This week Sundial Growers Inc. (SNDL) announced that it will be supplying cannabis to yet another Canadian province — British Columbia — a signal that bodes well for this up-and-coming cannabis stock. Thus far, Sundial’s products have only been available in Alberta, Saskatchewan, Manitoba and Ontario.
“As Sundial is expanding quickly, making our products available in BC, where there is a strong and enthusiastic cannabis culture, it’s exciting. BC is eager to receive safe, reliable and consistent products, and we are pleased to be able to provide our Sundial products to meet consumer needs,” said Andrew Stordeur, President of Sundial’s Canadian operations.
Just a couple days ago, analysts at BMO Capital Markets upgraded SNDL from Market Perform to Outperform, changing their tune from a few weeks ago. Analysts from CIBC still stand by their Neutral rating, while last month Cowen analysts also rated the stock Outperform.
And a couple weeks ago, Sundial announced that it had entered into a syndicated credit agreement with ATB Financial and Bank of Montreal for up to C$140 million ($105 million) to help finance the construction of additional buildings at its Canadian facilities.
According to the agreement, the lenders will extend an initial C$90 million of secured debt facilities in the form of a C$84 million senior secured term loan and a C$6 million revolving credit facility. Part of the funds will be put toward refinancing a prior debt facility with ATB. Sundial raised $143 million when it went public on Aug. 1.
How Sundial got into British Columbia
Sundial’s move into BC began several months ago when Sundial and the British Columbia Liquor Distribution Branch (LDB) signed an agreement that would let Sundial sell its marijuana products in BC.
Consumers can now purchase Sundial products through LDB’s online store or through brick-and-mortar retail stores. The BC Liquor Distribution Branch is the only wholesale distributor and public retailer for non-medical marijuana in BC.
Sundial will break ground in the BC market with its house brand: “Sundial.” The product line offers five experiences: Calm, Ease, Flow, Lift and Spark. Sundial also owns premium cannabis brands, Top Leaf and BC Weed Co., which the company soon hopes to make available in BC as well.
SNDL prides itself on methodically crafting small batches of cannabis that consistently yield high-quality. Currently, the company operates facilities in Canada and the United Kingdom and employs nearly 1,000 employees globally.
Sundial has built its reputation on growing ‘craft-at-scale’ cannabis, touting its modular facilities and award-winning genetics. The company’s flagship production facility is in Olds, Alberta, with a second facility in Rocky View, Alberta. They’ve already started construction of a new facility in Merritt, British Columbia.
In the United Kingdom, Sundial grows hemp, ornamental flowers and edible herbs throughout 1.5 million square feet of state-of-the-art indoor facilities. The company’s “Bridge Farm” brand has three facilities in Spalding and another under construction.
SNDL shares were trading at $8.77 per share on Friday morning, up $0.12 (+1.39%). Year-to-date, Sundial Growers Inc. (SNDL - Get Rating) has gained 3.42%, versus a 21.83% rise in the benchmark S&P 500 index during the same period.
About the Author: Eric Bowler
Eric is an accomplished journalist providing in-depth insights for more than two decades, with a special focus on the cannabis industry. Learn more about Eric’s background, along with links to his most recent articles. More...