SNDL, 1CM amend arrangement agreement

Executive Summary

• SNDL Inc. and 1CM Inc. have entered into an amended and restated arrangement agreement to acquire 32 cannabis retail stores (Cost Cannabis and T Cannabis banners) in Ontario, Alberta, and Saskatchewan for a total aggregate purchase price of $32.2 million in cash.
• The transaction is split into two closings to align with provincial regulatory approvals: the first closing involves 5 stores in Alberta and Saskatchewan for $5.0 million, expected in January 2026; the second closing involves 27 stores in Ontario for $27.2 million, with an extended outside date of May 31, 2026.
• SNDL has paid a $2.0 million non-refundable deposit toward the first closing. 1CM intends to return capital to shareholders from net proceeds following the second closing, while proceeds from the first closing will cover transaction costs and working capital.

Key Details

• Transaction Structure: Amended and restated arrangement agreement dated Dec. 15, 2025, amending the original agreement dated April 9, 2025.
• Assets Acquired: 32 cannabis retail stores operating under the Cost Cannabis and T Cannabis banners.
• Geographic Distribution:
  • Stage 1 Closing: 5 stores in Alberta and Saskatchewan.
  • Stage 2 Closing: 27 stores in Ontario.
• Financial Consideration:
  • Aggregate Purchase Price: $32.2 million in cash (subject to adjustments).
  • Stage 1 Price: $5.0 million in cash.
  • Stage 2 Price: $27.2 million in cash.
  • Deposit: $2.0 million non-refundable cash deposit paid by SNDL toward the first closing.
• Timeline and Regulatory Status:
  • Outside Date: Extended from Dec. 31, 2025, to May 31, 2026.
  • Stage 1 Closing: Expected in January 2026, contingent on forthcoming regulatory approvals.
  • Stage 2 Closing: Regulatory approval not expected in 2025; timing dependent on court approval.
  • Court Approval: 1CM obtained a final order on June 18, 2025. A hearing to vary the order is scheduled for Jan. 5, 2026.
• Shareholder and Capital Actions:
  • 1CM shareholders voted in favor on June 16, 2025.
  • 1CM anticipates a return of capital to shareholders from net proceeds, but will not announce it until after the second closing.
  • Net proceeds from the first closing will be used for transaction costs and working capital.

Notable Quotes

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