SNDL Announces Major Restructuring, Job Cuts to Save $20 Million Annually

LOS ANGELES- Canadian cannabis company SNDL Inc. has announced a significant financial restructuring plan, which includes the elimination of 106 full-time positions. The restructuring aims to optimize corporate overhead spending and consolidate its cannabis segments under the leadership of Tyler Robson. SNDL expects this move to result in annual savings of $20 million, with a one-time restructuring cost of $11 million over the next 18 months. The company anticipates realizing full benefits by mid-2025, with initial gains projected as early as Q3 2024.

This announcement follows SNDL’s recent acquisition of Delta 9 Cannabis’s debt for US$21 million, making SNDL the senior secured creditor with Delta 9 owing more than $40 million. This financial pressure has contributed to Delta 9 seeking creditor protection under the Companies’ Creditor Arrangements Act (CCAA). Delta 9’s board determined that CCAA protection was necessary due to cash flow and liquidity issues, debt repayment challenges, and difficulties in raising capital.

As part of its restructuring, Delta 9 has entered into an agreement with The FIKA Company to sell its cannabis retail and logistics businesses. The FIKA Company will also facilitate a sale and investment solicitation process for Delta 9’s licensed cannabis production business. The agreement includes up to $16 million in interim financing and plans to issue shares and repay secured debt.

The Toronto Stock Exchange is set to review Delta 9’s listing status, while SNDL continues to expand its presence in the cannabis industry. Recently, SNDL announced plans to acquire Indiva Ltd., a Canadian cannabis edibles producer, and has continued its investment in U.S. cannabis assets through its joint venture, SunStream USA Group.