Will Sundial Growers Be Taken Seriously Once The Alcanna Acquisition Goes Final

Although we do not consider Sundial Growers Inc. (Nasdaq: SNDL) to be a top-tier cannabis company, we believe the company could benefit from rising recreational and medical cannabis sales in Canada.

A few months ago, Sundial announced a plan of arrangement to acquire Alcanna Inc. (TSX: CLIQ) which would provide it with significantly more leverage to the Canadian cannabis retail market. Earlier this week, the company reiterated its commitment to the arrangement and we will monitor how the story advances from here.

After a period of market volatility, we heard rumors about the transaction falling apart and we believe these rumors are unfounded. When Sundial initially announced the agreement, it had unanimous support from Alcanna’s board and management team.

Earlier this week, Sundial CEO Zach George said he remains favorable on the transaction and reported that Institutional Shareholder Services Inc. (ISS), a leading independent proxy advisory firm, recommended that Alcanna shareholders vote in favor of the transaction at Alcanna’s special shareholder meeting.

Sundial has three primary operating segments: cannabis operations, retail, and investments. We consider the business to be well positioned to capitalize on the Canadian cannabis sector over the long-term and will monitor how the story evolves when cannabis is one day legalized at the federal level in the US.

After the US Safe Banking Act was not included in the National Defense Authorization Act (NDAA), Canadian cannabis stocks bounced higher. We consider this move to be transitory and expect to see increasing interest from the market and Canadian companies once federal legalization in the US seems more likely.

When analyzing the long-term potential that is associated with the Canadian and the US cannabis market, we continue to prefer the US. During the last year, several Canadian cannabis companies have acquired strategic US assets to be better positioned to capitalize on it when regulations change.

If you are interested in learning more about Canadian companies that are focused on the US cannabis industry, please send an email to support@technical420.com with the subject “Canadian Cannabis Companies With Leverage To The US” to be added to our distribution list.

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