Sundial Growers, Inner Spirit Holdings announce $131 million cannabis deal

Cannabis firms Sundial and Inner Spirit do business from Calgary.

Sundial sets eyes on Spiritleaf-branded cannabis stores across Canada.

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Sundial Growers Inc. is set for expansion with its planned acquisition of a network of cannabis stores across Canada.

In detail, the Calgary-based cannabis producer intends the buy Inner Spirit Holdings Inc. in a $130 million deal.

Spirit Holdings owns 86 franchised and corporate-owned cannabis retail shops branded as Spiritlife. It also operates out of the same city in Western Canada.

Sundial and Inner Spirit announced the deal Wednesday (May 5).

“Sundial becomes a stronger and more diverse cannabis company by acquiring Inner Spirit and the Spiritleaf retail store network,” Sundial CEO Zach George said in a media release.

George’s company grows cannabis. Its product line includes dried flower, prerolls, vapes and oil.

“Sundial’s capital base will enable us to support continued expansion and deepen the capabilities of the Spiritleaf retail brand,” the company executive said.

The announcement of the deal came two days after Canadian cannabis companies Tilray Inc. and Aphria Inc. disclosed on May 3 that they have completed a merger.

The new combined company will operate as Tilray, becoming the biggest cannabis firm in the world by revenue.

Moreover, experts say that the cannabis industry will see more mergers and acquisitions down the road.

Meanwhile, Darren Bondar, founder, president and CEO of Inner Spirit, said that Sundial represents the “ideal company” to acquire his business.

“The combination will enable us to further expand our position as the country’s leading retail cannabis brand for customers and communities,” Bondar said.

In addition, Bondar said that the acquisition will “open up new market opportunities”.

Sundial to grow with cannabis retail

Spiritleaf stores operate in Alberta, British Columbia, Saskatchewan, Ontario, and Newfoundland and Labrador.

To illustrate the reach of the network, Spiritleaf shops served 2.3 million guests in 2020.

Its 86th store opened in Edmonton on April 28, 2021.

In addition, the network expects to exceed 100 stores in the summer of 2021.

The respective boards of Sundial and Inner Spirit have approved the deal. The companies expect to complete in the third quarter of this year.

Inner Spirit needs to present the transaction for approval by its share holders at a special general meeting likely to be held in July 2021.

Under the deal, Inner Spirit stockholders will receive $0.39 for every share acquired by Sundial.

Follow Carlito Pablo on Twitter at @carlitopablo

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