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 purchase price of $32.2 million in cash.
• The transaction is split into two closings to align with 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, but this will be announced only after the second closing closes.

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:
  • First Closing (5 stores): Located in Alberta and Saskatchewan. Regulatory approvals expected to be forthcoming at closing.
  • Second Closing (27 stores): Located in Ontario. Regulatory approval not expected to be obtained in 2025.
• Financial Terms:
  • Aggregate Purchase Price: $32.2 million in cash (subject to adjustments).
  • First Closing Consideration: $5.0 million in cash.
  • Second Closing Consideration: $27.2 million in cash.
  • Deposit: SNDL paid a $2.0 million non-refundable cash deposit toward the first closing.
  • Use of Proceeds (First Closing): Net proceeds expected to be used to pay transaction costs and for working capital purposes.
• Timeline and Approvals:
  • Outside Date: Extended from Dec. 31, 2025, to May 31, 2026.
  • Court Approval: 1CM obtained a final order on June 18, 2025. 1CM intends to seek court approval to vary the order at a hearing scheduled for Jan. 5, 2026.
  • First Closing Expected: January 2026.
  • Second Closing Expected: Following the first closing, subject to regulatory approvals.
• Shareholder Actions: 1CM shareholders voted overwhelmingly in favor of the transaction at the annual and special meeting held on June 16, 2025.
• Capital Return: 1CM anticipates effecting a return of capital to shareholders from a portion of the net proceeds. This will not be announced until after the second closing.

Notable Quotes

• No direct quotes from executives were included in the provided text.