M&A / Property
1CM Provides Update on Arrangement Agreement with SNDL
SNDL deal collapse leaves 1CM stranded with Ontario stores and a cancelled return of capital
Executive Summary
- On April 9, 2025, SNDL agreed to acquire 32 cannabis retail stores from 1CM for $32.2 million in cash, subject to adjustments.
- On December 15, 2025, the agreement was amended to split into two closings: a first closing of 5 stores in Alberta/Saskatchewan for $5.0 million, and a second closing of 27 Ontario stores for $27.2 million, with overall deadline May 31, 2026. A return of capital to 1CM shareholders would follow the second closing.
- On January 7, 2026, the first closing was completed, with the second closing anticipated in H1 2026.
- On May 27, 2026, 1CM announced that the second stage has been terminated because regulatory approvals could not be obtained before the May 31, 2026 outside date. 1CM expects to receive a $250,000 termination fee from SNDL, retains its Ontario retail network, and cancels the planned return of capital. The company will pursue organic growth, targeting ~10 new store openings in 2026, aiming for annualized revenue toward $100 million (based on April 2026 annualized revenue of $69.4 million and gross profit of $11.3 million).
Material Impact
- The most recent news is materially negative. The collapse of the second closing eliminates an expected $27.2 million cash injection, a massive shortfall relative to the company’s size. The return of capital to shareholders is cancelled, removing a key near-term catalyst. The Ontario stores, which were to be sold, will now remain with 1CM, but without the transformative cash.
- The termination is a direct reversal of the deal that had driven stock activity since mid-2025. The regulatory delay was foreshadowed, but the outright failure of the deal is a severe setback. The retained retail network generates only ~$11.3 million in annualized gross profit, insufficient to replace the lost $27.2 million lump sum. The company will now need to fund growth internally or seek alternative capital, increasing dilution risk.
- The termination fee of $250,000 is trivial compared to the lost proceeds. The announcement extinguishes the primary reason many investors held the stock, and sentiment will sour.
EPIC · Price
Company Overview
- 1CM Inc. (CSE: EPIC) operates cannabis retail stores under the Cost Cannabis and T Cannabis banners. The flagship project had been the sale of its retail network to SNDL, but the Ontario portion has collapsed. The company now focuses on organic growth of its remaining Ontario stores. Revenue grew from ~$12.9 million in 2021 to ~$73.3 million in 2025; gross profit grew from ~$3.9 million to ~$15.4 million.
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Jan 30, 2026 · 00:53