its cannabis operations side, SNDL attributes its record results in revenue, gross profit, and cash flow within its retail cannabis segment in part to its data program.
With its 63% ownership interest in Nova Cannabis Inc., SNDL is Canada’s largest private-sector cannabis retailer, operating 187 locations under its four retail banners: “Value Buds”, “Spiritleaf”, “Superette”, and “Firesale Cannabis”.
As of March 21, 2024, SNDL had 85 Spiritleaf locations (21 corporate stores and 64 franchise stores), four Superette locations, two Firesale Cannabis stores, and 96 Value Buds stores.
Nova’s proprietary data licensing program generated revenue of $12.3 million in 2023, compared to $4.2 million in 2022, a 193% increase year-over-year.
SNDL reported record gross profit from its retail cannabis segment, with $73.7 million in 2023, or 25% of sales, compared to $47.3 million in 2022, or 23% of sales, a 56% increase year-over-year. Gross profit for its retail cannabis segment was $20.0 million, or 27% of sales, in the fourth quarter of 2023, compared to $15.7 million, or 23% of sales, in the fourth quarter of 2022, a 27% increase year-over-year.
