On October 31, 2022, SNDL Inc. announced the closure of its acquisition of the Zenabis Business following approval from the Québec Superior Court amid the Zenabis Group’s proceedings under the Companies' Creditors Arrangement Act (Canada). The transaction involved SNDL acquiring all issued and outstanding shares of Zenabis Ltd., a new entity formed by amalgamating select Zenabis Group entities.

The acquisition was part of the settlement for the senior secured debt owed by the Zenabis Group to an SNDL subsidiary. Zenabis Ltd., now owned by SNDL, possesses all operational assets of the Zenabis Business, including a key 380,000-square-foot indoor cultivation facility in Atholville, New Brunswick. This facility boasts a substantial production capacity of 46,000 kilograms of dried cannabis and 15,000 kilograms of extraction annually. It has also successfully exported to international markets like Malta, Israel, and Australia, bolstering SNDL’s export capabilities.

Further assets from the deal include over 22 million grams of cannabis inventory expected to be leveraged through wholesale, exports, and sales through SNDL’s retail network, which includes 185 stores. Additionally, non-core real estate and intellectual property rights related to Zenabis brands and strains were acquired, adding further value.

Legal counsel was provided to SNDL by McCarthy Tétrault LLP, with Ernst & Young Inc. serving as the Monitor, represented by Osler, Hoskin & Harcourt LLP. Norton Rose Fulbright represented the Zenabis Group. This strategic acquisition marks a significant expansion of SNDL’s footprint in the cannabis industry.