Sundial Growers Merger Possibly On The Horizon

sundial merger

UPDATE: 12/18: Reports of talks underway for a Sundial Growers merger with Canopy – Source

UPDATE: There is speculation that Sundial Growers was granted NASDAQ status to give them an extra quarter to sort out merger details.

Original Sundial Article by Max V – Must Read Click Here

Max V analysis on why Sundial and cannabis stocks will keep rising – Click Here

In a press release by Sundial Growers ($SNDL), the company and board of directors had authorized advisors and management that strategic alternatives need to be considered. One of these potential alternatives would be a Sundial merger with a larger existing cannabis company. An alternative that has already garnered interest from multiple Cannabis companies.

While this sounds gloomy, it is quite the opposite. Hope is far from lost for investors holding onto Sundial stock, as many potential cannabis companies appear to be perfect candidates for a merger with Sundial.

Sundial stock holders have been hanging onto a wild roller coaster, but things should be looking up in the near future. 

Sundial Has The Vape Game On Lock

sundial stock

While Sundial Growers may be liquidating their physical flower stock, their appeal to potential buyers or investors may not be totally lost. 

Flowers and merchandise have flopped for Sundial Growers. The vape market however has been very much in their favor. 

“The change in average gross selling price was primarily due to an increase in vape sales. Average gross selling prices for unbranded flower in the second quarter were $2.82 per gram up from $2.74 per gram in the previous quarter despite competitive pressures in the wholesale market as a result of industry-wide increased inventory levels.

The gross revenue from vape cartridge sales was $6.3 million in the second quarter of 2020 representing a 44% increase from the previous quarter. The company sold 5,997 kilogram equivalents of cannabis in the second quarter of 2020, a 35% increase over the previous quarter sales of 4,437 kilogram equivalents.” -Green Market Report

Inventory Clearance/Sunken Cost

After such a large increase in gross revenue from vape sales alone, it makes sense that Sundial is moving away from their other products. 

Sundial Growers is also now liquidating remaining physical stock at retail locations. Some merchandise and products are being cleared out at pennies on the dollar. 

“It is also looking at selling limited quantities of inventory at or below cost and entering into long-term supply agreements with other licensed producers, licensing or other strategic transactions involving the company, or any combination of the foregoing.

Sundial has engaged a financial advisor to assist with these efforts.”Green Market Report

Sundial Merger A Strong Possibility

In short, the outlook is bright. 

REMEMBER: Bears win battles, Bulls win wars.

sundial merger

The stock is currently trading under .30 cents per share. There is not much to lose here. 

Aside from total bankruptcy (which there are no indications of), there is no reason why this stock won’t eventually increase. 

We have the same advice for holders and potential buyers. Buy! 

States are legalizing, Sundial is selling vape carts almost as fast as they can produce them. 

We should expect further talk of a merger in the near future. 

Sundial Growers vape cartridge popularity is too large for other cannabis companies and investors to ignore. 

NASDAQ Outlook 

“The clear low-light was that analysts slashing their revenue forecasts for Sundial Growers next year. Analysts also expect revenues to grow faster than the wider market. 

The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Sundial Growers’ future valuation. 

Given the stark change in sentiment, we’d understand if investors became more cautious on Sundial Growers after today.”

Despite this outlook from NASDAQ, here at AFN we are very confident that a Sundial merger will be announced soon. Their marketing ability when it comes to vapes is too skilled and too intangible to ignore.

sundial merger

Definitely wouldn’t be the first time NASDAQ was wrong!

About Sundial Growers

Sundial Growers, Inc. engages in the production and distribution of flower, pre-rolls and vapes. It operates through the following segments: Cannabis, Ornamental Flowers, and Corporate.

The Cannabis segment includes legal cultivation and distribution of cannabis products under federally regulated licenses issued by Health Canada. The Ornamental Flowers segment covers the legacy operations of Bridge Farm.

The Corporate segment represents corporate activities and items not allocated to reportable operating segments.

The company was founded by Stanley J. Swiatek and is headquartered in Calgary, Canada. The listed name for SNDL is Sundial Growers Inc. Common Shares. – Source

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