CALGARY, AB – SNDL Inc. reported its financial and operational results for the full year and fourth quarter ended December 31, 2024. All financial information is reported in millions of Canadian dollars unless otherwise indicated.
SNDL has also posted a supplemental investor presentation and shareholder letter on its website.
Management highlights
Net revenue for the fourth quarter of 2024 was $257.7 million, and $920.4 million for the full year of 2024, representing growth of +3.7% and +1.3%, respectively, when compared to the same periods of the previous year. Both the quarter and the full year represent new records for the corporation, driven by strong growth from our combined Cannabis business of +16.5% in the fourth quarter and +10.6% over the full year.
Gross profit also reached new records, with $68.8 million in the fourth quarter of 2024, and $240.3 million for the full year, representing growth of +20.0% and +26.2%, respectively, when compared to the same periods of the previous year.
Gross margin of 26.7% in the fourth quarter of 2024 and 26.1% for the full year are also new records, representing improvements of +3.6 and +5.2 percentage points, respectively, when compared to the same periods of the previous year.
Operating loss was $(76.1) million for the fourth quarter of 2024, driven by a negative valuation adjustment of the SunStream portfolio of $(65.7) million, a Spiritleaf intangible write-off of $(15.0) million, and restructuring charges of $(0.6) million. Excluding these exceptional items adding up to $(81.3) million, our underlying Operating Income would have been positive for the quarter. These exceptional items largely contributed to the full year reported Operating loss of $(103.8) million.
Cash flow was negative by $(44.6) million in the fourth quarter of 2024, driven by the acquisition of Nova’s minority equity interest, as well as the repurchase of SNDL’s common shares. Full-year cash flow was positive by $23.3 million.
Free cash flow was positive both in the fourth quarter of 2024, at $11.6 million, and for the full year, at $8.9 million.
“We are pleased with the continued progress reflected in our fourth-quarter and full-year 2024 results, as we set new records and exceeded our commitment to achieving break-even free cash flow for the year. We have accomplished this while continuing to transform our business by investing in growth opportunities and strengthening our organizational capabilities. The SNDL team remains dedicated to raising the bar in 2025 and beyond,” said Zach George, Chief Executive Officer of SNDL.
“During the fourth quarter of 2024 and the first months of 2025 up to this date, we took several strategic steps to enhance our foundation for long-term success and shareholder value:
- Completed the privatization of Nova Cannabis Inc. through the acquisition of the remaining minority equity interest
- Acquired business and assets of Indiva Inc, positioning SNDL as the largest manufacturer of infused edibles in Canada
- Received approval from the Florida Department of Health for the transfer of the Parallel (Surterra Holdings, Inc.) license – an important milestone and prerequisite for completing the Parallel restructuring process
- Repurchased 10,764,107 SNDL common shares for cancellation at an average price of US$1.81 per share
- Acquired 4,350,000 common shares of High Tide Inc., equivalent to 5.4% ownership
- In addition, the company has applied for listing of its common shares on the Canadian Securities Exchange (CSE) and anticipates the CSE listing to go live in April 2025, providing shareholders with increased flexibility and optionality.
“The progress made during the last year in operational performance and financial discipline is undeniable, and we are encouraged by the many opportunities we still have ahead of us,” said George. “Our strong balance sheet, including $218.4 million of unrestricted cash as of December 31, 2024, is not only a competitive differentiator but also gives us the flexibility to thoughtfully deploy capital into organic and inorganic investments with attractive returns. Our plan is to continue building strong fundamentals, as we expect to build momentum through 2025 with the goal of generating $100 million in positive annual free cash flow within the next three years.”
Business segment highlights
SNDL’s business is operated and reported in four segments: Liquor Retail, Cannabis Retail, Cannabis Operations and Investments. Corporate and Shared Service expenses, as well as 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, are reported as Corporate.
Cannabis Retail
SNDL is one of Canada’s largest private-sector cannabis retailer, operating at March 17, 2025 in 185 locations under its three retail banners: “Value Buds” (117), “Spiritleaf” (67, of which 8 are corporate stores and 59 are franchise stores), and “Superette” (1). 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 grew dynamically over the full year, and particularly in the fourth quarter, as our Value Buds banner continues to gain market share, and we also run some additional promotional activities in the fourth quarter. Same store sales increased by +6.3% in the fourth quarter, and +3.5% over the full year.
Operating Income was impacted in the fourth quarter by a $15 million Spiritleaf intangible asset impairment, as we have converted several Spiritleaf stores into Value Buds. These conversions are increasing revenue, profitability and cash flow, and therefore create shareholder value. However, when the profit pool associated with the Spiritleaf intangible asset was reduced, it triggered the one-time non-cash impairment.
Adjusted Operating Income excludes the Spiritleaf intangible impairment, showing the underlying operational profitability of the segment, which has seen a material improvement when compared to the previous year, both in the fourth quarter and the full 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 reported a significant step up in revenues and profitability throughout the year, and particularly in the fourth quarter of 2024.
Net revenue expansion is driven by increased provincial board and Business-to-Business distribution and a continued focus on consumer innovation, quality and operational efficiencies. Reported revenue includes $7.5 million from Indiva between November 4 and December 31, 2024.
Gross profit and Operating Income improvements are driven by efficiency improvements from scale as well as productivity initiatives.
Investments
As of December 31, 2024, the Company has deployed capital to a portfolio of cannabis-related investments with a carrying value of $449.1 million, including $413.1 million to SunStream Bancorp Inc.. This carrying value was reduced by $51.3 million during the fourth quarter of 2024, mainly driven by a negative valuation adjustment of the SunStream portfolio.
In the fourth quarter of 2024, the investment portfolio generated negative operating income of $(63.7) million, including a $(65.7) million negative valuation adjustment of equity-accounted investees (SunStream portfolio). This non-cash valuation adjustment is the consequence of multiple factors, including increased U.S. industry risk and volatility following the negative adult use Florida vote last November, as well as the worsening performance of Parallel and Skymint investments due to delays in the completion of their restructuring process while operating in challenging competitive environments.
The negative Florida election vote to legalize adult use cannabis in this state is seen as an unfavorable development by the industry and the investor community, as evidenced by the significant declines in equity valuation of different Cannabis multi-state-operators. For SNDL’s investment in SunStream assets, we find a positive in this development, as it gives Parallel more time to complete its restructuring process without the additional competitive pressure of a changing market environment.
Subsequent to the end of the fourth quarter, 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
$667.6 million of unrestricted cash, marketable securities and investments, including investments in equity-accounted investees, and no outstanding debt at December 31, 2024, resulting in a net book value of $1.1 billion.
On November 14, 2024, the Company announced that its board of directors had approved a renewal of the share repurchase program upon its expiry on November 20, 2024. The Company’s share repurchase program continues to be available to lower the outstanding share float. SNDL will continue to assess opportunities to utilize the program to the extent that management believes it is in the best interest of SNDL’s shareholders. During the three months ending December 31, 2024, the Company repurchased 5,002,372 common shares for cancelation at an average price of US$1.84 per share. Subsequent to the quarter end, in January and February 2025 the Company repurchased an additional 5,761,735 common shares for cancellation at an average price of US$1.79 per share. This brings the total number of common shares repurchased during the last 6 months to a total of 10,764,107 at an average price of US$1.81 per share.
About SNDL Inc.
SNDL Inc. (NASDAQ: SNDL), through its wholly owned subsidiaries, is one of the largest vertically integrated cannabis companies and the largest private-sector liquor and cannabis retailer in Canada, with retail banners that include Ace Liquor, Wine and Beyond, Liquor Depot, Value Buds, Spiritleaf, and Superette. 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.
