EDMONTON, AB – SNDL Inc. reported its financial and operational results for the first quarter ended March 31, 2025. All financial information is reported in millions of Canadian dollars unless otherwise indicated.
SNDL has also posted a supplemental investor presentation on its website.
Management highlights
- Net revenue: In the first quarter of 2025, net revenue totaled $204.9 million, reflecting a growth rate of +3.6% compared to the same period in the previous year. This increase was primarily driven by robust growth of +16.8% in our combined Cannabis business.
- Gross profit: Gross profit for the first quarter of 2025 reached $56.6 million, marking a strong growth of +12.4% compared to the same period in the prior year.
- Gross margin: The gross margin in the first quarter of 2025 was 27.6%, setting a new record for the company. This represented an improvement of +2.2 percentage points year-over-year.
- Operating loss: Operating loss for the first quarter of 2025 amounted to $(12.1) million. This was partially impacted by a loss of $(4.5) million from the SunStream portfolio driven by a negative valuation adjustment, and restructuring charges of $(3.0) million. The quarter is lapping a favorable $9.1 million SunStream portfolio valuation adjustment in the first quarter of 2024.
- Cash flow: Cash flow was positive at $2.5 million during the first quarter of 2025. This was driven by the collection of Delta 9’s outstanding loan balance of $28 million, offset in part by the repurchase of SNDL’s common shares and the previously announced minority investment in High Tide stock.
- Free cash flow: Free cash flow in the first quarter of 2025 was slightly negative at $(1.1) million, despite seasonal impacts on revenue and the associated build-up of working capital, representing an improvement from the same quarter of 2024.
“In the first quarter of 2025, we saw robust growth in our cannabis segments and record aggregate Gross Margin. Our improvements in Free Cash Flow generation helped us nearly break even despite seasonal impacts and our unrestricted cash balances increased versus year end.” said Zach George, Chief Executive Officer.
“During the first quarter of 2025, we advanced several strategic initiatives to drive long-term value creation and strengthen our platform:
- Collected $28 million in outstanding debt from FIKA Company pertaining to loans previously extended to Delta 9 Cannabis Inc., inclusive of an interest premium settlement
- Received approval from the Florida Department of Health for the transfer of the Parallel (Surterra Holdings, Inc.) license – an important prerequisite for completing the Parallel restructuring process
- Repurchased 5,761,735 SNDL common shares for cancellation at an average price of US$1.79 per share during the first quarter of 2025
- Completed the acquisition of 4,350,000 common shares of High Tide Inc., representing 5.4% ownership
- Announced the Company application for listing its common shares on the Canadian Securities Exchange (“CSE”) and commenced trading on April 11, 2025.
Subsequent to the first quarter of 2025, on April 9, 2025, we announced that we had entered into an arrangement agreement to acquire 32 cannabis retail stores from 1CM Inc. for a total cash consideration of $32.2 million. We have also announced on April 22, 2025, the launch of our highly anticipated Rise Rewards loyalty program, designed to help Value Buds customers save more, earn more, and get even more from every visit. SNDL intends to expand the program across its retail banners in the future.
SNDL’s Board of Directors has approved an amendment to the Company’s share repurchase program, as described in further detail below
Finally, our Board of Directors has initiated a formal strategic review to evaluate SNDL’s exposure to U.S. multi-state licensed cannabis enterprises and its current exchange listing status, as outlined later in this document.
Our track record of operational execution, diversified asset base, and strong balance sheet – including $220.9 million of unrestricted cash as of March 31, 2025 – gives us with the flexibility to pursue both organic and inorganic opportunities with compelling returns. This review supports our long-term goal of establishing SNDL as a global cannabis leader and delivering sustainable shareholder value,” concluded Zach George.
Business segment highlights
SNDL operates and reports its business through four segments: Liquor Retail, Cannabis Retail, Cannabis Operations, and Investments. Additionally, a consolidated total for Cannabis is presented, encompassing the combined results of the two Cannabis segments, along with the revenue elimination associated with the Cannabis Operations sales to the provincial boards that are expected to be subsequently repurchased by the Company’s licensed retail subsidiaries for resale. Corporate and Shared Service expenses are reported as “Corporate”.
Liquor Retail
SNDL is Canada’s largest private sector liquor retailer, operating at April 30, 2025 in 165 locations, predominantly in Alberta, under its three retail banners: “Wine and Beyond” (13), “Liquor Depot” (19), and “Ace Liquor” (133).
Net revenue for Liquor Retail continued to decline in the first quarter of 2025 due to ongoing market demand softness. Additionally, the first quarter of 2025 had one fewer day compared to 2024, and Easter consumption shifted to April 20, 2025, from March 31 in the previous year. Same-store sales decreased by -4.9% in the first quarter.
Same store sales are specified financial measures that do not have standardized meanings prescribed by IFRS Accounting Standards and therefore may not be comparable to similar measures used by other companies. Refer to the “Non-IFRS Financial Measures and Other Measures” section of this MD&A for further information.Gross Margin improved to 25.4% in the first quarter of 2025, mitigating the Net Revenue impact on Operating Income, as well as the lapping a $0.9 million impairment reversal in prior year.
Cannabis retail
SNDL is one of Canada’s largest private-sector cannabis retailer, operating at April 30, 2025 in 186 locations under its three retail banners: “Value Buds” (121), and “Spiritleaf” (65, of which 7 are corporate stores and 58 are franchise stores). The Company’s Cannabis Retail strategy is based on several pillars, including the quality of its store locations, its range of products, and the unique experiences provided to customers. Using data and insights from a large volume of monthly transactions enables SNDL to leverage technology and analytics to inform and improve its retail strategy.
Net revenue for Cannabis Retail continued to demonstrate strong growth in the first quarter of 2025, driven by ongoing gains in market share. Same-store sales increased by +5.2% during this period.
Operating Income experienced substantial growth supported by revenue increases, productivity initiatives lowering SG&A, and the lapping of a fixed asset impairment recorded in the prior year.
Cannabis operations
SNDL has a diverse brand portfolio from value to premium, emphasizing premium inhalable formats and a full suite of 2.0 products. With enhanced procurement capabilities and plans to continue evolving toward a cost-effective cultivation and manufacturing operation, the Cannabis Operations segment is a key enabler of SNDL’s vertical integration strategy.
Cannabis Operations continues to report significant growth in both revenues and profitability during the first quarter of 2025.
Net revenue expansion was driven by increased provincial board distribution and a continued focus on consumer innovation, product quality and operational efficiencies. Reported revenue for the period includes $10.2 million contributed by Indiva, following its acquisition in the final quarter of 2024.
Gross profit and Operating Income improvements are driven by efficiency improvements from scale as well as productivity initiatives.
Investments
As of March 31, 2025, the Company has deployed capital to a portfolio of cannabis-related investments with a carrying value of $420.3 million, including $407.6 million to SunStream Bancorp Inc.. This carrying value was reduced by $28.8 million during the first quarter of 2025, mainly driven by the collection of the Delta 9 loan, and a negative valuation adjustment of the SunStream portfolio.
In the first quarter of 2025, the investment portfolio generated negative operating income of $(1.6) million, including a $(4.5) million impact from our SunStream portfolio, driven by a valuation adjustment. This non-cash valuation adjustment is the consequence of a reduction in the bond market price of Cannabist Company Holdings Inc..
In March of 2025, the Company recovered $28.0 million from FIKA, related to loans previously issued to Delta 9. This amount includes $26.4 million comprising the principal and outstanding interest balance.
On February 4, 2025, the Florida Department of Health approved the transfer of Parallel’s license. While a few additional steps are still required, this is an important milestone in completing Parallel’s restructuring process.
On March 17, 2025 the Company announced the purchase of 4,350,000 common shares of High Tide, equivalent to 5.4% ownership, at an average price of US$2.46 per share.
Equity position
$641.3 million of unrestricted cash, marketable securities and investments, including investments in equity-accounted investees, and no outstanding debt at March 31, 2025, resulting in a net book value of $1.1 billion.
The Board of Directors has approved an amendment to the Company’s Share Repurchase Program announced on November 14, 2024, to increase the maximum number of common shares that the Company may repurchase up to 10% of the public float of the Company, subject to the approval of the CSE.
During the three months ending March 31, 2025, the Company repurchased 5,761,735 common shares for cancellation at an average price of US$1.79 per share. This was in addition to the 5,002,372 common shares repurchased for cancelation during the fourth quarter of 2024 at an average price of US$1.84 per share.
Strategic review
In anticipation of the upcoming completion of the court-supervised restructurings of Parallel and Skymint, SNDL’s Board of Directors has initiated a formal strategic review process to evaluate the Company’s exposure to U.S. multi-state licensed cannabis enterprises and its current exchange listing status. The review aims to ensure alignment between SNDL’s long-term growth strategy and its public market platform, with the overarching objective of maximizing shareholder value.
In recent months, SNDL has received inbound interest from multiple cannabis operators in both Canada and the United States that have expressed interest in being acquired or pursuing asset-level or corporate transactions. This engagement underscores SNDL’s balance sheet and management strength, as well as its emerging reputation as a disciplined, retail-forward cannabis operator with international scale. As the North American cannabis industry continues to rationalize, well-capitalized consolidators like SNDL are uniquely positioned to realize synergies, drive operating leverage, and deliver sustained profitability.
To fully evaluate these opportunities and preserve strategic flexibility, the Board is assessing whether to maintain the Company’s current equity market listings, or transition to an alternative structure – similar to leading U.S multi-state operators who operate outside of NYSE and Nasdaq exchange frameworks. Such a move would provide SNDL with the regulatory latitude to actively manage a broader North American cannabis platform, potentially consolidating licensed cannabis businesses across multiple U.S. states.
There is no assurance that any transaction or listing change will result from this strategic review. The Company does not intend to provide additional updates unless or until the Board has approved a specific course of action or determines that further disclosure is appropriate.
About SNDL Inc.
SNDL Inc. (NASDAQ: SNDL, CSE: SNDL), through its wholly owned subsidiaries, is one of the largest vertically integrated cannabis companies and private-sector liquor and cannabis retailers in Canada, with retail banners that include Ace Liquor, Wine and Beyond, Liquor Depot, Value Buds and Spiritleaf. With products available in licensed cannabis retail locations nationally, SNDL’s consumer-facing cannabis brands include Top Leaf, Contraband, Palmetto, Bon Jak, La Plogue, Versus, Value Buds, Grasslands, Vacay, Pearls by Grön, No Future and Bhang Chocolate. SNDL’s investment portfolio seeks to deploy strategic capital through direct and indirect investments and partnerships throughout the North American cannabis industry.
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